Report: Gov’t incentives favor nuclear over renewable energy in SC

sfretwell@thestate.comMarch 15, 2013 

— As SCE&G and other utilities work to complete atomic power plants, the law that made construction possible gives power companies less incentive to use solar, wind and other forms of alternative energy.

That’s one conclusion in a broad study that criticizes the way South Carolina, Georgia and Florida have helped utilities afford the multi-billion dollar costs of building nuclear power plants.

The report, released Thursday through the Vermont’ Law School, said ratepayers in the three Southern states are being soaked for the high costs of building atomic reactors. It recommends that the nuclear reactor projects be cancelled to save money in the long run because the projects are still years from completion and will cost billions more than originally projected.

SCE&G is spending $10 billion on two new reactors at Jenkinsville because of a special financing method allowed by the state Legislature six years ago. Already, the company has incurred more than $280 million in extra costs building the plants, the report said. The plants are expected to become operational in 2017 and 2018.

Historically, utilities have had to show that power plants are up and running properly before they could recover the costs for construction, Vermont researchers said. Now, laws adopted in South Carolina, Georgia and Florida have allowed utilities to charge ratepayers for nuclear power plants before the reactors are built.

That takes away most of the risk of building the nuclear plants – and that could affect the rise of alternative energy, including solar power, according to the study by Vermont Law School economic analyst Mark Cooper.

“With the utility focused on building its rate base with a huge new reactor project, management has little interest in aggressively developing, and may become hostile, to alternatives,” the 78-page report said. Cooper recently testified on behalf of environmental groups against SCE&G during a recent S.C. Public Service Commission case.

SCE&G spokesman Robert Yanity said alternative energy will never replace nuclear as a main source of power, but he also said the utility remains committed to using alternative sources. SCE&G has already helped the Boeing aircraft plant in Charleston County develop one of the largest rooftop solar arrays in the South, he said.

“It is going to take all pieces of the puzzle to get where we need to be,” said Yanity, who said he had not yet seen the Vermont study Thursday. “Nuclear is going to have its part. Solar is going to have its part, as well as wind and natural gas. I don’t see nuclear ever phasing out what solar could be.”

South Carolina, which produces a greater percentage of nuclear energy than most states, also has some of the most restrictive policies against solar energy in the country and routinely has scored low in national rankings of its willingness to embrace solar energy, The State newspaper reported last fall.

In the past, utilities have either opposed alternative energy legislation or stood by as bills died in the Legislature, the newspaper found. Power companies, whom critics say fear competition, spoke last month against a bill to make solar energy more affordable for consumers – and a House committee quickly derailed the bill.

While solar energy remains expensive for homeowners to install, the Vermont report said the costs of sun power are dropping, even as the costs of nuclear construction are rising – and that trend is expected to continue. But South Carolina is focused on nuclear, the report said.

“The cost trends clearly suggest that nuclear reactor construction is not only more costly than the alternatives today, but will be a great deal more costly than many more alternatives in the future,” according to the report.

The report said the only states that have moved forward aggressively on new nuclear projects are those with laws allowing the plants to be financed through ratepayers upfront, rather than traditional forms of financing.

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