PINOPOLIS - Electric utilities generally don't like surprises, but Santee Cooper broke from tradition by announcing an unexpected turn of events Monday.
Santee Cooper will sell 5% of the VC Summer Nuclear Station expansion to SCANA Corp. over three years:
1% will transfer when the 1st unit goes into service;
2% will transfer within a year from that date; and
2% will transfer within a year of the 2nd transaction.
Also, Santee Cooper can't sell any more of its ownership stake until the two new units are completed.
The state-run power agency's board approved the $500 million sale to SCANA Corp. of a partial stake in two nuclear reactors being built in the Midlands.
"Not what you expected," Santee Cooper CEO Lonnie Carter said after the unanimous vote.
SCANA, which owns South Carolina Electric & Gas, already is the majority owner of the $10 billion V.C. Summer Nuclear Station expansion north of Columbia.
Until Monday, Duke Energy had been the only confirmed buyer.
The revised deal will boost SCANA's ownership of the new V.C. Summer reactors to 60 percent from 55 percent. Santee Cooper's portion will drop to 40 percent.
"Today's action reduces our costs to customers somewhat, while still preserving an ownership level that will position us well for the flexibility we will need going forward," Carter said.
Duke couldn't come to terms with Santee Cooper, representatives with both utilities said.
Cater said the sale became complicated because all the entities involved in the nearly three years of negotiations had "different needs and regulatory requirements."
"Nothing's ever simple," he said.
Duke spokesman Rick Rhodes declined to disclose specifically why the sale fell apart.
"We simply were not able to reach an agreement," Rhodes said. "I think the one thing we could add is that we wish Santee Cooper and SCANA continued success with the V.C. Summer project."
The sale to SCE&G's parent will unfold over three years and likely won't be finalized until about 2021.
Moncks Corner-based Santee Cooper began to look at cutting its V.C. Summer investment about four years ago, after its biggest customer, Central Electric Cooperative, decided to shift some of its power purchases to Duke.
As a result, Santee Cooper no longer had a short-term need for the extra power. Talks with Duke began in mid-2011.
Santee Cooper officials said Monday they're selling the stake reluctantly because they know they'll need more nuclear capacity in the future. At the same time, the utility was seeking to minimize the rate increases it will need to pay for its share of the expansion, said W. Leighton Lord III, board chairman.
"But you have to live in the present, too," said board member Cecil Viverette, a former CEO of Rappahannock Electric Cooperative in Virginia.
Carter said SCANA recently emerged as a potential buyer, after prospects for a deal with Duke dimmed.
Cayce-based SCANA plans to use the extra nuclear power it's buying to offset coal-powered units it plans to shutter over the next five years, CEO Kevin Marsh said in a statement Monday.
Also, the acquisition will delay the need to invest in natural gas-fired generators after 2020, Marsh said.
SCANA said it expect to pay for the additional 5 percent stake with internal funds.
Contact John McDermott at 937-5572.
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