Proposal would lower nuclear plant costs for Santee Cooper customers
A bill passed this week by the U.S. House would let Santee Cooper share in billions of dollars in tax credits that will be available if construction of new reactors at the V.C. Summer Nuclear Station in Jenkinsville moves forward.
The measure, which still needs Senate approval and President Donald Trump’s signature, would result in lower costs for customers of the Moncks Corner-based utility and would level the playing field with investor-owned South Carolina Electric & Gas — a partner in the project that’s already eligible for the credits.
A 2005 law that created the credits made them available only to entities that pay federal taxes. As a state-owned public power provider, Santee Cooper does not pay federal taxes.
Rep. Tom Rice, R-Myrtle Beach, proposed the legislation that would let public utilities allocate their nuclear-related tax credits to another tax-paying entity — for example, a construction contractor or nuclear plant designer.
“It would allow Santee Cooper to monetize our portion of the credits by negotiating terms for transferring them to eligible partners,” said Mollie Gore, the utility’s spokeswoman.
Gore said any money the utility gets from selling the credits “will be passed through to all our customers, reducing customer costs associated with the nuclear project.”
SCE&G — which would own 55 percent of the new reactors, with Santee Cooper owning the rest — has previously stated that the money it gets from the tax credits would go to customers.
“We will pass the credits to our customers for their benefit as we earn them,” said utility spokeswoman Rhonda O’Banion.
The credits are expected to total nearly $2.3 billion over an eight-year period if both reactors are built. Santee Cooper’s share of those credits normally would be around $900,000 although the utility probably would not get that much through a sale to a third party.
“Ultimately, terms would be dependent on negotiations,” Gore said.
The proposed legislation also would extend the deadline for construction of the reactors. Under the current law, they must be completed by the end of 2020. The proposal calls for them to be built “as rapidly as is practicable after Dec. 31, 2020.”
Rice, during a committee meeting last week, said if the deadline isn’t extended, “it will cost individual ratepayers hundreds if not thousands of dollars in increases in their annual utility bills.”
The bill passed the House by a voice vote but it is expected to face opposition in the Senate, where several legislators see it as a bailout for a nuclear industry with a history of financial and environmental mismanagement. The Senate has not scheduled a vote on the matter.
Utility officials say the tax credits are crucial to development of the V.C. Summer project, which was thrown into uncertainty following the March 29 bankruptcy of lead contractor Westinghouse Electric Co.
Since then, Santee Cooper and SCE&G have been paying for construction to continue while they study whether to go forward with one or both reactors or to scrap the project altogether.
The current deadline for the decision is June 26, although previous deadlines have been extended.
The legislation also would benefit Plant Vogtle, a nuclear project in Georgia where Westinghouse was hired to build two reactors. Public power providers are among the minority partners in that project, which likely can’t be finished by the end of 2020.
The V.C. Summer site broke ground in 2011 with the expectation that the first reactor would be online in mid-2016. The latest construction timeline puts both reactors online by December 2020, although that probably isn’t feasible with the Westinghouse bankruptcy.
The Jenkinsville project also is over budget, with its current $14 billion price tag about 22 percent higher than the original $11.4 billion cost.