Editorial: Agreement on abandoned VC Summer nuclear reactors sets new course for SC energy

This image from the S.C. Nuclear Advisory Council shows nuclear reactor assemblies in storage at V.C. Summer nuclear site last fall. Courtesy of the S.C. Daily Gazette.

It was the biggest business failure in South Carolina history. It took out our state’s largest corporation, sent the now-defunct SCANA Corp.’s top executives to prison, cost ratepayers throughout the Lowcountry and Midlands billions of dollars, and the fallout dominated the Legislature for years, forcing lawmakers to roll back a little-known law that incentivized utilities to overbuild.

When SCE&G and state-owned Santee Cooper abandoned their over-budget, over- deadline nuclear construction project eight years ago, it was difficult to imagine that the fiasco would ever be anything more than an expensive lesson for our state — and indeed a lesson that more and more legislators are starting to forget.

So assuming the deal doesn’t fall apart, Santee Cooper’s announcement Friday that it has selected the New York investment firm Brookfield Asset Management to purchase the two unfinished reactors at the VC. Summer nuclear site can only be characterized as a huge win for our state. And a wonderful surprise.

Utility officials say the reactors will produce 2,200 megawatts of electricity — about twice Santee Cooper’s share of the controversial natural gas plant it plans to build in Canadys — along with several years’ worth of jobs on the construction project.

The utility hasn’t announced the anticipated purchase price, although Sen. Tom Davis suggests — based on his conversations with utility officials — that it will be enough to significantly reduce the V .C. Summer surcharge the utility’s customers are still paying. Frankly, any amount of money is more than all but the most optimistic anticipated for years — and more than most people expected even when the Legislature voted earlier this year to direct Santee Cooper to seek a buyer for the abandoned construction project.

What changed is the monstrous demand that new data centers are placing on the power grid, and a presidential administration that is pro-nuclear. None of this is a done deal, of course. There are countless ways this could fall apart and send Santee Cooper back to the runner-up bidders. Santee Cooper CEO Jimmy Staton said completing a contract “will continue to be a long process” and noted that Friday ’s unanimous vote by his board of directors to move forward with Brookfield means “we are reaching the end of the first step in this process.”

Negotiations are expected to last six weeks, followed by a year or more of due diligence, licensing and permitting before any construction resumes. And that’s before we even start talking about the lengthy construction process, which could easily continue through multiple changes in federal nuclear policy.

But perhaps the biggest promise is that this deal (or a replacement deal) could launch what Mr. Davis and Mr. Staton both called a new paradigm in energy production, akin to the sort of bring-your-own electricity model we had called on data centers to employ just a week ago. As Mr. Davis put it in a guest column in

our Friday paper, this “innovative approach to power generation … places the financial burden on the private hyperscalers that are creating the demand for new energy capacity.”

“I think we’ve shifted the paradigm of how nuclear energy gets built here in the United States,” Mr. Staton told the board during a marathon meeting. “Instead of it being built with the risk being absorbed by the customers, … it will be absorbed by the entities seeking to build these assets.” 

The idea that the cost of new power generation would be borne by the “private hyperscalers” is crucial at a time when the demand for astronomically expensive new power plants is driven almost entirely by large industry, and more specifically dizzily proliferating data centers, with their voracious need for power to power artificial intelligence and the crypto industry.

The board’s unanimous decision to move forward on a deal comes just months after Santee Cooper changed its rate structure to make it less likely that individuals, retail and traditional industries would get stuck paying for the new power generation demanded by data centers and other large new industries that South Carolina's governments are enticing to move here. The Legislature should require Dominion and Duke Energy to do the same.

Santee Cooper's approach to data centers and other power-hungry industries and its decision (with legislative encouragement) to preserve what many of us saw as a useless asset on the V .C. Summer site both demonstrate a long-term, ratepayer-forward perspective that we don’t expect from the private sector. We won’t say it demonstrates that the politicians who insisted that we should sell the state-owned utility to an investor-owned utility were wrong when they kept talking about the inherent superiority of the free market. But that’s because when it comes to electric utilities, there is no such thing in South Carolina as the free market.

The state-owned utility is now in a position to set an example for the regulated monopolies on how to allocate costs and responsibilities among its various ratepayers. If the regulated monopolies don’t decide on their own to follow, then the Legislature needs to insist that they do.