We Can Hold Power Prices Stable – And Here’s How
Facts ARE Facts
Santee Cooper will not raise power prices this year. Or next year. In fact, we plan to keep power prices stable for the next five years, at least.
How can we do that? Think of our new business plan as a series of building blocks that interlock to form a years-long barrier that pushes down costs, creating savings that keep prices low and reduce our debt.
That’s a fact you can bank on.
Building Block #1: 10% headcount reduction – Santee Cooper has reduced headcount 10% compared to 2017 budgeted levels and we have committed to maintain that 10% reduction. This saves about $18 million a year, every year.
Building Block #2: Buying cheaper power – We’ve been buying cheaper power from the market to supplement our generation, saving $140 million to $150 million a year. These lower fuel prices have already contributed to several years of stable power costs for all our customers. We’ve also locked in low-cost natural gas for our Rainey Generating Station for the next three years. Santee Cooper will work to extend the lock on natural gas and also continue purchasing economical off-system power, providing additional savings into the future.
Building Block #3: Paying off debt – Just like you can with a mortgage, we’re paying off debt. We paid off $360 million of debt in October. And we plan to use internally generated cash and funds from selling our nuclear equipment to pay off another $500 million-plus over the next two years. This reduces our costs and holds the line on prices.
Building Block #4: Refinancing debt – If you’ve got a high interest rate on your mortgage and you refinance for a lower rate, you pay less over time and less each month. Santee Cooper does the same thing, and we’ve got a roughly $163 million refunding in the works for later this week. We’ll keep looking for opportunities to trade higher rates for lower and achieve more savings.
Building Block #5: Leaner, greener generation –Santee Cooper’s new resource plan calls for closing an older generating station, adding lots of solar power and taking other steps that save at least $90 million a year initially and up to $170 million a year when fully implemented (in about eight years). Replacing older, less efficient generation with new, cheaper generation adds up to big savings.
Each of these building blocks contribute to a better bottom line. As some savings run their course (such as buying cheaper power off system), others will take their place (like the savings from our new solar power). That gives all of Santee Cooper’s customers five more years of stable prices and a solid foundation for many more years of low pricing.
That is a FACT.