The S.C. House decided Wednesday how it wants to help the 700,000 SCE&G electric customers who stand to lose billions of dollars more for their utility’s failed attempt to expand a nuclear power plant.
That answer – which passed the House by a 119-1 vote Wednesday, and has support from the Senate and governor – comes in two parts.
First, the Legislature temporarily would block the Cayce-based utility from continuing to charge its customers some $37 million a month – or $27 a month for the average household – for the abandoned V.C. Summer construction project.
Second, the proposal adjusts state law to empower the state Public Service Commission, which sets utility rates, to nullify some of the nine rate hikes that SCE&G previously won to help pay for the project. That would lower the amount that SCE&G customers pay for power even if they, ultimately, are stuck paying for the useless reactors.
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The bill, which needs the approval of the state Senate, takes a softer stance against SCE&G than the House’s previous, perhaps unconstitutional proposal. That earlier bill would have repealed retroactively the 2007 Base Load Review Act and permanently rolled back SCE&G’s nuclear rates, a move the utility says would force it into bankruptcy.
The proposal reflects the best, most legally sound solution to the toughest issue anyone in the House ever has faced, Speaker Jay Lucas told the chamber.
“This amendment deals with the Base load Review Act,” the Darlington Republican said from the House floor. “It deals with what’s come to be called as the ‘nuclear premium’ in a way that’s thoughtful, in a way that’s constitutional and in a way that’s innovative.”
State Senate leaders seem to be on board with the House plan.
Senate President Pro Tempore Hugh Leatherman, R-Florence; Senate Majority Leader Shane Massey, R-Edgefield; and Senate Minority Leader Nikki Setzler, D-Lexington, Wednesday filed a joint resolution giving the PSC the authority to enact the lower, temporary electric rate mentioned in the House bill.
Massey said the Senate would try to move quickly on the bill. He hopes a subcommittee could debate the proposal as early as next week. “This is going to be a surprise to a lot of people, a shocker, but you’ve got the Senate and the House working together.”
State Sen. Mike Fanning, D-Fairfield, said senators buzzed with excitement last night when they first heard of the new House proposal.
“This gets us to that immediate relief for ratepayers,” Fanning said. “There has been a lot of hopelessness that we can’t do anything about the two nuclear reactors and the debacle, we can’t do anything about ensuring that ratepayers won’t be left holding the bag.
“This is the first volley back across the net that, ‘Yes, we can.’ ”
Gov. Henry McMaster would sign the House bill, spokesman Brian Symmes said. The Richland Republican has threatened to veto any proposal that leaves SCE&G customers on the hook for the $9 billion reactor project, which already has cost them $1.8 billion in the form of higher electricity rates.
The proposal could kill Virginia-based Dominion Energy’s offer to buy SCE&G’s parent company, SCANA. As part of that deal, Dominion has said it will offer SCE&G’s 700,000 power customers a $7-a-month rate cut and a $1,000-a-household cash refund.
House members have said the proposal was tailored specifically to keep that deal on the table.
But Dominion has threatened to pull out if it can’t continue to charge SCE&G customers another $2.8 billion for the project over the next two decades.
“The House action, assuming it becomes law and survives legal challenges, could offer temporary relief for SCE&G customers, but, unfortunately, could threaten the permanent solution offered by Dominion,” Dominion spokesman Chet Wade said in a statement Wednesday.
SCANA’s stock fell below $40 a share in trading Wednesday before rallying to close at $40.61, a loss of 10 cents. However, that is still far below Dominion’s buyout offer of roughly $51 a share, indicating Wall Street has doubts as to whether the deal ever will happen.
For months, House members had said they wanted to permanently roll back the $27-a-month nuclear surcharge on SCE&G’s monthly power bills.
But after poring over legal opinions, lawmakers grew concerned their proposal to repeal retroactively the 2007 Base Load Review Act – which enabled SCE&G’s nuclear project in the first place – would not withstand an inevitable court challenge by the utility.
Instead, the House bill punts the question of who should pay for SCE&G’s nuclear reactors to the Public Service Commission and the courts, which likely will have had the final say, anyway.
Until that question is answered — possibly years from now — the House’s proposal would force SCE&G to stop charging customers for the nuclear project. After nine rate hikes to bankroll the reactors, about 18 percent of the average customer’s power bill goes toward the project.
The House’s proposal also includes a way to lower SCE&G’s power bills even if the PSC or the courts decide the company can charge its electric customers billions of dollars more for the reactors.
That is because the House bill sets a new definition of the word “prudent” in the Base Load Review Act. The tweak to state law is intended to empower the PSC to reconsider and claw back some of the nine rate hikes it gave SCE&G in order to bankroll its nuclear project.
State lawmakers and a handful of other groups have challenged some of those rate hikes, saying SCE&G fraudulently obtained them by withholding key information and documents from the PSC, such as a February 2016 report that found the project was failing.
SCE&G has said it may sue to challenge the House’s proposal.
“In the event legislation is passed that interferes with the regulatory process and changes the legal standards for recovery of those costs in a way that would inflict severe damage on the company, the company would have no choice but to seek legal recourse at that time,” the utility’s spokesman, Eric Boomhower, said in a statement.
The House proposal also repeals the Base Load Review Act going forward, preventing another utility from using it.
The lowered SCE&G electric rate would be considered “experimental” under state law, meaning it is subject to adjustment by the PSC. The PSC can adjust the rate if it determines the new rate is unreasonably or unconstitutionally low.
SCE&G’s power bills would be lowered by about $27 per month within days of the bill becoming law.