The nuclear morass that has ensnared utility executives, state regulators, and legislators in South Carolina and Georgia shows no signs of easing its grip. Southern is set to decide soon whether its Georgia Power subsidiary will seek to complete Vogtle 3 & 4 even though the total cost for the much-delayed nuclear project has now ballooned to an estimated $25 billion. How those economics can ever pencil out is beyond me, but that is not the topic for today. Across the border in South Carolina, the blame-passing game has now started in the wake of Santee Cooper’s decision to pull out of the similarly delayed and way-over-budget V.C. Summer 2 & 3 project: Legislators in the state launched a series of hearings this month on the project, and the first order of business for Kevin Marsh, chairman and CEO of SCANA Corporation (the parent of South Carolina Electric & Gas, the lead partner in the Summer project) was to remind everyone listening that the company had done everything by the book, and that state regulators had continually vouched for the prudence of the utility’s decisions. But that is for another column as well.
What caught my eye, and what nobody at either utility ever wants to talk about, was the first bullet on the first page of Marsh’s presentation (which is available here). “Why did we choose nuclear in 2008?” he asked, rhetorically, I hope. His lead answer? “Growing customer demand required the addition of new base load generation.”
And therein lies the rub. Growing demand in the early 2000s clearly played a major role in pushing both Georgia Power and SCE&G to ask regulators to approve their respective nuclear projects. But the absence of similar growth, in fact the absence of any growth at all since the 2008-2009 recession and its consequent impact on the need for the projects, has been largely ignored by both utilities, as is abundantly clear in a review of their state-mandated integrated resource plans. Let’s take a look.