Editor's note: This piece originally ran in The Post and Courier on Dec. 16.
More than four months after SCANA and Santee Cooper announced the demise of their partially built nuclear plant, the magnitude of the disaster still boggles the mind. We …
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More than four months after SCANA and Santee Cooper announced the demise of their partially built nuclear plant, the magnitude of the disaster still boggles the mind. We know that the two utilities wasted $9 billion on the facility, and that virtually none of that amount is recoverable. Thanks to insightful investigative reporting by The Post and Courier, we also know that losses of comparable magnitude occurred in at least four other Southern states - on "clean coal" plants in Mississippi and Florida, on aborted upgrades to a Florida nuclear plant and on nuclear projects in North Carolina and Florida that were never even started. And we know that in each of these states, legislators set the stage for catastrophe by providing blank checks for the utilities, drawn on the accounts of millions of ratepayers.
In the coming years, South Carolina energy producers will spend another $9 billion on new capacity and old plant replacement. Will they repeat the errors of judgment that led inexorably to the Jenkinsville nuclear debacle? Or will they prepare the state for an era when the least costly power is also the cleanest power? It all depends on whether the S.C. General Assembly will enact meaningful reform during the upcoming legislative session.
First, though, let's put the size of the loss in perspective. Nine billion dollars amounts to:
- Almost three times the amount of money the state allocates annually to our schools - K-12 and higher education;
- 15 times SCANA's reported profit in 2016;
- 150 percent of SCANA's market value on Dec. 14;
- 18 times the amount of money U.S. taxpayers lost when the much vilified solar manufacturing company, Solyndra, declared bankruptcy;
- Four-and-a-half times the amount of money the city of Charleston estimates it would take to end flooding and substantially reduce the risk of hurricanes, and
- Slightly less than half of what the Confederacy spent fighting the Civil War (in 2011 dollars).
Now let's consider what $9 billion could have done had it been invested in energy efficiency and clean energy production, instead of being left to corrode in the middle of the state's largest mud puddle. Energy efficiency has been known for decades to be lower cost more than any power generation option. Furthermore, solar energy now ranks as the least expensive generation technology available and has been cost competitive with nuclear for the past five years. Per kilowatt hour, only natural gas is comparable in efficiency to solar power.
If SCANA and Santee Cooper had spent $9 billion on solar facilities, they could have produced around 10 million megawatt hours of electricity per year, representing about 12 percent of the state's total annual energy sales. Or, if the utilities had spent $9 billion on programs to make homes and businesses more energy efficient, we could have achieved annual savings at least equaling the amount of energy the nuclear plant would have generated.
This is to say that had SCANA and Santee Cooper invested in clean energy technology, the result could have powered more than one-tenth of the state, without carbon pollution or waste disposal problems. And remember, unlike a coal plant or a nuclear plant, solar energy production and energy efficiency are not "all or nothing" propositions. These can be built incrementally, and each increment can begin producing electricity as soon as it is completed. Consequently, there is no need for front-loading rate increases, no need to commit to large capital expenditures on facilities that may turn out to be unneeded or uneconomical, and no risk of the entire proposition crashing and burning.
But South Carolina, operating more like a tribal society than a modern state, conformed to former House Speaker Bobby Harrell's assesment: "When you're in the General Assembly, you have a need to be able to trust the people in authority." And trust authority they did - including lobbyists like Richard Quinn, whom SCANA hired for assistance on legislative matters.
How visible was the problem? The Sierra Club objected to the Base Load Review Act (cynically branded by utility lobbyists as the "Rate Payer Protection Act"), pointing out many of the risks that later plagued the project. Six members of the House voted against the law, including four from Charleston. So did Sen. Chip Campsen, R-Charleston. Gov. Mark Sanford refused to sign the bill.
Nine billion dollars later, the trust has begun to wear thin. Reform is in the air. But there is still a strong risk of recidivism. The new SCANA leaders, at the executive and board levels, were in positions of authority throughout the entire nuclear meltdown. Exactly the same is true with Santee Cooper. The only change is that they have moved up a notch in the hierarchy.
Structurally, nothing has changed either. The Legislature will debate a variety of reform measures in the new year, many of which are no more than window dressing or grandstanding.
True reform must include new safeguards that require regulated and publicly owned power producers to choose the least cost, cleanest technologies available. True reform must also infuse the power production sector with real competition, so that the market can serve as a primary driver of innovation and efficiency.
Dana Beach is executive director of the Coastal Conservation League.
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