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Westinghouse signs contract to build nuclear plants

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By Bonnie Pfister
Wednesday, May 28, 2008

Westinghouse Electric Co. said Tuesday it signed an engineering contract to build two nuclear plants in South Carolina, only the second such deal for new U.S. reactors in three decades.

Westinghouse and its partner The Shaw Group signed an engineering, procurement and construction contract with South Carolina Electric & Gas Co. and Santee Cooper to build two AP1000 reactors in Jenkinsville, S.C., said Westinghouse spokesman Vaughn Gilbert. The former company is a subsidiary of Scana Corp., while Santee Cooper is a state-owned electric and water utility .

The news comes as escalating costs for cement, copper and steel have cast a shadow over the so-called "nuclear renaissance" in the United States.

In March, SCE&G and Santee Cooper applied to the Nuclear Regulatory Commission for a license to build and operate the reactors -- two months after SCE&G said it was taking extra time to weigh rising construction costs.

"Our evaluation included coal, natural gas and other forms of generation, including renewables," Kevin Marsh, SCE&G president, said in a statement yesterday. "Bottom line, nuclear is the right choice for our customers."

Westinghouse CEO Steve Tritch said nuclear power is "now fully accepted as a cost-competitive, clean and highly safe source" of electricity. Officials declined to disclose the value of the contract, but estimated the cost to complete both units, included expected inflation, will be $9.8 billion. Construction is to begin around 2011, with completion in 2016.

In April, Monroeville-based Westinghouse signed a similar contract with Georgia Power. The last U.S. reactor was licensed in 1978 -- one year before a partial meltdown at the Three Mile Island nuclear power station near Harrisburg, as well as cost overruns on other plants -- put the brakes on nuclear energy in the United States.

Increased concerns over the environmental hazards of coal-burning power plants coupled with generous federal subsidies have revitalized the domestic industry, as have nuclear contracts in developing countries. Last year Westinghouse signed a $5.3 billion contract with China to build four reactors.

Westinghouse hired about 1,300 workers last year and will continue to add several hundred more each year for the foreseeable future, Gilbert said. The company employs more than 10,000 worldwide, including 4,000 in the region. It will move its headquarters to Cranberry next year.

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