CoolSculpting in Santee, SC

As utilities and lawmakers warn of rising demands for energy spurred by data centers, Santee Cooper approved next steps to add over 4,500 megawatts of power to South Carolina’s grid.

A majority of the new power comes from two plans: a 2,200 megawatt natural gas plant in Colleton County and the completion of the V.C. Summer nuclear reactors in Fairfield County.

The Santee Cooper Board of Directors met Friday morning in downtown Columbia. The group typically meets in Moncks Corner, near Charleston.

The board approved state-owned utility Santee Cooper’s role in building the natural gas plant in Canadys on a former coal plant. Santee Cooper will build the natural gas plant with Dominion Energy. The General Assembly allowed Santee Cooper and Dominion Energy’s partnership on the plant earlier this year. The two utilities will split the energy generated, with Santee Cooper owning 1100 megawatts.

Building the natural gas plant will cost about $5 billion, with each utility taking on half the cost, according to the meeting presentation. The natural gas plant is expected to be operational in the early 2030s, according to a news release.

A pipeline will have to be built through South Carolina for the natural gas plant, a point of concern for some residents and conservationists.

Santee Cooper’s board also approved a letter of intent for Brookfield Asset Management to complete two V.C. Summer nuclear reactors. The utility and SCE&G abandoned the project after spending $9 billion eight years ago, and customers are still paying for the failure on their energy bills. If completed, the nuclear reactors could add 2,200 megawatts of energy to the grid.

Two smaller projects also advanced Friday. A 300 megawatt battery energy storage system will be built and operated by a private company, Aypa Power, at the Jefferies Generation Station. While the battery energy storage system doesn’t create energy, it allows Santee Cooper to store and disperse generated power.

The board also approved procurement of two combustion turbines at Winyah Generating Station in Georgetown. The turbines can run on natural gas or fuel oil and will add 80-120 megawatts to the grid, according to a news release. The budget for the project is about $293 million, according to a presentation to the board.

A proposed natural gas plant in Colleton County has doubled in price over the past year, adding $2.5 billion to the price tag.

Santee Cooper and Dominion are planning a natural gas plant in Canadys on the property of an old coal plant. The two utilities will split the cost of construction and the 2,200 megawatts of energy generated.

Santee Cooper and Dominion Energy received permission from the lawmakers to work together on the Canadys gas plant earlier this year. While discussing the project in front of a special Senate committee in August 2024, Santee Cooper CEO Jimmy Staton said the project’s estimated cost was $2.5 billion.

“It should be north of the $2.3 to $2.5 billion, or in that $2.3 to $2.5 billion total range,” Staton said at the time. When asked by Sen. Majority Leader Shane Massey, R-Edgefield, if that was the total cost Santee Cooper and Dominion Energy would split, Staton replied “That’s correct.”

But last week, the utility estimated the plant would cost $5 billion. The Santee Cooper board of directors approved the utility’s role in building the natural gas plant Oct. 24 at a scheduled meeting in Columbia.

A spokesperson for Dominion Energy confirmed in an email its share of the project cost was $2.5 billion. Santee Cooper will pay the other half.

The higher cost is based on current market prices, Santee Cooper spokesperson Mollie Gore said. The $2.5 billion estimate was made using historical price data for similar projects, she said.

The natural gas plant’s construction will cost $5 billion, Gore said. It does not include a necessary planned pipeline that will snake across the Georgia border through Hampton County into Colleton County. The 71 mile pipeline, slated to be built by Kinder Morgan, is expected to cost $431 million, according to a fact sheet from the company.

Utilities are pushing forward with new generation projects as demand from data centers and other large customers rise in the state. Last week, Santee Cooper OK’d next steps for over 4,500 megawatts of power.

Why did cost double?

Rising costs of materials and labor contributed to the higher cost of constructing the Canadys natural gas plant, Gore said.

Demand for energy is rising across the country, so demand for the construction materials to build generation is also rising, Gore said. That has led to inflated prices on materials, like gas turbines, she said. Gas fired turbines have seen higher costs and longer wait times as demand soars across the country, according to a May analysis from S&P Global.

The price of gas turbines, pressure from tariffs and cost of construction and engineering contracts impacted the overall price of the project, said Dominion spokesperson Rhonda O’Banion in an email.

“Many variables can affect this estimate, either upward or downward,” O’Banion wrote in an email.

A more exact cost will be made public over the next few months when the project seeks approval from the Public Service Commission. Massey said regulators would need to figure out why the cost doubled.

“It’s frustrating to me that customers are having to pay for V.C. Summer that’s not completed,” Massey said. “And then also going to have to pay for Canadys as well. But it’s even more frustrating if now you’re telling me that eight months later, the price is doubled.” The Senate passed the bill allowing the utilities to collaborate on the project in May this year, but Massey voted against the bill.

Massey said he believes if the V.C. Summer nuclear reactors had been completed, the proposed natural gas plant might not be necessary. Santee Cooper and the now defunct SCE&G abandoned two V.C. Summer nuclear reactors in 2017. Ratepayers are still paying for the failed project on their energy bills.

Efforts are underway to try and restart the abandoned nuclear project, with asset management company Brookfield chosen to take over the project. Some have worried the additional energy two new V.C. Summer reactors and the Canadys natural gas plant won’t be necessary, including John Brooker, the energy policy director at Conservation Voters of South Carolina.

But Staton told reporters Oct. 24 the projects would be useful regardless of the actual demand because the utility could always retire older facilities.

“We believe the state is going to grow enormously, like it has been,” Staton said.

“I think we’re in a great position to be able to, irrespective of what happens, to keep energy affordable and reliable and manage the implications of no growth or limited growth with other resources,” he continued.

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 V.C. 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.

COLUMBIA — South Carolina’s state-owned utility is entering negotiations with a New York investment firm to finish partially built nuclear reactors abandoned eight years ago.

Santee Cooper’s governing board voted unanimously Friday to allow the power company’s management team to officially begin negotiating with Brookfield Asset Management on an agreement to restart construction of the failed expansion project at the V.C. Summer nuclear plant in Fairfield County.

Brookfield, which boasts a $1 trillion global investment portfolio, was among more than 70 companies to express interest after Santee Cooper put a call out nine months ago. It was a partner on one of 15 proposals Santee Cooper ultimately reviewed.

Negotiations will continue over the next six weeks, CEO Jimmy Staton said. Santee Cooper will name the other partners on the project at a later date.

Santee Cooper did not make public the potential terms of the deal, expected to be valued in the billions.

But Staton said Santee Cooper would use any cash proceeds it may earn from the agreement to pay down debts still owed on the abandoned nuclear facility. Customers could also benefit from the power the reactors would produce if finished.

In June, Staton told the Daily Gazette customers shouldn’t expect to see the debt come off their power bills, but his earlier predictions have changed.

“I feel pretty confident that our customers will realize some fairly significant value, both rates wise and otherwise, in this process,” Staton told reporters after Friday’s meeting.

Santee Cooper and the now defunct South Carolina Electric & Gas started construction on the two first-of-their-kind nuclear reactors alongside an existing unit near rural Jenkinsville in early 2013. But the project was riddled with delays, cost overruns and fraud that led to multiple federal convictions of former executives.

The utilities abandoned the plant’s expansion in 2017, but not before jointly spending $9 billion on the reactors that never produced a single megawatt.

Santee Cooper’s share of the debt was $3.6 billion, which customer continue to pay for on their monthly bills. Those payments could continue, in part or in full, through 2032, depending how much money Santee Cooper can secure for a buy down in any final deal with Brookfield.

If the two companies manage to ink a contract, Staton pledged that Santee Cooper customers will face no new costs associated with the project. All of that will be borne by Brookfield, as well as big tech companies, such as Google or Meta, that could buy the nuclear power a finished plant would generate.

“We’ve protected the rate payers of South Carolina, and quite frankly, I think we’ve shifted the paradigm of how nuclear energy gets built here in the United States,” Staton said.

After the firms mothballed the reactors eight years ago, SCE&G’s parent company, SCANA, collapsed. The reactors’ designer, Westinghouse, spiraled into bankruptcy.

Virginia-headquartered Dominion Energy bought up SCANA.

Dominion is not part of the deal, so it won’t at all pay down debt saddled to its 800,000 South Carolina customers. They’ll continue to pay over the next 14 years for $2.3 billion worth of debt from the abandoned expansion.

And it was Santee Cooper’s potential new partner, Brookfield, that took over Westinghouse in 2018.

To restart construction, Santee Cooper and Brookfield will need to find a construction firm. Westinghouse, which remains a part of Brookfield’s investment portfolio, won’t be the builder this time, Staton said.

It will take a year or more of due diligence, licensing and permitting before any construction on the inactive plants can restart, Staton added.

Among the funds Brookfield manages is a portfolio focused on clean energy and decarbonization. Earlier this month, the firm announced it had raised $20 billion for the effort.

The move to restart V.C. Summer follows calls by Gov. Henry McMaster earlier this year for a “nuclear power renaissance” in the state.

And U.S. Sen. Lindsey Graham of South Carolina has vowed his support for the effort, which will ultimately have to make its way through the federal regulatory process.

Staton also pointed to a May executive order signed by President Donald Trump, which calls on the Department of Energy to prioritize approvals for 10 large-scale nuclear reactors under construction by 2030.

“South Carolina is going to have number one and number two in that process,” Staton said. “You have placed South Carolina in the epicenter of the resurgence of nuclear in the United States.”

Still, nuclear power projects are expensive and take years to complete.

Vogtle Electric Generating Plant, operated by Southern Co. in Georgia, started construction around the same time as V.C. Summer. Work on the expansion wrapped up last year. Today the site is the nation’s largest nuclear plant, with four reactors.

But adding the two newest reactors cost more than $30 billion, more than twice the initial estimates.

Construction projects go over budget and fall behind schedule. Whether it’s new homes or highways or factories, it’s nearly inevitable: because contractors underestimate the cost, purchasers want to make changes, inflation continues apace and extra time means extra money.

South Carolinians certainly learned about cost overruns during the fiasco that was the attempt by SCANA Corp. and Santee Cooper to build two reactors at the V.C. Summer nuclear plant. The price started out at $10 billion, and construction was supposed to be completed by 2013; by the time the utilities pulled the plug in 2017, they had already sunk $9 billion into the project, which was less than half completed and at least seven years behind schedule. Today, after an eight-year pause, it’s expected to cost an additional $20 billion to complete the reactors.

So there’s not a lot we or the Legislature can do about new projections that show the cost to build the natural gas plant near Canadys that the Legislature green-lighted this spring already has doubled since the two utilities told lawmakers last year it would cost $2.5 billion.

As Columbia’s State newspaper reports, Santee Cooper and SCANA successor Dominion Energy attributed the new $5 billion price tag to tariffs and the skyrocketing demand (and cost) for new power plants, driven mostly by the AI data centers that our Legislature refuses to stop S.C. governments from paying to lure here.

The result is that electricity bills will be even higher than we expected for Santee Cooper customers, although we can hope they might be offset by rate reductions from Santee Cooper’s proposed sale of the abandoned nuclear reactors to the New York investment firm Brookfield Asset Management.

There’s no such relief in sight for Dominion customers, who will be hit even harder because of the other thing we learned from the V.C. Summer fiasco: Investor-owned utilities make most of their profit by building new plants and power lines and other stuff to deliver electricity to our homes.

So as Dominion spends twice as much constructing the gas plant, it stands to make twice as much in profit as legislators assumed when they approved the joint venture.

But there is something the Legislature can do about the higher bills the Canadys cost overruns will cost Dominion customers.

Among the Legislature’s many gifts to utilities this year were provisions that potentially increase the profit that our state guarantees to investor-owned utilities. Since those changes were based on assumptions that have so clearly changed, the Legislature should reassess the law.

We don’t begrudge Dominion and Duke the right to make a profit. But there’s a limit to just how generous that profit should be. Recall, after all, that both are regulated because they are monopolies: If you live in their service area, you have no choice but to buy your electricity from them. That’s a pretty big benefit that a lot of businesses would be happy to take in return for regulations on how much they can charge.

On top of that, our Legislature has refused to pass any restrictions on the utilities’ efforts to entice those data centers — which in turn increase their need to build more profit-generating generation capacity. Dominion has gone so far as to offer extra-low rates to Google’s data centers. Santee Cooper, by contrast, has adopted a new rate plan designed to protect other customers from having to subsidize the extra generation capacity it has to build or purchase for new data centers.