Last week the South Carolina House and Senate both started down a road to sell Santee Cooper and relieve the massive debt hanging over the heads of consumers. Now, the legislature needs to complete that journey by closing the sale. That’s the only outcome that will provide a financial benefit to South Carolina families.
It’s a simple choice, although the details are complex. The numbers are big either way. Let’s dive in and provide perspective. Here goes.
Debt Adds Up
It’s roughly a million dollars a day is the increase in Santee Cooper debt in South Carolina. $1,000,000/day = $41,666.66/hour = $694.44/minute. Interest that adds to the total debt.
Santee Cooper customers – direct-serve or co-op* – may find these numbers interesting. As it stands the debt will be paid by its customers, all customers of Santee Cooper.
What is this debt? There is the cost of the defunct new-build at VC Summer Nuclear. That is about $4 billion. That is owed on physical goods that were purchased, services from construction crews, engineering work, dirt work, and the list goes on. As you are building a house there are costs that add up even if you do not finish the house. When the organizations that committed to build the nuclear plant stopped, they had money that was already spent.
There is another $4+ billion. Some of this is ongoing costs of operations at Santee Cooper. A lot is interest on loans for the cost of the terminated nuclear facility. The project stopped in July 2017. Additional costs did not, since interest keeps being added.
A “to the dollar” assessment is tough because it changes constantly and the numbers are not necessarily transparent. Checking around for sources of clear information did not provide much. But at eight or nine billion the magnitude of the debt is staggering. The company’s debt is the size of the entire South Carolina state budget. Hard to ignore. Saving consumers from being stuck with this staggering debt is the sort of thing that should keep elected officials up at night – because if they fail to act there will surely be consumers spending some sleepless nights worried about paying higher electricity bills.
The average South Carolina per capita income is $26,645 per year. That is $512.40 per week. (Keep in mind, this is not per worker, but per person in South Carolina, whether working or not. No matter the age.) (Source)
If the average per capita weekly income is $512.40, and the nuclear debt is $41,666 an hour, that takes the weekly income of 81.3 citizens to pay the debt interest each hour.
Or 1,952 people’s weekly income each day to pay the nuclear debt.
Or 13,661 people each week to pay the interest debt.
Or, 710,382 people each year to pay the interest on the debt. That’s about the population of the top 14 South Carolina cities.
Forbes printed this: “In a debacle that Governing Magazine refers to as ‘one of the greatest wastes of money in any state’s history,’ South Carolina lawmakers are scrambling to address a situation in which Santee Cooper, an 80 year old state-owned utility, and South Carolina Gas and Electric (SCG&E), an investor-owned utility, have racked up more than $9 billion in debt for two incomplete and now abandoned nuclear reactors at the Jenkinsville, S.C. VC Summer power station.”
It is a big problem that needs leadership and speed to solve. Kudos to the people who introduced bills to help consumers in this way.
*Direct serve customers get their power from Santee Cooper. Many co-ops get power from Santee Cooper and then sell that to their customers – they are indirect customers. Both are exposed to the Santee Cooper debt.
Co-ops served by Santee Cooper: Aiken Electric, Berkeley Electric , Black River, Blue Ridge, Broad River, Costal Electric, Edisto Electric, Fairfield Electric, Horry Electric, Laurens Electric, Little River Electric, Lynches River Electric, Marlboro Electric, Mid-Carolina Electric, Newberry Electric, Palmetto Electric, Pee Dee Electric, Santee Electric, Tri-County Electric, York Electric