By Jessica Holdman
SCDailyGazette.com
COLUMBIA — As South Carolina utilities Dominion Energy and Santee Cooper weigh a new natural gas power plant, their customers are still paying for a pair of nuclear reactors that were never built.
Dominion Energy’s roughly 800,000 customers in South Carolina still have about 15 more years to pay on the abandoned project.
For homes powered by Dominion, the utility provider for South Carolinians from the Lowcountry through the Midlands, the boondoggle accounts for 5.6% of their monthly electricity bill. That amounts to just over $8 a month for the average residential customer, according to documents from the state utilities watchdog.
The fee, which isn’t shown on monthly bills, pays off $2.3 billion worth of debt for the abandoned expansion of the V.C. Summer Nuclear Station in Fairfield County.
Santee Cooper’s share of the debt was $3.6 billion. About 5% of its customers’ power bills goes toward paying that off, according to estimates reported in 2020 when rates were frozen as part of a legal settlement. Santee Cooper did not respond to messages by phone or email from the S.C. Daily Gazette.
That fee for the state-owned utility’s 2 million customers — including those in Berkeley, Georgetown and Horry counties served directly and those served by power cooperatives that buy power from Santee Cooper’s plants — will continue through at least 2032.
The debt’s origins go back 17 years.
Santee Cooper and Dominion’s predecessor, South Carolina Electric & Gas, asked state lawmakers to pass the now-notorious Base Load Review Act. The legislation blessed plans to build two first-of-their-kind nuclear reactors alongside a unit in Fairfield County and allowed power companies to bill customers for the project upfront.
Construction started four years later, in early 2013. But the project was riddled with delays, cost overruns and fraud.
The utilities abandoned the plant’s expansion in 2017, but not before spending $9 billion.
It was the failed nuclear project that brought Virginia-headquartered Dominion Energy to South Carolina after SCANA, SCE&G’s parent company, spiraled into bankruptcy. Dominion Energy bought what was the only Fortune 500 company based in South Carolina.
As part of that buyout deal — approved by utility regulators at the end of 2018 — Dominion Energy agreed to knock down what customers would ultimately owe, or roughly $22 less per month than what customers had been paying.
Rate freeze expiring
At the same time, a set of lawsuits by power customers and company shareholders made their way through the court system.
Settlements refunded customers a tiny portion of what they paid into the project.
In Dominion’s case, $121 million total was split between 1.1 million former and current customers over two rounds of refunds, with amounts varying based on how much they’d been billed for the failed project. Some checks were as little as a few cents.
A separate case settled by the utilities in 2020 awarded $520 million to customers of Santee Cooper — with a big chunk going to the lawyers — which also agreed to freeze its rates through the end of 2024.
But there was a catch.
Santee Cooper could petition the court to allow it to recuperate certain costs related to natural disasters and other unforeseen calamities. Between mine fires and storms and Russia’s invasion of Ukraine that caused gas prices to surge, the Moncks Corner-based utility plans to ask the judge to approve an estimated $680 million.
In April 2025, that bill is going to come due.
Central Electric Power Cooperative, which buys power from Santee Cooper and other sources to supply the 19 power cooperatives around the state, said the number came in “a lot higher than anybody thought it would,” bringing the combined costs for the nuclear plant and associated rate freeze to about $4.4 billion.
Cole Price, Central’s senior vice president, said talks continue with the state-owned utility over a final number.
“We have serious questions about those dollar amounts” and what qualifies, he told the S.C. Daily Gazette.
Meanwhile, unable to raise rates, Santee Cooper’s overall debt also has ballooned to $7.2 billion, according to the latest report from Wall Street credit agencies. That includes portions of the abandoned nuclear project. The utility has refinanced, drawing out some of those debt payments through at least 2056.
More power
Now, Santee Cooper seeks to partner with Dominion on a possible 2,000-megawatt natural gas plant on the site of a former coal-fired power plant along the Edisto River in Colleton County to serve the state’s ever-growing population and manufacturing base. That will mean taking on more debt.
The total price for the plant, as well as the associated power line and pipeline upgrades, is unknown. Similar plants built in recent years have come with a $2 billion price tag.
Legislation paving the way for the Canadys plant is making its way through the Statehouse, drawing criticism from environmental and consumer groups.
For those representing power customers, the concern is less about the gas plant and more about the rolling back of regulatory guardrails the Legislature put in place in the wake of the VC Summer debacle to protect consumers from again getting stuck with the bill.
A Senate panel began holding hearings on the bill last week. The House passed its version, sponsored by Speaker Murrell Smith, last week.
Jessica Holdman writes about the economy, workforce and higher education. Before joining the S.C. Daily Gazette, she was a business reporter for The Post and Courier.
S.C. Daily Gazette is part of States Newsroom, the nation’s largest state-focused nonprofit news organization.
