Repeat Performance: NRC approves COL for V.C. Summer

The U.S. Nuclear Regulatory Commission (NRC) on March 30 approved the combined construction and operating licenses (COL) for the V.C. Summer nuclear power plant in South Carolina, just the second construction license approved for a nuclear plant since 1978. The NRC voted 4-1, just as the Commission did for the Plant Vogtle COLs. The NRC is expected to issue the COLs within 10 business days.

South Carolina Electric and Gas Co. (SCE&G), a subsidiary of SCANA (NYSE: SCG), and South Carolina Public Service Authority, or Santee Cooper, the owners and operators of the existing single-unit, 1,100 MW V.C. Summer plant, submitted the application for two new 1,117 MW Westinghouse AP1000 reactors to be built at the site in March 2008. The $10 billion project, adjacent to the company’s existing reactor approximately 26 miles northwest of Columbia, S.C., began in 2009 after receiving approval from the Public Service Commission of South Carolina.

"These new nuclear units are a critical component of Santee Cooper's long-term plan to diversify our generation mix. Access to reliable and low-cost electricity will be key to job creation and economic development opportunities as we continue rebuilding our state's economy and position South Carolina for the future," said Lonnie Carter, president and CEO of Santee Cooper.

NRC Chairman Gregory Jaczko called the approval of the COL for Units 2 and 3 at V.C. Summer a “significant milestone.”

The NRC did impose two conditions on the COLs, with the first requiring inspection and testing of squib valves, important components of the new reactors’ passive cooling system. The second requires the development of strategies to respond to extreme natural events resulting in the loss of power at the new reactors. The Commission also directed the Office of New Reactors to issue to SCE&G and Santee Cooper, simultaneously with the COLs, an order requiring enhanced, reliable spent fuel pool instrumentation, as well as a request for information related to emergency plant staffing.

“The Nuclear Regulatory Commission’s approval of the license application to build two new advanced-design reactors continues the needed expansion of our nation’s electricity system,” said Marvin S. Fertel, the Nuclear Energy Institute’s president and chief executive officer. “The Nuclear Energy Institute congratulates South Carolina Electric & Gas, partner Santee Cooper, Westinghouse Electric, the Shaw Group and other project participants on this important milestone. This will be one of the largest construction and engineering projects in South Carolina history. It will create thousands of well-paying jobs during construction and provide careers for several hundred more people over the decades that the new reactors will generate electricity.”

V.C. Summer Unit 1, which has been in commercial operation since 1984, employs about 800 employees and contractors.The two new units are expected to add 600 to 800 permanent jobs when they begin generating electricity in the 2016 to 2019 timeframe.

“A lot of work went into this. And there is a lot work yet to come,” said Commissioner William Magwood. “This is the first step of long journey.”

In February, SCE&G filed a petition with the Public Service Commission of South Carolina seeking approval to update the construction milestone schedule as well as the capital cost schedule for the company’s new units.

SCANA said the originally approved budget for the project included contingency costs of approximately $438 million, or slightly less than 10 percent. The South Carolina Supreme Court, though, ruled that pre-approved contingency costs were not permitted to be part of the approved capital cost schedule. As a result, SCE&G is required to specifically identify and itemize such costs before they can be included in the approved project budget.

On March 29, 2012, SCE&G, Westinghouse Electric Co., and The Shaw Group Inc. (NYSE: SHAW) signed a preliminary agreement related to costs for construction of the company’s new units. The costs primarily relate to delays in receipt of the COL from the NRC rock conditions at the site, design of structural modules and design of the shield building.

SCE&G’s portion of these costs will be $138 million, $50 million less than the upper bound of $188 million originally disclosed.

“With COLs now in place for two U.S. utilities to build four AP1000 units, it is a clear affirmation that nuclear energy will continue to play an important role in the energy mix of this country, now and in the future.  Further, it solidifies the AP1000 design’s foundational role as the preeminent technology of choice in the United States and around the world,” said President and CEO of Westinghouse Electric Co. Dr. Aris Candris.

Shaw and Westinghouse currently are building four new nuclear units in the U.S., with two units each at V.C. Summer and Southern Co.'s (NYSE: SO) Plant Vogtle, and with two more units under contract for Progress Energy (NYSE: PGN) in Florida.

"We are honored to be part of the team to deliver the world's most advanced, emission-free power plant to V.C. Summer. This landmark project will provide numerous benefits for South Carolina and will create thousands of jobs," said J.M. Bernhard Jr., Shaw's chairman, president and CEO.

SCE&G said about 1,000 workers are currently engaged in early-site preparation work at the V.C. Summer site. The project will peak at about 3,000 construction workers over the course of three to four years.

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