SCE&G Hearing Scheduled Today To Address Concerns
By RON AIKEN
In a twice-delayed third-quarter earnings statement published Tuesday without the approval of its auditors, Japanese electronics firm Toshiba announced $9.2 billion in losses related primarily to the financial collapse of its U.S. nuclear component Westinghouse Electric, which filed bankruptcy March 29.
As Quorum reported last week, Westinghouse’s bankruptcy was triggered directly by massive losses it incurred when it assumed control of two new nuclear reactor projects in Georgia (Plant Vogtle) and South Carolina (VC Summer), both of which involve the construction of two new nuclear reactors at each facility and both of which have been plagued by years of missed deadlines and billions in cost overruns — costs that have been directly passed along to SCE&G’s ratepayers to the tune of $1.4 billion and counting.
In an effort to address the issue, SCE&G has requested and been granted an ex parte communication — a meeting at which just one side (SCE&G) presents its case without being subject to cross examination — scheduled for today (Wednesday) from 2:30 to 4:30 p.m. at the Public Service Commission’s building at 101 Executive Center Dr., Suite 100.
Scheduled to attend are all seven PSC commissioners, PSC staff, the Office of Regulatory Staff Executive Director Dukes Scott and members of three public interest groups: the Savannah River Site Watch, Southern Alliance for Clear Energy and the South Carolina Chapter of the Sierra Club.
Toshiba’s statement confirmed the opinion of market analysts that the Westinghouse crisis has severely crippled, if not outright toppled, Toshiba’s short- and long-term financial stability.
“There are material events and conditions that raise the substantial doubt about the Company’s ability to continue as a going concern,” Toshiba wrote.
Because of the concerns raised by the accounting firm PricewaterhouseCoopers Aarata LLC, which was auditing Toshiba but said it could not sign off on the results because it did not believe the accounting for Westinghouse was accurate, Japanese Finance Minister Taro Aso issued a scathing indictment of Toshiba’s situation.
“The problem is it is not clear why the auditors did not sign off,” Aso said. “If you’re a shareholder or an investor, you’d look at Toshiba’s earnings and ask, ‘What is this?’ This could fuel speculation that Japan’s auditing standards are soft or that Toshiba has problems.”
Market analysts note that Toshiba’s losses have pushed its liabilities past the level of its assets, meaning recovery is unlikely, if not impossible.
In a dramatic attempt to stanch the bleeding, Toshiba has offered up for sale one of its most-profitable arms — the memory chip unit. One bidder, Taiwan’s Foxconn, already has Japanese regulators deeply concerned because of its close ties to China.
Toshiba also may sell Westinghouse, which continues to negotiate with the federal government in an effort to seek protection from its creditors — including SCE&G — through bankruptcy.
While potential outcomes of Toshiba’s problems could be its delisting from the Tokyo Stock Exchange, the potential outcome for SCE&G ratepayers is that should SCE&G and its parent company, SCANA, not be able to recoup sufficient losses from Westinghouse, it may lose the financial ability to fund either or both reactors to completion, a scenario that looks more likely now than it has in the project’s 10-plus year history.
Reach Aiken at (803) 200-8809. Email him at email@example.com, and follow him on Twitter @RonAiken and @QuorumColumbia.