Customers who have helped foot a multibillion-dollar bill for two new nuclear reactors won't see a dime in refunds even though the project has been abandoned.
Continue Reading Below
South Carolina Electric & Gas and Santee Cooper customers have been paying for the reactors since 2009. Both utilities decided Monday to scuttle their project at V.C. Summer Nuclear Station north of Columbia after years of delays and cost overruns and the bankruptcy of its main contractor.
Executives with SCE&G's parent company, SCANA, told state regulators Tuesday they will seek permission to recover its outstanding $5 billion in costs over 60 years.
Despite the continued expenses, which include securing the site, customers won't see further increases for at least several years, said CEO Kevin Marsh. He could not specify how long. The company plans to use its share of a $2.2 billion settlement to offset hikes.
Sen. Mike Fanning, D-Great Falls, said customers have essentially thrown billions of dollars in the trash.
"They've abandoned the citizens of South Carolina who weren't asked if they wanted to pay. They were required," he said.
The project's abrupt end angered regulators who green-lighted the project nearly a decade ago and approved yearly rate hikes that now make up 18 percent of residential electricity bills.
"It's a grim day," Public Service Commission Chairman Swain Whitfield told the executives. "Even your harshest critics have called it a sad day. I'm going to go further in saying public trust is at stake here."
Commissioner Elizabeth Fleming said the news came "like a gut punch."
She hopes the utilities can somehow revive the project. But Marsh said he's tried unsuccessfully for months to find another partner. He said he's also sought help from the Trump administration, but requests for a grant went unanswered.
Derek Anderson of Lexington said the utility should immediately take that 18 percent tab toward the scuttled project off people's bills.
"I was pretty infuriated," said Anderson, adding his monthly bill averages $170 for a single person in a well-insulated home. "Why should we be forced to pay higher rates because a bunch of morons and idiots work at SCEG?"
The project employs about 6,000 people in a rural county of fewer than 25,000 residents. That includes 650 SCE&G workers, who were informed Monday that they no longer have a job. Contracts are spread among more than 100 companies statewide, said SCANA CFO Jimmy Addison.
"This is going to shatter lives, hopes and dreams in Fairfield County and the state of South Carolina. It's going to be devastating," said Whitfield, who lives in the county seat of Winnsboro.
Private utility SCE&G, which owns 55 percent of the project, must win state approval of its abandonment plans.
Fanning and other local lawmakers are encouraging the commission to reject it.
"The fight is not dead. Fairfield County is not accepting abandonment," Fanning said. "We want to see heads roll."
The project has been shrouded in doubt since Westinghouse, hired as primary contractor in 2008, filed for bankruptcy protection earlier this year. Utility officials say they've since gotten access to information they previously lacked.
Under a timeline adopted in 2012, the first reactor was supposed to be operational earlier this year, and the second reactor was supposed to follow in May 2018. The utilities' latest analysis shows the project likely couldn't be completed until 2024.
Construction is roughly one-third complete. The utility contends the project is two-thirds complete when counting what's been spent on equipment and materials that now must go into storage, Addison said. The company hopes to sell as much as possible.
A 2007 state law allows electric utilities to collect money from customers to finance a project before it generates power.
Santee Cooper has increased rates five times to pay for the escalating costs. The project accounts for about 8.5 percent of its residential bills. But the Public Service Commission has no authority over the state-owned utility.
The utilities announced last week that Westinghouse's parent company, Toshiba Corp., agreed to jointly pay them $2.2 billion regardless of whether the reactors are ever completed.
Santee Cooper will use its $1 billion share from Toshiba — to be collected between October and 2022 — to help prevent bills from rising, said CEO Lonnie Carter.
But another unknown is whether Toshiba can actually pay. In May, the Tokyo-based company projected a 1.01 trillion yen ($9.2 billion) loss for the fiscal year that ended in March. But Addison said he's confident the utilities will get the money from the sale of Westinghouse.
Environmental groups want customers to be refunded at least some of the money they've paid upfront. A hearing on that request had been set for October. The Public Service Commission will consider Wednesday whether to roll that into SCE&G's request.