Nuclear Plan Faces Scrutiny: State Hearings Begin Monday on Pros, Cons of Reactors in Jenkensville
November 30, 2008
The State Columbia, SC, Page 1 A
Beginning Monday, state regulators will hold hearings that promise to be as combustible as the topic. That's when the 20Public Service Commission will listen to arguments on whether expanding nuclear power is the best way to meet South Carolina's energy needs.
Specifically, the panel will consider a proposal from SCE&G and its partner Santee Cooper to build two new reactors costing $9.8 billion at their nuclear plant in Jenkinsville, 25 miles northwest of Columbia.
$9.8 Billion Timeline
The application by SCE&G and Santee Cooper to build two additional nuclear power plants in Fairfield County has to work its way through a long process among state and federal regulators.
Monday: S.C. Public Service Commission beings hearing on application to build the two reactors.
Late February: PSC is expected to issue ruling on the proposal.
Late 2011-early 2012: U.S. Nuclear Regulatory Commission is expected to rule on request for license to operate the new reactors and begin construction.
2012: Construction likely to begin.
Late 2015: Fuel scheduled20to be loaded into first new reactor.
2016: First reactor scheduled to begin operation.
2019: Second reactor scheduled to begin operation.
SOURCES: South Carolina Electric & Gas Co; Public Service Commission
On the line
WHO: SCE&G and Santee Cooper
WHAT: Two new 1,117-megawatt reactors costing $9.8 billion
WHEN: If approved by the U.S. Nuclear Regulatory Commission, construction could begin in 2012. The first reactor is scheduled to begin generating electricity in 2016, and the second one in 2019.
WHERE: SCE&G's V.C. Summer Nuclear Station in Jenkinsville, about 25 miles northwest of Columbia
JOBS: As many as 4,000 workers will be needed to build the reactors; running them will require 800 to 1,000 permanent employees, SCE&G said.
ABOUT THE HEARING
• The hearing begins at 9:30 a.m. Monday at the Public Service Commission's offices in the Saluda Building at Synergy Business Park, just off Bush River Road and I-20.
• The public will have two opportunities to comment during the hearing. The first session will be Monday from 9:30 a.m. to noon, and the second will be Wednesday from 4:30-6:30 p.m.
The new reactors each will generate 1,117 megawatts, combining to provide enough power for about 1.9 million households, according to the electric industry. They'll be built next t o the existing 966 megawatt nuclear plant, which went into operation in 1984.
The fireworks started last week when environmental groups accused state officials of "selling out" to the power companies.
Friends of the Earth, an intervenor in the case, and the Sierra Club of South Carolina, charged that the Office of Regulatory Staff offered a proposed settlement that "trounces the public interest and caves in to virtually everything sought" by the utility.
"The proposal ... is not only a clear sell-out of the public interest over the interests of SCE&G, but it also calls into question just who this agency represents," said Tom Clements with Friends of the Earth.
Clements urged that the agency be investigated, claiming that it has been "captured by corporate interests."
Dukes Scott, the agency's executive director, said "there is no agreement between ORS and SCE&G."
The proposal, which state law requires his office to draft, was sent to all parties involved in the case to see if "there was any room for discussion," Scott added.
Scott defended his agency, saying20it does represent the public interest.
And, Scott added, it also must consider what's best for economic development as well as integrity of the utilities.
A NUCLEAR TREND
The nuclear debate in the United States has been largely dormant since the 1979 meltdown at Three Mile Island, which caused no injuries or radiation leakage but shattered public confidence in commercial nuclear power.
Times have changed, and the public's memory has faded. Also, environmental concerns over greenhouse gases - the prime culprit of global warming - and the nation's dependency on foreign oil have prompted utilities to reconsider the nuclear option.
South Carolina, which has seven reactors at four sites, has a long history with nuclear energy. In 1958, SCE&G along with three other utilities built a 17-megawatt test reactor at Parr Reservoir, near the site of the utility's V.C. Summer Nuclear Station in Fairfield County.
The state's first commercial reactor at H.B. Robinson Power Station near Hartsville went into operation in March 1971, followed by nuclear plants in Oconee and York counties. The V.C. Summer reactor went onlin e in 1984.
Overall, 52 percent of the electricity consumed by South Carolinians is generated by nuclear power. That ranks the state third-highest in nuclear power consumption compared to the national average of about 20 percent, according to the federal government.
The pro and con arguments over the merits of building more nuclear reactors will be complicated, and it will require testimony from a host of expert witnesses.
IS NUCLEAR POWER THE BEST CHOICE?
The issue pits the utilities, which say they need the reactors to meet the state's future energy needs, against environmentalists and citizens groups, who say there are safer and more economical ways to do the same.
SCE&G, which has 646,000 electricity customers in South Carolina, expects to add 130,000 more customers in the next 10 years.
Its partner, state-operated Santee Cooper of Moncks Corner, projects a 16 percent increase in customers by 2020.
Santee Cooper has 155,000 customers in three c oastal counties and provides power to 685,000 more customers through 20 electric cooperatives.
SCE&G, which is the principal subsidiary of Columbia-based SCANA Corp., said nuclear is more reliable, economical and better for the environment than other power sources.
"Nuclear clearly winds up being the less expensive option," said Kevin Marsh, SCE&G president.
Opponents charge that the utility has not given enough consideration to using optional sources such as wind and solar power. And there's the inherent issue of safety.
One drawback to solar and wind as far as generating power is that they are not available for around-the-clock use, Marsh said.
"A nuclear plant typically runs all the time," Marsh said.
"We are not opposed to alternative energy. We think there will be a place for alternative energy when it's more cost-effective."
Clements said the utility should emphasize conservation instead of building big, expensive generating plants.
"It's much cheaper to save a kilowatt than to produce a kilowatt," Clements said.
SCE&G plans to build reactor units designed by Westinghouse, called the AP1000. While it's the only reactor design that has been certified by federal officials, it so far has gone through 15 revisions. Four AP1000 reactors are under construction in China, but none has been built in the United States.
When talk turns to safety, SCE&G executives point to their company's own experience over the past quarter century of running the V.C. Summer plant without incident.
FINANCING REACTORS
Money - where it will come from and how the project will be paid for - will be another part of the hearing.
In 2004, the state Legislature passed a law allowing utilities to increase electric rates to cover the cost of borrowing billions of dollars to pay for the new reactors.
Marsh said the pay-as-you-go approach should lower construction costs of the units by $1 billion.
SCE&G proposes to phase in a 37 percent rate increase over the life of the project, which will extend to 2019. The rate hikes, if approved, would start in March and be in increments ranging from less than a half percent to 4 percent.
The rate hike, though, will not be granted all at once, state officials said. Instead, the utility will have to make its case each year to the commission.
Being allowed to raise rates from the outset of the project will help the utility's case in attracting lenders, officials said.
"Our ability to borrow the money on Wall Street is made significantly easier when Wall Street gets the signal from the state that it is behind us," Marsh said.
Opponents, though, believe that the country's current financial crisis will make it more difficult and more expensive to find the money for the project.
They also say the utilities have underestimated the cost of the project. They say SCE&G's projected costs are less than half of what federal officials say is the average price tag of a reactor - $9 billion.
SCE&G's costs are lower because the reactors will be built on a site that it owns and much of the infrastructure needed to support expansion is in place, said Jimmy Addison, the utility's chief financial officer.
The utility also has developed an evacuation plan and has installed a warning system to alert the surrounding community, Addison said. Those are costs that would have to be added if the utility was building the reactors at an undeveloped site.
LET EVERYONE HAVE A SAY
The hearings by the seven-member panel of political appointees are scheduled to run through the week and possibly longer, said Charles Terreni, Public Service Commission spokesman.
About a dozen intervenors have entered the case.
Some of the intervenors are state agencies like the Department of Health and Envir onmental Control. Others are environmental groups and utility customers - residential, commercial and industrial.
Intervenors can participate in the hearing as much they'd like, making opening statements, questioning witnesses and presenting their own experts to either rebut or back the utility's case.
It's been the commission's practice to let everyone have their say, Terreni said.
"These folks stepped up and said they wanted to intervene in the hearing, Terreni said. "As long as they're willing to comply with the rule of procedure and meet their obligations, they can do it."
The commission ruling, expected to be issued by late February, won't be the final word.
The utilities still must get permission from the federal Nuclear Regulatory Commission. If the federal agency approves, construction on the first reactor could begin in 2012.
Reach Crumbo at (803) 771-8503.