Santee Cooper Petitions S.C. Supreme Court Regarding V.C. Summer Litigation
Tuesday, June 26th, 2018
Santee Cooper petitioned the S.C. Supreme Court to uphold Santee Cooper’s statutory mandate and duty to set rates that cover its expenses.
At issue are lawsuits filed in circuit court by certain electric utility customers, including Central Electric Power Cooperative. These lawsuits seek, in part, to prohibit Santee Cooper from charging for debt related to the V.C. Summer nuclear project. The issue is of significant public interest and needs to be decided swiftly, to protect the state’s credit as well as Santee Cooper’s viability and ability to provide low rates, economic development opportunities and other benefits to its customers and all South Carolinians.
Santee Cooper has asked the S.C. Supreme Court to declare Santee Cooper is required by state law to set and collect rates sufficient to cover all of its expenses, including debt obligations. Additionally, state law provides a covenant to debtholders that the state would not “alter, limit or restrict” Santee Cooper’s power to collect adequate rates.
“A lengthy trial and appeal process could jeopardize the valuable state asset that is Santee Cooper,” said Senior Vice President and General Counsel J. Michael Baxley. “We need immediate Supreme Court action on this fundamental issue. Credit rating agencies have already reacted to the pending circuit court litigation, citing the uncertainty it creates.”
Central, Santee Cooper’s largest customer, buys electricity from Santee Cooper and delivers it to 20 member-owned electric cooperatives across the state. In accordance with the Coordination Agreement that both utilities signed, Central is responsible to pay its share of the nuclear project. For decades, Central has enjoyed the benefits of low cost electricity through a cost of service arrangement, and Central fully supported nuclear construction to lower its costs even further. For Central to reverse position now puts other customers and the state of South Carolina at risk.
Santee Cooper brings value to South Carolina, through providing low-cost power directly and indirectly to all 46 counties of the state, through low rates and economic development incentives that attract and retain industry and jobs across South Carolina, and through an annual payment to the state’s general fund of 1 percent of Santee Cooper’s gross budgeted revenues, which reduces the tax burden on all South Carolinians. Santee Cooper has the second-lowest average rates among 40 utilities in South Carolina, and the lowest industrial rates. Those rates will remain competitive.
“We understand the frustrations of customers, legislators and other stakeholders over the nuclear project, and we will continue to work to offset costs through potential equipment sales or other avenues,” Baxley continued. “The impact to customers and the state will be far greater, however, if these plaintiff suits continue.”