South Carolina Electric & Gas Co. (SCE&G), unit of SCANA Corp. and Santee Cooper, South Carolina's state-owned electric and water utility, agreed for SCE&G to buy from Santee Cooper a 5 percent ownership interest in the two new nuclear units which are currently under construction at V.C. Summer Station in Jenkinsville, S.C.
The Santee Cooper board of directors approved the sale of 5 percent of V.C. Summer units 2 and 3 to SCE&G. Under the terms of the transaction, SCE&G will own 60 percent of the new nuclear units and Santee Cooper, 40 percent. Under the current ownership agreement, SCE&G owns 55 percent and Santee Cooper owns 45 percent.
The 5 percent ownership interest would be acquired in three stages, with one percent to be acquired at the commercial operation date of the first new nuclear power unit, which is anticipated to be in late 2017 or the first quarter of 2018, an additional two percent to be acquired no later than the first anniversary of such commercial operation date and the final two percent to be acquired no later than the second anniversary date of such commercial operation date.
The purchase price would be equal to Santee Cooper's actual cost of the percentage conveyed as of the date of the conveyance. Such cost is anticipated to be approximately $500 million for the entire 5 percent interest based on current project cost. The agreement also provides that Santee Cooper will not transfer any of its remaining ownership interest in the two new units until both units have been completed. The transaction is subject to customary closing conditions, including receipt of necessary regulatory approvals.
Santee Cooper has been exploring opportunities to reduce its ownership level since 2011, to better match the new units' capacity with business needs when the units come online and still provide generating diversity that takes into account regulatory and fuel cost considerations.