Westinghouse bankruptcy draws federal scrutiny as VC Summer nuclear project’s future remains unclear – Charleston Post Courier

A panel that reviews the national security implications of overseas entities doing business in the United States said it might investigate potential transactions in a bankruptcy that has put the $14 billion expansion of the V.C. Summer Nuclear Station project in doubt.

The federal Committee on Foreign Investment in the United States filed a letter late Monday with the U.S. bankruptcy court in New York stating that it could conduct an investigation into the possible sale of Westinghouse Electric Co. assets to foreign businesses. That investigation ultimately could be forwarded to President Donald Trump for further action, the letter states.

Westinghouse sought protection from creditors in March.

There are concerns that Chinese investors might make a play for the company's assets through the bankruptcy process, according to news reports. Westinghouse is a subsidiary of Japan-based Toshiba Corp., which has not announced any plans to sell its U.S. nuclear business.

Mollie Gore, spokeswoman for V.C. Summer co-owner Santee Cooper, said the state-owned utility would not be surprised by such a review, but it doesn't expect that to affect an ongoing analysis of the nuclear plant's future. A spokeswoman with SCANA Corp., parent of South Carolina Electric & Gas and the majority owner of V.C. Summer, did not respond to a request for comment.

Meanwhile, a report filed with the S.C. Office of Regulatory Staff says it could be months before Westinghouse makes a formal decision on whether to honor its contract with SCANA and Santee Cooper to add a pair of reactors at the Midlands nuclear plant. The two South Carolina utilities are paying to keep construction on track under an interim agreement that expires later this month.

Southern Co. has a similar arrangement at Plant Vogtle in Georgia, where Westinghouse was hired to build two reactors. That agreement expires Friday.

If Westinghouse rejects the V.C. Summer contract as part of its bankruptcy reorganization, SCE&G and Santee Cooper would have to find a replacement contractor or build the reactors themselves. The utilities could try to recover financial damages from Westinghouse in court, but that would be costly and time-consuming.

Santee Cooper's board of directors has called a special meeting to be held in closed session Wednesday to get legal advice related to the nuclear project.

Several V.C. Summer contractors and vendors have filed liens against Westinghouse with the bankruptcy court. The Office of Regulatory Staff said there is no timeline for when creditors will be paid because there is no current deadline for Westinghouse to file a reorganization plan.

Westinghouse recently filed thousands of pages of documents outlining its financial condition. They show an estimated $5 billion in assets and $618 million in known liabilities. Breaking the construction contracts at V.C. Summer and Vogtle could cost Westinghouse billions of dollars, according to a report in the Pittsburgh Post-Gazette. The newspaper said Fluor Corp. and Bechtel Corp., among the nation's largest engineering and construction firms, might be preparing bids to take over the projects.

The federal committee looking into a potential foreign buyer of Westinghouse assets said in its letter that an investigation could delay the bankruptcy case. Its investigations can take up to 75 days, according to the letter.

"If (the committee) determines that the transaction poses national security concerns that cannot be resolved, it will refer the transaction to the president unless the parties choose to abandon the transaction," the letter states. "The president may suspend or prohibit the transaction."

The president's decision would not be subject to judicial review, according to the letter.

The committee is an inter-governmental agency that includes representatives from U.S. Treasury, Homeland Security, the Attorney General's office, the departments of defense, commerce, energy and other agencies.

The nearly decade-long V.C. Summer project has been beset by financial and construction problems. The current cost estimate for the new reactors is 21.6 percent higher than an original $11.4 billion price. According to one projection, the eventual cost could balloon to $19 billion if both reactors are built.

The construction contract between Westinghouse and the South Carolina utilities was made public in late May. It sheds little light on the cost overruns, showing nearly three dozen change orders totaling about $325 million a fraction of the $2.6 billion in overruns since the project was announced in 2008.

Construction also is years behind schedule. The latest estimate puts the first reactor online in April 2020 and completion of the second unit delayed to December 2020. They have to be in service by the end of 2020 to qualify for federal tax credits that could offset about $2.2 billion of construction costs that utility customers have been paying.

Cayce-based SCANA owns 55 percent of the V.C. Summer project. Moncks Corner-based Santee Cooper owns the rest.

Under an agreement with Westinghouse, the utilities are expected to decide by June 26 whether to complete one or both reactors or abandon the project entirely. If the expansion is scrapped, some other type of power plant would have to be built to meet South Carolina's future electricity needs.

Reach David Wren at 843-937-5550 or on Twitter at @David_Wren_

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Westinghouse bankruptcy draws federal scrutiny as VC Summer nuclear project's future remains unclear - Charleston Post Courier