SCE&G customers should get up to $1 billion back — and fast, agency says

SCE&G customers deserve most of the approximately $1 billion that the power company recently received as compensation for its failed V.C. Summer nuclear expansion project, according to a state agency charged with looking out for consumers.

The state Office of Regulatory Staff, in a motion filed Tuesday, asked South Carolina’s utility oversight commission to decide the best way for ratepayers to get the money from SCE&G, a subsidiary of SCANA. The money could be returned by reducing customers’ monthly bills, giving direct rebates or some other method.

If approved by the state Public Service Commission, the request would offset a chunk of the $1.7 billion that SCE&G customers already have paid toward the bungled project.

“We are asking the commission to go ahead and decide how the customers are going to get their money back,’’ Regulatory Staff director Dukes Scott said. “It needs to be squared away, and the sooner it is resolved, the better for customers.’’

The money to repay partially customers would come from SCANA’s sale of a financial guarantee it received from the Toshiba Corp., parent of the failed nuclear project’s bankrupt chief contractor, Westinghouse. CitiBank bought Toshiba’s guarantee from SCANA and partner Santee Cooper last month for $1.84 billion.

After taxes, the amount SCE&G would net to help customers likely would be closer to $700 million, Scott said. SCANA has said the money would be used to benefit customers. However, Scott said his agency wants more specifics on how customers will get the money — and when.

SCANA and its junior partner in the V.C. Summer expansion project, the state-owned Santee Cooper utility, decided July 31 to stop building two nuclear reactors after spending $9 billion and about a decade on the effort. During that time, SCE&G customers have been charged nine rate increases — totaling about $1.7 billion — for the Fairfield County project.

Scott’s agency has been criticized for not doing enough to protect customers as the project was built. But last month, the Regulatory Staff office asked the PSC immediately to cut the higher rates that SCE&G’s customers still are paying for the now-abandoned nuclear project. Tuesday’s request is in addition to that, he said.

Now, the average SCE&G residential customer pays about 18 percent of his or her monthly bill for the nuclear plant. That is about $27 a month.

At one point this summer, SCE&G said it wanted another $2.2 billion to offset other costs it had incurred for the V.C. Summer project. However, the utility backed away from that plan as criticism rose.

State Sen. Nikki Setzler, the Lexington County Democrat who co-chairs a committee looking into the nuclear fiasco, said Scott’s office has the right idea in seeking to get money back for customers.

“It ought to all go back to customers,’’ Setzler said. “Customers are the ones who paid the bill.’’

SCANA spokesman Eric Boomhower was not specific on how the Toshiba-Citibank money would be used, but he said the money would go toward offsetting the V.C. Summer project’s costs.

“SCE&G intends to utilize the net value of these payments to mitigate the cost of the abandoned project to customers,’’ he said. “We hope that we will be able to engage in a discussion for a comprehensive settlement of the issues related to the project and how to further mitigate the impact on our customers.’’

This story was originally published October 17, 2017 at 1:24 PM with the headline "SCE&G customers should get up to $1 billion back — and fast, agency says."