Even though SCE&G won’t finish a multi-billion dollar nuclear expansion project in Fairfield County, customers will continue paying about one-fifth of their monthly power bills for the work.
Rates that customers now are charged for the project already are in the company’s rate base and “will remain so moving forward,’’ SCE&G spokesman Eric Boomhower said in an email Wednesday night.
The company has hit customers with nine power bill increases to finance the project in less than a decade.
SCE&G abandoned the nuclear project this week, but under a 2007 state law, can continue charging customers for the work unless the state Public Service Commission says otherwise.
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Collectively, SCE&G and partner Santee Cooper have spent about $9 billion for the reactor project. As an investor owned-utility, SCE&G will seek to recover its share of the amount it has already spent, which was about $5 billion.
Customers of SCE&G have paid about $1.4 billion as a result of company rate increases to fund the two new reactors at the V.C. Summer plant northwest of Columbia. They’re paying, on average, about 18 percent of their monthly power bills for the nuclear work.
Officials with the state Office of Regulatory Staff said they don’t expect the state Public Service Commission to change any rates this year for the SCE&G project in Jenkinsville.
SCE&G officials said this week they will attempt to limit future rate increases for the project by using part of a $1.1 billion settlement the company expects to receive from the Toshiba Corp. over the next five years.
Toshiba is providing the money to compensate for its subsidiary Westinghouse, the Summer plant’s chief contractor that declared bankruptcy earlier this year. The bankruptcy is blamed for killing the project. SCE&G says the Toshiba money will help keep future rates down.
“Current projections are that the funds available would allow SCE&G to offset rate increases for customers arising out of the abandonment for a number of years,’’ said Jimmy Addison, chief financial officer at SCANA, SCE&G’s parent corporation.
But attorney Bob Guild, who has represented consumer interests before the PSC since the 1970s, said that won’t be enough to pay off the failed project. Guild said the company is only pledging to keep rates down during the years it has the Toshiba money, if that is available. Toshiba is on shaky financial ground as a result of the Westinghouse bankruptcy.
“This is just a cheap sales ploy to try and make this deal look somehow more digestible,’’ Guild said. “It is not. It is terrible.’’
Guild, who represents the state Sierra Club, said he will try to convince the PSC that the amount customers now pay for the failed project is unjustified – and that any future rate increases should be denied.
Paying for a nuclear project that won’t be completed results from a 2007 state law that made it far easier for SCE&G to build the project. The law allowed the company to charge customers some upfront financing costs in their power bills, while also allowing the company to charge customers for construction costs, even if the project is not completed.
During a news conference to discuss the nuclear project shutdown, a bi-partisan group of state lawmakers said the Legislature had been shortsighted in approving the law in 2007. But they also ripped SCE&G and Santee Cooper for the companies’ oversight of the reactor project. They have formed a caucus to study utility reform. Those speaking Wednesday included Rep. Kirkman Finlay, R-Richland, James Smith, D-Richland, and Russell Ott, D-Calhoun.
“We should go back to the way our rates were nine years ago, before this entire debacle started,’’ Ott said. “Whatever has to be paid for going forward, should be paid for out of the pockets of the utilities that ultimately got us into this mess.’’
After the news conference, state Sen. Vincent Sheheen, D-Kershaw, agreed.
“The stockholders have been making out like bandits while the people who were supposed to be protected, the ratepayers, were suffering,’’ Sheheen told The State.
SCE&G quit the project Monday after junior partner Santee Cooper said it was dropping out. Santee Cooper officials said they didn’t need the power and the project had become too expensive to continue. At one time expected to cost about $11 billion, the twin reactor effort was expected to surpass $20 billion and be completed four years behind schedule.
SCE&G had wanted to scale the project back and build only one reactor, but without Santee Cooper, said it could not afford to do that.
Staff Writer Avery Wilks contributed to this story