Santee Cooper has scrapped its plans to raise electricity rates for its customers, hikes intended to bankroll an over-budget and now-abandoned nuclear expansion project in Fairfield County.
The unanimous decision by the state-owned utility’s board Friday means the 2 million S.C. residents who rely on Santee Cooper for power will be spared rate hikes for at least two years. The utility had planned to increase its rates by 3.9 percent in 2018 and 3.5 percent in 2019.
Santee Cooper officials Friday also defended their decision late last month to walk away from the construction of two new nuclear-power reactors at the V.C. Summer Nuclear Station in Fairfield County.
The utility would have had to raise its electricity rates 41 percent had it not given up on finishing the reactors, near Jenkinsville — “something that we know is not possible for the people that depend on us for power,” chief executive officer Lonnie Carter said.
No ‘credible offers’ to buy unfinished reactors
Directors of the state-owned utility convened for Friday’s special meeting with Santee Cooper in the middle of a political firestorm over the Jenkinsville project’s failure.
As state lawmakers scramble to investigate the fiasco, S.C. Gov. Henry McMaster is exploring selling Santee Cooper or its 45 percent stake in the multi-billion-dollar nuclear project.
Santee Cooper itself recently sent letters to roughly 50 entities that feasibly could buy some or all of its ownership stake in the unfinished reactors, spokeswoman Mollie Gore said.
However, Carter said, “To date, we haven’t received any credible offers to buy into completing our project.”
Carter objected to the idea that Santee Cooper itself should be sold.
“Any objective evaluation of selling Santee Cooper will demonstrate that that’s not in the interests of our customers, and I’m confident that the Legislature and the governor will reach that same conclusion,” he said.
‘Holding the line’ on rate hikes
Plagued by cost overruns and construction delays, the V.C. Summer project already has cost S.C. power customers roughly $2 billion in rate hikes – with more potentially on the way.
Santee Cooper’s board Friday pledged to hold town-hall meetings to explain to customers why the state-owned utility pulled out of the V.C. Summer expansion project.
Cayce-based SCE&G subsequently said it too would pull out of the project, blaming, in part, Santee Cooper for its decision. Investor-owned SCE&G said it needed a partner to complete at least one of the two Jenkinsville reactors.
Much of the power supplied to the state’s 20 electric cooperatives and their 2 million customers comes from Santee Cooper. Santee Cooper provides that power to the electric cooperatives, so any increase in Santee Cooper’s wholesale rates could affect cooperative customers.
However, Santee Cooper spokesperson Gore said the utility would “be holding the line with wholesale customers as well.”
“We intend to honor those agreements as they stand.”
Mike Couick – head of the Electric Cooperatives of South Carolina, which represents the state’s electric cooperatives – said Friday he was encouraged by Santee Cooper’s decision. But Couick wasn’t ready to endorse the utility’s action without further study. He said he needs to learn more about how Santee Cooper’s actions would affect cooperative members.
“It sounds like a step in the right direction, but when applied to wholesale customers, we need more specifics,’’ Couick said.
$540 million in rate hikes already
Santee Cooper leaders say they will re-evaluate the utility’s financial situation before making any further changes. Carter would not estimate how much rates could rise in the future to cover the cost of walking away from the nuclear expansion.
“I’m not going to make any speculation on our future financial plans until we can get through this evaluation process,” he said. “We know that it would be much less than what we were talking about before because we’re not finishing the units.”
Santee Cooper is not regulated by the state Public Service Commission, which must rule on rate-hike requests by investor-owned SCE&G. SCE&G, a subsidiary of SCANA, has said it intends to bill its customers for the cost of the unfinished reactors.
Santee Cooper already has raised its electricity rates five times since 2009 to help pay for the Jenkinsville reactors.
Those hikes have collected about $540 million from Santee Cooper customers, with much of the money going toward the nuclear project, Gore has said.