March 30, 2012 / 7:07 PM / 8 years ago

UPDATE 2-NRC grants second US nuclear reactor license in 30 yrs

* South Carolina reactors to cost more than $9 billion

* New schedule puts units online in 2017, 2018 (Adds comment, byline)

By Eileen O’Grady

HOUSTON, March 30 (Reuters) - The U.S. Nuclear Regulatory Commission on Friday approved a license for Scana Corp to build two reactors at the Summer nuclear station in South Carolina, the agency’s second approval of additional nuclear units to be built in two months after a 30-year construction hiatus.

Scana and its partner, state-owned electric agency Santee Cooper, want to build two AP1000 reactors at the Summer site near Jenkinsville, at a projected cost of $9 billion. The 1,100-megawatt units are expected to begin operating in 2017 and 2018.

Friday’s action “is a significant event for our company and marks the culmination of an intense review by the NRC,” said Kevin Marsh, Scana’s chief executive, in a statement.

In February, the NRC approved Southern Co’s proposed Vogtle reactors in a 4-1 vote.

No nuclear power plants have been licensed in the United States since 1979 when the partial meltdown of the reactor core of the Three Mile Island plant in Pennsylvania led to design changes that caused construction costs for nuclear plants to skyrocket and other projects to be canceled.

An expected revival of nuclear construction in the United States has now been tempered by falling natural gas prices and slow growth in electric demand.

Marsh said the country will be watching Scana and Southern as they move ahead with full construction activity.

“It’s important that we deliver these plants as designed, on schedule and on budget,” Marsh told Reuters. “That’s the challenge people will be watching.”

SCE&G’s 55-percent share of the two new reactors’ cost is now estimated at $5.8 billion, below earlier forecasts, Marsh said, adding that he’s confident the plant can be built on budget despite some cost overruns, blamed, in part, on an eight-month delay in NRC approval of the license.

On Thursday, SCE&G reached a preliminary agreement to settle a dispute over early cost overruns with contractors Shaw Group and Westinghouse Electric, a unit of Toshiba Corp .

Although current natural gas prices are at a 10-year low, Marsh said the costly nuclear project will protect his utility’s customers from future fuel-price volatility.

“This is a 60-year decision for us,” he said, citing the inability to lock in low gas prices for more than a few years.

An opponent of the plant called the NRC action “wrong-headed” in light of gas prices and increased safety concerns.

“The much-touted nuclear renaissance has fizzled in the face of falling prices of natural gas, lower electricity demand and the impacts of the Fukushima nuclear disaster,” said Tom Clements of the Alliance for Nuclear Accountability, who previously fought approval of the Summer reactors.

As he did last month, NRC chairman Gregory Jaczko cast a lone dissenting vote against the new Summer units, citing a need for the agency to make sure all safety issues raised by Japan’s Fukushima nuclear disaster are incorporated into new reactors before they are allowed to operate.

Congressman Edward Markey of Massachusetts, a critic of the industry, called the 4-1 vote “another victory for the nuclear industry’s effort to avoid implementation of the safety upgrades” in the wake of the Fukushima disaster.

“Access to reliable and low-cost electricity will be key to job creation and economic development opportunities as we continue rebuilding our state’s economy,” Lonnie Carter, Santee Cooper president, said in a release.

Santee Cooper has been working to attract partners, including Duke Energy and two Florida utilities, to reduce its 45-percent ownership stake in the new Summer reactors to about 20 percent, citing slowing demand for power following the 2008 recession.

SCE&G customers are already paying for certain costs related to the new Summer units under a state law designed to encourage nuclear development. Early construction work is under way at the site 25 miles (40 km) northwest of Columbia.

Interest in building new nuclear plants resurfaced a decade ago when gas prices soared and the U.S. Congress was expected to place costly limits on emissions of carbon dioxide produced by fossil-fueled power plants.

But the case for widespread U.S. nuclear plant construction has since eroded due to abundant gas supplies, slow electricity demand in a weak U.S. economy and uncertainty following the Fukushima disaster. (Reporting by Eileen O’Grady; Editing by David Gregorio, Dale Hudson and Bob Burgdorfer)

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