The construction of two nuclear reactors in Fairfield County are so far behind schedule that developers could lose tax credits originally meant to encourage construction.
But a bill that passed the U.S. House of Representatives on Tuesday, would permanently extend almost $2 billion in tax credits to the developers of reactors in South Carolina and Georgia. South Carolina Electric & Gas and state-owned utility Santee Cooper are building two reactors at the V.C. Summer Nuclear Generating Station near Jenkinsville, but the project has fallen years behind schedule due to problems with construction modules and cost overruns.
The 2005 Energy Policy Act attempted to spur new nuclear projects by offering massive tax credits to help offset their construction. But the law requires those reactors be in operation by 2021 to qualify for the credit. The measure proposed by U.S. Rep. Tom Rice, R-SC, bill would extend that deadline indefinitely.
“Strict, placed-in-service date rules would force these plants to make decisions between finishing before a deadline or making sure they’re constructed in the safest way possible,” Rice said on the House floor Tuesday.
Rice’s bill would also allow the utility companies like Santee Cooper and SCE&G to monetize their tax credits and sell them to their development partners. Without this provision, the tax credits would never make it to the developers they meant to help, he said.
“Right now, not-for-profit entities like public utilities are unable to utilize or transfer their share of the credits, leaving the majority of the tax credits allocated to these two plants unusable,” Rice said.
The bill was introduced as Westinghouse, the lead contractor for V.C. Summer, heads into bankruptcy. The resulting delays to find a new contractor threaten the entire project, particularly since they push back the completion date beyond the 2021 deadline. SCE&G’s agreement with Westinghouse expires on June 26. The utility must decide by that date if it wants to continue funding the nuclear reactor project at all. The utility has said the tax credit availability could determine their decision.
“The full availability of the $2 billion in tax credits will be a key factor in the regulator’s assessment of whether to approve the plans to continue with the facilities or shut down the construction completely,” Rice said.
Support for the bill extended across the aisle to South Carolina’s lone Democratic congressman. U.S. Rep. Jim Clyburn, D-SC, advocated for the tax extensions if only to continue funding for energy sources outside of fossil fuels.
“When complete, they will be the largest addition of carbon free energy in either state,” he said. “And will replace older fossil fuel emitting plants.”
U.S. Rep. Mark Sanford, R-SC, also echoed the environmental pitch for the project. “There is a clear scientific consensus on the idea of increased CO2 emission being tied to this notion of global warming,” said Sanford. “Of the available choices out there I think that something that does address the CO2 question is awfully important and nuclear does.”
The bill passed the House with a voice vote and will move to the U.S. Senate for consideration.