News | September 1, 2017

S.C. must fix flawed utility process and pursue solar to meet state’s power demands

The financial meltdown rippling from the failed V.C. Summer nuclear power station must spark changes in the way regulators consider new utility projects, according to SELC attorneys.

At the same time, the attorneys say, South Carolina should make a full commitment to pursuing solar energy as a lower-cost option the state’s power customers.

What we have now is a $9 billion hole in the ground that won’t power even a single lightbulb,” said Blan Holman, managing attorney in SELC’s Charleston office. “If regulators don’t use this costly debacle to overhaul their outdated thinking on power plants and electricity delivery, we are doomed to repeat the same mistakes. And South Carolina power customers are doomed to keep paying for those mistakes.

Holman said the state is stuck in antiquated thinking that electricity must be created by massive, centralized, and costly power plants, and then sent out through thousands of miles of transmission lines.

That system, aided by utility friendly state legislation called the Base Load Review Act, allows power companies to put all the financial risk for building new plants on customers who pay extra on their bills. The utilities make money even if the power plants blow their budgets or fail, as the V.C. Summer plant did.

In short, the system forces power customers to pay more on their bills, while the power-company executives make more money, no matter what happens with the plant, Holman said.

A proven but underused model in South Carolina relies on solar power to deliver electricity across the state, both for individual homeowners and for entire communities. Solar power puts the financial risk on private companies – not utility customers – to generate power. That model spreads smaller solar facilities across the state instead of relying on the massive hub-and-spoke system of centralized power plants and transmission facilities.

The South Carolina sun is powering 20,000 homes now, said Lauren Bowen, an SELC attorney focused on solar power. In five years, she said, there could be enough solar projects in the state to match all the power output that was anticipated from the failed nuclear plants.

Further, she said, solar power doesn’t need pipelines and, unlike fossil-fuel plants, doesn’t threaten customers with fluctuations in their bills when the cost of fuel rises. Solar doesn’t pollute the air or water, and it doesn’t subject communities to the risks of fuel leaks and spills, or radioactive contamination.

South Carolina’s persistent sun ranks as the tenth best solar resource in the nation, Bowen said. But the state is well behind neighboring North Carolina and Georgia in taking advantage of that resource.

South Carolina state lawmakers and regulators are convening hearings and meetings to dissect what went wrong with the proposed nuclear plant. Officials at SCE&G, co-owners of the V.C. Summer plant, admitted to state regulators that they did not have a detailed construction schedule or a cost estimate when they started building the plant and started billing customers to cover the expenses.

Utility officials say they also badly overestimated electricity demand and the cost of other fuels, like natural gas. Compounding the financial mess, the officials vastly underestimated the cost and the time needed to bring the plant online.

SELC on behalf of the South Carolina Coastal Conservation League repeatedly pressed state regulators in the past several years to lessen the financial burden the utilities were heaping onto their customers. But in hearing after hearing, state regulators refused to force the utilities to offer cost-saving energy efficiency programs for their customers, even as the bills kept climbing.

The hearings are revealing that the nuclear plant was poorly planned and not properly overseen. But, unlike private ventures, there was no compelling incentive to control costs and keep the project on schedule because the utilities had a guarantee that current power customers would pay the runaway costs.

Holman said that must change. And if the state doesn’t take a thorough look at how it provides electricity to its citizens – and fully explore cost-saving solar alternatives – then customers will remain the unwitting financial backers of poor planning and bad decisions.