Santee Cooper will be awash in excess power if SC nuke project is completed

If construction crews finish two nuclear reactors north of Columbia, state-owned Santee Cooper will have far more energy capacity than it needs to supply its 2 million customers for years to come, records show.

The company will have reserve capacity as high as 44 percent — about three times the amount the utility’s own records indicate is necessary to supply power in times of crisis, according to a 2016 Santee Cooper report filed with the state Energy Office. SCE&G, Santee Cooper’s senior partner on the nuclear project, also will have excess reserve margins for several years but the amount is less than the state utility and it levels off more quickly, records show.

Santee Cooper’s reserves are eye-popping to nuclear project opponents, who say excess capacity is another reason to scrap the over-budget and behind-schedule atomic plant expansion northwest of Columbia.

Already, Santee Cooper has hit ratepayers with five increases to help pay for the project. SCE&G has levied nine increases. Critics say more could be on the way if the V.C. Summer reactor project isn’t stopped. The power companies are deciding whether to continue the project and could make a decision as early as next month.

“With a large reserve capacity predicted, I do think that underscores that the reactors are not needed,’’ said Columbia’s Tom Clements, an adviser with Friends of the Earth, a national environmental group. Utilities “are presented with the dilemma of what to do with a huge influx of electricity that is not needed.’’

Excess capacity, or the reserve margin, is kind of like a savings account. It is the amount of capacity power companies have to provide energy beyond their expected maximum peak, or the time each summer or winter when people are using the most energy.

Santee Cooper typically needs reserve margins of 12 to 15 percent. But if the units are built and reserves rise up to 44 percent as forecast, Santee Cooper will use the large reserve capacity to recruit industry and to reduce its reliance on coal-fired power plants, the company said. The company also will sell 5 percent of its capacity in the project to SCE&G if the reactors are finished, spokeswoman Mollie Gore said.

Friends of the Earth and the Sierra Club say the reserves are far more than Santee Cooper needs. The groups released a report Tuesday that said the V.C. Summer project will create “massive excess capacity.’’ Both groups want the project scrapped before they say costs escalate further and ratepayers are hit with more electricity bill increases.

At issue is a nuclear expansion once touted as a way to meet future energy needs, but the project is in jeopardy. The chief contractor for SCE&G and Santee Cooper, Westinghouse, filed for bankruptcy in March, causing the utilities to reassess the effort.

SCE&G and Santee Cooper officials have said they’d still like to finish the reactors, but won’t do so if the costs are too great. A recent national report by the public interest group WalletHub says South Carolina, overall, has the highest monthly electricity costs in the nation.

Still, the utilities contend that there is a long-term need for some type of large energy plant because more power will one day be needed, even if that’s not the case now.

SCE&G and Santee Cooper face an Aug. 10 deadline to complete studies on the reactor project. For now, work is continuing on the reactors in Fairfield County. The utilities are expected to decide by mid-fall, if not sooner, whether they think it’s worthwhile to finish the $14 billion project. Some projections show the cost could soar to $23 billion. The Santee Cooper board met in private Wednesday to discuss the project.

Dukes Scott, who directs the S.C. Office of Regulatory Staff, said it’s likely that both companies are examining the amount of excess capacity that would be created by the new reactors as they work to complete their reports. His agency oversees rate hikes by SCE&G but not Santee Cooper because it is a state-owned utility.

“Common sense would tell you that if you are at a point where you had to make a decision, those types of issues would be there,’’ Scott said.

According to an energy plans report Santee Cooper puts together annually, the company currently has reserve capacity of 19 to 24 percent. But the company says it usually needs reserves of no more than 12 to 15 percent. If the Summer project is completed, the percentage of reserve capacity will soar to 44 percent in the summer of 2021 and remain above 30 percent at times until 2028, according to the report.

In contrast, SCE&G’s reserves are about 16 percent today and would rise to 27 percent in 2021, after the reactors would be built. But those reserves would begin to drop substantially after that and would be at 14.2 percent by 2030, according to SCE&G’s energy plans report. SCE&G did not answer questions about its future reserve margins.

A consulting company working for the Southern Environmental Law Center found similar trends in an analysis it is working on about the need for the plants.

Matt Cox, chief executive at the consulting group Greenlink, said his still-unfinished analysis also shows that Santee Cooper would have substantial amounts of excess capacity if the nuclear plants are not built.

But Gore, the Santee Cooper spokeswoman, provided data Wednesday showing Santee Cooper’s summer reserve margins would dip substantially below the 12 to 15 percent it prefers if the project is not built.

Why Santee Cooper would have higher excess capacity than SCE&G if the plants are built was not clear. But Gore said some excess capacity results from Santee Cooper’s decision to give up part of its customer base to Duke Energy in recent years.

That, plus slow growth and the loss of demand from a major industrial customer, contributed to the excess capacity, Gore said. Gore declined to say if the company is examining excess capacity as part of its evaluation. SCE&G also declined to discuss its evaluation.

Jim Warren, director of the environmental group N.C. Warn, said the excess reserves associated with the V.C. Summer project aren’t surprising. Utilities across the South have for years hit ratepayers with increases to pay for new power plants, only to find later that they had too much capacity, he said.

The V.C. Summer project is the latest example of the trend, he said.

“We certainly have a sense of concern for the people of South Carolina,’’ Warren said. “Based on where I sit and these factors, I’d say it would be in the public interest to cut their losses and cancel the project.’’

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