All SCE&G customers should get refunds, lawyers tell SC judge

Lawyers suing SCE&G told a S.C. Circuit Court judge Monday that all of the utility's ratepayers should be eligible for refunds because of a bungled multibillion-dollar nuclear reactor construction project.

The lawyers want their lawsuits against the utility to be declared class actions representing all SCE&G customers, not just their clients.

Lawyers representing SCE&G and the plaintiffs suing it also argued Monday over whether a controversial 2007 law — the Base Load Review Act — is constitutional. That law allowed SCE&G to charge its ratepayers for construction of two nuclear reactors.

SCE&G's customers already have paid $2 billion toward the Fairfield County project, which the utility abandoned last year. Its customers also are paying an additional $37 million a month toward the project's cost, even though it never will be finished.

If Judge John Hayes grants the class-action motion and the plaintiffs suing SCE&G win their case, all of the utility's approximately 700,000 S.C. ratepayers would be eligible for a refund. If Hayes denies the motion, only those people who have filed individual lawsuits against the utility could get refunds — if they win their case.

But SCE&G attorney David Balser fired back, telling Hayes the lawyers who are seeking class-action status are involved in multiple lawsuits against the utility in state and federal court. Those lawsuits pit the interests of the lawyers' clients and SCE&G's other customers against each other, Balser said.

As a result, the lawyers suing SCE&G have multiple conflicts of interests, said Balser, an attorney with the Atlanta-based King & Spalding law firm.

Balser showed the court a large chart of the law firms suing SCE&G, with lines that he said showed the conflicts of interest. He said those conflicts pose numerous "fatal flaws and fatal problems."

But lawyer Gibson Solomons, who is suing SCE&G, told Hayes there were so many similarities in the various state court lawsuits against the utility that the judge quickly should grant class-action status.

"This day, as we sit here, SCE&G will collect another $1.2 million," Solomons told Hayes, referring to the $37 million a month that SCE&G continues to charge its customers for the failed nuclear project.

The lawyers also argued over whether the Base Load Review Act was constitutional when the Legislature passed it.

That law also allowed SCE&G to increase its rates for construction at the nuclear project and, the utility argues, allows it to continue to recover its costs, even though the project has been abandoned.

Bob Cook, a top lawyer with the S.C. attorney general's office, told Hayes the money that ratepayers keep paying to SCE&G doesn't benefit anyone but the utility's stockholders, who get dividends every three months paid for from customers' bills.

"You can also refer to the Base Load Review Act as the 'Stockholders' Protection Act,' " Cook said. "It is for the stockholders, by the stockholders and serves the stockholders."

Since 2007, SCE&G's customers have been held captive by the Base Load Review Act, Cook said. SCE&G raised electric rates while its customers could not challenge the hikes or question the viability of the "plant that was never built."

In all, ratepayers have paid some $2 billion for the nuclear fiasco, Cook said.

"The Base Load Review Act is the gift that keeps on giving to the utility and keeps on taking from utility customers," Cook said, arguing the law is unconstitutional because it takes property — money for customers' monthly bills — without due process.

Ashley Parrish, a King & Spalding attorney representing SCE&G, disputed Cook's assertions.

The Base Law Review Act requires the utility to give its customers notice of rate hikes, and they can request a hearing before any hike goes into effect, Parrish said. Dissatisfied ratepayers also had the option of going to the Legislature and trying to change the Base Load Review Act, the attorney said.

In any case, monthly utility bills "are not constitutionally property," Parrish contended.

Judge Hayes is not expected to make a ruling soon.

Monday's hearing took place at the Richland County Courthouse.

Last July, SCE&G, its parent company SCANA and its junior partner, the state-owned Santee Cooper utility, abandoned the nuclear project, having spent $9 billion over a decade of construction attempting to build two reactors.

Critics contend SCE&G had known for years the reactors could not be finished. Despite that, they contend, the utility continued to charge its customers for the project.

This story was originally published April 30, 2018 at 2:59 PM with the headline "All SCE&G customers should get refunds, lawyers tell SC judge."