NEWS BRIEFS: Nuclear fallout at Statehouse, a Q&A and impact of life sciences

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The Summer facility when it was under construction

Lawmakers establish Energy Caucus, call for special Aug. 23 meeting

In the wake of billions spent on nuclear reactors that will remain unfinished for the foreseeable future, South Carolina lawmakers this week established a bipartisan caucus, and others will reconvene for a special Senate committee meeting this month.

On Monday, Santee Cooper and South Carolina Electric & Gas (SCE&G) abandoned the over-budget V.C. Summer project that has already cost $9 billion. Some of that money was raised by SCE&G on the backs of ratepayers, enabled by a 2007 act by the General Assembly.

The new S.C. Energy Caucus said Wednesday it wants to ensure affordable energy options and correct problems with the state’s Public Service Commission and Office of Regulatory Staff. The bipartisan group met with former V.C. Summer plant workers in Columbia at the Statehouse.

“The public trust is gone,”said  S.C. Rep. Micah Caskey, R-Lexington. “It is absolutely gone … People need to be fired. This is not OK.”

Also on Wednesday, Sen. Thomas Alexander, R-Oconee, called a special meeting of the Public Utilities Review committee for 10:30 a.m. Aug. 23 at the Gressette building in Columbia. According to a press release from Sen. Luke Rankin, R-Horry, the meeting will “explore the circumstances” that led up to the abandoned nuclear reactors project.” Rankin, who also chairs the Senate Judiciary Committee, requested the committee meeting.

Meanwhile, the Georgia nuclear reactor under construction with Westinghouse, like the V.C. Summer’s reactors, has a new price tag of $25 billion.

— Lindsay Street, Statehouse correspondent

SIX QUESTIONS:  Santee Cooper on the failed nuclear project

With all of the legislative and consumer fallout this week after the announcement on the halt to construction of two nuclear reactors in Jenkinsville, Statehouse Report wanted to hear a little from Santee Cooper, the state-backed utility that was a 45 percent partner with SCE&G in the failed project. While the for-profit SCE&G has been in the news a lot with stories about how ratepayers will be paying for 60 years on the project, there hasn’t been much reported on what Santee Cooper’s customers and state taxpayers face from the failed project.  

Santee Cooper’s board of directors was first to decide to stop pursuing the $9 billion joint venture that was wildly over budget and behind schedule.  Santee Cooper spokesman Nicole Aiello responded  to five questions regarding the halted constructions of the nuclear reactors in Fairfield County.  

Statehouse Report: How much have Santee Cooper customers paid so far for the nuclear plants? It appears to be $4.7 billion. How has that money been paid — with bonds or by ratepayers or both?

Aiello: Santee Cooper has borrowed $3.8 billion on construction to date. With interest, that number is $4.7 billion. A majority of that has been financed through bonds. Through April 30, 2017, $540 million has collected from customers through rates.

ShR: How much does Santee Cooper owe for obligations related to the nuclear plants?

A: We currently have $4.4 billion in outstanding nuclear debt. That includes generation, initial fuel, transmission and capitalized interest.

ShR: What happens with the 45 percent of the $2.2 billion that Toshiba will pay back, as announced last week?  Will that be refunded to ratepayers or is that to be used in some other way.

A: Santee Cooper will use the $976 million share of the Toshiba guaranty settlement primarily to avoid new debt and stabilize rates, and so benefit customers.

ShR: For any existing obligations, who will pick up the bill? Santee Cooper customers or state taxpayers as a whole, or a mix?

A: Santee Cooper does not receive taxpayer money or any state revenue. Ultimately, customers pay our debt and we will be doing all we can to mitigate the impact to them. For example, we will pursue additional cost recovery through legal processes, including Westinghouse bankruptcy and other potential culpable parties.

ShR: What is the total amount spent and obligated for the project and how does that amount work out per Santee Cooper customer?

A: As far as per customer, that’s not applicable because much is financed and spread over the next 40 years.

ShR: How much will it cost to maintain the unfinished reactors? Will that bill be split between Santee Cooper and SCE&G?

A:  Santee Cooper is still studying how much it will cost to maintain the site.

Life sciences industry has $11.4B impact in South Carolina, study says

Pharmaceutical and biotechnology companies inject $11.4 billion into the state’s economy, according to a study released Wednesday.

The study was commissioned by the S.C. Research Authority (SCRA) and S.C. Biotechnology Industry Organization (SCBIO) in partnership with the S.C. Department of Commerce, and prepared by the University of South Carolina’s Darla Moore School of Business.

The study finds that the life sciences sector has experienced an average annual employment growth rate of approximately 1.7 percent in the Palmetto State since 2005. There currently are more than 15,000 employees and 400 firms in the life sciences field.

According to the study, the life sciences industry is associated with an employment multiplier of 2.9; meaning that, for every 10 jobs created within the industry, an additional 19 jobs are created elsewhere in the state.

Typically, these jobs are high-paying, the study showed. The average direct job in South Carolina’s life sciences industry pays an annual total compensation of $78,658, which is approximately 95 percent higher than the state’s average annual compensation across all jobs.

— Lindsay Street, Statehouse correspondent

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One Comment

  1. I’d like you to follow the money starting with which legislators wrote the initial legislation that attracted SCE&G to get involved with the project — I think it was called, “Base Load Review Act”. The following message is what prompted this suggestion to you. Best Wishes. Thanks.
    C. Holmes
    Clemson SC

    I read the following in a recent SC Progressive message:
    “In 2007, a bill was introduced in the SC state legislature to let SCE&G charge customers in advance for future nuclear electricity. Georgia followed suit a few years later. Building the nuke, referred to as construction work in progress (CWIP), had previously been a financial burden on the stockholders who stood to benefit from the investment. The South Carolina bill was championed by Rep. William Sandifer and Sen. Tommy Moore, the Democratic candidate for governor that year.

    At the time, Sandifer was a Task Force chair of the American Legislative Exchange Council (ALEC), a corporate lobbying group promoting state legislation to maximize corporate profits. The “Base Load Review Act” was titled as a consumer friendly law to “TO PROTECT SOUTH CAROLINA RATEPAYERS BY ENHANCING THE CERTAINTY OF INVESTMENTS IN THE INFRASTRUCTURE OF ELECTRIC UTILITIES.”

    The bill – written by utility lawyers and lobbyists – ensured that SCE&G would get a set percentage of return based on its investment. SCE&G is currently guaranteed a healthy 10.5 percent on top of what they spend, so the more they spend, the more they make. The bill also holds the power company harmless if they “abandon the project after a prudency determination” by the Public Service Commission. The bill was sent to the floor without a public hearing.

    In a perfect example of a done deal – and with rare expedience – the House introduced the bill on April 17, 2007, had a second reading on the 18th, and final reading on the 19th. The bill passed the House with a 104-6 vote, with progressive legislators voting in favor and only a small bipartisan group voting no.

    Sen. Moore drove the bill in the Senate, and received $74,750 from electric companies that year. He also got the maximum $7,000 contribution from the law firm SCE&G hired to “secure” the legislation. The bill passed the Senate with unanimous consent without a roll call vote.

    The lobbying frenzy to promote the 2007 bill is a case study in following the money. Sold as a way to save consumers from a big rate hike at the end of construction, SCE&G’s electricity bills now include nearly a 20 percent increase to pay for the boondoggle.”

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