"It is important to understand that the Court's decision does not delay the actual construction of the new units. The Supreme Court's decision does not change the Commission's issuance of a Certificate of Environmental and Compatibility and Convenience, which is required to construct the new units."
– Edited By Tom Lamar –
SCANA subsidiary (NYSE:SCG) South Carolina Electric & Gas Company (SCE&G) received an opinion from the South Carolina Supreme Court reversing the decision of Public Service Commission of South Carolina to include cost contingencies and associated inflation as part of its anticipated components of capital costs under SCE&G’s Base Load Review Order for its new nuclear construction project.
“Contingencies are a normal part of major construction projects,” said SCE&G President Kevin Marsh. “Rather than having a pre-approved project contingency fund, this will simply require the company to go before the Commission for cost updates as previously designated contingency funds are to be used. This ruling may change the steps in the regulatory process but it should not change the outcome as long as the costs incurred are deemed prudent.”
The projected contingency fund was less than 10 percent of the total project budget. Of the pending revised rate request before the PSC, 99.5 percent is unaffected, as only about $270,000 out of $47.6 million revenue requirement is related to previously designated contingency dollars. All other portions of the Base Load Review Order remain intact and construction of the new units is continuing as planned.
Marsh added, “It is important to understand that the Court’s decision does not delay the actual construction of the new units. The Supreme Court’s decision does not change the Commission’s issuance of a Certificate of Environmental and Compatibility and Convenience, which is required to construct the new units.”