Santee Cooper, South Carolina’s state-owned utility, plans to start talks with South Mississippi Electric Power Association (SMEPA) for a power purchase agreement where SMEPA might eventually hold a minority interest in Santee Cooper’s share of two new nuclear units that will be built at the V.C. Summer station in South Carolina.
Santee Cooper holds a 45% interest in Summer units 2 and 3 that were approved by the U.S. Nuclear Regulatory Commission (NRC) March 30. SCANA (NYSE: SCG) subsidiary South Carolina Electric & Gas owns 55%. Santee Cooper has, however, been looking to reduce its 45% ownership stake.
The letter of intent, announced April 13 by Santee Cooper, calls for SMEPA to secure from 2% to 7% of the capacity and energy from the new generating units, which is roughly 4% to 14% of Santee Cooper’s ownership in the new units.
The letter of intent also includes as part of the potential transaction an option for South Mississippi Electric’s future acquisition of a portion of Santee Cooper’s ownership interest, Santee Cooper said in a news release.
The letter of intent sets no timetable for the negotiations. “And yes, we continue to talk to Duke,” a Santee Cooper spokesperson said in an email. The South Carolina-owned utility announced many months ago that it was in talks with Duke Energy (NYSE: DUK) about that company taking a stake in the new Summer units.
The NRC commission approved V.C. Summer units 2 and 3 in a 4-1 vote on March 30. Each of the new nuclear units will have a generating capacity of more than 1,110-MW.
SCANA has said the new reactors could go forward without a U.S. Department of Energy loan guarantee. “We have provided information to DOE as part of the loan guarantee application process, but DOE has not provided us with any specifics related to terms and conditions that might be attached to the loan guarantees,” a SCANA spokesperson said.
The two new reactors are expected to start operation by the end of 2018. As for South Mississippi, it announced in 2010 that it would purchase a minority interest in the integrated gasification combined-cycle power plant planned in Kemper County, Miss., by Southern Co. (NYSE: SO) subsidiary Mississippi Power.
South Mississippi Electric is a not-for-profit cooperative that generates, transmits and sells wholesale electric energy to 11 member distribution cooperatives that serve 56 of Mississippi’s 82 counties.