A state-owned power utility is asking South Carolina’s highest court to rule on its ability to recover its nuclear-related debt through higher rates on customers.
Santee Cooper filed the request Monday, asking the state Supreme Court to “declare Santee Cooper is required by state law to set and collect rates sufficient to cover all of its expenses, including debt obligations.” The utility faces several lawsuits on its current rates, including one from its largest power purchaser Central Electric Power Cooperative.
“Credit rating agencies have already reacted to the pending circuit court litigation, citing the uncertainty (the lawsuit) creates,” Senior Vice President J. Michael Baxley said in a statement.
Central sued to prevent Santee Cooper from continuing to use power bills to recoup roughly $4 billion in debt. Central, which provides power to the state’s 20 electric cooperatives, argued its customers should not be forced to pay for the ill-fated V.C. Summer Nuclear station expansion since it will never receive any benefit from the work. It also called for Central’s members to receive part of the settlement Santee Cooper and its project partner SCE&G received from the lead contractor Westinghouse’s parent company.
Santee Cooper argues Central is contractually obligated to pay roughly $2.8 billion and already buys around 60% of the power produced. Central claims Santee Cooper breached the contract by not making a good faith effort to keep costs at the project from spiraling out of control.
“For decades, Central has enjoyed the benefits of low-cost electricity through a cost of service arrangement, and Central fully supported nuclear construction to lower its costs even further,” the utility said. “For Central to reverse position now puts other customers and the state of South Carolina at risk.”
The utility says the current situation requires the case be decided quickly.
While state regulators at the Public Safety Commission must approve the rates set by SCE&G, Santee Cooper is not regulated by the PSC. Instead its rates are approved by its board of directors.