A new thinktank report estimates state-owned power utility Santee Cooper’s electric rates will go up significantly as a consequence of a failed nuclear project.
While the utility has kept rates the same since the V.C. Summer expansion project was shut down last year, the report from the conservative group Palmetto Promise Institute warned Tuesday that will likely change as nearly $7.5 billion in debt for the ill-fated nuclear project starts to come due. The report warns the amount customers are paying towards the project could double, causing rates to increase by at least 11 percent. That’s roughly $14 more per month for the average residential customer.
“Our economic research shows that future annual Santee Cooper utility bills will increase, anywhere from $166.99 per customer to upwards of $751.03, depending on demand elasticity for Santee Cooper electricity, the total debt and interest associated with the abandoned project, and Santee Cooper’s relationship with its largest customer,” the report speculates.
Santee Cooper disputes the report’s specifics, but admitted to news outlets in a statement that the utility will have to raise rates eventually. However, it maintains customers will pay 7 percent more rather than the higher figures cited by the institute. It was the first time the utility has given a dollar figure on the potential impact for customers.
The report also speculated Santee Cooper may need to be sold or declare bankruptcy to avoid financial disaster, noting its current margin of 6.6 percent is not enough to cover its massive losses and several lawsuits filed against it by the electric co-ops it serves. The researchers also recommend legislators and the governor establish a commission whose objective is to independently evaluate Santee Cooper’s assets and compare offers to buy the utility.