Guest Editorial: Third Anniversary of Nuclear Debacle
Frank Knapp, Jr. - By July 31, 2017, as the head of the South Carolina Small Business Chamber of Commerce I had been a vocal critic of the SCE&G/Santee Cooper nuclear construction project in Fairfield County that was years behind schedule and billions over budget.
On that day three years ago, the two utilities officially abandoned their effort.
SCE&G, which owned 55% of the project, had raised its electric rates 18% over 9 years costing customers more than $2 billion just to pay for financing costs. SCE&G’s nuclear construction debt stood at $5 billion.
Santee Cooper customers had paid hundreds of millions of dollars for the utility’s 45% share of the construction project. The state agency’s nuclear debt was over $4 billion.
As I told a reporter on July 31, 2017, the Small Business Chamber wanted to claw back every penny customers had paid toward the nuclear project and not have ratepayers be responsible for any of the nuclear debt.
How much of what we asked for has come to pass?
A ratepayer’s class-action lawsuit in 2018 resulted in SCE&G customers eventually getting bill credits for the money they had already paid for the nuclear project.
In December of 2018, the Public Service Commission (PSC) ruled that Dominion Energy could buy SCANA (SCE&G’s parent company). The ruling also said that electric rates had to be lowered by 15% and ratepayers would not have to pay $2.7 billion of the total nuclear debt.
Ratepayers would still pay $2.3 billion of the nuclear debt and also have rates 3% higher for a failed project that will never produce one watt of electricity.
Since 2018 the legislature has been debating what to do with Santee Cooper, the state agency’s $4 billion nuclear debt and rate hikes that have its customers on the line for billions of dollars for the abandoned project.
Today, the legislature has yet to make a final decision about Santee Cooper’s future. It has entertained offers to buy or manage the utility and a proposal from Santee Cooper on how it could reform itself to address the financial mess.
Settlement of a ratepayer class-action lawsuit this month addressed the objective of clawing back $520 million customers had already paid for the nuclear project, while reducing rates by 8% starting next month.
The remaining nearly $4 billion of nuclear debt is still the responsibility of Santee Cooper customers to pay.
Unfortunately, the legislature failed to take an offer from NextEra Energy to buy the utility. That offer would have erased all the nuclear and other debt of Santee Cooper ($6.8 billion), reduced rates by 18%, recovered $540 million for customers’ past higher rates and put the utility under the oversight of the PSC.
On this third anniversary of the abandonment of the nuclear project, Dominion and Santee Cooper customers still have not been made whole.
There is no hope to do so for Dominion customers. But a new purchase offer for Santee Cooper still might get the job done for its customers.
Frank Knapp Jr. is the president and CEO of the South Carolina Small Business Chamber of Commerce