SCANA studies options,nuclear expansion too costly

HOUSTON, Jan 25 (Reuters) - SCANA Corp's (SCG.N: Quote, Profile, Research, Stock Buzz) South Carolina Electric & Gas utility is stepping back from plans to pursue a new nuclear reactor as costs skyrocket, a spokesman said on Friday.

The Columbia, South Carolina-based utility planned to file an application with nuclear regulators last year but delayed that action while it studies costs of alternate generation options, said spokesman Robert Yanity.

With material and construction costs rising for all major infrastructure projects, including power plants, "we have to think about our customers," Yanity said. "We are still supportive of nuclear, but we need to make sure it is the right option."

In late 2005, SCE&G, along with Santee Cooper, a state utility, notified the U.S. Nuclear Regulatory Commission that they intended to seek a license to build and operate two new reactors at the site of the 966-megawatt V.C. Summer nuclear station in Fairfield County, about 25 miles northwest of Columbia.

SCE&G and Santee Coopers are joint owners of the Summer plant which began commercial operation in 1984.

Utility officials are studying alternatives such as new natural gas-fired generation or purchased-power options to meet the need for additional generation before committing to pursuit of a costly regulatory filing, he said.

Because no new reactors have been built in the U.S. in nearly three decades, new projects face a variety of obstacles, including rising costs for materials and a lack of skilled labor and project management talent, consultants said.

"We hope the next couple of months will give us direction," Yanity said.

If SCE&G decides to move forward to expand its nuclear capacity, it will file an application this year to take advantage of federal incentives for new reactors allowed under the Energy Policy Act of 2005, Yanity said.