Santee Cooper customers should expect a double cost hike in 2025 after years of frozen power rates
Electrical transmission power line. (Stock photo by Thianchai Sitthikongsak via Getty Images)
Residential customers of South Carolina's state-owned utility will likely see their monthly bills go up twice this year — an average of $11 in April and $5 more in July for the typical customer.
This second round of rate hikes come as Santee Cooper and its customers reach a legal settlement related to the failed expansion of the V.C. Summer nuclear plant in Fairfield County.
Power customers sued the Moncks Corner-based utility after cost overruns and mismanagement led to the 2017 abandonment of the nuclear project — after Santee Cooper and its former partner, South Carolina Electric & Gas, spent $9 billion.
Santee Cooper's share of the debt was $3.6 billion.
Here's how much SC power customers are still paying for a failed nuclear project
That lawsuit led to a rate freeze in 2020, which expired at the end of last year. While the utility was barred from raising electricity rates during that time, it was allowed to run up a tab for what the agreement called 'just and reasonable' expenses — such as costs related to natural disasters and other unplanned events.
That bill is now coming due for the more than 200,000 customers Santee Cooper serves directly in Berkeley, Georgetown and Horry counties, as well as customers of South Carolina's power cooperatives that buy power from Santee Cooper.
Santee Cooper's governing board signed off this week on an agreement deciding how much of those charges it would pass on to customers. Central Electric Power Cooperative, which buys power from Santee Cooper and other sources to supply the 19 power cooperatives around the state, signed off last week.
The agreement still needs the approval of former state Supreme Court Chief Justice Jean Toal, the retired judge who has overseen the case, before it goes into effect.
In all, Santee Cooper can charge for $550 million worth of expenses. It will bill about 65% of that to the cooperatives.
The utility will take the hit for about $155 million, writing that off in the company's financial statement, Ken Lott, its chief financial officer, told the board.
Santee Cooper will spread collections out over 14½ years starting in July, the utility's head attorney, Carmen Thomas, told the board.
Central Electric CEO Rob Hochstetler said his agency and others involved in the lawsuit did manage to get the bill knocked down on some costs Santee Cooper had sought to recover: A spike in natural gas prices the utility had to pay after Russia's invasion of Ukraine and a fire at an Illinois coal mine that Santee Cooper relied on for its supply.
Santee Cooper seeks potential buyers to restart failed SC nuclear expansion project
'In any kind of negotiation, no one gets everything they want, but we're better off than where we started,' he said.
Central Electric also has been preparing cooperatives and their members for this added expense, Hochstetler said, factoring the anticipated increase into the rates it charges the cooperatives it buys for.
In response, some cooperatives have held off on construction projects, instead saving the money so their customers wouldn't face as large a bill. Others have had to pass more of that cost on but have already started making adjustments so customers wouldn't feel the hit all at once.
Hochstetler said having the payment spread over more than 14 years also is a plus. As South Carolina's population continues to grow, the cooperatives expect to gain more members to help share in the cost over time.
'The cost per member gets lower and lower,' Hochstetler said. 'It's the same amount of dollars, but we're shrinking it. That, to me, is good for our state.'
This latest rate hike follows an earlier one approved by Santee Cooper's board in December.
Executives asked for that bump, which starts in April, to cover a $40 million revenue deficit projected for this year and to cover the costs of building out its system to serve a growing customer base.
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