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Santee Cooper CEO calls V.C. Summer project an investment

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Retiring Santee Cooper CEO Lonnie Carter told the House Utility Ratepayers Protection Committee on Tuesday that future rate increases remain a possibility.

“Santee Cooper has to recover its losses, but our board will be looking for ways to tighten its belt,” Carter told the committee.

After five retail rate increases since 2009 related to the failed V.C. Summer nuclear project, which Santee Cooper co-owns, Carter faced the question of whether he thought ratepayers were being taken advantage of.

“I feel misled by the contractor, and I’m very embarrassed by that,” he said.

State-owned Santee Cooper owns 45%, SCANA subsidiary S.C. Electric and Gas 55% of the reactor project, which collapsed after main contractor Westinghouse filed for Chapter 11 bankruptcy protection in April.

Carter sat alone in front of the committee as Co-chairman Russell Ott, D-St. Matthews, asked why the Santee Cooper board was not in attendance. Carter said there was some confusion about whether the board was invited to the hearing.

Committee Chairman Peter McCoy, R-Charleston, opened the proceeding by reading a letter dated Aug. 13, 2013, in which Carter wrote to SCE&G President Kevin Marsh about concerns with the modular construction taking place at the site. The letter said the project could be in danger.

A 2016 email from Carter to Marsh reiterated those concerns. As McCoy read: “We are backed into a corner if we don’t release this (Bechtel) report. The 2013 letter was about staying on schedule. We did not know it would be uneconomical until we analyzed all the data in 2017.”

The Bechtel report, prepared at the request of SCANA to assess Westinghouse’s performance, found a lack of management, vision, goals and accountability. It was not made public until late August when legislators threatened to subpoena it.

Carter was later asked when Santee Cooper decided it could not go forward with the project.

“We got the information, and analyzed everything the first of July,” Carter said. “The board acted July 31 to suspend work on the project.”

The two utilities spent $9 billion on the two 1,117-megawatt nuclear reactors.

Carter called the project an investment and said there could be a time in the future when the company could come back and finish the project.

“I wouldn’t say the project is a failure,” Carter said. “The environment in energy changed from when we first started. We should learn from this.”

The meeting comes one day after S.C. Gov. Henry McMaster ordered Santee Cooper to cooperate with federal and state investigations. McMaster threatened to fire the board if that didn’t happen.

McMaster’s efforts to salvage the V.C. Summer project got a boost when his office received letters of interest from four would-be buyers of part or all of Santee Cooper, including three Fortune 200 energy companies, The State newspaper reported.

“We’re the best option for South Carolina,” Carter said during Tuesday’s hearing. “Selling the state-owned company would be bad for power customers.”

The governor’s office declined to identify the interested companies. McMaster initially approached Charlotte-based Duke Energy, Atlanta-based Southern Co. and Richmond-based Dominion Energy.

The (Charleston) Post and Courier identified those companies as three that expressed interest.

Santee Cooper spokeswoman Mollie Gore said in an email that she had no information on potential buyers. 

"We believe any objective analysis will demonstrate Santee Cooper's continued value to South Carolina as a public power utility," Gore said in the email.

McMaster has been seeking buyers since August, hoping for a deal that would restart work on the reactors or give utility ratepayers some of their money back.

SCE&G ratepayers had their say before the House committee last week, calling for greater accountability and transparency.

Legislators have also heard from SCANA and SCE&G executives as well as the Office of Regulatory Staff and the S.C. Public Service Commission.

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October 04, 2017

Does Mr Carter this everyone is stupid. This was a huge failure of judgement. He and the Board should be terminated and bonus should be clawed back.