What in the world happened with V.C. Summer?

August 3rd, 2017
By Shelley Robbins

Every time I’ve written about the V.C. Summer nuclear reactor project in the Midlands, I’ve intentionally avoided the term “meltdown.” It was too trite. But after Monday’s announcement that the project, undertaken jointly by SCE&G and Santee Cooper, would be abandoned, “meltdown” seems to be the only term that truly describes the situation. And it’s not just the Midlands and Lowcountry who’ll bear the consequences— the Upstate will suffer too.

So what happened? Basically, South Carolina’s laws and regulatory oversight all cataclysmically failed and the project collapsed under its own weight.

We saw this coming.

Back in 2016, Upstate Forever staff saw the public notice for a proposed 52-mile natural gas pipeline segment connecting the massive Williams Transcontinental interstate pipeline with SCE&G’s facilities in the midlands. We annually review the state utilities’ long range planning documents, called Integrated Resource Plans, or IRPs, and we did not see how the need for this much additional natural gas could possibly be justified once the two new nuclear reactors came online. Those reactors would have shut down existing natural gas base load generation, freeing up plenty of natural gas for industrial and residential expansion. We questioned the “need” for the pipeline from Day One. We also challenged the route. It cut through pristine forests and productive timber lands (27 timber properties), crossed rivers and small family farms in Spartanburg, Laurens, Newberry and Greenwood Counties rather than following an existing natural gas pipeline path already in place.

The issue of “need” is a fundamental problem with the Federal Energy Regulatory Commission’s (FERC) pipeline permitting process. They simply don’t question it, and they have an immense amount of power. If a project receives FERC approval, the other permitting agencies mostly follow suit and the ability for the pipeline company to use eminent domain is essentially granted.  There must be a more thorough review process. Currently, FERC states that if there’s a customer, there must be need. They do not examine the relationships between the pipeline builder and the pipeline customers nor do they look at growth patterns.

With the help of the South Carolina Environmental Law Project, we fought the Dominion pipeline with every tool we had. FERC refused to share landowner information with us so we mapped the pipeline and determined those addresses ourselves. We contacted landowners impacted by the pipeline – folks who would lose the right to use their property through eminent domain – and helped them understand the process and their rights. We pressed DHEC to hold a public meeting (and DHEC willingly complied) but we had to provide notification addresses to DHEC (again – FERC won’t share that information, leaving landowners isolated and feeling powerless).

We hired experts and tried to convince DHEC to deny an important water quality permit, but in the end, the permit was issued. We were faced with a choice – whether or not to appeal the water quality certification and take the whole issue to court.

And then Westinghouse, the contractor hired to build the two nuclear reactors, filed for bankruptcy.  Until that time, it was assumed that the reactors would be completed, many years late and way over budget, but completed nonetheless. Once Westinghouse filed for bankruptcy, however, the cracks began to show.

The cost of delay

Upstate Forever calculated the cost to complete the VC Summer project – about $10/watt – and compared that to current costs for other forms of generation. A natural gas plant can be built for around $1-$2 per watt. Grid-scale solar can be built for about $2 per watt. The numbers simply didn’t add up. How could the powers that be possibly determine that completing the nuclear plants was in the best interest of South Carolina ratepayers?

No, we thought, the two utilities will come to their senses, abandon the nuclear project now, and replace any future needed base load with a smaller natural gas plant (and hopefully more solar). The existing capacity would not be freed up, and we had just lost our argument that the capacity provided by the pipeline was not needed. This was back in April.  

It took Santee Cooper and SCE&G three more months – at $30 million per week in continuing construction costs – to finally decide what has seemed obvious to us for awhile.

Impact to the Upstate

Here is how the situation, the debacle, the meltdown, affects us here in the Upstate. First – we must suffer the environmental damage and the assault on property rights caused by a pipeline that will serve Midlands and Lowcountry customers. We get no benefit.

Second – Duke Energy will need to decommission the Oconee Nuclear Station around 2030. It is not likely that the operating license for Oconee will be extended. Most of us are aware that Duke has received a license for a new nuclear facility, called the Lee Nuclear Station, in Cherokee County on the Broad River. That site is where Duke started to build a nuclear plant back in the 1980’s but abandoned it. It seems South Carolina now has a significant legacy of abandoning nuclear power plants. Someone should start a theme tour.

UF has been increasingly skeptical that Lee will actually be built. Now we’re positive it won’t be built. A tsunami of factors have begun piling up against that project, Fukushima pun not intended. But Fukushima does factor in. Nuclear construction costs and engineering safety requirements post-Fukushima have increased, neighboring North Carolina does not have a regulatory system that allows for recovery of costs before they have occurred (unlike South Carolina), fracked natural gas is insanely cheap, and now we know that the United States no longer has the technical expertise to build traditional nuclear power plants anymore. We are incapable of large-scale, complex infrastructure projects that aren’t roads.

In addition, growth in demand for electricity has stalled, thanks to increasing renewable energy availability and energy efficiency. Massive nuclear capacity simply isn’t justified or cost-effective. The V.C. Summer failure was the nail in the coffin. So Duke will  be looking at other options for base load replacement.

The good news

The situation has revealed the deep flaws in the state’s Base Load Review Act (BLRA) from 2007. The BLRA problems are exacerbated by a weak Public Service Commission (PSC) and an Office of Regulatory Staff (ORS) that operates under a conflicting mission – to represent the interests of both citizens and industry in matters before the commission.

There’s also an issue of accountability… or lack thereof. The PSC members are elected by the SC legislature after being nominated by the legislature’s own Public Utility Regulatory Committee (PURC). The head of ORS is appointed by the governor but only after being nominated by the PURC. The PURC is controlled by two people – the Speaker of the House and the Senate President Pro Tem. As such, these two bureaucracies that control virtually all energy decisions in the state are accountable to only two people rather than to the citizens of South Carolina.

This structure must change. Fortunately, Governor McMaster has called for hearings on the nuclear failure, but this isn’t enough. The entire system needs an overhaul, and now is the perfect time because the energy paradigm is currently shifting dramatically.

A sea change for SC

This shift is the other good news. Costs for utility-scale solar have fallen rapidly over the last few years. It’s running around $2 a watt – still a little more expensive than natural gas but there are no ongoing fuel costs that could become highly volatile. The sun is free, forever and ever and ever. And unlike nuclear, there are no decommissioning and spent fuel issues. We will need to address safe disposal of old solar panels, but that seems an easy problem to solve compared to spent nuclear fuel.

So the sun doesn’t shine 24/7? The battery storage technology has improved in efficiency and cost dramatically, thanks to a federal program called SunShot that has poured money into research. Storage is routinely being deployed on the grid now – sometimes with solar but also with traditional fuels in order to better manage peak load.

There are plenty of creative ways to to smooth out peak demand. For example, a Vermont utility is offering its residential customers a Tesla Powerwall battery for $1,500 – with or without solar – for just this reason. Smoothing out peak demand results in fewer expensive natural gas peaking plants.

I wonder how many residential batteries could be incentivized with the money spent on one peaking plant? Our regulatory structure in South Carolina doesn’t allow for this type of utility innovation – but it needs to, because Duke Energy is going to need to make some decisions about future capacity in the Upstate soon. We want them to have every possible clean energy option at their disposal. Given the pace of renewable and storage technological advancement, by 2030, it is now completely conceivable that new baseload will not need to be built at all. This is already being proposed in California and New York – nuclear baseload is being replaced by aggressive efficiency, renewables and storage programs. This option restores the carbon neutrality of the project in a way that natural gas simply cannot.

Our regulatory structure also doesn’t allow for significant utility investment in energy efficiency. Energy efficiency is definitely the low hanging fruit – the cheapest way to increase the amount of capacity available on the grid while also protecting low income residents from high power bills. There are many ways to encourage and pay for efficiency improvements – on bill financing, tax incentives, property assessed clean energy (PACE) programs, utility energy efficiency portfolio requirements – but our current structure doesn’t allow for most of these.

You can help

We have the opportunity right now to change this – to raise a phoenix out of this incredible nuclear dumpster fire.

Let our Upstate legislators know that this issue matters to US, too. Use this link to find your Upstate Senator and Representative. Tell them you want more accountability, more transparency, and more clean energy options for ALL of us in South Carolina.

You can also help by supporting Upstate Forever. We work tirelessly to protect our natural resources through conservation and advocacy. Please consider making a donation and join the fight to keep the Upstate green, vibrant, and prosperous.

Shelley Robbins is the Energy and State Policy Manager at Upstate Forever and can be reached at srobbins@upstateforever.org

Photo: NRCGOV / Flickr

 

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