Search Santee Cooper

Santee Cooper Board of Directors authorizes nuclear fixed price option

Board also approves $831 million bond sale


The Santee Cooper Board of Directors today authorized the utility to proceed with securing an option that substantially fixes the costs to complete two new units at V.C. Summer Nuclear Station. The fixed price option is an additional benefit to an amended Engineering, Procurement and Construction (EPC) Agreement that gives greater cost and schedule certainty to customers of Santee Cooper and South Carolina Electric &Gas Company (SCE&G), joint owners of the new nuclear project.

The Santee Cooper board also approved the sale of $831 million in revenue obligation bonds, primarily to finance the ongoing nuclear construction project. A portion of the proceeds will be used to refinance existing utility debt.

“Today’s board actions further enable Santee Cooper to minimize costs for customers as we strengthen and diversify our generation fleet by adding more reliable, carbon-free resources,” said Lonnie Carter, president and CEO. “The excellent response by investors shows continued Wall Street support for our strong financial management and execution of this plan. These new nuclear units will significantly tip Santee Cooper’s generation away from coal, and nuclear power features low fuel and operating costs along with impressive reliability.”

Santee Cooper owns 45 percent of the nuclear expansion project, and SCE&G owns 55 percent. The two utilities negotiated an amended EPC Agreement with Westinghouse Electric Co. LLC in October, featuring terms that incentivize schedule adherence and shift financial risk to Westinghouse for any additional delays in the current scope of work. The amended EPC Agreement also offers a fixed price option, and Santee Cooper’s authorization to proceed is contingent upon SCE&G receiving approval this fall of a related petition being considered by the South Carolina Public Service Commission.

Exercising this option will increase Santee Cooper’s budget for the nuclear project by about 20 percent, or $1.1 billion, but provides cost certainty that could save customers hundreds of millions of dollars. This would be the first time Santee Cooper has increased its project budget since the board approved the original budget in April 2012, and it would bring Santee Cooper’s total project budget to $6.2 billion.

The 2016BD bond sale included $508 million in tax-exempt series B bonds and $323 million in taxable series D bonds. The series B issue includes $91.3 million in refunding bonds, which provide $9 million in net present value savings. The term “tax exempt” means exempt from federal and South Carolina income taxes for South Carolina residents under current law.

The all-in true interest rate was 3.53 percent. Tax-exempt bonds mature from 2031 through 2056, and taxable bonds mature in 2023.

The issue drew ratings of AA- from Standard & Poor’s, A1 from Moody’s and A+ from Fitch. All three agencies reaffirmed existing ratings and a stable outlook for long-term debt.

Barclays was senior manager on the issue, with Bank of America Merrill Lynch serving as co-senior manager. Co-managers were Goldman Sachs & Co., Morgan Stanley, J.P. Morgan, U.S. Bancorp and Wells Fargo Securities. The Final Official Statement for these bonds will be available by contacting Santee Cooper Bondholder Relations at 1-877-246-3338. It will also be posted at

Santee Cooper is South Carolina's largest power provider, the largest Green Power generator and the ultimate source of electricity for 2 million people across the state. Through its low-cost, reliable and environmentally responsible electricity and water services, and through innovative partnerships and initiatives that attract and retain industry and jobs, Santee Cooper powers South Carolina. To learn more, visit