A joint Resolution

 

TO ENCOURAGE SANTEE COOPER TO ISSUE A REQUEST FOR PROPOSAL TO SOLICIT PROPOSALS ON UTILIZING ASSETS ASSOCIATED WITH V.C. SUMMER UNITS 2 AND 3, AND FOR CONSIDERATIONS RELATED TO A REQUEST FOR PROPOSAL.

 

Whereas, in 2008, the South Carolina Public Service Authority (Santee Cooper) and the South Carolina Energy and Gas Company (SCE&G) applied for combined licenses for two AP1000 nuclear reactors, referred to as Units 2 and 3, to be built at the V.C. Summer Nuclear Station site in Fairfield County; and

 

Whereas, Santee Cooper and SCE&G began construction of Units 2 and 3, but the construction was abandoned in July 2017 and the combined licenses were subsequently terminated in July 2019; and

 

Whereas, in July 2019, there had not been an AP1000 nuclear unit constructed in the United States; however, in 2023 and 2024, two AP1000 nuclear units were completed and became operational at the Vogtle Electric Generation Plant in Georgia, and in addition, four AP1000 nuclear units have been completed and became operational in China; and

 

Whereas, the successful completion of these nuclear units in Georgia and China show that the AP1000 technology is capable of providing carbon-neutral baseload electricity on a large scale, and has effectuated proficiency in completing and operating a AP1000 unit and also established an experienced workforce with unique knowledge and skill set regarding this technology; and

 

Whereas, nuclear-generation technology of varying designs and capacities are currently in development, construction, and operation in the United States, and by way of example, the AP1000 is the only gigawatt-scale Generation III+ light water reactor currently constructed and operational in the United States, and the design has overcome the "first-of-a-kind" challenges that contributed to delays and issues with the V.C. Summer Units 2 and 3 projects and ultimately contributed to the decision by Santee Cooper and SCE&G to abandon the projects in July 2017; and

 

Whereas, the lessons learned from the completed construction of Vogtle Units 3 and 4, as well as the four AP1000 reactors in China, have led to significant design improvements, and the updated design minimizes the need for major changes, apart from site-specific adaptations, and to significant insights into cost and project management to deliver the project on time and on budget; and

 

Whereas, six additional AP1000 reactors are currently under construction in China and countries such as Poland, Ukraine, and a few in Eastern Europe are actively seeking to deploy AP1000s to meet their energy needs, demonstrating the design's maturity and the robustness of its supply chain, both of which were underdeveloped during the early stages of V.C. Summer; and

 

Whereas, on September 12, 2024, the chairman and another member of the South Carolina Governor's Nuclear Advisory Council (GNAC), along with Santee Cooper personnel, inspected V.C. Summer Units 2 and 3 to, as stated in GNAC's written report dated September 16, 2024, "observe the status of the site's assets and provide a high-level opinion on the condition of the project facilities and equipment," and the report concluded that:

(a) "There were no technical obstacles to a more detailed examination of the potential completion of the facilities … with Unit 2 at approximately 48% completion and Unit 3 with significantly less completion."

(b) "Overall, the site is in excellent condition with other than some overgrowth there is no apparent degradation of grade or access to facilities. The laydown areas for materials and large components are well established and, where necessary, cordoned off with signage. The general impression of the site condition is one of a shutdown of several months rather than the actual term of seven years since cancellation in 2017."

(c) "The condition of the various buildings and facilities shows no degradation, corrosion or spalling of concrete. All of the installed components show no corrosion other than surface rust which would be expected under a construction project in progress. The exposed rebar material, which is coated, also shows no serious defects and with normal rust management techniques could be ready for additional concrete lifts. The warehouses are well maintained and intact with sufficient systems of lighting and ventilation operational."

(d) "Both the installed components and those in storage are in excellent condition. There is an extensive inventory of materials, assemblies and electrical and instrumentation systems that is well maintained and inventoried in a series of warehouses."

(e) "Given the pending power shortage in SC, the push towards sustainable energy sources, the extensive lead time for starting new nuclear projects and the significant amount of value invested in the completed work and inventory at V.C. Summer, it is prudent to take a last look at whether the plant offers an opportunity to jump start the solution to our power needs."; and

 

Whereas, there are several federal incentives and programs (collectively, "federal incentives") administered by the United States Department of Energy (DOE) available for nuclear projects, workforce development and nuclear supply chain expansion, including without limitation, (a) the HALEU (high-assay low-enriched uranium) Availability Program, (b) the Coal-to-Nuclear Transition Program, (c) debt financing for large-scale energy projects, including nuclear reactors and supply chain; (d) Gateway for Accelerated Innovation in Nuclear Vouchers; (e) the Advanced Nuclear Production Tax Credit; and (f) Advanced Nuclear Energy Tax Credits; and

 

Whereas, the DOE is offering tax credit and grants of up to forty percent and loan guarantees of up to eighty percent for construction of nuclear power plants whose availability is time limited; and

 

Whereas, given the increasing demand for electricity driven by, among other things, the growth of the role played by data centers in commercial activities, and the availability of new federal incentives and increased private investment, hyperscalers are now actively exploring and pursuing innovative nuclear-power options to meet that demand without increasing carbon emissions including, without limitation, the following:

(a) In September 2024, a $1.52 billion loan through the DOE Loan Programs Office was announced to restart the decommissioned Palisades nuclear plant;

(b) In September 2024, plans to restart the Unit 1 reactor at Three Mile Island were announced with an accompanying announcement of a large industrial customer agreeing to a twenty-year agreement to supply energy from that unit to meet the power demands of that electric customer;

(c) In October 2024, a company that operates data centers announced it would back the construction of seven small nuclear-power reactors in the United States;

(d) In October 2024, a company that is a leader in advanced nuclear reactors and fuel technology announced a financing round of approximately $500 million;

(e) In December 2024, another company that operates data centers announced that it will release a request for proposals to identify nuclear energy developers to help meet its AI innovation and sustainability objectives, targeting 1 to 4 gigawatts of new nuclear generation capacity in the United States; and

 

Whereas, the customers of Santee Cooper, which includes its direct-serve customers and the electrical cooperatives throughout this State and their customers, and the customers of Dominion Energy South Carolina (Dominion Energy), which acquired SCE&G in 2019, are still paying for costs associated with the abandoned Units 2 and 3 at V.C. Summer; and

 

Whereas, the State must identify and explore all options on how to best utilize the assets associated with the abandoned Units 2 and 3 and maximize the recovery of costs for these units in order to minimize the financial impact on South Carolina's ratepayers; and

 

Whereas, the State is facing a crossroads in its electric generation future in that significant population growth and increased economic development in the State is increasing the demand for electricity at a time when the State's electric utilities are planning to retire their traditional coal baseload generation plants to transition to other generation resources, and the State encourages Santee Cooper to determine, through a request for proposals, whether completion of Unit 2 or 3, or both, or any nuclear-powered electric construction at the site of the abandoned Units 2 and 3, is part of a way to reconcile these two imperatives to the benefit of Santee Cooper's customers and the State as a whole; and

 

Whereas, the willingness of large energy off-takers to explore innovative ways of meeting their energy demands, the availability of new federal incentives to assist with the construction of nuclear projects, the successful completion of AP1000 nuclear reactors and the immediate availability of completed engineering drawings, and the reports of the condition of the assets on site at Units 2 and 3 suggest completion of one or both of those units may now be feasible, and a request for proposal would be a way to identify and assess sources of serious interest in the private sector to complete one or both of those units or to explore another solution; and

 

Whereas, Santee Cooper is the state agency with unique knowledge of V.C. Summer Units 2 and 3, has expertise in the electrical industry, and has a customer base, either direct or in-direct, throughout this State, is the state entity best-suited to request solutions for assets related to Units 2 and 3, and has the legal authority to issue a request for proposal for solutions for assets related to Units 2 and 3. Now therefore,

 

Be it enacted by the General Assembly of the State of South Carolina:

 

SECTION 1.  The members of the General Assembly encourage Santee Cooper to issue a request for proposal, as expeditiously as possible, to solicit proposals from entities interested in utilizing assets associated with V.C. Summer Units 2 and 3. Such a request for proposal may be conducted in a manner to allow interested parties to provide their respective ideas and proposals.

 

SECTION 2.  In order to have a meaningful request for proposal process, Santee Cooper is encouraged to take steps to make available fundamental information needed for an entity to make a proposal, including, but not limited to, the legal and equitable ownership interests in the associated real and personal property and any data vaults regarding the project; provided, however, that the costs associated with these steps do not affect Santee Cooper's customers' utility rates.

 

SECTION 3.  In evaluating responses, the members of the General Assembly encourage Santee Cooper to consider each bidder's proposal to complete construction of Units 2 or 3, or both, or any other proposal related to the assets associated with Units 2 and 3, and to consider the impact that the completion of the proposal could have on South Carolinians including, but not limited to, providing relief to the ratepayers.

 

SECTION 4.  In the event Santee Cooper wishes to pursue a proposal in a response to its request for proposal that involves any transfer of interest in real property by Santee Cooper, the proposal must first be approved, rejected, or modified by the Joint Bond Review Committee in accordance with Section 58-31-240.

 

SECTION 5.  This joint resolution takes effect upon approval by the Governor.

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