Santee Cooper on Aug. 11 announced that its board of directors canceled two planned rate increases intended to cover costs for the V.C. Summer nuclear project.
The rates would have been implemented in 2018 and 2019 but were canceled following the July 31 abandonment of the new reactors. Santee Cooper, known legally as the South Carolina Public Service Authority, and SCANA Corp. subsidiary South Carolina Electric & Gas Co. decided to halt construction on the project following the bankruptcy of lead contractor Westinghouse Electric Co. LLC and billions of dollars in cost overruns.
"Conditions have changed materially since the rate process began in March," W. Leighton Lord III, chairman of the Santee Cooper Board of Directors, said in an Aug. 11 news release. "Our recent board votes to suspend the nuclear project and also to accept a negotiated settlement with Toshiba Corp., Westinghouse's parent company, allow us to now cancel this rate process. The board will continue to make decisions based on what is necessary to protect the financial integrity of Santee Cooper."
Santee Cooper in June proposed rate increases at an average of 3.7% across all customer classes. Those rate increases, which would take effect in April 2018 and April 2019, were required to meet additional expenses tied to the nuclear project, according to the state-owned utility.
SCE&G plans to seek a rate hike to recover about $4.9 billion in capital costs tied to V.C. Summer, which it would amortize over 60 years.
A $2.17 billion guaranteed payment from Toshiba to SCE&G and Santee Cooper is expected to help offset V.C. Summer costs.
"Toshiba's settlement will help offset the cost of the nuclear project, but Santee Cooper will still need to cover costs related to our load, other system improvements and environmental compliance," Santee Cooper President and CEO Lonnie Carter said in the news release. "We will tighten our belts and continue to look for ways we can be more efficient to make up the balance. It is important that we hold the line on costs, and Santee Cooper's talented and dedicated workforce will rise to the occasion."