Utility says no to rate hike

PINOPOLIS -- Santee Cooper customers won't see a rate increase in 2010.

The state-owned utility's board of directors on Monday unanimously adopted a $2.5 billion spending plan for next year, about 5 percent less than the current budget.

The lowered budget equals the 5 percent reduction in power sales for 2009 because of the less-than- electric economy. It does not include a rate increase like the one that went into effect in November, Santee Cooper President and Chief Executive Officer Lonnie Carter said. A second round of increases was slated for November 2010.

"This is an extremely tight budget," Carter said. "We worked hard to hold down costs. These are hard economic times."

Industrial power sales were down 16 percent in 2009 and are not expected to return to levels experienced in 2008 until 2013, said budget overseer R.M Singletary, Santee Cooper senior vice president of corporate services.

"Less sales than targeted reduced revenues," Singletary said.

The new budget includes $1.91 billion for the electric system, $6.5 million for the water systems and $584.2 millionfor capital expenditures.

Just over $331 million will go toward construction of new nuclear facilities at the utility's jointly owned V.C. Summer Nuclear Station near Jenkinsville. Santee Cooper and facility-partner South Carolina Electric & Gas want to add two nuclear units at the power plant at a cost of $10 billion. Santee Cooper's share is $4.5 billion. The first unit would come online in 2016. The second would follow in 2019.

Earlier this year, Santee Cooper shelved plans to build a $1.2 billion coal-fired power plant in the Pee Dee after the utility's biggest customer, Central Electric Power Cooperative, planned to shift 1,000 megawatts of its load to North Carolina-based Duke Energy beginning in 2013.

Reduced demand for power and proposed federal regulations for new, costly technology on coal plants also played a role in the decision to suspend construction of the environmentally controversial plant on 2,700 acres in Florence County.

Still, the budget includes $21 million for the Pee Dee plant because of contractual agreements with suppliers.

Carter said the suspension lasts until March 31, after which the utility will try to sell off turbines, generators and other equipment already purchased for the nixed power plant.

Santee Cooper plans to hold onto the land, which it has owned for several years, he said.

More than half of the $1.91 billion operating and maintenance budget, $978 million, will go for fuel and purchased power.

Among major capital items are $27 million for renewable power generation, environmental control improvements and recycling combustion byproducts; $68.6 million for transmission improvements; and $37.5 million for distribution upgrades.

Santee Cooper's employs about 1,850 people, a number that hasn't changed much over the past decade. The new budget does not call for an increase in employees.

Reach Warren Wise at 937-5524 or wwise@postandcourier.com.