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Officials: Refinancing South Carolina reactors saves money

Posted 4:38 p.m. Wednesday
Updated 4:42 p.m. Wednesday

— Officials overseeing the construction of some of the country's first new nuclear reactors in decades said Wednesday that a recent financing deal means fewer costs from the multibillion-dollar project will be passed on to power customers in South Carolina.

The comments from officials including SCANA Corp. CEO Kevin Marsh, whose employer owns a 55 percent stake in the project at V.C. Summer Nuclear Station in Jenkinsville, come just weeks before state regulators are due to consider the ninth rate increase related to the construction project.

The 3.1 percent increase requested by SCANA's electric utility component, South Carolina Electric & Gas Co., would be the largest single rate increase since the company began charging its 700,000 customers for construction.

Currently pending before the Public Service Commission, the request would pay off an additional $846 million in cost overruns. It pushes the project's final costs to nearly $14 billion. In 2009, the utility's final approval paperwork estimated costs at $11.4 billion.

Marsh, who spoke with The Associated Press during a rare media day at the complex about 30 miles northwest of Columbia, said that he understands power customer frustrations with the repeated rate increases to offset financing for new reactors.

But the chief executive said that a fixed-price deal negotiated last year when Texas-based Fluor Corp. became the project's lead construction contractor makes it easier to stay on target.

"It gives us a significant amount of price certainty," Marsh said of the negotiated deal, which he said shifts more costs back to reactor designer Westinghouse Electric Co. instead of power customers.

"If you have a series of rate increases, it's logical that they would be frustrated by that," Marsh told AP. "Sometimes, the best decision for the long term is not the easiest."

Marsh spoke while standing on a platform specially constructed to give reporters a vantage point overlooking the massive project. About 3,800 people are currently working on the reactors, which will be massive structures of concrete and steel. One of the largest cranes on earth is currently at the site, a blue, 560-foot-tall monster with twin booms, a massive rear counterweight and ability to move components weighing millions of pounds.

Projects like the new reactors in Jenkinsville are rare. Along with two additional Westinghouse AP1000 reactors being constructed at Plant Vogtle in eastern Georgia by Southern Co. subsidiary Georgia Power and its co-owners, they're the first of their kind to be built in the U.S. Once both are online, South Carolina will have nine operational nuclear plants.

Initially slated to open in March 2017, the first reactor is now expected to go online in August 2019, with the second following a year later. Officials have attributed delays to previous suppliers unaccustomed to the high degree of scrutiny associated with nuclear work.

But officials also attribute delays, as well as increased costs, to changes in the project's construction contractors. The original company, Shaw Group Inc., was bought out in 2012 by Chicago Bridge & Iron, which was replaced in October by Fluor.

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Kinnard can be reached at http://twitter.com/MegKinnardAP. Read more of her work at http://bigstory.ap.org/content/meg-kinnard/

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