How SC’s nuclear project collapsed: A timeline
Dominion Energy is pitching a new deal to complete its buyout of SCANA, after spending a week in behind-the-scenes negotiations to try to settle a legal case over the Cayce-based utility’s nuclear construction debt.
In a new filing with the S.C. Public Service Commission, Virginia-based Dominion offers to cut the Cayce-based utility’s rates by about $20 a month — double its previous, $10-a-month offer. As part of that offer, Dominion said Thursday it also would accept a smaller profit from SCANA subsidiary SCE&G’s failed V.C. Summer nuclear project.
However, the new deal would not include the $1,000 refunds Dominion has promised SCE&G customers since January. The $1.3 billion slated for refunds instead would be used to reduce SCE&G’s nuclear debt, which would help pay for Dominion’s deeper rate cut.
“In meetings that we had been having, we came to the realization that there are quite a few stakeholders in the process who would rather have lower rates in lieu of cash payments,” Dominion spokesman Ryan Frazier told The State. “We view this as giving the (S.C. Public Service Commission) another option to consider as they are setting SCE&G’s rates.”
According to the new filing, Dominion also would not seek to charge SCE&G customers for roughly $550 million in nuclear construction costs that the utility incurred after March 2015.
The state’s utility watchdog has said March 12, 2015, is the first date it can prove SCE&G deceived the S.C. Public Service Commission — which sets utility rates — about the project’s progress in order to raise rates on customers.
Ultimately, SCE&G raised rates nine times on customers — to the tune of $27 a month on the average residential customer’s power bill — before abandoning the over-budget and long-delayed project in July 2017.
The new filing doesn’t replace Dominion’s previous offer to issue $1,000-a-household refunds and cut rates by $10 a month. Dominion said it stands by that offer and, in fact, prefers it.
The PSC can consider either offer in the long-awaited SCE&G rate case that begins next Thursday.
The new offer comes near the end of a week in which Dominion privately has pushed for a settlement with groups involved in a case before the S.C. Public Service Commission over SCE&G’s rates and whether Dominion can buy the embattled Cayce-based utility, sources say.
By Thursday afternoon, talks with the 19 groups involved in the case hadn’t led to a settlement that would ensure Dominion closes on its SCANA buyout.
Dominion’s push for a settlement came as the utility and others groups learned Circuit Judge John Hayes is preparing to rule the 2007 Base Load Review Act is unconstitutional. That state law enabled SCE&G to charge its customers for the V.C. Summer project during its construction and even after its abandonment in July 2017.
So far, SCE&G has charged its customers $2 billion for a pair of unfinished nuclear reactors in Fairfield County. Hayes’ expected ruling could force SCE&G to refund that money or affect its ability to charge customers in the future to pay off its remaining $4.9 billion in nuclear construction debt.
That could spell disaster for efforts to buy SCANA by Dominion, which wants assurances it can continue charging SCE&G’s customers for the V.C. Summer debt.
“Judge Hayes has indicated that he is considering issuing an order that would violate ... the ‘No Changes in Law’ provision of our merger agreement,” Dominion chief executive Tom Farrell said in testimony filed Thursday at the PSC. “If Judge Hayes were to issue such an order, we would be unable to close the merger,” walking away from the SCANA buyout.
In making its pitch to groups for a settlement, Dominion has said that a ruling from Hayes could force SCE&G into bankruptcy, four sources told The State on Thursday.
The Virginia-based utility has said its deal offers more certainty to the state, SCE&G’s customers and S.C. businesses than years in bankruptcy court.
During negotiations, Dominion had said it wanted a settlement done by the end of this week, sources said. Hayes’ ruling could come as early as next week.
Dominion’s previous plan would have cut SCE&G’s nuclear surcharge — once $27 a month — to about $17. The new plan slashes the monthly nuclear bill to $7.
Under Dominion’s previous plan, residential customers would have received a $1,000 refund up front but paid about $4,000 over the next two decades: a net of about $3,000 for two reactors that won’t produce any power.
The new plan would see customers pay $1,700 over the next two decades.
Some lawmakers had suggested Dominion cut rates more from the beginning, calling the $1.3 billion in refunds a “pay-day loan.” But the $1,000-a-customer refunds have been the utility’s main selling point in marketing the deal to the public.
As part of the new offer, Dominion also would agree to accept a lower profit as it pays down the V.C. Summer project’s nuclear debt over the next 20 years. The alternative offer would cut $500 million from Dominion’s bottom line, the utility said Thursday.