Toshiba to pay 2 utilities $2 billion for nuclear reactors
Jul. 27, 2017
COLUMBIA, S.C. (AP) — Toshiba Corp. has agreed to pay South Carolina utilities $2.2 billion for two troubled nuclear reactors regardless of whether they're ever completed, officials announced Thursday.
Under the settlement, the Tokyo-based company will pay $1.2 billion to South Carolina Electric & Gas, which owns 55 percent of the project, and $1 billion to state-owned utility Santee Cooper, with owns the remaining 45 percent. Payments will start in October and end in September 2022, the companies said in a joint news release.
The owners of the new reactors at V.C. Summer Nuclear Station in Jenkinsville, about 30 miles northwest of Columbia, are still weighing the project's future.
The project was already billions over budget and years behind schedule when its main contractor, Westinghouse, filed for bankruptcy earlier this year.
Its parent company, Toshiba, agrees to pay whether the project's finished, only one reactor is complete or it's abandoned altogether. The project is roughly one-third complete.
Toshiba initially signed a guarantee for the project in 2008, promising to pay 25 percent of the owners' costs. The guarantee was reaffirmed in 2015, when the contract was renegotiated. The settlement fully satisfies that guarantee, the utilities said.
The agreement leaves the two utilities responsible for resolving more than $210 million in liens filed by subcontractors. If those bills are paid through bankruptcy proceedings, Toshiba will get a $100 million credit.
The announcement comes days before SCE&G officials are slated to give state regulators an "interim update" on their assessment on whether to proceed.
The settlement is "only one factor that we will consider in our comprehensive evaluation of options to determine the most prudent decision on our nuclear construction project," said Rhonda O'Banion, spokeswoman for SCE&G parent company SCANA. "We will reach a decision soon."
Last month, Toshiba agreed to pay $3.7 billion toward two nuclear reactors in Georgia that also were being built by Westinghouse.
Santee Cooper's board unanimously approved the settlement in a teleconference Thursday, spokeswoman Mollie Gore said.
Approval by SCE&G's board followed, O'Banion said. She declined to provide further details.
"We appreciate our customers' patience while the analysis on cost and schedule for the project is being completed," Santee Cooper CEO Lonnie Carter said.
Environmental groups are calling on state regulators to order SCE&G to abandon the projects and refund customers at least some of the costs they've paid upfront in rates that have risen yearly since 2009. Construction now accounts for 18 percent of residential customers' electric bills. A hearing before the Public Service Commission is set for October.
Whether the commission can order the utility to refund customers and how much are matters of debate. That could require proof the utility gave regulators faulty information.