Despite bankruptcy warning, SCE&G pressed to refund millions to customers

Environmental groups plowed ahead Wednesday with an effort to get refunds paid to SCE&G’s customers for the utility’s failed nuclear reactor construction project in Fairfield County.

During a hearing before the state Public Service Commission, environmentalists, who have fought SCE&G’s nuclear project for a decade, urged the utility oversight board to consider ordering refunds to customers. They said SCE&G misled the public and improperly spent millions on the V.C. Summer project.

SCE&G and its junior partner in the project, the state-owned Santee Cooper utility, quit the project July 31 after almost a decade of work and spending $9 billion.

“They want to take no financial consequences whatsoever of having flushed nine billion dollars down our toilet,’’ said Bob Guild, a lawyer for the Sierra Club and Friends of the Earth. “And they want ratepayers to take full responsibility.’’

At stake is as much as $1.8 billion that SCE&G customers already have paid to finance the two reactors. The PSC, under the 2007 Base Load Review Act, approved nine rate increases for the project and allowed the Cayce-based utility to increase the project’s budget by hundreds of millions of dollars. The original cost of the project was estimated at $11 billion, but completing the reactors would have cost twice as much.

Wednesday’s PSC proceedings followed an eight-hour hearing Tuesday on whether SCE&G should be allowed to continue charging customers $27-a-month on power bills for the shuttered nuclear project. In addition to the push by environmentalists for refunds, the state Office of Regulatory Staff asked the commission Tuesday to halt the $27 nuclear charge.

The next step is for the PSC to decide whether to throw out each request seeking money for ratepayers, as SCE&G has requested. If the commission refuses to toss out the cases, another hearing is expected in early 2018 on cutting the nuclear charges and paying customers back, attorneys said Wednesday.

SCE&G said it is sorry the reactors could not be finished. But the company said it shouldn’t have to pay back customers for money already collected through rates approved by the PSC.

Company officials say deep cuts in customers’ monthly utility bills or refunds could push SCE&G into bankruptcy. In turn, that would hurt SCE&G’s customers by jeopardizing reliable delivery of power, utility officials say.

The $27-a-month nuclear charge brings in about $450 million a year for the SCANA subsidiary, which has 700,000 customers in central and coastal South Carolina.

“If you grant the wrong relief, you really can put the company in bankruptcy, and that’s going to tie everyone’s hands,’’ SCE&G lawyer Belton Zeigler told the PSC Wednesday. The company has proposed having a hearing on its utility rates early next year, but environmentalists said does not justify tossing out their request.

SCE&G says it could agree to cut some of the current charges. It proposed Tuesday to hold hearings in January on reducing those rates to cut some — but not all — of the $27-a-month charge.

Zeigler, SCE&G’s outside counsel, said state law doesn’t allow refunds to customers. "There is no right to reparations,’’ Zeigler told the PSC.

Environmental attorney Guild disputed that, adding he is skeptical SCE&G would be financially ruined if it had to pay back customers for the bungled project. “I shed far more tears for SCE&G ratepayers.’’

SCE&G and Santee Cooper blamed the project’s failure on the March bankruptcy of its chief contractor, Westinghouse. When the nuclear expansion project shut down, more than 5,000 people were left jobless and ratepayers were stuck with the bill for two unfinished reactors that would not be completed.

The Sierra Club and Friends of the Earth took formal action last summer to halt the nuclear-related charges and require refunds to SCE&G customers. The S.C. Coastal Conservation League since has joined the case in favor of returning money to customers.

The Sierra Club and Friends of the Earth have been raising alarms about the nuclear project for much of the past 10 years. Many oppose nuclear power, but they also have said the reactors would be too costly to complete.

The bungled nuclear project is the “single most significant, devastating failure in utility planning and execution in the history of the state of South Carolina,’’ Conservation League attorney Blan Holman said.

This story was originally published December 13, 2017 at 1:02 PM with the headline "Despite bankruptcy warning, SCE&G pressed to refund millions to customers."