CORRECTION: An earlier version of this letter incorrectly said that Rep. James Smith voted for the 2007 Baseline Review Act, which made it easier for SCE&G to raise rates to pay for the failed nuclear plants in Jenkinsville. Mr. Smith did not vote for the bill; he was on deployment in Afghanistan at the time of the vote.
Over the past nine years, the Public Service Commission has approved nine rate increases, worth $1.4 billion, so SCE&G customers could bear the cost of financing the nuclear expansion project in Fairfield County. Having decided to scrap the deal and terminate approximately 5,000 project workers, SCE&G has no plan to repay the billions of dollars stolen from ratepayers with nothing to show for it. But who is really to blame?
In 2007, the Legislature passed the Base Load Review Act, which authorized utilities like SCE&G to shift the cost of a new nuclear reactor to current ratepayers. The state Senate unanimously passed the bill, while the House approved it by a vote of 104-6. To his credit, then-Gov. Mark Sanford put aside his Appalachian Trail hiking guide long enough to determine it was a bad deal and refused to sign this bipartisan blunder. It became law without his signature.
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To my surprise, many of the legislators now criticizing SCE&G’s decision to terminate the Fairfield project voted for this law. Among them were four members of the “Energy Caucus,” formed in response to this fiasco and claiming a mandate to protect ratepayers and fix South Carolina’s “broken” energy policy: Reps. Leon Stavrinakis and Nathan Ballentine and Sens. Vincent Sheheen and Greg Gregory.
Let’s put blame where it belongs. SCE&G is a corporation obliged to maximize profits for investors — not to pursue the public good. It convinced our Legislature to pass a sweetheart deal that shifted cost and risk of loss away from the corporation and onto the public. It’s a tremendous, shameful legislative accomplishment that has taken $1.4 billion out of ratepayers’ pockets. The General Assembly should have anticipated that the public’s interest could be undermined by SCE&G’s special interest, but it failed to do so.
However, all is not lost. The law provides that if a utility abandons a project funded by rate increases, it bears the burden of proving its decisions were “prudent.” The Legislature broke our energy policy, and the PSC has the unenviable task of investigating this mess and making the public whole, but it does have the power to do that. If the PSC concludes the decision to abandon the project was not prudent, the cost shifts back to SCE&G.