Santee Cooper plans to slash its budget after nuclear fiasco

The state’s publicly owned utility is looking to slash its next three annual budgets by a total of $120 million in the aftermath of its aborted nuclear project in Fairfield County.

Santee Cooper leaders say those savings – plus $895 million from a settlement over the project’s failure — could help prevent customers’ power bills from increasing.

Meanwhile, the utility Friday named an interim chief executive, agreeing to pay Jim Brogdon, its former in-house counsel, a $375,757-a-year salary to replace embattled CEO Lonnie Carter, who is retiring.

Holding down electricity bills is a priority as Santee Cooper seeks to placate furious state leaders and customers. Both have fumed since July 31, when the utility and its partner, Cayce-based SCANA, pulled the plug on a nine-year, $9 billion effort to build two new nuclear reactors at the V.C. Summer Nuclear Station.

The Moncks Corner-based utility’s customers have been hit by five rate hikes already to pay for the now-abandoned reactors. Those customers are on the hook for at least $3.4 billion more to pay off debt associated with the project.

State lawmakers have pushed Santee Cooper to some how lower that $3.4 billion figure.

Meanwhile, S.C. Gov. Henry McMaster has worked since August to negotiate a deal that would give customers their money back by selling some or all of the state-owned company.

“The board is committed to working with staff to find additional savings,” Santee Cooper board chairman Leighton Lord said. “We want to look at everything. ... Our goal is to maintain rates as low as possible while maintaining our reliability.”

Outgoing CEO Carter told lawmakers earlier this week that he could not estimate how high rates ultimately would have to rise to pay off the nuclear project’s debt.

At a board meeting Friday, Santee Cooper unveiled a proposal to cut its annual budget by about $40 million – or 4 percent – for each of the next three years.

The utility offered key specifics about where it would cut costs.

While it does not expect layoffs, Santee Cooper will save some of the money by not replacing about 150 employees expected to retire by next June, spokeswoman Mollie Gore said. That represents about 8.6 percent of Santee Cooper’s 1,750 workers.

“We have been challenged to cut our budget as much as we can across the company,” she said.

Meanwhile, Brogdon told reporters he would begin meeting with employees Monday to “assure them that Santee Cooper is a great place to work.”

“My hope is that I’ll be able to put them at ease, at least about what we’re to do,” he said.

Santee Cooper’s board did not vote on the cost-cutting proposal. It will decide on next year’s budget, including the the first year of cuts, in December.

The board also discussed spending a $895 million settlement from Toshiba — the parent company of the project’s bankrupt lead contractor, Westinghouse — to keep customers’ power bills from increasing in the next few years.

Under the current plan, about two-thirds of that settlement would be used to pay down Santee Cooper’s $8 billion in debt. About half of that debt is tied to the nuclear project.

The rest of the settlement would go toward reducing how much the utility must borrow in the future.

This story was originally published October 13, 2017 at 10:58 AM with the headline "Santee Cooper plans to slash its budget after nuclear fiasco."