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- Electricity, energy policy, natural gas, and now nuclear is being talked about again.

Thank you once again for watching and supporting the most widely watched and longest running dialogue on Carolina business, policy and public affairs seen every week across the Carolinas.

It's not just the politics of it, but the energy industry is seeing renewed attention, policy, expansion, the threat of AI, is that it's going to be a voracious consumer of more and more electricity, along with more server farms, electric vehicles, and even the heads of state in the Carolinas, like the commerce secretaries are saying that we are on the verge of an energy crisis because of our growth here in this region.

Well, in a moment, we will talk again with the Chief Executive Officer of South Carolina State-owned utility, Santee Cooper.

Jimmy Staton joins us on this executive profile.

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(bright music) - [Announcer 2] On this edition of "Carolina Business Review", an executive profile featuring Jimmy Staton, President and CEO of Santee Cooper.

(bright music) - Hello, welcome again to our program.

You may be one of the most smiling chief executive officers that (laughing) I've had chance to talk to.

- I appreciate that.

- And especially given Jimmy that you're in a business that's, it's not for the faint of heart.

So, welcome and thank you for doing that.

- Thank you, Chris.

Thanks, pleasure to be here.

- [Chris] Thank you.

- Great to see you again.

- Thank you.

- Look forward to the opportunity to chat about what is going on, and what I think is the most dynamic industry in the world at probably the most dynamic time in our history.

- You would have to feel that way given that the Trump organization has changed some of the rules of engagement, but that seems like it's a wind at the back for the energy.

So, let's unpack this just a little bit.

At the end of January of this year, Jimmy, that you all had announced that you're seeking proposals to buy or partner with the V. C. Summer Nuclear Plant that's been mothballed now for a while.

A lot of attention around that, but, so that was a nuke that never really got started.

Give us the plan.

What are you trying to do with this asset that's kind of been a dead asset on your balance sheet for a while?

Where do you see this going?

- Well, we have seen, you know, a lot has gone on since 2017 when the plug was pulled on moving forward with V. C. Summer.

And one of a couple of those items is Vogtle got completed, Southern did a great job, spent a fair amount of money, but they got it completed.

So, there's a completed design for the AP1000 nuclear facility.

So, that's been fantastic.

Obviously we've talked a number of times, even the last time I was here, about the growth that we're seeing here in the Carolinas and that we've gotta continue to meet that growth.

And again, nuclear, I think has to be a part of that answer.

And all of our customers are looking for carbon free sources of energy.

And so all of that kind of culminated in what should we be doing with what I think is one of the most unique assets in the country right now, particularly after we saw Duane Arnold in Iowa, the nuclear plant there is being restarted, Palisades in Michigan is being restarted Three Mile Island- - Right.

- Is being, Constellation's gonna restart those facilities.

- But that's not a utility company, right?

That's Microsoft.

- Constellation used to be more, yeah, it's Constellation in conjunction with Microsoft.

- Okay.

- And again, most of this, I think you're gonna see people with big balance sheets participating in those restarts.

So, we saw those happening, and those are the older technology nuclear plants that have been shuttered that are now being reopened.

We spotted the fact that, you know what?

I think we are the most unique remaining location where we started work on the new technology AP1000s.

Probably about 40% completed on V. C. Summer 2, less than that, probably more in the 15 to 20% completed in V. C. Summer 3.

And so with all of this growth, all of this opportunity, there was a lot of interest starting to be expressed.

Is there a way to restart this to complete the work that went on?

And so we thought, because there was so much interest, because what we were seeing, the best process for us is let's do an RFP.

Let's see what kind of interest is out there from folks.

How do we do this?

What are their thoughts?

We think we're pretty good from time to time, but we haven't cornered the market on smart ideas.

And so we want to encourage people to come, bring us your ideas on how can we move forward with bringing V. C. Summer perhaps back to life?

- Did you get any pushback at all about the idea of restarting that internally to South Carolina?

State House, the Governor, anyone?

- Not at all.

In fact, the Governor's been incredibly supportive.

He sent his Nuclear Advisory Council out to do a review.

They were, and I'm proud of this, they were pleasantly surprised with the way that the equipment, the buildings had been maintained.

And so they felt very positively about that.

We've had some other folks come out and visit it.

And again, they feel like there's, and we do too, that there's a lot out there.

There's a lot of, I mean, the containment facility is mostly constructed.

The office space out there is constructed.

There are a lot of buildings in place.

A lot of the systems were already put in place.

So, there's a lot more out there than I think what people might otherwise have realized.

- So, for the geeks that are watching the seven years, this has been mothball or so, there hasn't been degradation in the assets out there on the ground?

- Not significant.

I mean, again, everything ages over time.

- Sure.

- But it's been well maintained by our team, the folks at Dominion, because they also own some of the property out there.

It's been very well maintained.

And you probably expect that, it's right next to an existing nuclear facility that's running.

And so we feel pretty good about the way it's been maintained.

It's not brand new.

And so a lot of the things out there will have to be re-certified.

But again, we think that's a strong possibility and we think it accelerates someone's ability to be able to restart.

If it cuts two or three years off of a restart- - Of a cycle of build- - That's a significant impact for folks wanting to complete nuclear facilities.

- How do you, and of course this is almost the leading question, and I don't mean this, when you're down in it, Jimmy, how do you really balance the idea of being environmentally friendly, and I'm, I mean, not just kind to the climate, and kind to the environment, I get that part, but when you balance those that say, we can't do any more carbon, well, we're gonna restart a nuke.

- [Jimmy] Right.

- But the idea of trying to balance all of these ideas and, oh, yeah, I don't want a rate increase, and I wanna do this, and I don't want a carbon blah, blah, blah, blah.

How do you make sure that all those are truly answered questions to those people that have that issue?

- That's a great question.

And it's a full question.

We are, I think the Carolinas in particular, and again, I'm a new Carolinian, only been here three years, but it's such an attractive place to be for, in anything that we might be doing here.

But I feel like we have the opportunity to continue to advance bringing new technologies, new capabilities here in South Carolina, or in the Carolinas, I apologize.

- [Chris] Yeah, go ahead.

- Ask me the question again, I wanna make sure I'm- - Yeah, no, and I would say, let's take it down this way.

- Yep.

- What's your preferred outcome?

Where do you see it perfectly happening?

- Okay.

- That you sell the asset completely, that it's off the balance sheet, that you have someone else running it, but you still enjoy the revenue and you can pass through to shareholders?

- My customers have been shouldering the costs of what we invested previously in V. C. Summer.

And so the ideal situation for me would be that someone compensates us, takes over the property and the equipment that's out there and moves forward with completing the facility.

So, that would give some relief to my customers, which I think would be a wonderful thing.

We appreciate their tolerance of what we've been charging them.

So, I would love to see some value that I could return to my customers.

And then equally importantly, is that we see someone move forward and bring new nuclear generation to the Carolinas.

We think that's important.

That's about, you know, that area out there with two units could generate 2,000 Megawatts.

That's a significant addition to our footprint.

That would also give us a little bit of the opportunity and maybe the runway to move away from coal-fired generation as a primary base load for us, Santee Cooper in particular, we're fairly heavy in coal still, but quite frankly, so too are all of us, all of the Carolinas is heavy in coal.

And so I think having a new administration in place that is willing perhaps to give us more of a runway to ensure that we have the resources in place that might be carbon free, like nuclear, like solar, some of the other options that are out there as we start to down our coal footprint.

I think that would be a perfect result.

That way we can keep it reliable.

And to your point, we can keep it affordable so that as we install new facilities or combining them with these depreciated assets that we have, so that we can keep rates relatively stable.

We think we can do that.

- One final question on that.

What kind of interest have you seen so far since January 25th announcement that you're looking for somebody?

- It's been incredible.

We have had 50- - Encouraging?

- Very encouraging.

We've had 50 folks express interest in the facility.

Many of them have signed non-disclosure agreements so that we can get all of the information that they would need to assess the facility and what value they may want to provide for that facility.

So, I've been very pleased with the response that we've gotten.

They have until May 5th.

- And you're really hoping not to extend that, but to wrap that up and have it sold?

- We'd like to not extend it.

I mean, again, nuclear facilities are incredibly complex and so we fully expect that there will, whoever is interested and whoever makes it to the finals, if you will, the final round- - [Chris] Yeah, sure.

- Is gonna wanna do some due diligence.

And so we're factoring that into it as well.

- Any, I'm sorry, Jimmy, any idea after the May 5th deadline, when would you expect to have a finalist announced and approved?

- It's a challenging question because what I would like, we wanna make sure that we give folks adequate amount of time to do their due diligence, but there are also some deadlines that are in place right now at the federal level to get support from DOE in the form of low interest loans or no interest loans.

So, we wanna make sure that whatever we do here enables the folks to qualify for those DOE activities.

So, new administration, we don't know if those- - But that doesn't hurt, does it?

- No, it helps us.

It helps us I think.

This new administration we find is very interested in continuing to move forward with solar, or solar, I'm sorry, with nuclear.

- [Chris] Right.

- And we need that, we need that support.

And there was some question, would the DOE loans continue?

That sort of activity continue.

We feel pretty confident that's gonna be out there.

'Cause I think the folks that want to finish this, they will be willing to put money into it, to put money at risk.

But there's still a little bit of risk here, right?

A little financial risk.

I think a lot of the technology risk has kind of been taken off the table because you've got two AP1000s that Vogtle's operating.

You've got four in China, you have four more in China being constructed right now.

So, I think the technology risk is almost eliminated, but the financial risk, timing, resources, the impact of tariffs on costs, those sorts of things, that's still to be decided.

- Secretaries of Commerce in North and South Carolina, Michelle Saunders, former Secretary of Commerce, but Harry Lightsey in South Carolina and I know you know him, has said multiple times, at least on this program, and I've heard him quoted this way, that there's an energy crisis going on.

Does that paired with the idea that there are new policies coming outta Washington around energy?

Is this, and I don't wanna overstate this, sir, is this going to be a renaissance in the energy industry in the United States?

- I think it will be.

I think it will be not just on the nuclear side.

We've talked a lot today and there's been a lot of discussion about a nuclear renaissance.

And I think that should happen.

And quite frankly, I think it should happen largely in the Carolinas.

We've always been a leader in nuclear, and I think we should continue to do that.

But with the new administration, we have the opportunity to move forward with natural gas fire generation in the states, that quite frankly, in the past administration that might've been much more challenging.

And so for us to meet what Secretary Lightsey has been able to do and what has happened here in North Carolina, the only way for us to be able to meet those new demands is gonna be all of the above approach to electric generation.

We need natural gas, we need the flexibility that natural gas provides to be able to address the peaks and the lows in demand and in order to be able to incorporate solar, which we, again, we think solar is a great resource, but it's an intermittent resource.

- It won't be base load- - Not a dispatchable, right?

And so we need something that when it comes up, we can ramp it down, we can do that with a gas plant.

And then when solar, when it starts, when night approaches, we need to be able to ramp back up.

We need that kind of flexibility on the system that only in today's world only natural gas is able to provide.

So, make investments in nuclear today.

We've got an opportunity, I think now to bring more natural gas into the Carolinas.

- [Chris] Natural gas generation.

- Yep, natural gas generation, and natural gas.

I mean, I think with, there felt like there was almost a moratorium on new pipelines being built.

And now I feel like that's been opened up a little bit.

We need more natural gas in the state.

I think from both a new generation perspective, but it's also natural gas can be used as a demand side management tool as well, right?

If you use natural gas, if you have natural gas at your house, you may use it to heat rather than use electric heat.

20 years ago I would've said, I don't ever wanna see that happen.

And today, with all of the demand that's growing out there, having a little bit of natural gas coming in to relieve some of that peak need on the system looks very attractive today.

- You've been, you know how free markets work, obviously.

Because a bid and ask and prices and demand.

In South Carolina, there is a faction of businesses that say, we wanna be able to buy our energy outside the market.

We want to go and buy it like we buy anything.

- [Jimmy] Right.

- Do they have a point?

Is there a good argument to say that would alleviate some of it if they could go outside the market?

- Again, it's a very good question.

And we've, as utilities, we work very, very closely with our large volume customers.

They obviously deserve the lowest prices we can provide 'cause they bring very high levels of need and it's constant.

So, a lot of volume.

Therefore, they should see that in a lower price.

And we work very closely with them to make sure that happens.

My concern with kind of deregulation or opening the market to that, just that group of customers is, what's the potential impact on the other customers that we serve?

Our residential and commercial customers.

We're fairly sophisticated buyers of energy ourselves, right?

And so we feel that we can manage the needs of our large load customers and manage the needs of our lower load factor customers, our residential and commercial customers in a combined way and still buy very, very attractive, very, very attractively-priced electricity.

'Cause just to give a little bit, we operate all of these assets.

We don't run them every day, right?

I mean we run those on an economic basis- - [Chris] On a usage, yeah.

- So, whatever is the lowest price at the moment, that's what we will buy.

And if that happens to be in Georgia or in Maryland, that's what we'll do.

We'll buy the cheapest energy we can and bring it to our customers.

So, I don't feel like there's a dearth of opportunity for us to continue to lower cost.

What does concern me though is we do have a relatively constrained transmission grid, particularly here in the southeast, and so- - So, the physical asset of the delivery of electricity?

- Yes.

Being able to import, there are limitations, if you will, on my ability, let's say using South Carolina as an example, my ability to import from Georgia or from North Carolina on any given day is somewhat constrained.

And the only reason I bring that up is, so my abilities to reach out for the cheapest electricity is what it is.

If I give that up and I give that up to my large customers, then I have even less of an ability to go out and buy that cheapest energy at any given time.

And so that's, when I say I have a concern about what's the impact on the residential and commercial customers, I'm afraid providing that transmission capacity and import capacity to just large customers will limit what I can do to buy lowest cost energy for the entirety of the system.

- We have about five minutes, and I want to get to some of the threats.

The threat not just being cyber threat, and I do want you to gauge that for us, but many people have said AI is gonna be a voracious consumer of electricity.

Is that a threat?

Will you be able to meet the demand?

Do you talk to your colleagues at other utility producers to figure out strategy?

So, there's AI and there's cyber threat, how do you quantify this?

- Well, from an, starting with the economic development aspect of AI, bringing data centers into the Carolinas, I think is absolutely critical for us.

I think otherwise we might miss the opportunity to prepare ourselves for probably the economy of the future.

So, I think, you know, bringing those resources here is important.

And so we have to be able to figure out how to meet those loads.

And we've been doing that.

We've gone out and bought assets, we've gone out, and we're in the process of building.

Like I said, we're making the investment.

Hopefully someone will be making the investment at V. C. Summer.

We've got a natural gas plant that we're proposing.

There'll be another natural gas plant, I think right behind that one that we will seek to bring to the state.

- Do you think or you know?

Come on, you gotta be thinking about this.

- Okay, we're thinking about it.

We're almost certain that's going to be the case.

- Yeah, yeah.

- We're optimizing the other assets that we have on the system because again, I think it's important for economic development long term that we bring those resources and that we figure out how to meet those needs.

So, we will meet those needs.

It may take a little bit longer than what any customer would want, but quite frankly, it's happening around the country.

And so everything is taking a little bit longer than what folks would like.

So, I think, again, we are so attractive here in the Carolinas then I think we'll continue to build those loads.

Now the flip side of it is AI and its potential impact on cybersecurity.

It's concerning.

It's concerning to us as an industry, It's concerning to us as a company, how do we address the, we have to harness AI in order to be able to fight AI, if that makes sense to you.

- It seems ironic, doesn't it?

- Right?

You've got a lot of folks that are targeting our systems all the time and they are getting more creative and bringing more AI, artificial intelligence to the table in order to address that.

We have to have an equivalent amount on our side that is matching that and fighting and being able to push back against those potential invasions.

So, I think we have to invest in it.

We have to bring it into our states.

We've gotta harness it because someone else is already out there harnessing it anyway.

- You know, literally a minute left.

When you think about the threats, there were threats in North Carolina recently.

I'm trying to remember, and I'm not gonna get this right, Jimmy, over the last three years, people shooting at substations, how do you protect from that?

- The best way that you can, it's hard for us to build barriers around everything that we have.

And so that's a challenge.

But you can, having the right technologies in place, cameras, those sorts of things that are wider ranging than what you might otherwise think.

Use of drone technology to help protect some of our facilities.

Those are the sorts of things that as an industry we're having to continue to bring to bear to ensure that we operate safe, reliable, affordable electric grid.

- Yeah, Jimmy, thank you.

That was a half an hour and we probably, well, I know we left a lot of things.

We didn't talk about offshore wind, we didn't talk about other alternate sources.

But thanks for being on the program once again.

A lot going on.

- Thank you.

Thank you very much.

Appreciate, it's always great to see you, Chris.

- Yeah, thank you, sir.

- Thanks.

- And May 5th quiet period till then mostly until you get that- - Yeah, mostly quiet till then.

And then we'll get feedback and obviously we're gonna be sharing with our board and our other folks that are gonna be very, very interested- - Thank you.

- In the Carolinas- - Thank you.

- As to what we're doing.

- Thank you, sir.

Good to see you.

- Thank you, good to see you.

- Thank you for watching our program.

Do you have any questions or comments?

It's pretty easy, carolinabusinessreview.org.

Until next week, I'm Chris William, (bright music) - [Announcer 1] Gratefully, acknowledging support by Martin Marietta, Foundation For the Carolinas, Sonoco, BlueCross BlueShield of South Carolina, High Point University, and by viewers like you.

Thank you.

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