It has been a year since Santee Cooper made the difficult decision to suspend construction of the V.C. Summer nuclear project, following the bankruptcy of contractor Westinghouse and a comprehensive analysis showing the project would be too expensive to finish. Much has been said and written about that decision, including some incorrect information about the project’s impact on customers.
I understand why customers are upset by this project, and Santee Cooper is working hard to offset its costs. A typical Santee Cooper residential customer is now paying $5.35 a month, or 4.5 percent of the bill, towards debt for the nuclear expansion. That cost will vary according to annual debt service requirements, and over the life of the debt (through 2056) the typical residential customer is projected to pay an average $13.33 a month, or $160 a year. That is about $6,200 per residential customer.
Santee Cooper has increased system rates 4.3 percent since 2009 because of this project. We project needing three or four more small rate increases, adding up to 7 or 8 percent, by 2023 to provide revenue for obligations including the remaining nuclear debt.
We are working to reduce customer impact and have already cut an average $40 million from our 2018, 2019 and 2020 budgets by cutting almost 11 percent from capital and non-fuel operating and maintenance costs. We are using the nearly $900 million settlement from Toshiba, then-parent of Westinghouse, to strategically pay debt service and reduce long-term debt, avoiding a projected $1.3 billion in debt costs to customers. Equipment sales would offer additional revenue to offset this debt, and we will pursue potential buyers of the high-value equipment we are preserving on site.
We have a good track record: Santee Cooper has the second-lowest average electric costs among 40 utilities in South Carolina, according to the U.S. Energy Information Administration. Looking ahead, Santee Cooper is positioned to still offer low-cost, reliable electricity and water that benefits 2 million South Carolinians. Again, I understand our customers’ frustration. We remain focused on reducing the impact of this project on them.
Interim President and CEO