In response to lawsuits from customers, including its largest power purchaser, Santee Cooper has asked the S.C. Supreme Court to affirm its authority to set rates that allow it to meet expenses, including debt from the failed V.C. Summer nuclear reactor project.
In a news release issued Monday, the state-owned utility asked the state high court to “declare Santee Cooper is required by state law to set and collect rates sufficient to cover all of its expenses, including debt obligations.” The utility said the lawsuits, including one filed by Central Electric Power Cooperative in February, need to be decided quickly to “protect the state’s credit as well as Santee Cooper’s viability.”
Central, a wholesale distributor that provides power to the state’s 20 electric cooperatives, sued to prevent Santee Cooper from charging those co-ops more for the abandoned nuclear project. The suit also calls for Central’s members to receive their share of a payment that Toshiba, parent company of project contractor Westinghouse, made to Santee Cooper after Westinghouse declared bankruptcy.
Central buys around 60% of the power Santee Cooper produces. It is contractually obligated to pay about $2.8 billion of Santee Cooper’s $4 billion in V.C. Summer-related debt, but says in the lawsuit, filed as a cross-claim against the utility in an existing class-action suit, that Santee Cooper breached that contract.
“For decades, Central has enjoyed the benefits of low-cost electricity through a cost of service arrangement, and Central fully supported nuclear construction to lower its costs even further,” Santee Cooper said Monday. “For Central to reverse position now puts other customers and the state of South Carolina at risk.”
J. Michael Baxley, Santee Cooper senior vice president and general counsel, called for “immediate action on this fundamental issue.”
“Credit rating agencies have already reacted to the pending circuit court litigation, citing the uncertainty it creates,” Baxley said.
Santee Cooper owned 45% of the V.C. Summer project, abandoned in July 2017 after a series of construction delays and rising costs. The state-owned utility, along with co-owner S.C. Electric & Gas, poured $9 billion into the reactors’ 10-year construction, leaving ratepayers of both companies to foot the bill for the unfinished reactors.
Santee Cooper said in a letter to S.C. Gov. Henry McMaster in February that it will pay about $16 million a year to preserve the millions of dollars in equipment still at the Fairfield County nuclear power station. Baxley said the potential sale of that equipment could help ease ratepayers’ project-related burden.
“We understand the frustrations of customers, legislators and other stakeholders over the nuclear project, and we will continue to work to offset costs through potential equipment sales or other avenues,” Baxley said. “The impact to customers and the state will be far greater, however, if these plaintiff suits continue.”