V.C. Summer aerial (copy)

South Carolina's electric cooperatives plan to sue Santee Cooper to stop the utility from charging 1.5 million cooperative customers for the failed nuclear project at V.C. Summer. Provided/SCANA Corp.

COLUMBIA — South Carolina's electric cooperatives plan to sue Santee Cooper to stop the public utility from charging customers for V.C. Summer, fracturing the two groups' long-held business relationship and inflaming an economic crisis that has already consumed the state.

The cooperatives' decision to file a legal claim against state-run Santee Cooper comes half a year after the troubled nuclear project near Jenkinsville was abandoned due to ballooning costs and endless construction problems. 

It's unclear exactly how the legal challenge could impact the utility's finances. But it might jeopardize the $4 billion in bonds Santee Cooper issued for the reactors over the past decade. The cooperatives are Santee Cooper's largest customer. 

The cooperatives' attorneys, among other things, argue that Santee Cooper should not be allowed to charge people for the nuclear project because the unfinished reactors aren't producing power and are unlikely to start pumping out electricity to people's homes and businesses any time soon. 

The leaders of the state's 20 electric cooperatives also want 70 percent of the $831 million that Santee Cooper received through a settlement with Toshiba, the parent company of its nuclear contractor Westinghouse Electric. 

Santee Cooper had yet to see the actual legal complaint, said Mollie Gore, the utility's spokesperson. The cooperatives don't plan to file anything in court until next week.

The legal claim will actually be filed by Central Electric Power Cooperative, the entity that buys power from Santee Cooper and distributes it to the cooperatives spread throughout South Carolina's 46 counties. Central is led by a board of 40 cooperative members. 

“We took this action because it’s the right thing to do to protect both our member-cooperatives and their consumer-members,” said Robert Hochstetler, Central’s president and CEO. “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.”

The cooperatives paid more than $422 million to Santee Cooper to finance the reactors since workers broke ground on the project. Last year, around 5.5 percent of Central's overall power costs were attributable to V.C. Summer. 

But the price of those nuclear payments on individual cooperative customers is harder to pinpoint because of decisions made by the leaders of the 20 local cooperatives. 

The legal claim spun off of an ongoing class-action case filed by a cooperative customer in the aftermath of the V.C. Summer cancellation. As part of that ongoing battle in circuit court, the cooperatives are able to challenge Santee Cooper and its ability to collect money for useless power plants. 

The dispute could place the cooperatives and Santee Cooper in the spotlight for the first time since the reactors were canceled last August. 

For months, state officials have focused their attention on S.C. Electric & Gas, the majority owner of the reactors at V.C. Summer. State lawmakers are still wrestling over what to do about the $37 million a month that utility continues to collect from its 700,000 customers. 

But Gov. Henry McMaster has spent recent months courting investor-owned utilities in an attempt to sell Santee Cooper.

We're starting a weekly newsletter about the business stories that are shaping Charleston and South Carolina. Get ahead with us - it's free.

"If SCE&G ratepayers shouldn't be charged, then neither should the co-op customers of Santee Cooper," McMaster tweeted Friday. "That's what I have been saying, and that's why selling Santee Cooper is the only way to protect co-op customers."

Mike Couick, the CEO of The Electric Cooperatives of South Carolina, said the legal challenge won't impact McMaster's and other lawmakers' attempts to significantly transform Santee Cooper. 

But other lawmakers in the Statehouse aren't interested in a sale. They worry that exempting co-op customers from the nuclear charges will weaken Santee Cooper and harm the 176,000 customers served directly by the utility. 

"I'm greatly disappointed in the actions of the cooperatives of South Carolina," said Sen. Larry Grooms, R-Charleston. "A partnership of 75 years may have been irreparably harmed today." 

Grooms, who represents Moncks Corner where Santee Cooper is based, said the cooperatives claim could cripple the state utility — a vestige of the New Deal era. He also points out that the cooperatives agreed to a contract in 2013 that allowed the V.C. Summer project to continue.

"The co-ops played a major role in moving forward with the project," Grooms said. 

Reach Andrew Brown at 843-708-1830 or follow him on Twitter @andy_ed_brown.