This story was updated at 4:18 p.m. EDT.
House lawmakers today advanced legislation that would allow the developers of two financially struggling reactor projects in South Carolina and Georgia to cash in on expiring tax credits.
Members of the House Ways and Means Committee approved a bipartisan measure, H.R. 1551, by voice vote to amend the nation’s tax laws to allow new nuclear reactors put into service after 2021 to qualify for production tax credits worth hundreds of millions of dollars.
Senators from South Carolina and Georgia eager to see the nuclear projects survive are pushing sister legislation in the upper chamber, and President Trump has given lip service to supporting the industry alongside coal as it faces economic challenges (E&E Daily, June 14).
Before its passage, Republican Rep. Tom Rice of South Carolina, who co-sponsored the measure with Democratic Rep. Earl Blumenauer of Oregon, said H.R. 1551 is critical for regulators analyzing the ultimate cost of the reactors in his home state in coming weeks. "Passing this legislation is more important now than ever," he said.
While the utility sector is backing the bill, environmental groups and members like Rep. Lloyd Doggett (D-Texas) cast the measure as a "public subsidy," warning of nuclear accidents and suggesting that the government back renewables.
The tax incentives are poised to play a large hand in deciding the fate of two historic projects in Georgia and South Carolina.
The credits are seen as a possible financial and political buffer for both the companies incurring costs — and wanting to ticket the reactors as economical — and customers who may have to foot a large part of the bill.
On the hot seat in Georgia is Southern Co. subsidiary Georgia Power, which is analyzing the cost of completing its Vogtle reactors following the very public bankruptcy of its main contractor, Westinghouse Electric Co. LLC. And in South Carolina, Scana Corp.’s South Carolina Electric & Gas Co., which is building twin reactors at the V.C. Summer plant, is also contemplating how to handle rising costs and the effect on customers.
The possibility of missing PTC deadlines has long dogged the Vogtle developers, who stand to receive up to $800 million in federal PTCs, split evenly among the reactors, as long as they start operating before 2021. Georgia Power has said it’s unlikely that either Vogtle reactor will produce power by the end of 2020.
Jacob Hawkins, a spokesman for Georgia Power, confirmed the importance of the incentives following the bill’s passage in the House committee. "We look forward to it moving through the process as production tax credits were intended to support the development of new nuclear in this country and strengthen national security through energy independence and innovation," he said.
Southern CEO Tom Fanning has pushed the issue on and off Capitol Hill to "receive some flexibility" on PTC compliance dates, but declined to provide specifics. "I’ll leave names and conversations out," Fanning told E&E News after Southern’s annual meeting in May. "But while I was talking, a guy stopped me and said, ‘No, no, no, we’re in, we’re in.’"
The stakes are even higher in South Carolina, where executives from SCE&G have stressed that the tax incentives amount to more than $2 billion — a critical lifeline as the company analyzes the costs of completing two reactors at V.C. Summer, near Jenkinsville, S.C.
"It is prudent to protect the eligibility for credits even if the current deadlines are missed," Scana CEO Kevin Marsh told regulators at an April hearing in South Carolina.
SCE&G has been working closely with Rice and Sen. Tim Scott (R-S.C.) on their respective bills. The legislation was broadened to make it possible for public power companies such as Santee Cooper to take advantage of their potential share of the credits. Santee Cooper owns 45 percent of V.C. Summer.
Utilities pushing for legislative relief insist that the PTCs also represent a lifeline for customers of nuclear power and other reactor developers.
"Our ability to monetize these production tax credits is critical to our customers," said Mollie Gore, Santee Cooper’s spokeswoman. "They could be worth hundreds of millions to them in the same way that tax credits assigned to other owners will benefit their customers."