Today marks the second anniversary of the decision to abandon construction on two nuclear reactors in Fairfield County after wasting $9 billion of SCANA and Santee Cooper electric customers’ money on the project.
We’re still dealing with the fallout of that failure, including determining the fate of Santee Cooper, which could be sold to a private company if it makes economic sense for customers in the long-term.
But there are ways in which the state’s residents remain troublingly vulnerable to expensive and unnecessary energy projects. And the nuclear mess has made clear the consequences of waiting until it’s too late to address problematic regulatory policy.
The most obvious concern is Dominion Energy’s Atlantic Coast Pipeline, which is working its way down the East Coast.
As of February, that project was behind schedule and at least $3 billion over budget, which will sound awfully familiar to those who followed South Carolina’s nuclear effort as it foundered and eventually failed.
Dominion says it doesn’t need to build the pipeline into South Carolina, at least for now. But its acquisition of SCANA -- and all of its natural gas power plants -- would give it the justification necessary to get federal go-ahead should it eventually rethink that decision.
And South Carolina wouldn’t have much of a say in that choice until the pipeline had already been built and Dominion went to the state Public Service Commission to ask customers to pay for it.
Although the laws are very different, the result could be painfully similar to what happened when SCANA customers ended up with the bill for a worthless pile of reactor parts. And the Atlantic Coast Pipeline’s cost -- at least $7 billion and climbing -- isn’t far off from the nuclear debacle either.
The obvious solution would be to require regulatory approval from state officials before building a pipeline. There’s no demonstrable need for more natural gas in South Carolina at the moment, so such an expensive project would be a tough sell.
Without legislative action, however, the only thing the PSC would be able to do is try to hold back the inevitable rate increases to pay for a pipeline after it has already been built.
So far, lawmakers have rightly been focused on cleaning up the mess for former SCANA customers and figuring out what to do with Santee Cooper. But this anniversary ought to serve as a reminder to look ahead as well.
The state Legislature has worked hard to make it more difficult for another nuclear fiasco to happen in South Carolina. That’s commendable. It’s also almost certainly not the most imminent threat.
Given the perverse economics inherent in regulated utilities -- profits are allowed as a set percentage of expenditures, meaning that utilities can earn more by spending more -- there’s an obvious incentive to bring a big, expensive pipeline into South Carolina.
Lawmakers must make sure that electric customers don’t end up paying for another costly project they don’t need.