State-owned power utility Santee Cooper’s board voted Friday to jettison planned rate hikes the next two years after the failure of a nuclear project those increases were supposed to help fund.
The agency had proposed the 3.9 percent average increase in June, more than a month before the board voted to no longer fund further construction of two nuclear reactors in Fairfield County. The board’s decision led its partner South Carolina Electric and Gas to ultimately abandon the V.C. Summer Nuclear Generating Station expansion. Santee Cooper President and CEO Lonnie Carter said the agency needs to re-examine the proposed hikes now that nuclear construction expenses are no longer on the table.
“What we’re trying to look at is what, specifically, do we need to do based on what we know today,” Carter told reporters after the vote. “And we know that it would be much less than what we were talking about.”
Santee Cooper staff will try to come up with a new funding plan moving forward. Spokeswoman Mollie Gore said that plan will be presented to the board in October.
It’s unclear what sort of costs Santee Cooper could be facing in the future. The state agency had 45 percent ownership in the project and its partner SCE&G has already indicated it will need to spend $4.9 billion more to close the site and recover lost financing costs. A presentation by the Electric Cooperatives of SC showed Santee Cooper had spent roughly $4 billion on the project as of June. Santee Cooper largely funded its portion of the costs through bonds.
Carter said Santee Cooper will try to use some of the nearly $1 billion share of its settlement with lead design contractor Toshiba to offset those losses. However, that money hinges on the near-bankrupt Toshiba’s ability to pay. He said it would have cost 75 percent more than expected to finish work on both reactors, which he said would have required an eventual 41 percent rate increase on customers.
Gov. Henry McMaster has proposed selling off Santee Cooper’s share in the project as a last-ditch effort to restart work. However, Gore noted Santee Cooper had already attempted to find a partial buyer back while the project was still financially stable in 2011, but was unsuccessful.