S.C. Governor Henry McMaster’s statement on Santee Cooper taken from his proposed 2020-2021 budget warns and informs Horry County residents of new rate increases from Santee Cooper.
Says Governor McMaster, “Paying off Santee Cooper’s debt will cost direct-serve customers in Horry County, Georgetown, and Berkeley about $6,200 per household.“
Over $7 billion was lost by Santee Cooper under the watch of current District 33 Senator Luke Rankin. Rankin served as the Chairman of the Senate’s oversight committee of the state owned utility.
Said the Governor, “Resolving the future of Santee Cooper is no longer a question of “if” – it’s now a question of “when and how.“
HOW IT HAPPENED: TIMELINE ON $9 BILLION IN TOTAL LOSS
The V.C. Summer nuclear expansion project began as a shared effort between V.C. Summer Nuclear Generating Station owners, SCANA and Santee Cooper, to add two reactors (Units 2 and 3) to the South Carolina plant. However, the decade-long, $9 billion expansion was bogged down by delays and cost overruns until the effort was ultimately abandoned in July 2017.
Despite the abandonment, more than 700,000 South Carolina utility customers see charges related to the project on their monthly electric bills. Lawmakers have battled back and forth for months over the payments, balancing fairness to customers against the risk of bankrupting SCANA and harming the state’s economy.
As the South Carolina House and Senate continue to debate whether to ban the ratepayer charges once and for all, here’s a look back at the history of the V.C. Summer expansion project failure:
Feb. 12, 2004: The South Carolina General Assembly passes a bill that creates the Office of Regulatory Staff, which replaces the state consumer advocate in representing the interests of the public in utility rate cases.
April 19, 2007: The General Assembly passes the Base Load Review Act. The bill makes it easier for utilities to raise rates to pay for nuclear reactors while they are under construction and to charge ratepayers for their investments in plants that are not completed.
March 27, 2008: South Carolina Electric & Gas, a subsidiary of SCANA, applies to the Nuclear Regulatory Commission for a Combined Construction and Operating License to build two 1,100 MW AP1000 pressurized water reactors (Units 2 and 3) at the V.C. Summer Nuclear Generating Station.
May 27, 2008: SCE&G and Santee Cooper announce they have reached an engineering, procurement and construction contract with Toshiba-owned Westinghouse Electric Company. The reactors are originally projected to cost $9.8 billion.
May 30, 2008: SCE&G requests the Public Service Commission to approve the first rate increase associated with the nuclear project.
October 2008: The Office of Regulatory Staff recommends approval of the project, and the PSC allows SCE&G to begin site work.
February 2009: The PSC approves the expansion plan. According to the plan, construction is expected to start in 2012, Unit 2 is expected to begin operations in 2016, and Unit 3 is expected to begin operations in 2019.
December 31, 2011: SCE&G announces the first project delay, citing the need to redesign nuclear modules, as well as production and manpower issues.
March 2012: The NRC approves the construction license for the two proposed reactors. The reactors are now expected to begin operations in 2017 and 2018.
March 9, 2013: Construction of Unit 2 officially begins. It is the first reactor to start construction in the U.S. in 30 years.
November 2, 2013: Construction of Unit 3 officially begins.
October 2014: SCANA announces a one-year delay and extra project costs of $1.2 billion. The delay is attributed to the fabrication and delivery of structural modules. Expected completion is revised to late 2018/early 2019 for Unit 2, and a year later for Unit 3. The state Supreme Court rejects a legal challenge to the Base Load Review Act.
October 2015: SCE&G and Santee Cooper push back expected completion dates to 2019 and 2020.
February 2016: SCANA and Santee Cooper commission the Bechtel Report, which outlines Westinghouse failures and accuses the utilities of insufficient oversight.
June 2016: SCE&G asks the PSC to approve another rate increase. The increase is approved later that month.
July 2016: SCE&G requests the last of 9 rate hikes to fund the project. The Office of Regulatory Staff and S.C. Public Service Commission approve the increase, but also negotiate a settlement to keep SCE&G from raising its rates until the project is finished.
February 2017: SCANA announces Westinghouse provided SCE&G with revised in-service dates of April 2020 and December 2020 for Units 2 and 3, respectively. “The completion dates provided in the new schedule are within the 18-month contingency period provided under the construction provisions of the Base Load Review Act administered by the Public Service Commission of South Carolina,” SCANA says.
March 2017: Westinghouse files for Chapter 11 bankruptcy, citing $9 billion in losses from its two U.S. nuclear construction projects, including the V.C. Summer expansion project.
July 31, 2017: SCANA and Santee Cooper announce they are abandoning the $9 billion project after Santee Cooper voted to cease all construction. Customers have paid $2 billion for the reactors as part of their monthly electric bills. Analysts estimate completing construction could have ultimately cost more than $23 billion.
August 1-15, 2017: SCE&G files for an abandonment petition on August 1. As part of the petition, the utility asks the PSC to allow it to charge ratepayers $4.9 billion it has spent on the abandoned project. The Office of Regulatory Staff files a motion to dismiss the petition on August 9, and SCE&G withdraws it on August 15 with the intent to refile at a later date.
August 22, 2017: A special state Senate committee holds its first hearing on the abandoned nuclear project. The next day, a House committee holds its first hearing.
September 4, 2017: Santee Cooper gives Governor Henry McMaster a copy of the 2016 Bechtel Report.
November 16, 2017: SCANA announces a 3.5 percent electric rate cut for SCE&G customers.
December 2017: Two cases are filed regarding the $27 monthly charge SCE&G customers still pay for the nuclear project. One asks the PSC to eliminate the ratepayer charge, and the second demands that SCE&G refunds customers the $2 billion they have already paid. SCE&G argues that the charge is necessary for the utility to remain solvent and files motions to dismiss both cases. The PSC denies SCE&G’s requests and orders the Office of Regulatory Staff to conduct an audit on the utility’s rates.
January 3, 2018: Dominion Energy announces it will buy the embattled SCANA Corp. in a $14.6 billion deal that will include $1.3 billion in refunds to SCE&G utility customers (approximately $1,000 per customer). However, customers will still be charged higher electricity bills to pay off the debt for the project.
January 23, 2018: The S.C. House passes a proposal to strengthen the Office of Regulatory Staff and add a state consumer advocate for utility customers. “There wasn’t any real advocacy on behalf of the public interest and the ratepayer,” says state Rep. Peter McCoy, a sponsor of the proposal.
January 31, 2018: The S.C. House votes 119-1 to halt $37 million in monthly customer payments to SCANA. Under the terms of the agreement between the SCANA and Dominion Energy, Dominion could terminate the deal to purchase SCANA if the reactor payments from customers are stopped.
February 20, 2018: The S.C. Senate passes legislation that requires the PSC to delay its decision on SCANA’s abandonment petition until December.
February 23, 2018: State electric cooperatives decide to sue Santee Cooper over ratepayer charges associated with the failed project.
March 7, 2018: The S.C. House votes for a second time to cut off the money SCANA bills its 700,000 customers for the abandoned nuclear expansion project. House lawmakers accuse the Senate’s inaction of costing customers tens of millions of dollars since the House passed the first bill at the end of January. Senate lawmakers claim they are worried about bankrupting SCANA and harming the state’s economy.
March 21, 2018: Dominion Energy and SCE&G submit documents to S.C. regulators indicating customers will pay an additional $3.8 billion for V.C. Summer nuclear project if Dominion buys SCANA. Approximately $1.8 billion would come from residential customers – amounting to $2,600 per household over the next two decades – and $2 billion would come from commercial customers.
April 18, 2018: The S.C. Senate agrees to temporarily cut SCE&G bills by 13 percent, as the S.C. House and governor battle over how much customers should continue to pay for the V.C. Summer project.
April 25, 2018: The S.C. House rejects the Senate’s plan to cut SCE&G bills by 13 percent, demanding a larger, 18-percent rate cut.
May 10, 2018: The S.C. Senate votes to repeal the 2007 Base Load Review Act, which allowed SCE&G to charge utility customers for the reactors while they were under construction. The Senate also votes to reinstate the office of consumer advocate, which gives customers an attorney that fights for them in rate hike cases.
June 2018: A state audit finds the final tab for the V.C. Summer project could increase by as much as $421 million due to sales tax and interest SCE&G and Santee Copper still owe on materials bought for the reactors. The utilities say they will challenge the audit’s findings.
June 27, 2018: The S.C. House and Senate pass a proposal to temporarily cut SCE&G electric rates by almost 15 percent. The lawmakers also agree to delay deciding who is responsible for paying for the failed reactors until December.
June 29, 2018: SCE&G files a federal lawsuit in an attempt to block the S.C. PSC from enacting the rate cut mandated by lawmakers.
July 31, 2018: One year after SCANA abandoned the V.C. Summer project, its shareholders vote to merge the company with Dominion Energy.
August 6, 2018: U.S. District Court Judge Michelle Childs denies a motion from SCE&G to block the lawmaker-mandate rate cut.
August 7, 2018: The temporary 15 percent rate cut goes into effect. According to reports, average SCE&G residential customers should see their August electric bills decrease by more than $110 due to both the cut and a one-time credit for past electricity use.
September 4, 2018: The NRC approves the transfer of the licenses for the three reactors the V.C. Summer Nuclear Station, including the two unfinished units, to Dominion. With the last federal hurdle cleared, N.C. and S.C. state regulators now control the fate of the potential sale.
September 21, 2018: The U.S. Fourth Circuit Court of Appeals denies SCE&G’s request for an injunction to halt the temporary rate cuts as well as the utility’s request for an expedited appeal. However, the court also rejects a request from S.C. lawmakers to dismiss the appeal entirely. Thanks to the ruling, the rate cuts will remain in place until the S.C. PSC issues its ruling on SCE&G’s longer-term rates in the fall.
October 19, 2018: SC Sen. Brad Hutto, D-Orangeburg, says at an energy conference that a state judge could rule the 2007 Base Load Review Act, which enabled the V.C. Summer Project, unconstitutional. Dominion Energy said it would walk away from the deal to buy SCANA if that happened.
October 25, 2018: Dominion files an alternate plan with S.C. regulators to buy SCANA that would lower customer bills but eliminate a previously proposed $1,000 customer refund. The plan would provide a total of $1.91 billion in refunds over 20 years rather than $1.3 billion in upfront refunds.
November 24, 2018: SCANA reaches a $2 billion settlement with customers who sued over their high electricity rates. As part of the settlement, SCE&G customers will also receive $115 million that had previously been intended for SCANA executives.
December 4, 2018: SC Circuit Court Judge John Hayes gives preliminary approval to SCANA’s settlement with customers; however, the settlement is contingent on the PSC approving Dominion’s offer to buy SCANA. The PSC must make a decision by December 21.
December 14, 2018: The South Carolina Public Service Commission voted to allow Dominion to purchase South Carolina Electric & Gas for $15 billion. Former SCE&G Vice President of nuclear finance administration Carlette L. Walker testified against SCE&G, accusing its leaders of dishonesty about the true cost of the nuclear project. The acquisition estimated to cut $22 off consumers’ average monthly bill rather than refund each customer $1,000.
January 2, 2019: Dominion Energy finalized its purchase of SCE&G. Under Dominion’s leadership, SCE&G will collect $2.3 billion from ratepayers over the next two decades.
April 29, 2019: SCE&G is rebranded under the name Dominion Energy South Carolina.
May 3, 2019: Dominion released its first earnings report since acquiring SCE&G, reporting a loss of $680 million for the January – March period. The report predicted the company would be profitable again in the second quarter.
*Timeline provide by: https://www.chooseenergy.com/news/article/failed-v-c-summer-nuclear-project-timeline/
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