SCE&G should scrap the expansion of its V.C. Summer nuclear project before ratepayers are hit with higher monthly power bills from the investor-owned utility, a report released Tuesday says.
The 21-page report by Vermont Law School economist Mark Cooper blasted the project as unnecessary at a time when energy demand is down and renewable energy sources are an increasingly viable way to meet customer demands.
SCE&G’s project, being constructed jointly with state-owned Santee Cooper, has been most recently estimated to cost about $14 billion, but could rise above $20 billion, by some accounts. It already is at least $2.5 billion over budget and about three years behind schedule.
Cooper said power companies should cut their losses and walk away from an effort that he said was a mistake from the start. The V.C. Summer expansion project is about one-third complete.
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“Abandoning the project will save ratepayers and the state billions of dollars,’’ the study said.
Cooper, who has spoken against the project in the past, conducted the study on behalf of two environmental groups, Friends of the Earth and the state Sierra Club, which also oppose the nuclear reactors. Those groups want “reparations’’ for ratepayers, or requiring customers to reimburse some of the more than $1 billion they’ve already been charged for the effort.
SCE&G and Santee Cooper have said they would still like to finish the reactors, but only if they can afford it. The two utilities now are assessing whether to continue the work and expect to make a decision soon. Santee Cooper’s board has a special closed door meeting Wednesday to discuss the project’s future. The two utilities began assessing the project after the main contractor, Westinghouse Electric, filed for bankruptcy in March.
Part of economist Cooper’s report says ratepayers could see higher bills if the project moves ahead and costs skyrocket. By his estimates, SCE&G customers could wind up paying $100 per month of their utility bill, on average, for construction of the nuclear project. They now are now paying, on average, about $27 toward the nuclear project.
In a telephone news conference with reporters, Cooper said a $100-per-month cost would be a worst case scenario, based on estimates of the project rising past $20 billion.
“A $23 billion cost would lead to astronomical rate increases,’’ Cooper said.
State utility regulators had struck a deal with Westinghouse before its bankruptcy filing to contain some of the costs, but Sierra Club officials have questioned the agreement and the deal does not cover all costs.
The higher rates in Cooper’s report focus on SCE&G, which is an investor-owned utility, unlike Santee Cooper. Santee Cooper also has increased rates for customers, but has not said what percentage of its bills goes toward the construction project.
SCE&G did not respond to questions about higher utility rates to finance the nuclear project. But the company said in statement that it is aware of efforts by Friends of the Earth and the Sierra Club “to stop construction of the nuclear units while SCE&G and Santee Cooper are evaluating what actions are in the best interests of our customers and other stakeholders.’’
Cooper criticized state legislators for adopting a law that allowed SCE&G to charge costs of the project to ratepayers upfront, rather than after the fact, as is the typical way of financing such projects.
Cooper is a senior fellow for economic analysis at Vermont Law School’s energy and environment institute. He has a doctorate from Yale, published seven books and previously given testimony on the South Carolina project before the state Public Service Commission.