The S.C. House may pass a Senate plan this week to slash SCE&G's power bills by 13 percent despite a veto threat from Gov. Henry McMaster, who has vowed to eliminate the entire 18-percent surcharge the Cayce-based utility continues to bill its customers for a failed nuclear project.
The House previously voted for an 18-percent rate cut, insisting SCE&G's 750,000 S.C. customers should not have to pay another dime for the failed, $9 billion V.C. Summer Nuclear Station expansion project.
However, several House members told The State that voting for a smaller rate cut would not be an about-face. Instead, they said, adopting the Senate's 13-percent cut is the House's best option to give SCE&G customers some temporary relief with the legislative session winding down and the Senate unlikely to vote for a larger rate cut.
"The difficulty you run into is that if we do not accept what the Senate sent, it may go to a (joint House-Senate) conference committee and never come out,” said House Majority Leader Gary Simrill, R-York, noting fears House and Senate negotiators could fail to agree on rates.
'He's going to keep his promise'
The Senate's proposal would cut SCE&G bills by 13 percent until December, when the state Public Service Commission, which sets utility rates, decides who should pay for the failed reactor project.
After nine rate hikes over the past decade, SCE&G customers have paid $2 billion in higher power bills for the nuclear project and continue to pay about $27 a month for it.
In December, the PSC also is set to decide whether Virginia-based Dominion Energy can finalize its proposed buyout of SCE&G and its parent company, SCANA. Dominion has threatened to pull out of the deal if lawmakers cut SCE&G's power bills at all, taking off the table its proposed $10-a-month rate cut and $1,000-a-household refunds for SCE&G customers.
The House twice — on Jan. 31 and March 7 — passed proposals that would cut the entire 18-percent nuclear surcharge. The Senate chewed on the idea for months before passing a 13-percent reduction last week. That figure was adopted from a financial study that found SCE&G could survive at least a 13-percent cut without going into bankruptcy.
In January, McMaster threatened to veto any proposal that allowed SCE&G to continue charging customers for the nuclear project, abandoned last July after years of cost overruns and construction delays.
"He's going to keep his promise to the people of South Carolina," spokesman Brian Symmes said Monday. "It's important for people to keep their word, and the governor hopes that House members will fight for what they passed."
Not willing to gamble
But some House members say it isn't that easy.
Lawmakers doubt there are enough votes in the state Senate — where the 13-percent cut was hotly debated — to pass an 18-percent cut.
"We've cut (the nuclear surcharge) from 18 percent to 5" percent in the Senate proposal, said state Rep. Kirkman Finlay, R-Richland. "I don't know that I am willing to gamble such progress for such little gain."
Some lawmakers also argue the Senate proposal nearly wipes out the 18-percent nuclear surcharge, anyway, by including an amendment that forces SCE&G to use its benefits from recent federal tax cuts to lower power customers’ monthly bills. That could knock down SCE&G's rates another 3 to 5 percent, lawmakers say.
But the state's utilities already are required legally to lower their power bills to reflect lower taxes, and those savings won't begin to benefit customers until 2019, rendering that argument moot, state regulators say.
Not every House member agrees about adopting the Senate's plan. State Rep. Peter McCoy, the Charleston Republican who led the special House panel that investigated the nuclear debacle, said the Senate doesn't have the votes to override a gubernatorial veto.
The only path forward, he says, is to reject the Senate's proposal, forcing a "conference committee" negotiation between a few House and Senate members, where he hopes the Senate can be persuaded to adopt the full 18-percent cut.
"If you really want this to happen, if you want it to pass, you've got to go to conference," McCoy said.
Efforts to reach S.C. House Speaker Jay Lucas, R-Darlington, for comment Monday were unsuccessful. The House Majority Caucus is expected to discuss the Senate proposal Tuesday before taking a vote.
House members in favor of adopting the Senate's plan say they want the governor on board. They say they fear a veto by McMaster — who is running for a four-year term this year — would derail the entire effort to cut SCE&G's rates.
“If he does veto this bill, he’s either not caring about customers getting rate relief or he’s playing some other type of game benefiting himself, politically," said state Rep. Russell Ott, D-Calhoun. "For me, this is about getting the customers as much guaranteed relief as I can, as quickly as possible.”