Santee Cooper Plans to Sell Unfinished Nuclear Reactors: What's Next?

In January, Santee Cooper, a South Carolina utility, took its first public step toward deciding the future of its two unfinished nuclear reactors at the Virgil C. Summer Nuclear Station — either completing construction or finding an "alternative use." The process could take years.

Citing an anticipated surge in electricity demand driven by "advanced manufacturing investments, AI-driven data center demand, and the tech industry's zero-carbon goals," Santee Cooper's CEO emphasized that Units 2 and 3 at VC Summer "could produce reliable, zero-carbon electricity in a shorter time frame than a new nuclear plant."

Rather than taking on the responsibility of completing the two 1,117-MW AP1000 reactors — which have been mothballed since July 2017 — Santee Cooper hired investment bank Centerview Partners to lead a solicitation for proposals from parties interested in acquiring the project. The proposal deadline is May 5.

Experts told Utility Dive that it remains uncertain whether the solicitation process will yield a viable completion plan. If it does, and assuming a thorough on-site audit is completed, the new units could be built and operational within five to eight years.

What happened at VC Summer — and who might take over?

Santee Cooper and co-owner South Carolina Electric & Gas (SCE&G) began construction on VC Summer Units 2 and 3 in 2013. Four years later, after spending $9 billion, the parties agreed to terminate the project due to slower-than-expected progress, escalating cost estimates, and the bankruptcy of primary contractor Westinghouse.

The episode led to the dismissal of the entire South Carolina Public Service Commission and nearly collapsed SCANA, SCE&G's parent company, which was acquired by Dominion Energy in 2019. Two SCANA executives and two Westinghouse executives later faced criminal charges for falsifying company records related to the project and lying to federal investigators.

The U.S. Nuclear Regulatory Commission approved the co-owners' request to terminate their combined operating license in 2019.

Although South Carolina ratepayers are still paying for construction costs incurred in the 2010s, policymakers' interest in completing the project has grown as the state's population and manufacturing sector boom. In his January State of the State address, Republican Governor Henry McMaster mentioned proposed reforms to accelerate new natural gas and nuclear power development in the state and said the project could "lead the nation's nuclear renaissance."

"Restarting these two reactors would not only help meet the state's future electricity needs, but would also... spur investment and construction of new nuclear power nationwide," he said.

According to a member of the state nuclear advisory council who toured the site last year, the abandoned construction site is "actually in pretty good shape." Santee Cooper CEO Jimmy Staton told state lawmakers in January that the utility had sent seven confidentiality agreements to companies interested in the project.

Serious solicitation responses could come from groups led by "financial-type organizations" or large companies that are "willing to put significant money upfront to restart construction," said Eugene Grecheck, president of Grecheck Consulting and former president of the American Nuclear Society.

But given VC Summer's history of problems, a bilateral power purchase agreement like the 20-year deal between Microsoft and Constellation Energy involving the restart of 835 MW at the Crane Clean Energy Center is unlikely, said Julian Edwards, chief development officer at The Nuclear Company. The company aims to deploy 6 GW of new nuclear capacity over the next decade, and Edwards described The Nuclear Company as a "bystander" in the VC Summer solicitation process.

"I don't see a world where ratepayers and large local industrial users don't benefit," Edwards said. She noted that high-electricity-consuming manufacturers like steelmaker Nucor have a long-standing and growing presence in the Carolinas.

Possible operating models

The pool of potential license holders and eventual operators is smaller and could include large utilities with nuclear plant operating experience in the region — such as Duke Energy, Dominion Energy, and Southern Company, Edwards said.

Dominion Energy operates and owns two-thirds of VC Summer Unit 1. But Grecheck said Dominion is currently "not contractually or legally involved in whatever might happen with Units 2 and 3."

Future owners of the unfinished units might adopt an operating model similar to the Nuclear Management Company. That company, formed around 2000 by a consortium of five utilities to operate six nuclear plants in the upper Midwest, has since been dissolved. Grecheck said NMC operated those plants on a "cash-for-services" basis but did not own the facilities or their output, thereby reducing financial risk.

In any case, Grecheck said, an ownership group and license holder would need to take on significant risk to bring the VC Summer project to completion, or find "creative ways" to mitigate risk. "Federal financing or loan guarantees would make this more acceptable," he said.

The U.S. Department of Energy is expected to realign its priorities to focus on reliable energy resources such as natural gas, geothermal, and nuclear, experts said, but the DOE's Loan Programs Office — which has tens of billions of dollars in authorized but unspent funds — has remained effectively silent since the final week of the Biden administration. The DOE did not respond to a request for comment.

What would it take to complete VC Summer Units 2 and 3?

Regardless of federal financing, the state nuclear advisory council's November report that the site is in better condition than expected "was a very important step," boosting public confidence in the project's viability, said Craig Stofer, senior project manager for the Electric Power Research Institute's Advanced Nuclear Technology program.

Although the condition is unclear, the fact that workers completed the switchyard serving the new units before abandoning the project could also be a positive factor, Stofer said. However, any potential owner would need to conduct a more thorough inspection of the site, equipment, and associated quality assurance documents to determine how much remediation is needed, he added.

Such inspections could bring unexpected bad news, Grecheck said. He cited the decades-long saga of the Tennessee Valley Authority's unfinished Bellefonte nuclear plant. That approximately 2,500-MW facility in Alabama was abandoned in 1988, with its two units estimated to be 90% and 58% complete, respectively. But after "subsequent asset recovery activities and more recent inspections of remaining equipment," TVA lowered its completion estimates to 55% and 35% in 2009.

TVA sold the Bellefonte site in 2016 to a group led by a local real estate developer with intentions to complete construction, but that group walked away from the deal two years later and withdrew its construction permit in 2021, potentially shelving the project permanently.

Determining equipment condition after a long hiatus is difficult, especially without comprehensive maintenance records, Grecheck said. This contrasts sharply with the "known quantities" involved in restart efforts at prematurely retired reactors such as Palisades, Duane Arnold, and Three Mile Island, all of which operated reliably for decades.

In some respects, the portions of the project that have not yet begun may carry lower risk, said Kate Fowler, global nuclear leader for Marsh's Global Specialties Energy and Power practice. "In that case, you're just bringing in new equipment, and the challenge is the supply chain. But new equipment might be easier to manage than proving existing equipment can be restarted."

From an insurance perspective, the VC Summer project "might not look much different from an ordinary construction process," although any insurer would want to conduct its own very thorough due diligence, Fowler said.

TVA's completion of Watts Bar Unit 2 in 2016 — after a 22-year hiatus from 1985 to 2007, plus design modifications in the early 2010s following the Fukushima Daiichi accident in Japan — demonstrates that, contrary to Bellefonte, successfully resuming construction of a mothballed fission plant in the U.S. is possible, Fowler said.

Still, it won't be quick or easy. Until more information about the site's condition is released, none of the experts interviewed by Utility Dive would speculate on the cost of completing VC Summer Units 2 and 3. As for project duration, Grecheck said it could be done in five years or less, assuming a competent project management team efficiently pursues licensing, workforce development, and procurement in parallel, while Stofer predicted seven to eight years. Edwards and Fowler declined to estimate a completion date.

"I encourage all participants... to base decisions on facts after thorough review," Edwards said.

All agreed that the VC Summer project would benefit from lessons learned at Georgia Power's nearby Vogtle plant, where thousands of workers — many of whom still live in the area — just finished building the first two operating AP1000 reactors in the U.S.

"When you compare a project like this, with so many parts essentially complete, it does look faster than starting from scratch," Stofer said.