Shaw-Westinghouse Consortium Bags Second Nuclear Build Contract in Two Months

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Researched by Industrial Info Resources (Sugar Land, Texas)-- The Shaw Group (NYSE:SGR) (Baton Rouge, Louisiana) and Westinghouse (Monroeville, Pennsylvania), the so-called "AP 1000 consortium," have signed a second major engineering, procurement and construction (EPC) contract for a nuclear project in Jenkinsville, South Carolina. This project, the second in two months, could signal the beginning of a "nuclear renaissance" in terms of new building plans for the nuclear power industry after a prolonged pause of three decades. The contract consists of two 1,117-megawatt (MW) AP 1000 reactors to be built at the 935 MW VC Summer nuclear plant site in Jenkinsville.

A month ago, the consortium won a contract with Georgia Power Company (NYSE:GPW) (Atlanta, Georgia) to supply two AP 1000 additions to the Alvin W. Vogtle nuclear plant in Waynesboro, Georgia. The units will be designed and built in the U.S. For more information, view related May 23, 2008, article - Doosan Bags $288 Million U.S. Nuclear Plant Order.

The VC Summer contract was awarded by South Carolina Electric & Gas Company (SCE&G), the principal subsidiary of Scana Corporation (NYSE:SCG) (Columbia, South Carolina) and the South Carolina Public Service Authority (Santee Cooper) (Moncks Corner, South Carolina), a state-owned electrical power and water utility company. The two companies are joint owners of the VC Summer plant, which began commercial operation in 1984. An agreement covering the two new reactors will see SCE&G covering 55% of the cost and generating output and Santee Cooper covering the 45% balance.

SCE&G President Kevin Marsh said the EPC contract was designed to help minimize the cost of the new units. He said that a significant portion of the contract price was fixed, or fixed with agreed-upon inflation factors. Constructing the new units at the existing nuclear site would lower the cost and minimize the need for new transmission lines, he said.

Although detailed costs were not disclosed, the final total cost of the units is estimated at $9.8 billion, with SCE&G responsible for about $5.4 billion and Santee Cooper responsible for about $4.4 billion. Both companies will also carry some costs for transmission facilities and some project-financing costs.

The partners submitted an application for a combined construction and operating license to the Nuclear Regulatory Commission on March 31, 2008. This will be followed by a three- to four-year review process with approval and the issue of a license expected in 2011. With construction beginning in 2011-12, the first AP 1000 could go into commercial operation by 2016, with the second to follow in 2019.

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