The last few days have been a whirlwind in South Carolina’s energy realm with the announcement that major utilities are abandoning the under-construction nuclear reactors at the V.C. Summer power plant. Here is a brief description of what’s been going on from SACE’s point of view. The background:
The V.C. Summer power plant in Jenkinsville, South Carolina is the site of two under-construction nuclear reactors. The reactors are owned jointly by South Carolina Electric & Gas parent company, SCANA, and state-owned utility Santee Cooper (55 percent and 45 percent ownership shares respectively). Each reactor is designed to be 1,100 megawatts (MW) in size for a total of 2,200 MW of overall capacity if complete. SCANA and SCE&G began the project in 2008 with estimated completion dates set at April 2016 for Unit 2 and January 2019 for Unit 3. From very early on in the project, Santee Cooper and SCE&G have been perpetually changing the completion dates and asking
for more and more rate hikes to pay for it. Altogether, the reactors are about 37 percent built, nine years into the project.
The project’s continued viability has been in doubt for years, however it came to a head earlier this year when lead contractor
Westinghouse filed for bankruptcy. In the aftermath of the announcement, SCANA and Santee Cooper began internal analyses to understand what the future of the project looked like.
Santee Cooper called a last-minute board meeting on Monday at which they revealed their internal analysis and the
figures they shared were very eye-opening: total project cost they pegged at $25 billion – up from an initial estimated $10 billion at the project outset substantial completion date for the project was estimated to be pushed out to November of 2024 – initially estimated at April 2017, meaning 7.5 years delayed additional rate increases of 41 percent would be required to finish the project After the presentation, Santee Cooper’s board voted unanimously to abandon both reactors and stop throwing good money after bad. SCE&G executives brief the SC Public Service Commission on plans to abandon the V.C. Summer construction project on August 1, 2017.
Meanwhile, as revealed in an ex parte briefing at the South Carolina Public Service Commission on Tuesday, SCE&G was planning on
continuing to build one reactor (at a cost of over $7 billion) and abandon the other. They would have moved forward with this plan except that when they heard from Santee Cooper’s board that they were pulling the plug, SCE&G decided it could not move forward on the project alone, so they announced full abandonment as well. What happens now: Santee Cooper and SCE&G are both seeking rate increases to pay for costs already incurred for project construction. SCE&G said on Tuesday that they will keep the option open of raising rates again in the years to come to pay for additional costs incurred after July 2017.
People are mad.
Governor McMaster is calling for legislative hearings to discover what went wrong with the whole process. A large bipartisan group of state legislators launched the South Carolina Energy Caucus to call for major energy regulation reform, including reform of the Public Service Commission and Office of Regulatory Staff; repeal or major reform of South Carolina’s construction work in progress (advanced cost recovery) law; and the institution of a new coherent state energy plan. There are calls as well for the SCANA shareholders to bear more of the costs instead of customers.
Meanwhile, some legislators, especially those from Fairfield County, where the project is located, are hoping for a bailout from the federal or state government to keep the project going and keep contractors employed. SCE&G, Santee Cooper, and Southern Company have tried to get a federal bailout from the White House to no avail. Friends of the Earth and Sierra Club have a petition filed with the Public Service Commission to get citizens’ complaints about the project and process onto the record.
What can you do?
No doubt, the energy realm in South Carolina is going to continue to be rocked in the weeks and months to come, but in the meantime, there are some discrete opportunities for citizens to engage. To begin with,
South Carolina citizens should . contact their state legislators and demand more accountability in energy regulation
Santee Cooper and electric co-op customers can attend the public hearings scheduled for Aug. 14-16 to comment on the proposed rate hike for Santee Cooper customers. If approved, the rate hikes would be about 9 percent over the next two years.
More specifically, proposed rates increases are: