SC regulators hold hearing on nuclear request

Bloomsberg Business Week: SC regulators hold hearing on nuclear request
South Carolina regulators heard testimony from the public Monday as they consider whether Duke Energy Corp. should continue to spend money to keep its nuclear options open.

Members of the Public Service Commission adjourned the hearing to review a proposed settlement among the company, regulators and several other parties in the case. The hearing will resume Tuesday morning.

The Charlotte, N.C.-based power company wants to continue spending money on the licensing process for a proposed site in Cherokee County even though the company has not yet decided to build another nuclear plant in South Carolina.

Duke Energy already operates five reactors at two sites in South Carolina -- the Catawba Nuclear Station in York County and the Oconee Nuclear Station in Oconee County.

The settlement reached by the company, the state Office of Regulatory Staff, the South Carolina Energy Users Committee and the Coastal Conservation League would reduce planned expenditures to $120 million from $229 million that the company initially requested.

The Public Service Commission is reviewing the settlement and will rule on the request later.

Office of Regulatory Staff executive director Dukes Scott said the request would have no immediate impact on rates.

Duke Energy spokesman Jason Walls said regulatory approval of the spending means that regulators think it is a good idea to keep its nuclear options open. It does not guarantee that the company will be able to recoup the costs in a rate case down the road.

Duke Energy also is seeking approval for the same expenditures from North Carolina utility regulators, who have recommended the same $120 million as a cap for spending from January 1, 2011, through June 30, 2012. About two-thirds of the cost would be allocated to Duke's North Carolina operations, according to filings with the North Carolina Utilities Commission.

Those filings also indicate that Duke's estimate for when it would need the power generated by the proposed Cherokee County plant has now moved to 2021 and beyond because of reduced power demand during the recession and uncertainty over how effective energy efficiency programs will be.

The one opponent to Duke Energy's request who has not signed on to the South Carolina settlement is Tom Clements, Southeastern nuclear campaign coordinator for Friends Of The Earth. Clements wants Duke and other utilities to pursue energy efficiency and conservation programs before they are allowed to build new nuclear generation plants.

South Carolina regulators have approved the construction of two nuclear reactors by South Carolina Electric & Gas and state-owned utility Santee Cooper. Because of declining electricity demand, Santee Cooper is selling off some of its portion of the new plant, which still needs approval from federal regulators.

In the proposed settlement with South Carolina regulators, Duke Energy agrees to negotiate with Santee Cooper and SCE&G about buying an interest in their reactors planned for Jenkinsville near Columbia rather than building its own plant.