THE SC LEGISLATURE spent nearly a year trying to craft a response to the collapse of a nuclear construction project that collapsed $9 billion and 10 years in. But before that, lawmakers took actions for 13 years to encourage SCE&G parent company SCANA and state-owned Santee Cooper to build a new generation of nuclear reactors that would provide our state with a steady, reliable source of power for a burgeoning economy.
Not only did the assumption that we needed to go heavy into new nuclear turn out to be wrong, but in retrospect, decisions by all parties seem at best ill-advised and at worst … well, time will tell what at worst could mean.
The result is that $11 billion was spent (more than $2 billion by ratepayers, $9 billion by SCE&G and Santee Cooper, which will have to recoup those costs from … someone) on what are now essentially two giant mounds of concrete at the VC Summer nuclear facility in Fairfield County.
The following timeline, which I am updating periodically, traces this slow-motion disaster from a pro-utilities law the Legislature passed in 2004 to today.
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Feb. 12, 2004: SC General Assembly passes S.208, creating the Office of Regulatory Staff to replace the state consumer advocate in representing the interests of the public in utility rate cases before the Public Service Commission. The office is required to balance the interest of ratepayers against the “preservation of the financial integrity of the state’s public utilities.”
May 25, 2005: SC General Assembly overrides governor’s veto of S.573, which makes it nearly impossible for governors to remove members of the Santee Cooper governing board.
April 19, 2007: SC General Assembly passes S.431, the Base Load Review Act, which makes it easier for utilities to raise rates to pay for nuclear reactors while they are under construction and easier to charge ratepayers for their investments in plants they don’t complete. The bill becomes law on May 3 without Gov. Mark Sanford’s signature.
May 27, 2008: SCE&G and Santee Cooper announce plans for $9.8 billion nuclear expansion project at the VC Summer plant in Fairfield County. SCE&G would pay $5.4 billion for construction, Santee Cooper $4.4 billion.
May 30, 2008: SCE&G asks the Public Service Commission to approve the first of multiple rate increases to help fund the nuclear project. (Because Santee Cooper is a state agency, the PSC does not have to approve its plans.)
Oct. 27, 2008: The Office of Regulatory Staff recommends approval of the nuclear project, saying SCE&G showed a need for extra capacity, the AP 1000 reactor design was a good one and more nuclear would allow for stable fuel costs.
October 2008: The Public Service Commission gives permission for SCE&G to begin site work.
February 2009: PSC approves SCE&G’s nuclear expansion plan, which calls for construction to begin in 2012, fuel to be loaded into the first reactor in 2015, the first reactor to begin operation in 2016 and the second reactor to begin operation in 2019.
Dec. 31, 2011: SCE&G reports that progress has been delayed because of the need to redesign nuclear modules, as well as “production issues’’ and “manpower issues.”
March 30, 2012: US Nuclear Regulatory Commission issues construction and operating licenses for the two reactors.
June 6, 2013: SCE&G warns of delays of up to a year because of problems with parts being built in Louisiana. It says completion of the first reactor could be delayed until late 2017 or early 2018.
May 2014: Santee Cooper asks SCE&G to hire an outside company to oversee project management.
Oct. 2, 2014: Contractors say it will cost $1.2 billion more than expected to complete the rectors.
Oct. 22, 2014: SC Supreme Court rejects a legal challenge to the SC Base Load Review Act.
October 2015: SCE&G replaces the original consortium of contractors with Westinghouse Electric, which agrees to cap at $7.7 billion the remaining cost of construction. Any remaining costs would be Westinghouse’s responsibility.
October 2015: SCE&G and Santee Cooper revise completion dates to 2019 and 2020.
Feb. 5, 2016: The Bechtel Report, commissioned by SCANA and Santee Cooper, details failures by prime contractor Toshiba/Westinghouse as well as the utilities’ insufficient oversight of the project.
June 14, 2016: SCE&G asks the PSC to approve an $852 million increase in construction costs. SCE&G says that fixes the reactors’ cost in place. A later settlement agreement with contesting parties reduces the increase to $831 million.
June 28, 2016: SCE&G asks for its ninth rate increase under the Baseload Review Act. A residential bill for 1,000 kilowatts would cost $148 per month, up from $107 in 2009.
Nov. 9, 2016: Public Service Commission approves settlement agreement among SCE&G, Office of Regulatory Staff and other parties, while approving a fixed price on the project and the later completion dates. Agreement says SCE&G’s total cost would be fixed at $7.7 billion.
March 29, 2017: Westinghouse files for bankruptcy. SCE&G, Santee Cooper and Westinghouse reach agreement that allows construction to continue while the power companies assess the project’s future.
April 2017: Westinghouse parent Toshiba says it is in financial trouble as a result of its nuclear business. SCE&G says in legal filing that “there is no assurance that Toshiba will fulfill its payment guaranty obligations.”
July 31, 2017: Santee Cooper and SCE&G announce they are abandoning work on the nuclear project. The following day, SCE&G files an abandonment petition, which asks the PSC to let it charge ratepayers for up to $4.9 billion it has spent on the project.
Aug. 9, 2017: Office of Regulatory Staff files a motion to dismiss SCE&G’s abandonment petition.
Aug. 11, 2017: Santee Cooper board votes to scrap already-approved rate increases for 2018 and 2019.
Aug. 15, 2017: SCE&G withdraws its abandonment petition but makes clear this is only to give legislators and regulators longer to study the situation, and that it will refile the petition later.
Aug. 22, 2017: Special SC Senate committee holds its first hearing on the failure of the nuclear project.
Aug. 23, 2107: Special SC House committee holds its first hearing on the failure of the nuclear project. House Speaker Jay Lucas calls on Regulatory Staff Director Dukes Scott to resign; Gov. Henry McMaster says he will not accept a resignation from Mr. Scott.
Aug. 25, 2017: Santee Cooper CEO Lonnie Carter announces his retirement.
Sept. 4, 2017: Santee Cooper gives Gov Henry McMaster a copy of the secret 2016 Bechtel report, commissioned by the two utilities, that details their insufficient oversight of the project.
Sept. 21, 2017: SCANA announces that it has received subpoenas from the US Attorney’s Office for documents related to the project; Santee Cooper confirms that it has also received subpoenas.
Sept. 26, 2017: SLED confirms it has opened an investigation.
Sept. 26, 2017: SC attorney general’s opinion calls Base Load Review Act “constitutionally suspect” and says the Legislature could modify the act retroactively to reduce the amount of money SCANA can recover from ratepayers and possibly even force refunds.
Sept. 26, 2017: Office of Regulatory Staff files a petition asking that SCANA be forced to immediately stop charging customers for the project.
Oct 25, 2017: Senators learn that SCANA has left much of the unfinished VC Summer project to crumble, as part of its strategy to show the Internal Revenue Service it has abandoned the plant and deserves a $2 billion tax write-off.
Oct. 31, 2017: SCANA announces that CEO Kevin Marsh and Senior VP Stephen Byrne are retiring effective Jan. 1 and names CFO Jimmy Addison as new CEO.
Nov 16, 2017: SCANA proposes to cut SCE&G electric rates by 3.5 percent, saving average customers more than $5 a month, and reduce from 60 to 50 the number of years it wants to keep charging customers for the nuclear project. Lawmakers react coolly.
Dec 8, 2017: Gov McMaster gives Santee Cooper Board Chairman Leighton Lord until Dec. 18 to resign or be removed.
Dec 15, 2017: Dukes Scott announces he is retiring Jan. 15 as director of the Office of Regulatory Staff.
Dec 29, 2017: Leighton Lord resigns as Santee Cooper board chairman.
Jan 3, 2018: Dominion Energy announces it will purchase SCANA Corp, give SCE&G customers refunds averaging $1,000, cut rates by 5 percent, or about $7 per month. and reduce the 20 the number of years it wants to keep charging customers for the nuclear project. Lawmakers react coolly.
Jan 19, 2018: Office of Regulatory Staff issues a report saying SCANA is unlikely to go bankrupt if it is forced to stop collecting nuclear surcharge. It does not address what would happen if regulators do not allow the utility to collect some sort of nuclear payments in the future.
Jan 23, 2018: Gov McMaster announces he will veto any legislation that allows SCE&G to continue collecting any nuclear surcharge.
Jan 31, 2018: SC House passes legislation to temporarily eliminate SCE&G’s $37 million-per-month nuclear surcharge.
Feb 20, 2018: SC Senate passes legislation requiring PSC to delay any decision on SCANA’s abandonment petition until December.
Feb 23, 2018: Santee Cooper agrees to spend $19 million annually to preserve the abandoned nuclear reactors, parts and equipment.
May 10, 2018: SC Senate passes legislation to temporarily reduce SCE&G’s $37 million-per-month nuclear surcharge to $32 million per month; Legislature adjourns without reaching agreement on competing House and Senate bills, but agrees to come back in June to try again.
June 27, 2018: Legislature passes H.4375 and S.954, which delay a decision on the Dominion petition until Dec. 21, temporarily slash SCE&G’s nuclear surcharge from $37 million to $30 million per month until then and make it more difficult to keep the surcharge in place after that.
June 28, 2018: SCANA reduces its second quarter dividend by 80 percent — enough on an annualized basis to make up for the Legislature’s temporary rate cut.
June 28, 2018: Gov. McMaster vetoes H.4375; House and Senate immediately override the veto, 110-1 in the House and 39-0 in the Senate.
July 2, 2018: Public Service Commission votes unanimously, without debate, to temporarily slash SCE&G’s nuclear surcharge, as directed by the Legislature.
July 2, 2018: SCE&G files suit in federal court seeking to overturn laws passed the previous week.
Aug. 6, 2018: U.S. District Judge Michelle Childs denies SCE&G’s request for a preliminary injunction.
Aug. 7, 2018: Legislatively ordered 15 percent rate cut and refund for April-July charges begins appearing on SCE&G bills.
Here are some other pieces I’ve written about this that you might find helpful:
Ms. Scoppe writes editorials and columns for The State. Reach her at email@example.com or (803) 771-8571 or follow her on Twitter or like her on Facebook @CindiScoppe.