Santee Cooper’s Reform Plan Provides Certainty
Friday, February 14th, 2020
Offering new certainty in pricing, a greener power supply and transformed governance, Santee Cooper’s Reform Plan keeps customer pricing stable for seven more years, adds 800% more solar to its current generation mix, pays off an amount equal to the nuclear debt in 12 years, and dramatically increases stakeholder input and transparency. It also continues Santee Cooper’s unique economic development efforts, superior reliability and excellent safety record while keeping control, decision-making and employment with South Carolinians.
“Our goal is to build a brighter future for South Carolina,” said Mark Bonsall, president and CEO. “We acknowledge our role in the V.C. Summer 2 and 3 project, which we shut down. We apologize that we had to do so, are working hard to make it up to customers and the state, and this Reform Plan is a huge step forward in that effort.”
Let’s break it down:
Price stability for customers:
The Reform Plan produces net present value savings of $2.7 billion over 20 years, largely through a greener energy mix and other efficiencies. Those savings will help pay off debt and provide continued price stability for customers for at least another seven years.
All told, Santee Cooper customers will not have had any price increases for up to 13 years once 2027 comes around.
Any price increases after seven years will be at or below the rate of inflation.
The typical Santee Cooper residential customer already has the lowest average monthly power bill in the state compared to other large utilities in the state (an average 9% lower than customers of these utilities).
Increasing governance and transparency:
The Reform Plan targets transparency in decision-making with an intense focus on cost to customers and stewardship of South Carolina’s economy and environment. Our Board already has adopted Resource Planning Principles and Pricing Principles that will guide Santee Cooper’s decision-making. The Plan also would create an Integrated Resource Planning Group with people from different stakeholder groups, including customers, legislators and community advocates, and require that we submit pricing principles and plans for review by the Office of Regulatory Staff.
Public hearings will be required for any proposed generation of 125 megawatts (MW) or more and transmission additions at the 125-kilovolt level or above.
We will seek to place into state law the processes used to set electric prices and conduct operations of the Board of Directors.
Significant debt reduction:
Santee Cooper will pay off $3.6 billion in debt in 12 years – an amount equal to the outstanding nuclear debt. Savings will continue to fuel debt payoff beyond those 12 years.
Our debt leverage ratio is forecasted to reach a historic low of 68% by 2026. It will continue to improve beyond 2026.
Growing environmental commitment:
Santee Cooper proposes adding 1,500 MW of new solar power to its generation mix. That’s an 800% increase and enough to power 750,000 homes. It’s also more solar than is currently installed in the entire state.
In addition to the Business Forecast’s plan to bring online 500 MW of natural gas-fired capacity in the late 2020s, we will make additional purchases of up to 500 MW from other gas units as needed beyond that.
In keeping with our 2019 Business Forecast, we will:
add 200 MW of battery storage, the largest commitment to this technology in South Carolina, to help maintain reliability and optimize our solar resources
close the four coal-fired units at Winyah Generating Station beginning in 2023
work with Central to develop 200 MW in conservation savings
These steps help reduce Santee Cooper’s carbon emissions by 43% compared to 2005 numbers and save money without sacrificing reliability.
“The Reform Plan emphasizes transparency, risk management, price and service stability, adaptability and that South Carolina is home,” said Bonsall. “It also keeps all the benefits South Carolina realizes from a state-based electric utility, such as economic development and environmental stewardship, and it keeps control of that utility local. It is a very certain path forward.”