Santee Cooper’s largest customers can continue their lawsuit to stop the state-owned utility from charging customers for an unfinished nuclear power plant, a judge ruled.
Circuit Court Judge John Hayes on Wednesday dismissed Santee Cooper’s effort to throw out the lawsuit by South Carolina’s 20 electric co-ops, which buy two-thirds of the electricity produced by Santee Cooper and deliver it to 1.5 million South Carolinians.
If the co-ops ultimately are successful, their customers would be off the hook for continuing to pay 70 percent of Santee Cooper’s construction costs, including the state agency’s $4 billion in debt from the failed V.C. Summer nuclear expansion project.
A ruling in favor of the co-ops also could free the 177,000 customers that Santee Cooper serves directly from paying higher rates for the unfinished reactors. Now, those customers pay about $5 a month for the nuclear project. That rate is expected to rise another $8 a month.
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However, a ruling for the co-ops also could leave the 84-year-old utility with no way to pay off its $4 billion nuclear debt, triggering a Santee Cooper bankruptcy. Santee Cooper’s bondholders likely would suffer if that happened.
The co-ops’ case rests on the idea that Santee Cooper cannot legally charge its customers for a nuclear plant that never has produced power.
In his order Wednesday, Hayes rejected Santee Cooper’s contention that the law governing the state agency “favors bondholders over the citizenry.”
“That a government agency needs more reminding that it serves the people is a conclusion I cannot accept,” Hayes wrote.
Mike Couick, chief executive of the Electric Cooperatives of South Carolina, said the co-ops are delighted with the ruling.
“Santee Cooper’s motion to dismiss was an effort to remove those questions from the courtroom,” Couick said. “We appreciate the judge’s determination to give our members and the direct-serve customers (of Santee Cooper) their day in court.”
Santee Cooper spokeswoman Mollie Gore said the agency will continue to fully defend itself in court.
“We also have petitioned the S.C. Supreme Court for a decision on key issues related to this suit, and the court has not yet ruled on that petition,” she said. “We are very early in what is likely to be a lengthy proceeding, and so I’m not able to speculate about what-ifs.”