Washington (Platts)--30Mar2012/525 pm EDT/2125 GMT

The US Nuclear Regulatory Commission Friday approved licenses for South Carolina Electric & Gas and partner Santee Cooper to build and operate two new nuclear generating units at their Summer station.

The five-member commission voted 4-1 to approve the licenses, with Chairman Gregory Jaczko once again voting against the decision, saying he wanted a requirement that the companies implement a series of post-Fukushima safety requirements before being allowed to operate.

Jaczko disagreed with co-commissioners and said nuclear units should be required to act faster to adopt new requirements coming from a review of the lessons of the Fukushima nuclear accident in Japan.

Jaczko called the decision "another significant milestone" for the agency in comments after the vote. He said that while he voted against the licenses, commissioners were "getting closer in some areas where we've had disagreement."

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Commissioner Kristine Svinicki said following the vote she was "very confident" in the majority decision that the staff safety and environmental reviews of the SCE&G application were thorough and complete.

In their order on the matter, the majority ordered that SCE&G be required to improve the ability of the new Summer units to respond to external hazards like earthquakes and flooding using portable emergency equipment as a condition of the license. SCE&G will have to show it meets the requirements before it will be allowed to load nuclear fuel.

The commission also required NRC staff to issue an order requiring improved ability to measure the water level of spent fuel pools; the lack of such instrumentation at Fukushima caused confusion, the agency has said.

"We have in place well-established regulatory processes by which to impose any new requirements or other enhancements that may be needed," the order said.

Industry and agency sources have said staff could issue the licenses later Friday.

The receipt of the licenses will allow SCE&G to begin safety-related construction at the site in Jenkinsville, South Carolina, where preliminary work is already well underway.

There are 1,000 workers on the site now, and that number will rise to 3,000 at the peak of the three- to four-year-long construction effort, SCE&G and Santee Cooper said in a joint statement Friday.

The decision will be the second time this year NRC has approved combined construction permit-operating licenses for new nuclear plant construction.

In February, the agency issued COLs to a Southern Company subsidiary to build and run two new units at the Vogtle plant in eastern Georgia. Those licenses were the first construction authorization the agency issued for a power reactor since 1978.

Jaczko also voted against those licenses.

Southern Company began ramping up construction immediately after receiving its licenses February 10 and employment at the construction site is expected to peak at 3,500, officials have said.

The Summer station, where a single 1,006-MW reactor operates, will be expanded by adding two Westinghouse AP1000 units of 1,117 MW each. The first new unit would be complete in 2017, with the other finished in 2018, SCE&G said Thursday in a statement.

NRC is reviewing 10 additional applications for construction of 20 reactors, although only one of those applications has a contract in place for construction. That project, Progress Energy's proposed Levy County station in Florida, is unlikely to go into service until the 2020s, Progress has said.

NRC could complete the review of the Levy COLs this year, but it is unclear whether licenses would be issued in 2012, agency spokesman Scott Burnell said Friday.

The Summer and Vogtle projects are the the only ones likely to go forward in the US, said Tom Clements of the anti-nuclear Alliance for Nuclear Accountability.

"The much-touted nuclear renaissance has fizzled in the face of falling prices of natural gas, lower electricity demand and the impacts of the Fukushima nuclear disaster," the group said in a statement.

The only reason those projects are going forward is that Georgia and South Carolina allow utilities to collect some project costs from ratepayers before the generating units are complete, the Alliance said. Such regulatory systems are "unjust" to ratepayers, the statement said.

The future of nuclear plant construction beyond Vogtle and Summer is dependent on government support, including loan guarantees, production tax credits and early recovery of costs, a nuclear industry official said.

"The economics of new electricity production in this country have changed dramatically over the last five years," said Alex Flint, vice president of governmental affairs for the Nuclear Energy Institute during a Washington conference appearance Thursday.

Today, natural gas is the most attractive fuel source for utilities, and it is unclear what fuel source will be economically favored in five or ten years, he said. Government regulations about carbon emissions are difficult to predict, making fuel diversification important, he said.

The decision by NRC "is a clear affirmation that nuclear energy will continue to play an important role in the energy mix of this country, now and in the future," said Aris Candris, CEO of Westinghouse, in a statement.

--William Freebairn, william_freebairn@platts.com

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