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Sierra Club and Friends of the Earth File Formal Request with S.C. Public Service Commission for Hearing on the Prudence of Troubled V.C. Summer Nuclear Reactor Construction Project, Call for Halt to Spending

Posted Jun. 22, 2017 / Posted by: Friends of the Earth

COLUMBIA, S.C. – In an effort to inform the public about the stunning failure of the nuclear reactor construction in South Carolina, two public interest groups today filed a complaint about the project with the South Carolina Public Service Commission (PSC).  With the filing, the groups aim to break the silence of decision makers about further cost overruns and massive rate hikes that loom as the project unravels.

The announcement of the filing was made by the South Carolina Chapter of the Sierra Club and Friends of the Earth outside the PSC office in Columbia and before a gathering of supporters.  The groups formally requested a hearing on the prudence of decisions concerning construction of new AP1000 nuclear reactors by South Carolina Electric & Gas (SCE&G) and partner Santee Cooper at the V.C. Summer site north of Columbia.  

Both groups have repeatedly warned about financial and technical problems with the project since its initial PSC approval in February 2009.  Those warnings have fallen on the deaf ears of SCE&G, the PSC and S.C. Office of Regulatory Staff, a state agency charged by law to work on behalf of the “public interest.”

The groups requested that the PSC halt further, unauthorized spending on the troubled nuclear reactor construction project, whose cost has soared to over $15 billion.  A report by analyst Morgan Stanley in March 2017 indicates the cost of the project could be as high as $22.9 billion, over twice the original cost estimate.

“Our filing and a subsequent hearing will help to expose the myriad of untenable problems facing the project, show that termination is the best course of action and demonstrate that ratepayers must be refunded a significant part of their investment,” said Bob Guild, lawyer for the two groups and who was legal counsel in the first intervention against the project, by Friends of the Earth in 2008.  

“The filing with the PSC is solely in the public interest and will help break the vow of silence by decision makers who do not want the public to be aware of the depth of the financial crisis facing the beleaguered project,” added Tom Clements, senior adviser with Friends of the Earth.

In the filing, the groups further asked for a review of project abandonment and for payment of “reparations” to ratepayers for “unjust and unreasonable rates” associated with the project. 

SCE&G made a stunning admission in a public presentation to the PSC on April 12 – that no cost estimate and no construction schedule exists for the mismanaged project, now several years behind schedule. SCE&G also revealed at that time that that $120 million is being spent per month on the project, an amount not approved by the PSC and being undertaken at the risk of SCE&G and Santee Cooper, a 45% owner of the troubled project.

The “complaint,” filed pursuant to S.C. law and PSC regulations, requests that the costly reactor project be replaced by lower-cost energy efficiency, solar, wind and other renewable energy alternatives.  

A declaration of bankruptcy on March 29 by Westinghouse, vendor of the experimental AP1000 reactors under construction in South Carolina and at the Vogtle site in Georgia, sent a shock wave that continues to cause chaos with the status of the projects. Construction of the reactors at V.C. Summer is only 37% complete and $8.9 billion have already been sunk into the project, potentially putting ratepayers on the hook for billions of dollars in more wasteful spending if the project is not terminated. SCE&G customers have already paid $1.44 billion for project financing, under the Base Load Review Act, and nine rate hikes for that financing now account for a shocking 18% of the power bill. 

These areas of concern will be addressed in a PSC proceeding, either now or in the future, by a utility economist who is an expert witness for FOE and the Sierra Club: 

  1. There has been wasteful and unauthorized spending;
  2. Ratepayers will benefit from recovered costs;
  3. There has been a lack of a free-market approach, dooming the project from the start;
  4. Customers’ rates could be mitigated by on-bill financing for alternative measures; and,
  5. Least-cost alternatives such as solar, wind, efficiency and conservation should be pursued. 

Dr. Mark Cooper, Senior Fellow for Economic Analysis, Institute for Energy and the Environment, Vermont Law School, who serves as the expert witness for the groups, will soon release a report entitled The Failure of the Nuclear Gamble in South Carolina. That report will substantiate the requests made in the filing with the PSC of June 22 and demonstrate that project cancellation is still the prudent course of action and will save ratepayers billions of dollars. Dr. Cooper’s report will be released via a tele-presser to be held after July 4.

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Contacts:
Robert Guild, attorney, SC Sierra Club and Friends of the Earth, (803) 917-5738, bguild@mindspring.com
Tom Clements, Senior Adviser, Friends of the Earth, (803) 240-7268, tomclementssc@gmail.com
 
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