The Palmetto State’s nuclear renaissance centers on the $10 billion V.C. Summer two-reactor nuclear power plant project in Fairfield County. File photo
As some European countries move to phase out nuclear power in favor of alternative energy sources, South Carolina is doing the opposite: It’s embracing a nuclear renaissance, which in turn could crowd out investment in alternative energy, according to a new report.
The Palmetto State’s nuclear renaissance centers on the $10 billion V.C. Summer two-reactor nuclear power plant project in Fairfield County, which is about 30 miles outside Columbia. It was proposed in 2007 and has several years until it’s complete.
The nuke site project is the subject of a report released March 14, titled “Public Risk, Private Profit: Ratepayer Cost, Utility Imprudence,” authored by Mark Cooper, a senior fellow for economic analysis at Vermont Law School’s Institute for Energy and the Environment.
Cooper says South Carolina is important to study in the world of nuclear power in part because of the interesting way constructing the nuke site here has been financed. Under the South Carolina Base Load Review Act, ratepayers — not company shareholders— have been footing the bill for the high cost of the project’s construction. Those increases in your power bills? That’s the reason.
Cooper’s position is that ratepayers have gotten hosed in this financing deal, and the report recommends plant owners could save ratepayers as much as $10 billion over four decades if they canceled the nuclear project and developed alternative energy instead.
The private power company SCE&G owns the site along with Santee Cooper, the state’s public utility. Construction of the two reactors isn’t finished, but they are projected to come online by 2018.
For its part, SCE&G believes nuclear power is the “best low-cost, long-term solution” for South Carolina’s energy needs, according to spokesman Eric Boomhower. He adds that when the two new reactors come online, SCE&G’s energy portfolio will be about a third nuclear, a third coal and a third natural gas — and more than 60 percent will be what he called non-emitting.
“This sets us up well to effectively and efficiently meet the future energy needs of our customers while operating in a compliant and environmentally responsible manner,” Boomhower says.
South Carolina’s political leadership tends to favor nuclear power. The state generates a sliver more than half its power from nuclear energy, and politicians like the idea of attracting high-paying nuclear jobs to South Carolina. Groups like NuHub, a public-private partnership launched by EngenuitySC, are “working to maximize economic and job creation opportunities for the nuclear industry” in the Midlands, and establish the area as a “hub and global leader for nuclear energy innovation,” according to the organization’s website.
The tradeoff for making the Midlands a mecca for the nuclear industry, however, is environmental and economic risk. SCE&G customers have seen five rate hikes in their power bills in the last two years because of the V.C. Summer project, which has endured cost overruns of $280 million, according to Cooper’s report.
The Sierra Club of South Carolina this week filed an appeal with the S.C. Public Service Commission, the government oversight entity that allowed SCE&G to hike its power bills. The group argues the PSC should enforce discipline on SCE&G for its cost overruns or the company will never make the management choice to pull the plug on its project since it can always pass along the cost of it to ratepayers.
In October, Cooper testified before the PSC and questioned the prudence of continuing the V.C. Summer nuclear project as the price of natural gas has fallen dramatically since the project began.
Cooper’s new report also outlines how the Base Load Review Act gives the power company fewer incentives to use alternative energy sources like wind, solar and others because of its nuclear commitment.
Bob Guild, of the state Sierra Club, says that because the power company made such a big bet on nuclear, “They are essentially stuck selling the output of the huge nuclear plants that they’re committed to.” The state, too, makes alternative energy development difficult: Last fall, The State reported that South Carolina has some of the most restrictive policies in the nation against solar energy.
Last year Santee Cooper was looking to sell off some of its shares in the V.C. Summer project, and was negotiating with utilities in other states. At the time it rankled the S.C. Office of Regulatory Staff and public policy groups because “they believe it would leave S.C. residents bearing the risks of housing nuclear plants while other states get the benefits of inexpensive and reliable power from the projects,” reported to the Charlotte Business Journal.
According to Cooper’s report, nuclear projects are only moving aggressively forward in states like South Carolina where ratepayers foot the bill up front rather than shareholders.
“While the economic case against nuclear reactor construction was strong in 2008 when these EPC (engineering, procurement and construction) contracts were signed and the construction approved, a dramatic change in material conditions was evident by 2009-2010 and the reactors should have been cancelled,” the study said.
Boomhower, of SCE&G, said its nuclear strategy “has been reviewed and approved numerous times and has consistently been deemed prudent by the Public Service Commission of South Carolina.”
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