Expensive delays are piling up for the companies building new nuclear power plants, raising fresh questions about whether they can control the construction costs that crippled the industry years ago.
The latest announcement came this week from executives at SCANA Corp., which has been warned by its builders the startup of the first of two new reactors in South Carolina could be delayed two years or more. SCANA Corp. and plant co-owner Santee Cooper have not accepted that timeline from the companies designing and building the reactors, nor have they accepted responsibility for additional costs.
That announcement may well foreshadow more delays for a sister project in eastern Georgia, and they have caught the attention of regulators and Wall Street.
"Delays generally cause cost increases, and the question becomes who's going to bear the costs?" said C. Dukes Scott, executive director of the South Carolina Office of Regulatory Staff, a watchdog agency that monitors SCANA Corp.'s spending.
None of this is helpful for the nuclear power industry, which had hoped its newest generation of plants in Georgia and South Carolina would prove it could build without the delays and cost overruns so endemic years ago. When construction slows down, it costs more money to employ the thousands of workers needed to build a nuclear plant. Meanwhile, interest charges add up on the money borrowed to finance construction.
A single day of delay in Georgia could cost $2 million, according to an analysis by utility regulators.
Utility consumers often end up paying for these extra charges in the form of pricier electricity bills, unless the government intervenes and forces shareholders to absorb all or some of the losses. Despite previous delays and problems, regulators in both states have previously said finishing the nuclear plants is cheaper than stopping and building gas-fired power plants.
"People take it seriously because really the operative word is uncertainty," said Paul Patterson, an analyst for Glenrock Associates. "This is a large and complicated project and any significant delay has the potential to raise expenses."
Originally, the first of SCANA Corp.'s two new reactors was supposed to start commercial operation in April 2016. The company later moved that target startup date to early 2017.