In 4-1 vote, NRC gives blessing to two new units at V.C. Summer

The Nuclear Regulatory Commission (NRC) went decades without approving a new nuclear plant in the United States, now it has approved two such projects during the first quarter of 2012.

In another 4-1 vote, the NRC endorsed an application by SCANA (NYSE: SCG) subsidiary South Carolina Electric & Gas (SCE&G) to build and operate two new reactor units alongside the existing V.C. Summer nuclear power plant about 26 miles northwest of Columbia, S.C.

Technically speaking, the commission’s March 30 vote found the NRC staff’s review adequate enough to make the necessary regulatory and safety findings, clearing the way for NRC’s Office of New Reactors to issue the combined construction and operating licenses (COL). Look for that issuance to occur within 10 days, NRC said in a news release.

The estimated $9bn project being developed by SCE&G and its minority partner, Santee Cooper (which is South Carolina’s state-owned utility), becomes the second to win approval through NRC’s combined license procedure. Earlier this year a group led by Southern Co. (NYSE: SO) subsidiary Georgia Power became the first to secure a COL to build and operate Vogtle units 3 and 4.

Under the old nuclear plant licensing rules that were in force years ago, companies had to first get a license to construct a plant and later win a second approval to actually run it.

The NRC imposed two license conditions, with the first requiring inspection and testing of squib valves, important components of the new reactors’ passive cooling system. The second requires the development of strategies to respond to extreme natural events resulting in the loss of power at the new reactors. The commission also directed its Office of New Reactors to issue to SCE&G and Santee Cooper, simultaneously with the COLs, an order requiring enhanced, reliable spent fuel pool instrumentation, as well as a request for information related to emergency plant staffing.

Chairman finds himself lone dissenter again

As was the case during the Vogtle vote, NRC Chairman Greg Jaczko cast the lone vote opposing issuance of the COL for Summer.

“I fully support the decision by my colleagues to include this license condition and I consider this important progress in incorporating the lessons from Fukushima,” Jaczko said in his dissent. “However, I continue to believe that we should require that all Fukushima-related safety enhancements are implemented before these new reactors begin operating. To that end, I proposed a license condition that would require implementation of all new requirements that are presently being developed by the staff, at our direction, to incorporate the lessons from Fukushima. Unfortunately, I do not have the support of my colleagues for this license condition and, therefore, cannot join them in approving the issuance of these COLs.”

The commission majority, however, said NRC already has well-established procedures to implement new requirements on nuclear plants.

The majority said it is confident that the commission’s approach—using rigorous, well-established processes rather than the Chairman’s loosely-defined proposed license condition, is enough in this case. “We therefore expect that the new VCSNS [V.C. Summer Nuclear Station] units will comply with all applicable ‘post-Fukushima’ requirements in a timely fashion as they are developed, and we impose no additional Fukushima-related license conditions today,” the commission majority wrote.

Duke eyes stake in new units; SCANA irons out cost issues

SCE&G and Santee Cooper submitted the COL application on March 27, 2008. Since then, Santee Cooper has decided to decrease its ownership stake in the two new nuclear units. Santee Cooper has publicly acknowledged that Duke Energy (NYSE: DUK) has expressed interest in buying a stake in the new nuclear units.

The NRC certificated Westinghouse’s amended AP1000 reactor design, which will be used at the new units at Vogtle and Summer, on Dec. 30, 2011. The AP1000 is a 1,100-MW pressurized-water reactor that includes passive safety features.

On March 29, SCANA announced a preliminary cost agreement  with the Shaw Group (NYSE: SHAW), which will be its engineering, procurement and construction vendor for the Summer expansion project.

These challenged costs primarily relate to delays in receipt of the new plant license from NRC, rock conditions at the site, design of structural modules and design of the shield building. SCE&G’s portion of these costs will be $138m, $50m less than the upper bound of $188m originally disclosed, SCANA said in a news release.

Because of the NRC license taking longer than first expected, the two new units are now expected to be completed in 2017 and 2018.

Santee Cooper’s President and CEO called the nuclear units a critical part of the state-owned utility’s effort to diversify its generation mix.

About 1,000 workers are currently engaged in early-site preparation work at the V.C. Summer construction site. The project will peak at about 3,000 construction craft workers over the course of three to four years. The units will then add 600 to 800 permanent jobs when they start generating electricity.

As expected, the V.C. Summer expansion vote drew quick praise from the Nuclear Energy Institute.

“Coupled with the NRC’s recently approved expansion of the Vogtle facility in Georgia and the Tennessee Valley Authority’s ongoing completion of Watts Bar 2 in Tennessee, there will be an additional 5,600 megawatts of nuclear generating capacity on the Southeast’s electricity grid by the end of the decade,” said NEI President and CEO Marvin Fertel.

About Wayne Barber 4201 Articles
Wayne Barber, Chief Analyst for the GenerationHub, has been covering power generation, energy and natural resources issues at national publications for more than 20 years. Prior to joining PennWell he was editor of Generation Markets Week at SNL Financial for nine years. He has also worked as a business journalist at both McGraw-Hill and Financial Times Energy. Wayne also worked as a newspaper reporter for several years. During his career has visited nuclear reactors and coal mines as well as coal and natural gas power plants. Wayne can be reached at wayneb@pennwell.com.