Jul. 2--Trust funds to cover the costs of shutting down commercial nuclear reactor units in South Carolina appear in good condition despite the recent economic downturn.

The financial shape of the funds, which are invested, came to light last week when federal regulators reported the owners of 18 power plants are short of cash. None of those companies operates the seven reactor units in South Carolina.

"This is not a current safety issue, but the plants do have to prove to us they're setting aside money appropriately," said Tim McGinty of the Nuclear Regulatory Commission.

If there were any deficiencies in the S.C. plants' trust funds, the power companies said they have plenty of time to fix them.

That's because it will be 20 to 30 more years before a plant is South Carolina is scheduled to be decommissioned. Even then, the plant could either have its operating license extended another 20 years or simply mothballed for 60 years.

Given the economy's uncertainties and the fact that a nuclear plant could be in operation for decades longer, the projected decommissioning costs may not hold up, said Tom Clements, Southeastern nuclear campaign coordinator for Friends of the Earth.

"The further we go into the future, the more unreliable these numbers could become," Clements said. "It's really incumbent on the utilities and the NRC to keep the funds full."

Money for the trust funds comes from a portion of electric sales and is set aside by the utilities to be invested in an external trust, which is accounted for separately from the company's own resources.

Money needed for the trust fund is factored into electric rates, which are approved by states' public service commissions.

State regulators review the accounts when utilities apply for rate increases or seek an accounting order, said Randy Watts of the Office of Regulatory Staff.

The power companies, in turn, include the trust fund accounts in their annual reports and also file reports with federal regulators.

It will cost $451 million to shut down the V.C. Summer Nuclear Station at Jenkinsville, which is operated by Columbia-based South Carolina Electric & Gas Co. and state-operated Santee Cooper, according to the utilities' annual reports.

SCE&G, which owns two-thirds of the 966-megawatt plant, would be responsible for about $300 million of the decommissioning costs; Santee Cooper about $150 million.

In its 2008 annual report, Santee Cooper said it had already collected its share of the decommission costs and had stopped making deposits in the fund.

SCE&G, which puts aside 0.14 percent of its annual electric sales revenue for decommissioning costs, has about $81 million in the trust fund, said spokesman Robert Yanity.

While that's less than what its partner has socked away, SCE&G has "a long time horizon" to collect the funds it needs, Yanity noted.

The Summer plant, which went online in 1984, has a license to operate until 2034. The utility could mothball the reactor unit an additional 60 years.

The mothball process, called Safestor, requires radioactive fuel to be removed from the reactor and the spent fuel storage. The fuel then is stored in dry casks at the plant.

Charlotte-based Duke Energy, which operates seven reactor units in the Carolinas, has $1.4 billion in its decommissioning fund and collects about $48 million annually, said spokeswoman Rita Sipe.

Progress Energy, which operates four units in the Carolinas including one in Darlington County, had $651.5 million set aside as of March 30, said spokesman Mike Hughes.

The Raleigh-based energy provider also has $392.7 million set aside for its lone unit in Florida.

"The most important thing to know is that we are appropriately funded to ensure decommissioning as needed at the end of the plants' licensed operation," Hughes said.

Reach Crumbo at (803) 771-8503.

-----

To see more of The State, or to subscribe to the newspaper, go to http://www.thestate.com.

Copyright (c) 2009, The State, Columbia, S.C.

Distributed by McClatchy-Tribune Information Services.

For reprints, email tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.

NYSE:DUK,

A service of YellowBrix, Inc.