Santee Cooper just borrowed $1.34 billion, a record amount for a public agency in South Carolina.

It isn’t finished, either, not by a long shot. As Santee Cooper finance chief Jeff Armfield recently informed the electric utility’s board, from now through 2016 “will be heavy borrowing years for us.”

The state-owned power company likely will use some of the future proceeds to comply with new air regulations and fund routine capital improvements. Another portion will replace older debt that has higher interest costs, the equivalent of home refinancing.

But the bulk of the cash from the future bond sales will end up in Fairfield County, where Santee Cooper is shouldering 45 percent of the $10 billion expansion of the V.C. Summer Nuclear Station.

SCANA Corp.’s South Carolina Electric & Gas is responsible for the rest. The first of the new reactors north of Columbia is expected to start producing power by early 2018. The two units will have a roughly 60-year shelf life.

Utilities are all about planning for the future, but in this case it’s the here-and-now that’s more problematic. Santee Cooper and its ratepayers are assuming a 10-figure debt obligation as the electric utility industry’s “nuclear renaissance” is quickly dimming.

Lone wolf?

Entergy Corp. offered the latest evidence last week by announcing it will shutter a Vermont nuclear plant this year, saying a glut of cheap natural gas made the New England generator too uneconomical. Three others owned by other utilities in Wisconsin, Florida and California also are on the docket to close in 2013.

But that’s not all.

A couple of weeks ago, a report from Georgia regulators concluded that Southern Co.’s plan to add two reactors near Augusta at a cost of $14 billion wouldn’t make financial sense if work began now.

And Charlotte-based Duke Energy has indefinitely shelved plans to proceed with a $24 billion nuclear plant in Florida that it inherited from its buyout of Progress Energy.

It’s enough to make the V.C. Summer expansion an outlier. Santee Cooper Director Bill Finn of Charleston recognized as much during the Aug. 19 board meeting, casually mentioning to no one in particular about a “lonely here” feeling.

Even Lonnie Carter, Santee Cooper’s CEO, did some Monday morning quarterbacking that Monday morning.

Carter reminded his board the investment was approved in better times, in early 2006. Two years later, the economy was entering its most punishing downturn in decades. In hindsight, Santee Cooper probably wouldn’t have committed to such a big stake in the V.C. Summer deal if it knew then what he knows now, the CEO acknowledged.

Summer sale

Even so, Carter stands behind the nuclear project.

“Definitely needed,” he said after the last board meeting. “And economical.”

Carter dismissed comparisons to the Southern Co. project, saying its escalating costs in Georgia are the result of a construction contract that has fewer fixed terms than the V.C. Summer deal.

Santee Cooper signed on the Jenkinsville expansion to balance out the kinds of fuel it uses to generate power. A primary goal is to scale back its reliance on coal, which Carter said is going to get more expensive to burn in the years ahead as pollution rules get more stringent.

The question now is whether Santee Cooper will be saddled with too much nuclear power and, consequently, too much debt. Wall Street’s three big credit rating firms agree that’s a major risk if the Moncks Corner-based utility can’t sell off a big slug of the V.C. Summer plant in fairly short order.

The only prospect for now is Duke Energy Carolinas, which expressed an interest in acquiring at least 10 percent of Santee Cooper’s stake more than two years ago. Those negotiations continue, Carter said.

Ultimately, Santee Cooper wants to cut its exposure to the nuclear project by more than half to about 20 percent, but the exact figure is in flux.

“At some point we have to decide how much we want to retain,” Carter told the board.

Providing power to the people isn’t the straightforward process it once was, when coal was king. It can be problematic nowadays. Pricey, too.

Contact John McDermott at 937-5572