WILMINGTON, North Carolina (Reuters) - South Carolina regulators have unanimously approved a request by the state’s largest utility, South Carolina Electric & Gas (SCE&G), to join with a state-owned utility to build two nuclear reactors.
The South Carolina Public Service Commission vote on Wednesday gave South Carolina Electric & Gas the right to begin raising electricity rates next month to help pay for its portion of the $9.8 billion project.
SCE&G, a subsidiary of SCANA Corp, and Santee Cooper, known formally as the South Carolina Public Service Authority, plan to build the two reactors at the site of the V.C. Summer Nuclear Station near Jenkinsville, about 30 miles north of the state capitol, Columbia.
The commission approval also puts the SCE&G/Santee Cooper project ahead of the other 16 applications filed with the U.S. Nuclear Regulatory Commission for a combined construction and operating license (COL) for a nuclear power plant.
The NRC’s review of the COL applications is expected to take three to four years. It has been three decades since a nuclear power plant was built in the United States.
The South Carolina utilities have contracted Westinghouse Electric Co. -- owned by Japan’s Toshiba and Shaw Group -- to build the nuclear plant and expect to have the first reactor in operation by 2016.
SCE&G proposes financing its planned $5.4 billion investment in the new power plant by raising rates 0.49 percent in March and another 2.8 percent in October 2009, followed by increases in each of the next 10 years.
The first increase will be about 53 cents a month for SCE&G customers using 1,000 kilowatt hours of power per month, which now costs $107.60, according to SCE&G spokesman Robert Yanity.
As a state-owned utility, Santee Cooper does not need to seek Public Service Commission approval of its investment in the planned nuclear power plant.
The state utility has not decided how to include its project costs in the rates it charges to the state’s 20 electric cooperatives, spokeswoman Mollie Gore said.
She added the utility planned to pay for its $4.4 billion share in the project with available cash and borrowings.
Santee Cooper has no rate changes planned through 2010, Gore said, adding that this means the earliest the nuclear plant costs could be included in rates is 2011.
Editing by Pascal Fletcher and Jim Marshall