Columbia, S.C., February 23, 2010 – In a case that could have far-reaching implications for efforts to build new nuclear reactors in the U.S., the South Carolina Supreme Court has set a hearing date on a challenge against a new reactor project planned in the state.
The March 4 hearing at the state Supreme Court in Columbia will consider the appeal by the environmental organization Friends of the Earth of a decision by the South Carolina Public Service Commission allowing South Carolina Electric and Gas to proceed with a two-reactor nuclear power project and to begin collecting rates to pay for it.
SCE&G’s reactor project is considered to be on the Department of Energy’s short list of four projects being considered for a federally subsidized loan guarantee.
Friends of the Earth believes that loan guarantees constitute unwarranted giveaways to an industry which should be forced to compete in the free market and not depend on taxpayer bailouts.
Friends of the Earth said in its appeal that the state’s Public Service Commission erred in its February 2009 decision allowing the project to go forward by not adequately requiring SCE&G to present energy alternatives and by not fully considering the cost of the project.
The appeal also challenges aspects of a South Carolina law, the Baseload Review Act, that forces rate payers to pay for the nuclear project far in advance of its operation and also in the event the project is cancelled mid-stream.
Friends of the Earth claims that this “construction work in progress” law is unconstitutional as it forces rate payers to pay for something they may never receive.
SCE&G claimed in the hearing on the reactor project that the two reactors will cost $11.5 billion, but the company had previously filed a $9.8 billion cost with the Securities and Exchange Commission.
Georgia Power, which also aims to build two AP1000 reactors, has said those reactors are likely to reach a cost of $14 billion. On February 2, Nuclear Regulatory Commissioner Greg Jaczko stated in an Arizona Republic article that “the best estimate for a new reactor’s price tag is about $10 billion.”
The two Westinghouse AP1000 reactors that SCE&G intends to build have yet to be certified or receive a license from the Nuclear Regulatory Commission, and are now undergoing redesign of the “shield building” that covers the reactor containment. Due to this serious matter, no established review schedule exists for the design, meaning more delays in the licensing decision or a rejection of the design by the Nuclear Regulatory Commission.
In addition to SCE&G, the state’s Office of Regulatory Staff, which Friends of the Earth alleges has abrogated its responsibility to look out for the interest of rate payers, is also a target of the appeal.
The S.C. Energy Users Committee, an association of large electricity users in the state, has also mounted a second challenge against the Public Service Commission decision. No hearing date for that appeal has been set and the court declined to combine the two appeals.