Dominion deal requires SC to ignore whether SCE&G fraudulently won rate hikes

A state commission has not yet decided whether SCE&G fraudulently won approval for electricity rate hikes it used to finance a failing nuclear construction project.

But such a ruling, by the Public Service Commission, could kill Dominion Energy’s offer to buy SCE&G’s parent company and issue refunds to the Cayce-based utility’s customers, Dominion chief executive Tom Farrell told state lawmakers Wednesday.

That peeved members of a special S.C. House committee that met for four hours Wednesday to pore over the $14.6 billion proposed deal, which would see Virginia-based Dominion take over what once was South Carolina’s largest publicly traded company.

“So what you’re saying is — regardless of how the rates were arrived at and, regardless, of how the facts were laid out, accurate or inaccurate — it would become a moot point, and we would set the rate at the rate you would put forward?” state Rep. Kirkman Finlay, R-Richland, asked Farrell.

Farrell disagreed with some of Finlay’s language, including a reference to the buyout as a get-out-of-jail-free card for SCE&G. But the longtime Dominion chief said his utility’s deal is better for SCE&G’s customers than a Public Service Commission ruling that would order SCE&G to lower its electricity rates.

“We would ask them to make an independent judgment on all the facts and circumstances,” Farrell said of the Public Service Commission, whose approval is needed to finalize Dominion’s buyout of SCE&G parent SCANA.

The proposed deal includes $1.3 billion in cash refunds to SCE&G customers who have paid $1.8 billion for the Cayce-based utility’s failed, decade-long $9 billion effort to build two nuclear reactors in Fairfield County.

It also would lower SCE&G’s electricity rates by $7 a month and reduce the number of years, to 20 from 60, that SCE&G customers would continue to pay off the cost of the useless, abandoned reactors.

But Dominion’s deal hinges on its ability to charge SCE&G’s customers another $2.8 billion for the nuclear project over 20 years. And that depends on a Public Service Commission ruling that SCE&G’s actions concerning the V.C. Summer nuclear expansion project were justified and prudent.

That is a matter of intense debate.

Senate and House members investigated SCE&G’s nuclear debacle last fall. Many came away convinced SCE&G had misled state regulators for years in order to continue building – and charging customers for – the now-abandoned Summer Unit 2 and 3 reactors.

Environmentalist groups want the Public Service Commission to rule that SCE&G hid or lied about important information that would have led the commission to deny rate hike requests or halt the project altogether.

Last month, the commission ruled against SCE&G’s request to throw out that case. The commission is expected to rule in the case sometime this year.

This story was originally published January 17, 2018 at 4:07 PM with the headline "Dominion deal requires SC to ignore whether SCE&G fraudulently won rate hikes."