Utility made failed plea for billion-dollar nuclear grant
Top executives at the company behind two financially struggling nuclear reactors, which were halted earlier this week, tried but failed to get a federal grant totaling at least $1 billion and as much as $3 billion from the Trump administration, Axios has learned.
Why it matters: The plea from SCANA Corp., the utility behind the pair of failed reactors in South Carolina, offers a glimpse into the behind-the-scenes deliberations occurring between the Trump administration, which has spoken positively of nuclear power, and the industry facing mounting economic challenges. This was the most explicit opportunity the Trump administration had to show that its rhetoric would translate into action. It opted not to, largely because of the steep price tag.
- The deliberations were revealed in a transcript newly released from a hearing earlier this week in which company executives testified front of the South Carolina Public Service Commission.
- SCANA Corp. CEO Kevin Marsh said the Energy Department offered them a loan guarantee, but he said they needed not a loan but a grant of $1 billion to cover them in case its costs rose over the fixed price it had set with the commission. "We pursued that as hard as we could," Marsh said. "And we got no response."
But there's more: An Energy Department official Thursday said when SCANA officials were discussing the grant with the department in July, the request was for up to $3 billion to build the reactors. A request for comment to SCANA was not immediately returned.
"The Department of Energy did work with representatives of the [South Carolina] project to discuss potential paths forward with regards to the project's financial situation," said Energy Department spokeswoman Shaylyn Hynes. "A loan guarantee was a potential option for the company to consider which they ultimately chose not to pursue."
Some context: $1 to $3 billion is a hefty price tag for a grant, a type of federal aid that isn't typically paid back like a loan. Barack Obama gave out a lot of grants as part of the 2009 stimulus law but of much smaller size. For example, he gave $2.4 billion in grants for 48 separate electric vehicle projects. The scale and cost of nuclear power is much bigger than most other energy technologies, as evidenced by the $8.3 billion loan guarantee Obama gave another pair of struggling reactors in Georgia, backed by Southern Company.
What's next: The Energy Department official I spoke with indicated the outcome could be different with the Georgia reactors, given the existing loan guarantee relationship. "We have a fiduciary responsibility," the official said. "So any changes to the loan have to go through a process."
The big picture: The fate of Southern's two reactors are much greater than themselves. They are the only new ones under construction in the U.S. in some 30 years. Trump's decision to not help SCANA with its reactors dealt a blow to the industry, and what the Energy Department decides to do with Southern's reactors will be, at the risk of overstating it, a make or break it moment for the industry for the foreseeable future.