MONCKS CORNER, SC (WCSC) - Santee Cooper's board of directors has approved a request to cancel two proposed rate increases for its customers.
The move comes a week after the board suspended the construction of two nuclear power units at V.C. Summer Nuclear Station in Fairfield County.
"Conditions have changed materially since the rate process began in March," Santee Cooper Boar Chairman W. Leighton Lord III said. "Our recent Board votes to suspend the nuclear project and also to accept a negotiated settlement with Toshiba, Westinghouse's parent company, allow us to now cancel this rate process. The Board will continue to make decisions based on what is necessary to protect the financial integrity of Santee Cooper.
The Board approved a rate study in March, prior to Westinghouse's bankruptcy, according to utility spokesperson Nicole Aiello.
Based on that study, Santee Cooper management in June proposed rate increases of an average 3.7 percent each across all customer classes that would take effect in April 2018 and April 2019.
Those rate increases would have been needed to meet additional expenses related to the nuclear project, declining load, other system improvements and environmental compliance.
Those proposed rates have been in a period of public review since June.
The move to withdraw the rate increases cancels all steps in the rate process, including a comment meeting that had been scheduled for Aug. 14 in Moncks Corner, Aiello said.
An October public hearing on the rate proposal and a scheduled December board vote on the increases have also been canceled, she said.
Toshiba, the parent company to Westinghouse, agreed to settle its parental obligations for the project July 27, and Santee Cooper will use its net proceeds from that settlement to directly benefit customers.
"Toshiba's settlement will help offset the cost of the nuclear project, but Santee Cooper will still need to cover costs related to our load, other system improvements and environmental compliance," Santee Cooper President and CEO Lonnie Carter said.
The settlement will be paid in installments beginning in October 2017 and ending in September 2022.
"We will tighten our belts and continue to look for ways we can be more efficient to make up the balance," Carter said. "It is important that we hold the line on costs, and Santee Cooper's talented and dedicated workforce will rise to the occasion."
Suspending construction on the V.C. Summer expansion is projected to save Santee Cooper customers nearly $7 billion in additional capital and interest costs, officials say.
Santee Cooper's analysis of costs and schedule following Westinghouse's bankruptcy showed the cost to complete both units would be $11.4 billion including interest, Aiello said.
That figure represented a 75 percent increase over the original plan and a 41 percent increase over a fixed-price contract agreed to by all parties that took effect in November 2016, four months before the bankruptcy filing, according to a release from the utility, which also labels the updated cost of the project "uneconomical."
Santee Cooper officials say they are planning informational meetings in the upcoming weeks to discuss factors leading up to the vote to suspend the project, but a time and location has not yet been confirmed.