This article was originally published by the Post and Courier on July 30, 2018.
July 31. Up until a year ago, that date probably didn’t mean much to most of us. Now, like December 7, it may go down as a date that will live in infamy.
One year ago this week, South Carolinians learned that SCANA and state-owned utility Santee Cooper would pull the plug on the expansion of the V.C. Summer Nuclear Station in Fairfield County. We woke to discover that $9 billion had been poured down a hole, part of it paid in advance by ratepayers due to the now infamous Baseload Review Act.
One year later, much has happened, but unfortunately much remains the same.
So what has happened in the last year?
The General Assembly convened special ratepayer protection committees to learn more about the debacle. Governor Henry McMaster called for selling Santee Cooper. Palmetto Promise Institute released three studies pointing out that unlike investor-backed SCANA, Santee Cooper customers alone were on the hook for the utility’s approximately $4.5 billion investment in the failed project. And finally, just last month, the legislature established a commission to study the future of Santee Cooper. That commission is charged, among other things, with examining the utility’s value and making a recommendation regarding a potential sale.
The collapse of the project instigated a number of investigations at the state and federal levels. These investigations are still underway, but have already turned up gross mismanagement that led to the entire original $9 billion projected cost being spent with neither reactor even remotely close to completion. Nineteen lawsuits have been filed, several of which will have serious ramifications for Santee Cooper and SCE&G customers. The Department of Revenue has initiated an audit. Moody’s Investors Service downgraded SCANA’s credit rating, and Santee Cooper’s rating is under review.
Back at Santee Cooper, CEO Lonnie Carter retired with a $16 million golden parachute just weeks after the V.C. Summer project was shuttered (just months before SCANA’s CEO Kevin Marsh also stepped down). Santee Cooper’s Chairman resigned soon thereafter, after a public battle with the Governor. With the legislature unwilling to take up former state attorney general Charlie Condon’s board chair appointment, Santee Cooper is essentially rudderless when critical decisions need to be made regarding Santee Cooper’s role in this disaster. All the while, Santee Cooper customers and the customers of the co-ops that purchase their power from Santee Cooper through the Central Electric Power Cooperative continue to pay higher rates for the hole in the ground that is the abandoned V.C. Summer project.
Much more time has been spent examining SCANA’s role in this fiasco, the proposed SCANA-Dominion merger, and the plight of SCE&G’s customers than the future of Santee Cooper. And that examination is paying off for SCANA ratepayers. Lawmakers rolled back most of the V.C. Summer nuclear surcharge on SCANA customers with a 15 percent temporary rate cut, giving the Public Service Commission (PSC) until December 31 to approve new lower rates. They also pushed back the July 12 deadline for PSC approval of a possible SCANA-Dominion merger, strengthened the Office of Regulatory Staff as a watchdog and created a utility rate consumer advocate.
That seems like a lot of activity. Until you realize what has not happened, which is the most critical of all. So far, ratepayers have not felt an ounce of relief.
With Dominion in the wings, SCE&G customers could have some hope on the horizon, but what about Santee Cooper ratepayers? Santee Cooper’s customers have paid less so far, but according to recent research by a team of economists on behalf of Palmetto Promise, they are on the hook for more — to the tune of as much as $50,000 per customer over the next 38 years depending on the success of a lawsuit filed by Santee’s customer Central Electric — if we don’t move on from the status quo. And the longer the delay, the higher that number gets.
The special commission to review Santee Cooper has been appointed, a panel that includes the governor himself. When will it get to work? We don’t know. But, we know this: we can’t afford to waste another year. The Commission on Santee Cooper should resist the urge to play it safe by waiting until after the election in November to take up its task.
One year in, with few answers to the biggest financial disaster in state history, we need accountability and action. Taxpayers need protection and Santee Cooper ratepayers deserve relief. To dare is to do.
Dr. Oran Smith is Senior Fellow at Palmetto Promise Institute.