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Santee Cooper Board approves nuclear construction contract, more certain path forward



10/27/2015

<p>SCE&G and its partners on July 23 placed the 2.4-million pound CA01 module that will house a number of major components in the first of two new nuclear plants at the V.C. Summer Nuclear Station. (Via SCE&G News/Flickr)</p>

SCE&G and its partners on July 23 placed the 2.4-million pound CA01 module that will house a number of major components in the first of two new nuclear plants at the V.C. Summer Nuclear Station. (Via SCE&G News/Flickr)

MONCKS CORNER, S.C. — The Santee Cooper Board of Directors today authorized a change to the contract for its joint expansion of V.C. Summer Nuclear Station with partner South Carolina Electric & Gas Co. (SCE&G), which will provide more certainty on price and schedule.

The board approved a resolution authorizing Santee Cooper President and CEO Lonnie Carter to execute a new Limited Agency Agreement with SCE&G, reflecting approval of an amended Engineering, Procurement and Construction (EPC) Agreement SCE&G will execute with the consortium building two new AP1000 nuclear power units at V.C. Summer.  The amended EPC Agreement reflects that Westinghouse Electric Company, LLC (WEC) intends to acquire the stock of Stone & Webster from Chicago Bridge & Iron (CB&I). Following that acquisition, Stone & Webster will continue to be a party to the EPC Agreement for the V.C. Summer expansion, but as a subsidiary of WEC instead of CB&I.

WEC intends to engage Fluor Corporation or its affiliates as a subcontracted construction manager. Fluor has experience with many large electric generating projects, including V.C. Summer Unit 1.

The amended EPC Agreement will tie payments going forward to a milestone schedule, increase liquidated damages and add a fixed-price option that if exercised would significantly shift the remaining financial risk to the contractors. Under the base amendment, Santee Cooper will pay an additional $112.5 million to settle known construction cost increases agreed to last year. If the fixed-cost option is chosen and approved, Santee Cooper's share would be another $800 million in exchange for EPC Agreement price certainty for the balance of the construction project.

"This is a positive development in the new nuclear project, because it offers significant incentives and penalties associated with bringing the units online in 2019 and 2020," Carter said. "The new fixed price option would limit construction costs if we choose to exercise it. Finally, we are confident that Fluor will bring solid expertise and resources that will keep the project on track to deliver 2,200 megawatts of clean energy to South Carolina by 2020."

Santee Cooper is South Carolina's largest power provider, the largest Green Power generator and the ultimate source of electricity for 2 million people across the state. Through its low-cost, reliable and environmentally responsible electricity and water services, and through innovative partnerships and initiatives that attract and retain industry and jobs, Santee Cooper powers South Carolina. To learn more, visit www.santeecooper.com