NEWS: Lawmakers, nonprofits seek remedy for stalled nuclear construction

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By Lindsay Street, Statehouse correspondent  |  The construction of two nuclear towers at the V.C. Summer plant in Jenkinsville is continuing to shine a spotlight on a 2007 law that lawmakers and two nonprofits say enables unneeded or risky energy projects while consumers unfairly shoulder those costs.

Friends of the Earth and Sierra Club this week released a report, “Failure of the Nuclear Gamble in South Carolina,” which focused on their June 22 complaint to a state regulatory agency that the $14-billion project should be halted and ratepayers should be reimbursed.

The V.C. Summer plant expansion project is owned 55 percent by SCANA’s South Carolina Electric & Gas and 45 percent by state-owned utility Santee Cooper. SCE&G’s customers have been funding the project for years through rate hikes approved by the S.C. Public Works Commission (PWC) and allowed by the Base Load Review Act of 2007.

As of May, about one third of the project was reported completed — though SCE&G has said if you include “all aspects of the project” such as equipment and procurement, it is closer to 65 percent complete. Media reports have said nearly 20 percent of a SCE&G customer’s bill pays for the new reactors’ construction and those customers have seen nine electricity rate increases to pay for the project.

On Thursday, SCE&G responded to the environmental nonprofits’ complaint saying it denies that PWC can halt the ongoing project.  It filed a motion to dismiss, saying ending the project now would be “premature.”

The electric utility’s CEO has publicly said previously it may pull the plug on the project, an announcement that will come during the third quarter this year. Kevin Marsh publicly conceded in April the $14 billion project could be abandoned following the bankruptcy of the project’s top contractor, Westinghouse Electric Co. The project is about $3 billion over budget and $8.6 billion has already been spent. In Thursday’s response, SCE&G said the project expends $120 million every month.

Meanwhile, a bill is making its way through the House to prevent utilities from raising rates to pay for utility projects under construction.

Nonprofits question need for nuclear plant

Earlier this summer, Friends of the Earth and Sierra Club filed a complaint with the S.C. Public Service Commission, which regulates the utility and transportation companies in South Carolina.

The complaint requested the commission to initiate a hearing to determine “the prudence” of building the additional nuclear units at V.C. Summer, whether the project should be abandoned, and how the utility can make amends to customers who have experienced a nearly 20 percent increase to their bills to pay for the project.

During a July 18 teleconference on the nonprofits’ report, energy expert Mark Cooper said the nuclear project, if completed, would produce more electricity than would ever be needed in South Carolina or could be sold. Cooper is a senior fellow for economic analysis at Vermont Law School’s Institute for Energy and the Environment.

“It creates humongous amount of electricity … it creates massive excess capacity,” Cooper said. “It’s pure waste.”

Cooper said the project used the Base Load Review Act, which allows utilities to charge customers in advance of completed construction, and now has caused soaring energy costs.

Construction at the Summer site.

“They were given a special privilege to supply that cost on the bill,” Cooper said. He added that the same privilege should go toward ratepayers in the form of investing in decentralized, renewable power.

A briefing at the request of SCE&G is slated for 10 a.m. July 28. The hearing is scheduled for 10:30 a.m. Oct. 2 at the Public Service Commission’s hearing room in Columbia.

The fate of the reactors reportedly will be determined in September. SCANA and Santee Cooper arranged a temporary work agreement with Westinghouse Electric, and the utilities said in a joint statement June 27 that they would decide whether to bring the project to a close or continue with the build before Sept. 30.

Lawmakers seek to remedy soaring costs

Nowhere else in the nation do ratepayers pay more for power. That’s according to a recently released WalletHub study. SCE&G ratepayers pay nearly twice as much per kilowatt hour as Duke Carolinas ratepayers, the study said.  [Clarification, 7/23:  A previous version of this story made it unclear on how the state has high power costs. The state ranks 24th in overall energy ranking — which includes heating oil, natural gas, and vehicular fuel — but first in monthly electric cost.]

Finlay

In March, S.C. Rep. Kirkman Finlay, R-Richland, filed a bill that would revise the Base Load Review Act. H. 4022 came out of subcommittee before the recess, and will be heard in Labor, Commerce and Industry Committee when the legislature reconvenes in January.

“Nobody knows, at this point, what’s going to happen at V.C. Summer but I think it has become abundantly clear that the Base Load Review Act and the financing it allows is probably not a good idea to leave in place for future projects,” Finlay told Statehouse Report. “From their perspective there’s virtually no risk. I don’t know if it allows them to pursue risky behavior but if they understand that ratepayers are ultimately going to have to pay the price they don’t have to worry about as much as they would otherwise.”

Finlay said that when his bill was first introduced, those in the utility industry said it would never make it out of subcommittee. But now, he said he’s getting more co-sponsors as the V.C. Summer plant construction continues to encounter rising costs and the cost of power goes up. In April, before the session ended, four legislators added their names to the bill.

“As ratepayers realize the massive increases that are going to be required from them, there is going to be ever greater pressure on us to change that law that created this mess,” Finlay said. “The pressure is going to continue to ratchet up. Look, if it had been delivered on time and on budget, we wouldn’t be having these discussions. It’s a lack of performance and timeliness that is forcing us to reconsider it.”

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3 Comments

  1. What’s Santee Cooper’s stake in all this? Are only SCEG customers paying for this or are the state tax ayers or Coop customers on the hook also?

  2. Laura Morris says:

    https://wallethub.com/edu/energy-costs-by-state/4833/ According to this, SC does not have excessively high utility rates.

    • Andy Brack says:

      Thanks for the comment. See our clarification: A previous version of this story made it unclear on how the state has high power costs. The state ranks 24th in overall energy ranking — which includes heating oil, natural gas, and vehicular fuel — but first in monthly electric cost.

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