Santee cooper timeline

Grand Strand Resident Speak Up On Santee Cooper

Last summer, the state Department of Administration began the process of accepting bids to buy or manage some or all of Santee Cooper. State lawmakers will be deciding on what to do with the debt-riddled, state-owned utility as soon as January 15. In response, Santee Cooper released its business forecast and newest set of initiatives in what the utility claims to be an effort to pay down the debt without increasing customer’s rates.

Before this forecast was publically released, it was leaked that Santee Cooper was in talks with Georgia based Southern Company in a cost-sharing agreement. Lawmakers and the governer’s office quickly shot down any chance of this plan happening, even threatening to remove board members that voted in favor of the plan.

Santee Cooper quickly abandoned the plan and announced the most recent business forecast including a five-year rate freeze after saying for months rates would increase by at least 7 percent to pay back the more than $7 billion of debt the utility faces, $4 billion of it from the failed V.C. Summer project.

Wayne Mershan, a Murrells Inlet resident, wrote to the South Strand News regarding the forecast’s plan to move to solar and natural gas energy sources. While Mershon acknowledges the need for a transition to solar and natural gas he asks, “How will it be possible to make these necessary improvements when it has over $7 billion in debt? How are they going to accomplish their sustainability goals and get out of debt at the same time without raising rates again?”

It is clear residents are suspicious of how valid Santee Cooper’s most recent forecast actually is. A forecast that includes a five-year rate freeze and a transition to more sustainable energy sources, all while being able to pay down the debt.

This set of initiatives is leaving customers and South Carolina residents wondering, what will happen to rates after five years? Who will pay for these transitions to solar and natural gas considering the infrastructure is not currently in place? And, what will happen to the debt while all of these transitions are taking place?

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Santee Cooper’s Largest Customer Urges They Were Powerless Throughout the V.C. Summer Project

Santee Cooper’s largest customer, the electrical coops that buy three-fifths of Santee Cooper’s power which gets distributed to their customers across the state of South Carolina, is suing the state-owned utility. While the coops are by far the agency’s largest customer, a 38-page claim filed in August works to show that Santee Cooper actively kept the problems of the V.C. Summer construction hidden from the coops.

The project left Santee Cooper billions of dollars in debt. To pay off this debt, the burden falls onto both the state-owned utilities’ direct serve and co-op customers. The 20 co-ops who purchase power from the utility are suing to stop Santee Cooper from charging their customers any more for the debt.

The coops attorney in the case explained, “The emails, letters, etc.described above tell the indisputable story of a project beset almost from the beginning with myriad fundamental, entrenched problems that led inexorably to major delays and cost overruns,” the co-ops’ attorney, Frank Ellerbe, wrote in the filing. “Yet, it was a story Santee Cooper kept largely to itself.”

The coops claim to be powerless throughout the construction process of the nuclear reactors and in turn, should not be held responsible for the debt Santee Cooper faces for their failures. While success for the coops will save millions of customers from having to pay off the debt, there are still a lot of questions left unanswered.

If Santee Cooper is blocked from increasing the coop rates, what will happen to the debt and how will it be paid?

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Grand Strand Residents Are Ready for a Solution to Santee Cooper’s Debt Problem

Just last month, the state Department of Administration announced that it would now be accepting bids to buy or manage some or all of Santee Cooper.

Once the bids are received, the four consulting firms chosen by the state administration will review and pass on their recommendation to the General Assembly. From there, the assembly will make a decision on the future of the state-owned utility.

As this process continues, Santee Cooper’s direct serve and cooperative customers will continue to pay for the utility’s massive debt stemming from the failed V.C. summer project. In the meantime, Grand Strand residents are continuing to express their hope for legislators to sell Santee Cooper, get the state out of the utility business, and get rid of the debt.

Johnnie Bellamy, a Myrtle Beach resident, wrote to The State expressing his thoughts on the issue stating, “Investor-owned utilities have offered to buy Santee Cooper and provide lower long-term rates. Selling Santee Cooper just makes good sense to protect customers from sky-high electric bills.”

However, Santee Cooper has publically advertised to its customers that they have some of the lowest rates in the state, which Bellamy argues, “The electric cooperatives have complained that Santee Cooper has the highest wholesale rates not only in the state but in the region, ranging from 25% to nearly 50% higher than investor-owned utilities.”

Validating his concerns, another South Carolina resident of Murrells Inlet, Dick Richards, wrote to the South Strand News saying, “If a qualified buyer can pay off the debt and offer low rates, it just makes good sense that our legislators vote to sell Santee Cooper to protect ratepayers and get the state out of its failed utility business.”

It is clear residents up and down the Grand Strand would like to see the state move forward with selling Santee Cooper.

Meanwhile, the electric cooperatives that purchase their power from Santee Cooper are in a battle against Santee Cooper to stop them from charging their customers any more for the V.C. Summer debt.

However, while this may help the cooperative customers, there are many questions left to answer if the cooperatives win their lawsuit against the state-owned utility. Will Santee Cooper, a state agency, have to file for bankruptcy?

Or will all the debt be left in the hands of the direct serve customers if the utility isn’t sold?

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How We Got Here: A Santee Cooper V.C. Summer Nuclear Disaster Timeline

The largest financial disaster in South Carolina history didn’t happen overnight.

May 2008 – The start of this fiasco. SCE&G and Santee Cooper announced a nuclear expansion project at the VC Summer plant. Since the announcement of the VC Summer Project eleven years ago, several delays and massive problems were hidden by the project’s leadership.

There are several key dates before the most recent decision to explore the sale, but we’re focusing on the monumental dates that reveal SCE&G and Santee Cooper’s poor leadership, lack of transparency, and what led customers to be responsible for Santee Cooper’s $8 billion debt.

February 2009 – The nuclear expansion plan is approved and construction is set to begin in 2012 with the first reactor to begin operating in 2016 and the second in 2019.

November 2009 – Santee Cooper approves and implements a 3.4% rate increase to help pay for the project.

December 2011 – The project gets off to a rocky start with the first delay being reported by SCE&G for production issues, manpower issues, and the need to redesign nuclear modules.

December 2012 – Santee Cooper approves and implements another 1.8% increase to rates.

June 2013 – Another delay follows pushing the first reactor operation date to late 2017-early 2018.

December 2013 – Santee Cooper approves and implements yet another rate increase. This time a whopping 5.2% to help pay for the struggling project.

May 2014 – Obvious signs of trouble appear and Santee Cooper asks to hire an outside company to oversee the project.

October 2014 – Money trouble becomes more apparent when contractors say it will cost an additional one billion dollars to complete the reactors.

October 2015 – Westinghouse is brought on board and completion dates are rescheduled yet again. The project is now pushed back to late 2019-early 2020.

December 2015 – During this time, SCE&G asked the Public Service Commission of the Office of Regulatory Staff to increase rates to help fund the project. Santee Cooper has its own board of directors and doesn’t have to get rate hikes approved by anyone except its own board, so Santee Cooper increases rates to help fund the project.

April 2016 – Another rate increase is approved and implemented by Santee Cooper. Customers see their rates go up by 5.3% this time.

June 2016 – SCE&G asks for its ninth rate increase.

March 2017 – Westinghouse files for bankruptcy. The company cites $9 billion in losses from its two nuclear construction projects, one of which is the VC Summer project.

April 2017 – Santee Cooper increases rates another 2.1%.

July 2017 – Shortly after this, Santee Cooper and SCE&G announced they were abandoning the project even though customers have already paid up to $2 billion for the reactors.

At this point, much of the general public was still unaware of the financial effects it was having on them.

August 2017 – A special South Carolina Senate committee holds their first of MANY hearings and former Santee Cooper CEO Lonnie Carter announces his retirement.

September 2017 – A month later Santee Cooper turns over the Betchel report detailing their insufficient oversight of the project.

January 2018 – SCE&G customers hear good news when Dominion Energy announces it will purchase SCANA Corp.

June 2018 – A state audit reports that the final amount for the failed project could increase by over $400 million.

August 2018 – A 15 percent rate cut and refund for April-July charges begin appearing on SCE&G bills. Meanwhile, Santee Cooper customers are still continuing to pay for the failed nuclear disaster.

March 2019 – Santee Cooper executives are unable to answer important questions about the future of Santee Cooper and rates during a Senate hearing. Following this, South Carolina Senate President Harvey Peeler introduces legislation that calls for exploring options for a possible Santee Cooper sale.

April 2019 – Santee Cooper announces rate increases totaling about 7% between 2021-2024 with no PSC oversight.

May 2019 – Lawmakers adopt this resolution and will begin exploring options to sell Santee Cooper. Read more about what this resolution means, here.

July 2019 – The two-year anniversary of the abandonment of the failed V.C. Summer project that started back in 2008, over a decade ago, yet Santee Cooper direct serve and electric co-op customers are still paying for this massive financial disaster.