SCE&G’s announcement Thursday that it would cut power bills by $5 a month to make amends for its costly nuclear fiasco was met with near-universal scorn.
The company’s plan was its first acknowledgment that customers should get a break on their power bills after years of paying for the now-abandoned construction of two reactors in Fairfield County.
The Cayce-headquartered utility previously had said it would not refund money, and at one point, even sought to charge people more for a project that won’t be built. SCE&G and Santee Cooper, its public partner, quit the project July 31 after spending $9 billion and about a decade on the effort.
For any of SCE&G’s customers confused about the proposal to cut power bills, here are answers to a few questions you might have.
Would the plan affect me?
Yes, if you’re one of SCE&G’s roughly 700,000 electric customers, including in Columbia and Charleston.
How would the proposal affect SCE&G customers?
If approved by the state Public Service Commission, SCE&G’s plan would cut your monthly electricity bill about $5 per month.
That cut would come from reducing how much the company charges you for the scuttled project.
The proposal also would let you off the hook for the estimated $2.2 billion in reactor construction costs that SCE&G had planned to charge its customers. But you still would pay some of the financing costs.
How much am I still paying for the V.C. Summer nuclear project?
About 18 percent of the average customer’s bill currently goes toward the scuttled project. That equates to about $27 per month – assuming your power bill is about $150 per month.
SCE&G’s plan Thursday would immediately reduce the amount you pay for the nuclear project to about 14.8 percent of your bill.
SCE&G president of retail operations Keller Kissam estimated the nuclear surcharge would decline to 9 percent within three years and then gradually drop to zero over a 50-year span.
Why am I still paying that monthly charge if SCE&G has abandoned the reactors?
A 2007 state law, passed at utilities’ request, enabled SCE&G to charge its customers for the project’s financing costs while the plant was being built.
SCE&G raised its rates nine times to cover the borrowing costs for the plant’s construction. The utility says it still needs that money to pay down those financing costs.
So far, SCE&G customers have paid about $1.7 billion to help finance the nuclear project.
However, SCE&G has spent about $4.9 billion for the reactors’ construction. That must now be paid off.
The company plans to put toward that debt a $700 million settlement from the parent company of the project’s lead contractor and a $2 billion tax credit SCE&G expects to receive from the Internal Revenue Service.
SCE&G said Thursday its shareholders would eat the remaining $2.2 billion in construction costs over the next 50 years by accepting reduced earnings.
SCE&G’s customers still are on the hook for the financing costs. But the nuclear surcharge on customers’ bills will decline to zero over the next 50 years.
Will my power bill drop as SCE&G charges me less for the project?
If it is up to SCE&G, don’t bank on it.
SCE&G says the $5 cut is likely the best its customers will get, as the company has other rising operating expenses to tackle. But lawmakers, interest groups and state agencies are working on plans to provide more than the $5 power bill reduction.
What are my elected officials doing about this?
Politicians wasted no time yesterday rejecting SCE&G’s plan, describing it as an “insult,” “completely unacceptable” and “too little, too late.”
Gov. Henry McMaster and S.C. lawmakers have made clear that they want the 18 percent nuclear surcharge to stop – reasoning that it is wrong, on principle, to charge customers for a benefit you won’t give them.
Many of them also want SCE&G to return the $1.7 billion it already has charged customers to finance the project.
Will the charges stop? Will I get my money back?
These questions are harder to answer and depend on a number of legislative and legal variables.
S.C. House members are moving forward with a package of bills that would block further SCE&G nuclear charges and potentially refund customers’ money.
S.C. senators are set to debate their own proposals next week.
At the same time, two cases before the state Public Service Commission could result in lower bills for customers.
One of those comes from environmental groups opposed to nuclear power. Friends of the Earth and the state Sierra Club are seeking either refunds or breaks on people’s power bills that would be more than the $5 SCE&G has offered. Many of the costs SCE&G says it needed for the project were not legitimate, or “prudent,’’ the groups contend.
In the other case, a state agency is asking the PSC to stop SCE&G from charging any more money for the nuclear project. If successful, that would halt the $27 per month charge customers now pay for the project’s financing costs.
Meanwhile, an array of lawsuits have been filed seeking money back for SCE&G customers.
How would SCE&G pay any refunds?
Don’t expect a check in the mail, even if lawmakers or other interests are successful in challenging SCE&G’s nuclear charges.
It is more likely the company would provide relief in the form of credits that lower bills.
If I can’t get a full refund, will I get anything for what I’ve paid for the nuclear project?
SCE&G’s proposal Thursday included the purchase of a 540-megawatt gas-fired plant in Calhoun County – at no cost to customers.
The purchase would give SCE&G customers some value for the money they have spent, while giving SCE&G much-needed power, Kissam said.