South Carolina's electric cooperatives will file suit against state-owned utility Santee Cooper to stop their payments for the failed V.C. Summer nuclear plant expansion.
The board of trustees for Central Electric Power Cooperative - S.C. voted Feb. 23 to preserve legal options for South Carolina's electric cooperatives following the abandonment of the nuclear reactors in Fairfield County, according to a news release. Central provides wholesale electric service to all of the state's 20 retail electric cooperatives through long-term contracts with Santee Cooper, known legally as South Carolina Public Service Authority, and other power providers, according to its website.
Central is asking the court to declare that Santee Cooper cannot charge the co-op for costs tied to the unfinished nuclear units that are not "used or useful" and argues the utility has breached its contract. The action will take the form of a cross-claim against Santee Cooper in a class-action lawsuit in the 14th Circuit Court of Common Pleas in which Central and the utility are both defendants, according to the news release.
"We took this action because it's the right thing to do to protect both our member-cooperatives and their consumer-members," Central President and CEO Robert Hochstetler said in a written statement. "From the beginning, we've made the consumers our first priority. They are both our owners and our customers, so we're going to do what we must to protect their interests in this very difficult situation."
Central also wants the court to grant it a large share of the $831.2 million lump sum cash payment Santee Cooper received from Toshiba Corp., the majority stakeholder of bankrupt V.C. Summer contractor Westinghouse Electric Co. LLC. The Japanese conglomerate agreed to pay about $976 million to Santee Cooper for its 45% project ownership. The board of directors for Santee Cooper along with project partner SCANA Corp. agreed to sell their claims to hedge funds at a discount to get cash immediately, instead of taking payment installments for five years.
"Because Central, through its contract, bears approximately 70[%] of Santee Cooper's capital costs, the cooperative has asked the court for 70[%] of the lump sum payment made to the state utility," Central said in the news release.
Central and the electric cooperatives contend the claim will not hamper the state's efforts to sell Santee Cooper to help its customers and the state recoup costs from the scrapped reactors, funded by about $8 billion in debt.
"This does not stop our ongoing efforts to significantly transform Santee Cooper through a formal test of the market," Michael Couick, president and CEO of the Electric Cooperatives of South Carolina Inc., said in a written statement. "We're anxious to work with the General Assembly and all other involved parties to minimize the impact on consumers and Santee Cooper's employees."