BRADENTON, Fla. - Co-owners of two South Carolina nuclear reactors under construction say they need more time to consider their options since the main contractor, Westinghouse Electric Co., filed for bankruptcy.
SCANA Corp. and the state-owned South Carolina Public Service Authority’s Santee Cooper filed notices Monday stating they extended an interim assessment agreement through Aug. 10.
“The agreement allows for a transition and evaluation period during which South Carolina Electric & Gas Co., principal subsidiary of SCANA, and V.C. Summer Nuclear Station project co-owner, Santee Cooper, can continue to make progress on the site,” the notice said.
Fluor Corp., a subcontractor being paid by the owners, is continuing to work on the project. Santee Cooper has issued $4.2 billion of municipal bonds to date toward its 45% share of the new units at V.C. Summer.
The latest extension of the agreement provides V.C. Summer owners more time to evaluate the cost to complete the reactors, and to negotiate a resolution with Westinghouse and its owner, Japan’s Toshiba.
Westinghouse filed for reorganization in the Southern District of New York on March 29, saying that it will use the bankruptcy code to shed some or all of its $9.8 billion of losses on its nuclear construction business. Those losses primarily relate to Westinghouse’s role as the prime contractor for the new units in South Carolina and two new units at Plant Vogtle in Georgia. Both are using Westinghouse’s new AP 1000 reactor design.
The Plant Vogtle owners, which include Georgia Power Co. and the Municipal Electric Authority of Georgia, negotiated a binding services agreement with Westinghouse on June 9. MEAG has issued $2.92 billion of bonds for its 22.7% ownership share of the project.
The agreement will allow Westinghouse to reject its contract at Plant Vogtle and transition construction management of the two new reactors there to Southern Nuclear Operating Co., a Birmingham, Ala.-based affiliate of Southern Co. The pact also includes a settlement in which Toshiba will honor a $3.68 billion financial guarantee of project costs.
U.S. Bankruptcy Judge Michael E. Wiles will hold a hearing on July 18 on Westinghouse’s motion to approve the Vogtle services agreement.
The agreement requires Plant Vogtle’s owners to pay Westinghouse’s costs, while allowing the company to eliminate its liability toward the project, according to a court filing Friday by Westinghouse’s chief transition and development officer, Lisa Donahue, a managing director with AlixPartners LLC.
“The debtors are almost certain to profit from the favorable cost structure of the services agreement,” Donahue said. “Accordingly, the services agreement represents a low-risk and limited liability proposition that is expected to result in substantial revenue to Westinghouse.”
Under the agreement, Westinghouse will provide engineering, procurement, and licensing support for the intellectual property associated with the AP 1000 reactor design.