SCE&G customers soon could get a partial break from paying for failed nuclear project

SCE&G customers could learn within the next few weeks whether they will get a temporary break from paying roughly $37 million a month for a failed nuclear project.

A group of the utility’s industrial customers last week asked the S.C. Public Service Commission to rule quickly on a request to slash SCE&G’s rates by about 13 percent — at least until the end of 2018.

After taking up the state budget this week, the S.C. Senate also is set to vote on whether to cut SCE&G’s rates by the same amount — a move that would lower the average residential customer’s monthly power bill by about $19.

Because of nine rate hikes over the past decade, the typical SCE&G residential customer now pays about $27 a month for the V.C. Summer project. After nearly a decade of construction and $9 billion in costs, the Cayce-based utility and state-owned Santee Cooper abandoned efforts to build two new reactors at Summer last July.

The larger question — whether SCE&G customers must continue to pay for the project over the next few decades — likely won’t be answered by the PSC until at least the end of the year. However, in the interim, S.C. lawmakers have proposed temporarily cutting SCE&G’s highest-in-the-region power bills, saying the utility’s 700,000 customers deserve a break after paying $2 billion already for the project in the form of higher power bills.

But that proposal has stalled in the Senate. Some senators question the proposal's constitutionality. They also fear that passing it would drive away Dominion Energy, the Virginia-based power company that has offered to buy SCE&G’s parent company, SCANA, and offer its customers a $10-a-month rate cut and refunds worth about $1,000 a household.

Dominion has threatened to walk away from buying SCANA if lawmakers meddle with SCE&G's power bills.

Cue Columbia attorney Scott Elliott and the S.C. Energy Users Committee, a group of industrial electricity customers that took matters into their own hands last week.

On April 6, Elliott filed a motion asking the PSC to cut SCE&G’s rates by 13 percent, noting a Senate-commissioned study, released last month, concluded that amount could be cut without forcing the utility into bankruptcy.

“The purpose of the (2007 Base Load Review Act) was to allow SCE&G to recover the prudently incurred costs of its nuclear construction while protecting its customers from responsibility for imprudent financial costs,” Elliott wrote in his filing. “Shareholders have benefited disproportionately from the failed nuclear construction. Ratepayers are entitled to protection from any further injury from SCE&G’s’ failures. Any further delay in reducing SCE&G’s rates would be arbitrary and capricious.”

The filing gives SCE&G 10 days to respond. Then, Elliott has another five days to counter the utility's response. While state law does not give the PSC a deadline to rule, the commission, typically, would put the request on its next agenda, according to its chief clerk, Jocelyn Boyd. “I don’t know how quickly, but, typically, we don’t sit on these motions.”

Elliott said his argument relies on multiple studies that have concluded SCE&G can survive a rate cut.

"I wouldn't presume to handicap what will happen in the Senate," Elliott said. "I've created another avenue for the commission to grant some temporary relief."

Elliott’s filing piggybacks off a previous request by the state Office of Regulatory Staff, the agency that polices utilities, asking the PSC to remove the entire 18-percent nuclear surcharge that SCE&G now adds to its customers' monthly power bills.

Regulatory Staff still thinks the full 18 percent should be cut, Director Nanette Edwards said Wednesday. However, the agency also plans on sending the PSC a letter supporting Elliott’s filing.

“Our position has not changed, but we are also supportive of the filing to suspend 13 percent of the revised rates,” Edwards said.

This story was originally published April 11, 2018 at 1:58 PM with the headline "SCE&G customers soon could get a partial break from paying for failed nuclear project."