Political and economic aftershocks continue from the nuclear expansion woes in South Carolina and Georgia. In the Palmetto State, the 45% minority owner of the abandoned $9 billion, two-unit V.C. Summer nuclear plant, state-owned Santee Cooper, last week filed a motion with the South Carolina Public Service Commission seeking to intervene in the consideration of an offer by Virginia-based Dominion Energy to buy the 55% majority owner of the project, SCANA Corp.
Dominion has threatened to scuttle the $14 billion merger if state lawmakers follow through on a proposal to reduce SCANA’s rates, which have risen significantly in order to pay for the Summer fiasco. Press accounts note that Santee Cooper may challenge the merger, as the large public power system faces its own existential challenges.
Santee Cooper’s major customer, S.C. Electric Cooperatives, is suing Santee Cooper over the pass through of Summer costs. Gov. Henry McMaster has said he wants to sell the system and Florida-based Next Era Energy has shown some interest.
According to Charleston’s Post and Courier newspaper, Santee Cooper executives “secretly fretted for years that its partner SCANA was incapable of overseeing the construction of two nuclear reactors in South Carolina but continued to forward payment after payment for the now-abandoned project, according to records obtained by The Post and Courier.” The newspaper added, “Santee Cooper had little ability to change things on its own as it was the minority partner in adding two reactors at V.C. Summer. The utility signed much of its control over to SCANA as the project was being planned in 2008.”
The two most recent chief executives involved, SCANA’s Kevin Marsh and Santee Cooper’s Lonnie Carter, both retired as a result of the nuclear mess.
While Georgia regulators, facing nearly identical problems with the construction of the two-unit Vogtle new nuclear build, have kept the project going, the badly over budget project is threatening the existence of another large publicly-owned utility, Jacksonville, Florida’s JEA. City voters in November will face a ballot question: “Should the City of Jacksonville City Council call for a binding referendum to approve the terms and conditions of any City Council action approving the sale of more than 10% of JEA?”
The city council, the city employees, and JEA’s management have been at loggerheads over the fate of the utility that supplies the city with power and water. A large part of the problems facing the electricity business has been the escalating costs of the Southern Company’s Vogtle project.
According to news accounts, JEA in 2008 signed an agreement to invest in the Georgia project. According to the Florida Times-Union, “That agreement has mushroomed into an obligation that could cost as much as $25 billion and would be a major complicating factor if a private company were to purchase JEA.”
Under the Vogtle agreement, JEA is obligated to buy power from the plant for 20 years after completion, estimated to be four years from now, although all earlier estimates have been wrong. The public power system will continue paying for its share of the project no matter how far over budget or behind schedule the project becomes.
The JEA financial official who signed off on the Vogtle deal in 2008, Paul McElroy, later became the CEO. McElroy resigned April 6. The Times-Union commented that he stepped down amid the privatization wrangle, “a heated issue that left McElroy standing between angry utility employees on one side and some city officials who made it clear that had little faith in him on the other.”
— Kennedy Maize