November 16, 2017 / 4:17 PM / a year ago

UPDATE 1-SCE&G to cut electricity rates after failed nuclear project

(Adds details on rates, cost to shareholders, gas-fired plant, background)

Nov 16 (Reuters) - South Carolina Electric & Gas Co (SCE&G), the main subsidiary of Scana Corp, said it will cut electricity rates to placate customers angered at having to bear the cost of the company’s abandoned V.C. Summer nuclear project.

SCE&G will rollback residential rates to where they would have been in March 2015, resulting in an immediate annual reduction to rates by about $90 million, or 3.5 percent, the company said.

It said there would be $2.9 billion in reduced shareholder earnings over 50 years as they absorb the nuclear construction amortization costs. The company also said it would write off $810 million.

“We’ve heard our customers’ frustrations about paying for a power plant and having nothing to show for it,” said Keller Kissam, SCE&G’s president of retail operations who will become its president and chief operating officer on Jan. 1, 2018.

“This proposal gives customers additional power generation while also lowering rates for customers,” he said.

SCE&G said it will add a 540-megawatt natural gas-fired power plant to its system, replacing more than 40 percent of the projected power that was to be provided from the V.C. Summer nuclear construction project.

The company also said it will add about 100 megawatts of large-scale solar energy to its system.

V.C. Summer, which was majority-owned by Scana, was ditched in July after estimated costs to build two nuclear reactors spiraled to as much as $24 billion.

Analysts have said the failure of the Summer project and the bankruptcy in March of its designer and contractor, Westinghouse Electric, will likely result in no new nuclear reactors being built in the United States for many years, if ever.

In October, Scana announced the resignation of its chief executive, Kevin Marsh, as the utility company grappled with billions of dollars in cost overruns tied to the abandoned nuclear project.

Summer was one of only two new nuclear power plants under construction in the United States. The other is at Southern Co’s Vogtle plant in Georgia, which is still being built. The two Vogtle reactors are expected to be completed in 2021 and 2022. (Reporting by Nallur Sethuraman in Bengaluru and Scott DiSavino in New York; Editing by Susan Thomas)

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