Troubled SCE&G nuclear plant could mean higher bills for rural co-op customers

Rural electric customers, including about 100,000 in the Columbia area, potentially face higher power bills during the next eight years to pay for a troubled nuclear expansion project in Fairfield County.

Wholesale power costs for the state’s electric cooperatives may rise by as much as 14 percent by 2025, which could, in turn, affect how much the co-ops’ customers pay each month for power, records show.

Roughly 3.5 percent of the wholesale increase would help pay the costs of SCE&G and Santee Cooper’s $14 billion nuclear expansion project, a spokesman for the Electric Cooperatives of South Carolina said this week. The co-ops group declined to break down the other costs.

The possible increase was contained in a document outlined at an electric cooperatives meeting earlier this month in Charleston County. Environmentalists obtained a copy of the report and released it on the Internet last week.

Lou Green, a spokesman for the Electric Cooperatives of South Carolina, said the projected wholesale power increase is preliminary and likely to change. It’s also up to cooperatives to decide if they will pass higher wholesale rates to consumers, Green said.

“These are discussion points more than a statement of fact,’’ Green said of increases outlined in the PowerPoint document presented at the Charleston County meeting.

But while Green said a 3.5 percent increase for nuclear is modest considering the hike is spread out over multiple years, anti-nuclear activists questioned whether the increase would be that low — and others said any increase in rates is noteworthy.

Bob Paulling, chief executive at Mid-Carolina Electric Cooperative in Lexington County, said higher wholesale power rates ultimately could affect rural ratepayers.

“Wholesale power costs are between 68 and 70 percent of our operating expenses that we have to pass along’’ to customers, Paulling said. “Any increase in our wholesale power costs affects us directly.’’

Electric cooperatives are non-profit, member-run organizations that serve many of the state’s rural areas. They buy energy – much of it produced by Santee Cooper – wholesale from Central Electric Power Cooperative, a go-between organization that deals directly with cooperatives.

Many customers of rural electric cooperatives live in poorly insulated mobile homes, sometimes in poverty stricken areas. The lack of insulation often means power bills are higher than in homes built of bricks and wood because so much energy escapes through thin walls. Higher power bills make the impact more painful to people who live in such homes, critics said.

Statewide, South Carolina has 20 electric cooperatives, including Mid-Carolina, Tri-County and Fairfield Electric in the Columbia area. The three collectively serve about 100,000 people. Other cooperatives are in rural areas just outside of metropolitan Columbia.

Bob Guild, a Sierra Club lawyer leading the charge against the nuclear plant expansion, said electric cooperatives should carefully examine whether they want to continue relying on power from Santee Cooper – if it means paying higher rates for the new nuclear plants. Guild said cooperatives should examine getting more power from other sources, such as Duke Energy.

“I would just urge co-op board members and co-op members to insist on their leadership protecting their interests and not the interests of Santee Cooper and SCE&G,’’ Guild said. Guild and Tom Clements, with the Friends of the Earth environmental group, said wholesale rate increases are likely to be higher than 3.5 percent, given the amount SCE&G customers had to pay to finance the nuclear project.

So far, SCE&G has hit customers with nine rate increases to pay for the project. That has raised about $1.4 billion. About 18 percent of SCE&G customers’ power bills go to finance the project.

The nuclear project will add two reactors at SCE&G’s V.C. Summer power station to complement the existing reactor onsite. But the project is years behind schedule and approaching $3 billion over budget. Contractor overruns and problems receiving equipment for the work are blamed for the higher costs and delays. Construction on the expansion project is about one-third complete, with costs projected to rise.

SCE&G and Santee Cooper face a Monday deadline to complete a study on whether to continue the Fairfield nuclear project, abandon it or scale it back to just one new reactor.

Despite concerns, Tri-County Electric President Heath Hill said he favors continuing to pursue the Fairfield nuclear project, even though it is expensive.

He’s not happy about the escalating costs, but said building the plants will provide a stable source of power for decades to come. If not, volatility in the natural gas market could one day hurt customers, even though gas is an abundant and stable source of energy now, he said.

“That was very mismanaged,” Hill said of the project. “But if you mothball it or do just one plant, the poor people are never going to recoup anything. It wouldn’t take but one little hiccup with this gas market and you’d be way yonder worse off.’’