SCE&G customers may get break on power bills to offset nuclear plant debacle

COLUMBIA SCE&G customers could see an 18 percent drop in their power bills if the state Public Service Commission agrees with a request to stop charging people for the costs of a failed nuclear reactor project in Fairfield County.

The S.C. Office of Regulatory Staff asked Tuesday that the PSC suspend rates now being charged for the V.C. Summer expansion northwest of Columbia. If the PSC approves the request, that would mean a $27 drop in the average residential power bill, the regulatory staff office said.

Tuesday’s request, however, carries potentially bigger financial returns for SCE&G customers who’ve been billed $1.7 billion for the twin reactors already.

In addition to seeking to suspend rates now being charged for the reactors, the request asks the PSC to give credit or refunds to customers for charges they’ve paid over the past nine years. The latter request is contingent on either the Legislature rolling back the law that allowed customers to be charged for the reactors or a court ruling the law unconstitutional.

Dukes Scott, director of the Office of Regulatory Staff, said an opinion by Attorney General Alan Wilson sparked his agency’s request. Wilson’s office called portions of the law that allowed SCE&G to charge customers for the project “constitutionally suspect.’’

The law, the Base Load Review Act of 2007, made it easier for SCE&G to finance the twin reactor project in Fairfield County. Already, the company has charged its customers more than $1.7 billion for the project through nine rate increases, and has indicated it would seek up to $2.2 billion more from customers to pay back what the utility has spent from its own funds.

“I feel like we are doing what we have to do,’’ Scott said.

SCE&G spokesman Eric Boomhower said Tuesday night that his company would “vigorously contest” the Office of Regulatory Staff’s request. But Frank Knapp, who heads the state Small Business Chamber of Commerce, applauded the regulatory staff office’s filing.

“Residential and commercial ratepayers should not be denied the use of their money now being taken by SCE&G under a possibly unconstitutional act,’’ Knapp said in a letter Tuesday to the PSC. “Not only does this pose a hardship for households but it also deprives local businesses of potential consumer spending for goods and services.’’

SCE&G and junior partner Santee Cooper quit the project July 31 after chief contractor Westinghouse filed for bankruptcy. The companies had spent $9 billion on the effort and collectively raised rates 14 times before pulling the plug, citing rising costs. The increases, coupled with the decision not to build the reactors, have incensed the public and resulted in legislative hearings. State and federal criminal investigations are now underway to determine why the project failed and who is responsible.

Santee Cooper, SCE&G’s partner, has generated about $500 million through rate increases to pay for the project, but the state-owned utility is not regulated by the PSC and is not included in the regulatory staff request.The Public Service Commission meets Wednesday, but is not expected to take up the request at its weekly meeting, Scott said.

The Office of Regulatory Staff petition asks the PSC to require that SCE&G “immediately suspend” charging people for the project. The request is considered a temporary suspension until the General Assembly takes action to roll back the Base Load Review Act or a court declares the law unconstitutional.

SCE&G is now charging customers a total of $37 million each month for the project, which the company has no plan to complete.

Under the law, SCE&G was entitled to raise rates annually – with limited chances for the public to oppose the increases – after the Public Service Commission determined in 2008 that the project was “prudent,’’ a legal term that means it is justified. The law passed at a time when nuclear energy was seen by utilities as a way to provide needed electricity well into the future.

But demand began to fall and SCE&G’s project, one of only two like it in the country, ran into troubles caused by the failure of chief contractor Westinghouse to get parts from a factory in Louisiana. Construction work was also rife with problems and Westinghouse ultimately declared bankruptcy in March of this year.

That caused SCE&G and Santee Cooper to quit the project nearly two months ago. But ratepayers were still being charged the financing costs of the project.

This story was originally published September 26, 2017 at 7:14 PM with the headline "SCE&G customers may get break on power bills to offset nuclear plant debacle."