Nuclear Development Questions and Answers

SCE&G and Santee Cooper, a state-owned utility in South Carolina, are building two 1,117-megawatt nuclear electric-generating units at V.C. Summer Nuclear Station in Fairfield County, S.C., where V.C. Summer Unit 1 has been in commercial operation for more than 30 years. Westinghouse Electric Company is the design contractor, and Chicago Bridge & Iron (CB&I) is the construction contractor.

Use the questions and answers below to learn more about SCE&G's nuclear development project.

Click the question to see the answer.

Q. A lot has changed since you decided to build the two new reactors. Is the project still prudent?

A. Yes. With a project of this magnitude, there has to be some flexibility built into the process. This is a long-term project designed to ensure customers have clean, safe and reliable energy for decades to come. When the two new nuclear units go online, SCE&G’s generation mix will be about a third nuclear, a third scrubbed coal and a third natural gas. More than 60 percent of SCE&G’s generation will be non-emitting.

Q. Why continue on the path of building nuclear plants considering the low cost of natural gas?

A. This is a question we have studied. That analysis still points to moving forward with new nuclear. When evaluating options for generating electricity, it’s not just about construction costs. There are many other considerations. For example, fuel costs; although natural gas prices are relatively low right now, it’s still cheaper to produce electricity using nuclear fuel. It’s extremely positive that natural gas prices are low today, but a 20-year historical review will show significant volatility in the cost of natural gas.

The natural gas industry is changing. Today, about 30 percent of our electric generation is fired by natural gas. SCE&G’s customers are enjoying the benefits of lower cost gas that shale gas fields and fracking technology has made available recently. However, this same technology is still relatively new. Wholesale natural gas prices are currently unregulated, and many question the long-term impacts of fracking. Gas producers are working on strategies to export their natural gas to overseas markets, which may place upward pressure on price. For all of these reasons, betting South Carolina’s energy future primarily on natural gas is not without risk. Gas has a role – a supporting role – in a balanced portfolio that will protect customers against price swings in any one fuel supply.

Adding nuclear power to our system will allow us to achieve a very balanced generation portfolio. Once our two new nuclear units are complete, we anticipate our generation mix will be about one-third nuclear, one-third natural gas and one-third scrubbed coal, giving us the flexibility to take advantage of whatever generation option makes economic sense for our customers at any given point in time.

Bottom line: nuclear will help reduce greenhouse gases in our state, will produce electricity more affordably than any other form of large-scale power generation currently available, and will result in a balanced energy portfolio to serve our customers. It’s simply the best solution for meeting our state’s long-term need for clean, reliable power.

Q. Why is SCE&G building nuclear reactors instead of using renewable technology?

A. Compared with all the options—including alternative sources such as wind and solar, as well as other traditional fuel sources such as coal and natural gas—nuclear was chosen after careful consideration as the best option to meet the energy needs of our customers well into the future in a manner that is safe, clean, reliable, proven, efficient, and economical. Renewable technologies such as wind and solar energy continue to improve. However, they still cannot provide the large-scale, around-the-clock generation required to meet South Carolina’s energy needs.

Q. Why build another power plant instead of promoting conservation?

A. SCE&G has does promote conservation through its EnergyWise® programs and incentives that can save customers money. Those programs include online energy-saving tips, home and business energy audits, rebates on ENERGY STAR appliances and lighting, and incentives to homebuilders. Learn more about SCANA’s balanced energy solutions in our Environmental Sustainability Report.

Conservation, alternative forms of generation (like biomass and wind), and nuclear power will all play a part in meeting South Carolina's future energy needs. Each of these will be important to provide a diversified group of resources to meet the energy challenges that lie ahead. Helping consumers find energy efficient solutions is a significant part of SCANA’s balanced energy strategy.

Q. Is the project still on budget and on schedule?

A. SCE&G is continuously tracking costs and construction progress and updating the Office of Regulatory Staff (ORS) and the Public Service Commission of South Carolina (PSC) on a quarterly basis. Visit the Nuclear Financial Information page on this site for the most up-to-date nuclear financial information.

Q. How will the new units affect my rates?

A. We estimate that our customers will see an average rate increase of about 2.5 percent per year during construction of the units. The Base Load Review Act, which is a state law enacted in 2007, effectively reduces the cost of building nuclear power plants in South Carolina by allowing the state’s regulated utilities to adjust rates annually during construction of such plants to recover related financing costs. Paying financing costs while construction is ongoing, as opposed to waiting until the project has been completed, lowers the cost of building the new units at V.C. Summer by about $1 billion, which in turn reduces the amount our customers will pay through rates for such things as the cost of capital, depreciation, property taxes and insurance associated with the project. We estimate this will save our customers at least $4 billion in electric rates over the life of the new units.

To draw an analogy, imagine you were planning to build a house and finance the purchase price with a 30-year mortgage. You could: pay any interest on the construction loan while the house is being built (like we’re doing with the new nuclear project or pay no interest on the construction loan while the house is being built, but instead have the total amount of that interest included in your 30-year mortgage. The second option would significantly increase the amount you’d actually pay for the home because every month for 30 years you’d be paying interest on the interest associated with the construction loan.

The construction costs, as approved by the PSC, are not reflected in rates until the plants are put into service for the benefit of our customers.

Q. Where are you with the loan guarantee process? Do you need a loan guarantee to fund your project?

A. We have provided information to DOE as part of the loan guarantee application process, but DOE has not provided us with specifics related to terms and conditions that might be attached to the loan guarantees. Without such information, we cannot effectively determine whether it would make sense for us and our customers to participate in the loan guarantee program. We have been consistent in stating that the loan guarantees are not essential to our ability to fund our nuclear construction project.

Q. What economic benefits do the new plants bring to the local economy?

A. Nuclear plants are economic drivers. In addition to the approximately 800 workers at the operating plant, the new nuclear project will provide approximately 3,000-3,500 jobs at the peak of construction. There will be about 800 fulltime employees once construction is completed. SCE&G pays more than $20 million in property taxes for V.C. Summer Unit 1, and that amount will significantly increase when the new units are operational. SCE&G has a strong partnership with colleges and universities to meet the demands of the new nuclear workforce, and the company is cultivating the pipeline at the high school level and below. The Port of Charleston receives large components for the project and is expected to receive approximately 24,000 tons of equipment throughout construction.

Q. What are you doing to try to give local residents an opportunity to work on the project?

A. SCE&G works closely with local schools to support students who are interested in Science, Technology, Engineering and Mathematics careers. CB&I, the contractor hired to build the new units, operates two local recruitment and employment centers. One is in Winnsboro, S.C., operated in conjunction with Midlands Technical College, and the other is in Irmo, S.C.. For more information about construction jobs at V.C. Summer, visit www.cbi.com/careers. To learn about non-construction jobs, visit www.sceg.com/en/careers-at-sceg/.

Q. Who oversees the nuclear industry?

A. The Nuclear Regulatory Commission has rigorous inspection processes for all U.S. nuclear power plants and nuclear construction projects.

Q. What impact do nuclear plants have on the environment?

A. SCE&G’s energy portfolio includes a diverse mix of electricity generation. This strategy relies upon increasing amounts of non-emitting nuclear and renewable electric generation, as well as existing fossil-fuel fired plants with proven emissions controls. Nuclear plants generate electricity virtually emissions-free, providing large quantities of electricity without affecting air quality or contributing to global warming.

Q. How much water will the new units consume?

A. All fuel-based electric power plants circulate large volumes of cooling water through the plant, but they actually consume only a small amount. It is projected that the existing V. C. Summer unit plus the two new units will consume less than 1.2 percent of the Broad River’s average flow.

A typical nuclear plant supplies electricity around the clock for 740,000 homes. A nuclear power plant that returns cooling water directly to the source, such as V.C. Summer’s current unit, consumes the equivalent of six to 16 gallons of water per day per household. Nuclear plants that use cooling towers, such as the two future units at V.C. Summer, would consume the equivalent of 20 to 26 gallons of water per day per household. By comparison, the average U.S. household of three people consumes about 300 gallons of water per day for indoor and outdoor uses, according to the United States Geological Survey (USGS).

Q. Why did you choose the Westinghouse AP1000?

A. The new reactor design, called the Westinghouse Advanced Pressurized Water Reactor (AP1000), builds on the industry's excellent safety record by using fewer moving parts and using cooling systems that rely on gravity instead of power supplies and motor-driven components. The AP1000 has 85 percent less cable, 80 percent less pipe, 50 percent fewer valves and 35 percent fewer pumps than today's generation of reactors.

Q. What are you doing to make sure the reactors are built as designed?


A. Thorough inspections will continue over the course of the project. SCE&G expects that there will be issues, whether self-identified or identified by the regulator, which will need to be addressed along the way. This is a normal part of the nuclear licensing and construction process, it is in keeping with SCE&G’s meticulous oversight as well as the rigorous oversight by the NRC, and it ensures plants are designed and built safely.

Q. What lessons have you learned from the Fukushima incident in Japan?

A. The U.S. nuclear energy industry responded within days of the accident in Japan, inspecting plants to ensure they could withstand similar extreme natural events. In addition, V.C. Summer and the entire nuclear industry adopted a strategy to ensure that lessons learned in Japan are applied quickly and effectively at America’s reactors to make our safe plants even safer.

Q. With no federal disposal of used fuel, how long can V.C. Summer store used fuel on site?

A. SCE&G has managed used nuclear fuel and other nuclear waste by-products safely and efficiently for nearly 30 years. V.C. Summer’s current fuel pool has enough capacity to safely store used fuel through 2017. SCE&G will add dry storage by 2015. These robust, steel-lined, concrete containers are one of the storage methods used by nuclear stations across the U.S. As it has done safely for years with the current unit, SCE&G will store the used fuel from the additional reactor units on site. The new nuclear units will have their own fuel storage facilities — there will be no connection to the current fuel pool. Dry storage is an option for longer term storage for the new units as well. While SCE&G supports the construction of a permanent federal repository for used nuclear fuel, the company can safely store the used fuel.