As S.C. lawmakers finalized their plans to cut SCE&G’s electric rates this spring, the Cayce-based utility and Virginia-based Dominion Energy made a last-ditch effort to avoid the Legislature’s ax, proposing to sweeten their deal for SCE&G electric customers.
That offer would have increased to $1,530 from $1,000 the average amount that Dominion refunded to SCE&G’s residential electric customers for higher bills they have paid because of a failed nuclear construction project.
The two utilities told state Senate leaders they would provide up to $300 million more in refunds for SCE&G’s residential electric customers if lawmakers killed their rate-cut bill and agreed to support Dominion’s buyout of SCE&G’s parent company, SCANA, Senate Majority Leader Shane Massey told The State.
S.C. House Speaker Jay Lucas, R-Darlington, and state Rep. Kirkman Finlay, R-Richland, also said they heard from Dominion representatives in the weeks leading up to the Legislature’s passage of a law cutting SCE&G’s rates by 15 percent.
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Dominion publicly has said its proposal to buy SCE&G and offer its electric customers a $1,000 refund, on average, and a permanent $10-a-month rate cut is its best and final offer.
However, lawmakers weren’t sold on the sweetened deal, telling The State it didn’t go far enough in the long run to protect SCE&G customers — who have paid $2 billion in higher rates, or $1,545 for the average household as of June 1, for the failed V.C. Summer expansion project.
“Everybody was cognizant that a lot of pain and agony could be spared if a very good deal was reached for the ratepayers,” Finlay said. “We (lawmakers) just have a little bit stronger definition of what a good deal for the ratepayer is.”
Dominion spokesman Chet Wade said SCANA made the sweetened offer and Dominion “facilitated those discussions.” Dominion has said lawmakers, in passing the controversial rate cut last month, were gambling with ratepayers’ money.
“We have long expressed concerns that if you go down the legislative path that has been put forward, it will ultimately mean a long, protracted court battle that will put in jeopardy any benefits for customers,” Wade said. “That scenario is starting to play out. … We have a solution that gets very real, very significant benefits to customers in short order and without the risk of it being overturned in the courts.”
In a statement, SCANA spokesman Eric Boomhower said the utility “supported discussions with representatives of Dominion and legislative leaders,” and continues to believe the Dominion deal is the best solution for SCE&G’s customers.
According to Massey, the two utilities said they could provide about $264 million more in refunds to customers by cutting the amount that SCANA pays its shareholders in dividends for two quarters.
Massey said the rest of the money behind the increased offer — some $36 million — would have come from S.C. state agencies giving up their promised refund from Dominion.
The $300 million in extra benefits would have refunded almost all of the money that SCE&G’s residential electric customers have paid so far for the failed effort to build two nuclear reactors at the V.C. Summer Station in Fairfield County.
The new offer would have boosted the typical customer’s nuclear refund to roughly $1,530. Customers also would have received the refund within a month of the deal closing, rather than Dominion’s previous 90-day window.
But there was a catch, Massey said.
In return for the larger refunds, the utilities wanted S.C. lawmakers to kill their proposal to temporarily slash SCE&G’s rates by 15 percent, kill a bill that could pressure the S.C. Public Service Commission to permanently lower those rates in December and make statements publicly supporting the Dominion deal, the Edgefield Republican said.
The proposed customer benefits also were contingent upon the S.C. Public Service Commission approving Dominion’s plan to buy SCE&G parent SCANA and allowing Dominion to continue charging SCE&G’s customers for the failed nuclear project for the next 20 years.
“I told them there is no way in hell that I’m doing that,” Massey recalled. “It gives customers some temporary gain, but it sells them out in the long term. They (customers) were still going to keep paying for V.C. Summer.”
House Speaker Lucas, R-Darlington, said he also was approached by Dominion representatives. But he said those talks never delved into specifics because the House was clear that it was not on board.
At some point in the negotiations, a Dominion representative drafted a letter to the Public Service Commission on behalf of Speaker Lucas, laying out what Dominion wanted out of the proposed settlement.
The letter, obtained by The State, would have told the PSC, which sets utility rates in South Carolina, that Lucas was withdrawing his intervention in the SCANA-Dominion merger case and the Legislature had dropped its plans to slash SCE&G rates.
The letter never was sent. Lucas’ office said Friday the speaker did not write the letter, nor has he seen it.
“In no circumstances would the House ever agree to support any type of merger based upon some type of additional money being added to the deal,” Lucas said, adding the PSC was the proper place to make that kind of offer. “There was an inclination that they would somehow modify the offer, but given where they were and given the fact that there may have had to be some kind of blessing of this deal, it wasn’t discussed with me at any great length They knew fairly quickly that those two things could not go together.”
Finlay, one of three House members on the committee that negotiated the 15-percent rate cut agreement with the Senate, said the numbers he heard from Dominion representatives were too low.
Lawmakers have an obligation “to investigate every possible avenue of resolving this for the ratepayers as quickly as possible,” the Columbia Republican said. “(But) we are not in the business of endorsing deals. … We got into this trouble by getting a little more involved in the private sector than we should have been, vis-a-vis the Base Load Review Act.”