Dominion Energy intends to raise SC utility rates for first time since nuclear fiasco
As a viral pandemic sweeps the state, Dominion Energy is signaling its intent to raise rates on customers for the first time since acquiring SCE&G, the beleaguered utility that engineered one of the biggest construction failures in South Carolina history.
Dominion, a national energy giant headquartered in Virginia, filed notice Monday with the S.C. Public Service Commission of a planned rate adjustment that many expect will be a hefty increase for the company’s electric customers in South Carolina.
The proposed rate increase, to be detailed next month, comes at a time when many South Carolina residents are suffering through the coronavirus disease pandemic that has left them out of work or struggling financially. It also comes less than three years after SCE&G, the company acquired by Dominion, walked away from a nuclear construction project that had cost ratepayers billions of dollars.
Dominion didn’t say Monday how high it would seek to raise rates. But officials with the Office of Regulatory Staff and attorneys who tangled with SCE&G over the V.C. Summer nuclear expansion project said they expect the company would file for a sizable increase following last year’s merger agreement to acquire SCE&G.
The deal kept Dominion from seeking a rate increase until this summer.
Scott Elliot, a lawyer representing companies that use large amounts of energy, said some of the rate increase may be justified, but he doubts all of it will be.
“You just have to sharpen your pencil and see what they really need,’’ he said. “They’ll ask for more than they need.’’
Bob Guild, a Sierra Club lawyer, said he expects Dominion to be a stronger adversary before the Public Service Commission than SCE&G. He said a rate increase during the COVID-19 outbreak is hard for many people to swallow.
“The company knows this is going to be an extraordinarily unpopular hit on electric consumers, particularly under the economic depression and conditions of a pandemic,’’ Guild said. “They are sensitive and aware it’s going to be a major bloodbath to get through this.’’
Dominion had been expected to file its notice of intent to raise rates two months ago, but delayed that until this week because of the coronavirus. But the company apparently could not wait any longer. Dominion said it needs a rate adjustment to continue providing the service customers expect.
“We recognize that there may never be an ideal time to request a rate review,” the company said in a statement. “We have been doing all that we can to help our customers who are struggling financially through the pandemic. No matter the circumstances, our customers continue to count on us to keep the electricity flowing – now more than ever. A rate review is critical to our company’s ability to continue to provide the essential service of electricity safely and reliably.’’
Dominion Energy serves the Columbia, Charleston, Aiken and Hilton Head Island areas in central and coastal South Carolina. The company has more than 700,000 electric customers in the state.
Company spokeswoman Rhonda O’Banion said the planned increase is not tied to reimbursement for the two nuclear reactors that SCE&G and partner Santee Cooper tried unsuccessfully to build in Fairfield County. But she did indicate that transmission lines installed to serve the V.C. Summer site, which has one existing reactor, are part of the need for an increase.
“(S)imultaneous with the construction of V.C. Summer units 2 and 3, Dominion Energy made upgrades to strengthen the capacity and resiliency of our transmission system,’’ she said in an email. “Those assets are in service today and are currently being used each day to deliver electricity to our customers.’’
In 2017, SCE&G and partner Santee Cooper abandoned the twin-reactor project after spending $9 billion and raising rates on customers for a decade.
At the time, about 18% of the average SCE&G residential bill, or about $27 per month, was going to the nuclear project that would not be built. Some of that amount was cut as a result of the merger, but customers are still expected to collectively pay billions of dollars for the failed project.
Now that Dominion has filed its notice of intent to seek a rate increase, it will begin working on the details of its plan. The company could file the proposed rate increase plan as early as Aug. 14. Hearings would be held after that, with a final decision by the state Public Service Commission expected in February 2021. Rates would take effect in March 2021, according to plans.
While rates were raised on customers for the V.C. Summer project, the former SCE&G utility has not had a general rate increase for other things in years, state officials said.
“This notice was expected given the dialogue we’ve had with the company about when they would come in for the rate case,’’ said Ron Aiken, a spokesman for the S.C. Office of Regulatory Staff, a watchdog agency. “Like any rate case, we’’ll review the application once it is filed.’’
This story was originally published July 13, 2020 at 6:47 PM.
