In Final Days Of Session, South Carolina Lawmakers Seek To Help Ratepayers Facing Billions In Debt
This article was written by Patrick Gleason and originally published by Forbes on April 14, 2018.
In a debacle that Governing Magazine refers to as “one of the greatest wastes of money in any state’s history,” South Carolina lawmakers are scrambling to address a situation in which Santee Cooper, an 80 year old state-owned utility, and South Carolina Gas and Electric (SCG&E), an investor-owned utility, have racked up more than $9 billion in debt for two incomplete and now abandoned nuclear reactors at the Jenkinsville, S.C. VC Summer power station.
Much like California Gov. Jerry Brown’s pet project, the “bullet train” currently under construction that is intended to connect Los Angeles and San Francisco, the VC Summer nuclear project is quickly becoming a cautionary tale for other states. As costs and timelines doubled on both projects, in large part due to a lack of capable management and oversight resulting from government intrusion into projects that are beyond their scope, billions of dollars have been invested into projects that will likely never be completed.
Adding insult to injury, South Carolinians have already paid for around $2 billion of the $9 billion squandered by Santee Cooper and SCE&G. South Carolina households paid for it in the form of higher utility bills and continue to do so.
While SCE&G parent company SCANA has stockholders who can help to absorb the debt, Santee Cooper’s sole source of income is its customers, who will be paying off the remaining $7 billion in principal and interest that the government-owned utility owes for the next 48 years if no changes are made. As a result, customers can expect to see many rate hikes in their future to foot these bills if South Carolina lawmakers fail to take action soon.
Governor Henry McMaster (R) deserves credit for shining light on the dire state of this now-shuttered nuclear project. Last year Gov. McMaster released the audit of the project conducted by Bechtel Corp., which Santee Cooper and SCE&G sought to hide from the public.