Scana Corp., owner of South Carolina’s largest power and natural gas utility, would save consumers almost $10 billion over 40 years by scrapping two nuclear reactors it’s constructing and instead building gas-fired plants, according to a report.
The case for Scana’s Summer nuclear project “could not be more abysmal for ratepayers,” Mark Cooper, an economic analyst with the Vermont Law School’s Institute for Energy and the Environment, said in a statement today. The reactors face $283 million in new construction costs, recession-flattened demand and a 73 percent drop in gas prices since regulators approved the project in 2009, according to the report.
Scana, based in Cayce, South Carolina, responded that the $10.2 billion project is under-budget and will help the power company avoid becoming overly dependent on a single fuel, with nuclear energy, coal and natural gas each producing about one-third of its electricity.
“We continue to believe that nuclear power is the best low-cost, long-term solution for our state’s growing energy needs,” Eric Boomhower, a spokesman for Scana, said in an e-mail.
South Carolina regulators have reviewed and approved Scana’s new nuclear strategy “numerous times,” Boomhower said. “Our construction work on the new units is going well,” with projected costs about $615 million less than the $6.3 billion that Scana anticipated in 2008, he added.
The first reactor at the site near Jenkinsville, South Carolina, is scheduled to begin generating power in 2017, according to Scana’s website. Santee Cooper, the state-owned power and water utility, owns 45 percent of the project.
Cooper said the reactors would cost consumers $9.4 billion more than power from combined-cycle gas plants over 40 years, with costs rising if the nuclear project runs over-budget. Duke Energy Corp.’s proposed Levy County nuclear reactors in central Florida would cost $4 billion more than gas plants, according to the report.
Regulated power companies face little incentive to use cheaper gas and renewable energy alternatives because ratepayers bear project costs, not investors, Cooper said. South Carolina, Florida and Georgia, where Southern Co. is building two reactors, allow utilities to charge consumers for construction costs as they are incurred.