Politics & Government

SC House rejects 13% SCE&G rate cut, saying it does not go far enough

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The S.C. House on Wednesday rejected a state Senate plan to cut SCE&G’s power bills by 13 percent, arguing instead for a larger, 18-percent cut.

The move would protect — at least temporarily — the utility’s 700,000 S.C. power customers from continuing to pay for a failed nuclear construction project.

But any cuts to SCE&G’s highest-in-the-region electric rates, promised for nearly nine months by lawmakers, could fall victim to a legislative stalemate over whether to slash all — or just most — of the 18-percent nuclear surcharge on the utility’s monthly power bills. That money goes to pay for the abandoned V.C. Summer reactor project.

The rate-cut question — all or most? — now goes to a conference committee, where three House members and three senators will negotiate. The House will argue customers shouldn't pay another dime for two useless nuclear reactors, while the Senate will argue a 13-percent cut is more likely to withstand SCE&G's inevitable legal challenge.

If the House and Senate can't reach an agreement, the rate-cut bill could die.

'We're gambling'

The House voted 104-7 on Wednesday to fight for the full cut, in part because Gov. Henry McMaster threatened to veto anything less. Senators have said their chamber likely does not have the votes to pass an 18-percent rate cut.

House members also said Wednesday they don’t trust the Senate to help them override McMaster's promised veto of a 13-percent rate cut. However, Senate Majority Leader Shane Massey, R-Edgefield, said Wednesday the Senate would override a veto.

"We have the opportunity to meet in conference and strive for zero percent, joining the governor," said House Majority Leader Gary Simrill, R-York. "What we want to do is exhaust every single possible strand to protect the ratepayer, and that number needs to be at zero."

SC House Speaker Jay Lucas believes that "rate payers should be immune" from SCE&G surcharges, in reference to the 2017 nuclear fiasco.



However, state Rep. Russell Ott argued the House likely was killing the rate-cut bill for the year by rejecting a 13-percent cut, which could be passed now, in order to negotiate for an 18-percent cut already rejected by senators, who fear toppling SCE&G's parent, SCANA, into bankruptcy.

“We’re gambling,” said the Calhoun Democrat, who was vice chairman of the special House committee that investigated the nuclear debacle. “But we’re not gambling with our money. We’re gambling with other peoples’ money.”

McMaster, who like House members must seek election later this year, said Wednesday he stands by his veto threat.

“I am not concerned about legislator games and threats and connivances and discussions,” McMaster said before the House vote. “I’m not concerned with it. What I’m concerned about are the people of South Carolina who have paid their money, who had no choice to pay it, are not getting what they paid for. They need to get their money back and they need to not pay another cent. So, the amount that they ought to have to pay from here on is zero. That’s the only acceptable amount.”

During the State of the State, Gov. McMaster talks about getting SCE&G customers' money back. Courtesy of SCETV.

'Our best option'

Wednesday's House debate was nine months in the making, with some lawmakers citing promises they made after SCE&G and the state-owned Santee Cooper utility quit the decadelong, $9 billion V.C. Summer construction project last July.

“Our best option is to go to conference," said state Rep. Peter McCoy, R-Charleston, who chaired the House's special nuclear committee. "That’s the only way we make the ratepayer whole.”

The project has cost SCE&G customers some $2 billion so far in the form of higher power bills. That is because of a 2007 state law that allowed those customers to be charged for the plant during its construction and after its abandonment. The typical SCE&G customer continues to pay $27 a month for the project because of nine rate hikes levied to finance the construction of two reactors, now abandoned.

The Legislature's rate-cut proposal now has a few avenues to passage.

The Senate could refuse to budge in conference committee, and both sides could agree to cut less than 18 percent, as the Senate proposes. Two-thirds of both chambers then would need to vote in favor of overriding McMaster's veto. That is the most likely outcome.

The House could persuade the Senate to adopt the 18-percent cut, which the governor then would sign. That is unlikely because there are not enough votes in the Senate to pass an 18-percent rate cut.

The House and Senate could agree to cut less than 18 percent, and McMaster could change his mind, signing their plan into law or letting it become law without his signature. This option is more unlikely, in part because of the November election.

The rate cuts would last only until December, when the Public Service Commission is set to decide who should pay for the nuclear project in the long run. The PSC also will decide then whether Virginia-based Dominion Energy can buy SCE&G's parent company, SCANA.

Dominion has threatened to pull out of that deal — withdrawing its $10-a-month rate cut and $1,000 refunds for SCE&G customers — if lawmakers meddle with SCE&G's power bills.

7 days left, nothing passed

With just seven legislative days left in the 2017-18 session, the General Assembly has yet to pass any new laws addressing the failed nuclear project, its owners and the regulatory system that enabled it.

A handful of bills have passed the House but stalled in the Senate.

They would:

Fire members of the state Public Service Commission, which approved nine SCE&G rate hikes to bankroll the failing nuclear project

Fire and restructure the state board that oversees the PSC

Strengthen the S.C. Office of Regulatory Staff, the state agency that polices utilities

Fire Santee Cooper’s board, replace its members and begin considering its sale to a private company

See the history of how SCANA and SCE&G's V.C. Summer nuclear project failed and what lawmakers are doing now to prevent it from happening again.



Reach Wilks at 803-771-8362. Follow him on Twitter @AveryGWilks.
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