Up to 2 million S.C. residents who rely on Santee Cooper for electricity could face higher power bills, stemming from the state-owned utility’s failed partnership to build two nuclear reactors in Fairfield County.
“We will have to recover the costs associated with this project,” Santee Cooper chief executive Lonnie Carter told an S.C. House committee Tuesday. “We don’t have any shareholders,” who could shoulder those costs instead of customers.
Santee Cooper has about $4.3 billion left to pay for the now-abandoned project. A settlement with the parent company of the project’s contractor, Westinghouse, would knock close to $1 billion off that amount. But, ultimately, customers could be on the hook for the rest, Carter said.
Carter’s comments came as a House committee held its fourth hearing into the demise of a plan to expand the V.C. Summer Nuclear Station, adding two reactors.
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A federal grand jury, the S.C. attorney general’s office and the State Law Enforcement Division also are investigating the nuclear fiasco, which has cost S.C. power customers $2 billion already through 14 rate hikes.
The project’s majority owner, Cayce-based SCANA, long has said it will seek to charge its customers as much as $2.2 billion more to shut down the project and pay off debt associated with the abandoned reactors.
Carter suggested Tuesday that Santee Cooper could charge its customers even more.
The two utilities ignited a political firestorm July 31 when they said they had abandoned the project after spending $9 billion and weathering years of cost overruns and construction delays.
The project’s failure incensed the utilities’ power customers and S.C. lawmakers, who say they want to protect those ratepayers from paying any more toward the nuclear project.
The average SCE&G customer is paying about $27 a month for the two reactors, which now will not be completed.
“We cannot make the ratepayer whole,” state Rep. David Mack, D-Charleston, said Tuesday. “But we do want to stop the bleeding.”
Santee Cooper’s potential rate hikes are at least two years down the road.
In August, the Moncks Corner-based utility scrapped plans to raise its electricity rates by 3.9 percent in 2018 and 3.5 percent in 2019, saying it needed to re-evaluate its finances after walking away from the $9 billion nuclear project. That move ensures Santee Cooper will not raise its rates those years, the utility says.
Santee Cooper spokeswoman Mollie Gore said Tuesday the utility is working to limit what its customers are billed for the unfinished reactors. The utility is cutting its budget and will preserve the V.C. Summer site so it can be finished or sold years down the road, she said.
“Because the debt is structured over up to 40 years, that gives us a long time to pursue additional offsets,” she said.
Throughout Tuesday’s daylong hearing, Carter stressed Santee Cooper’s board has worked to curtail power bills.
But lawmakers were frustrated board members didn’t accompany Carter to the Columbia hearing. That left the 18-member House committee with only Carter – who announced in August that he is retiring – to question about the V.C. Summer debacle.
“They played a very integral role in this process,” state Rep. Russell Ott, D-Calhoun, said of Santee Cooper’s board members, appointed by the governor. “It is very disappointing that none of them chose to come when the invitation was extended to them.”
Carter said board members were unaware of the request that they testify.
For close to five hours, Carter fielded questions about Santee Cooper’s response to problems at the V.C. Summer site that led to the project’s demise. That response, he said, was hamstrung by the utility’s limited authority at the Fairfield County site. Santee Cooper owned 45 percent of the project. That left the project’s majority owner, SCANA, calling the shots, Carter said.
When Santee Cooper asked for permission to release the long-secret Bechtel report, which diagnosed critical problems at the site 18 months before the project was scuttled, SCANA refused, Carter said.
When Santee Cooper pushed to hire an outside manager to guide the project to completion, SCANA resisted, Carter said.
“Because SCANA was the majority owner and the agent, we had to go with whatever they decided,” he told legislators.
That did little to comfort the House panel.
State Rep. Bill Crosby, R-Charleston, wondered how a “good guy” like Carter could have let the debacle happen.
However, state Rep. Micah Caskey, R-Lexington, said he isn’t satisfied Santee Cooper pushed SCANA hard enough to fix the doomed project. “I didn’t hear anything today that indicated they had tried to do anything more than send emails.”