Dominion buys out SCANA: How we got here
The leader of the S.C. House cautioned the state’s utility watchdog Monday against pursuing an SCE&G rate cut so big that it could be defeated in court and “cost South Carolina ratepayers more money in the long term.”
Instead, in a Monday letter, S.C. House Speaker Jay Lucas, R-Darlington, was supportive of concessions for ratepayers that were included in Virginia-based Dominion Energy’s latest offer to buy SCE&G’s parent company, Cayce-based SCANA.
The Darlington Republican urged the S.C. Office of Regulatory Staff to pursue a rate cut for SCE&G in the neighborhood of the temporary, $21-a-month cut that S.C. lawmakers passed earlier this year. Dominion’s latest offer permanently would cut SCE&G’s rates by a similar amount — about $20 a month, double what the Virginia-based company previously offered.
“These concessions by Dominion are undoubtedly victories for ORS and, most importantly, the ratepayer,” Lucas wrote to Regulatory Staff executive director Nanette Edwards.
The Darlington Republican sent the letter three days before the S.C. Public Service Commission begins a monthlong hearing into SCE&G’s July 2017 decision to abandon the $9 billion V.C. Summer nuclear expansion project.
The hearing will re-examine SCE&G’s nuclear-related electric rates and determine whether Dominion completes its buyout of the troubled utility.
Dominion has pushed the groups involved in the case, including Regulatory Staff, to reach an out-of-court settlement over SCE&G’s rates that would finalize its buyout proposal. But those talks have not led to an agreement before the start of this week’s PSC hearing.
Lucas’ letter stops short of calling on Regulatory Staff to reach such a compromise, saying the Dominion buyout will be decided “in the private sector at a later date.” Lucas and the House are one of 17 groups that have intervened in the PSC case.
Several others — including Regulatory Staff, the S.C. AARP and environmental groups — have filed testimony requesting bigger rate cuts than Dominion has offered.
In his letter, Lucas wrote that the House believes SCE&G was deceitful during the construction of the doomed nuclear project and “was not entitled to much of the rate premium it collected.”
However, Lucas says Regulatory Staff’s current proposal, filed with the PSC, is too aggressive.
“The rate we both desire is unobtainable,” Lucas wrote.
That Regulatory Staff plan would lower what the average SCE&G residential customer pays for the nuclear project to about $1,280 over the next 20 years.
Dominion’s latest offer would cost that customer about $1,700. Its previous offer — which remains on the table and includes a $1,000-a-household for SCE&G’s electric customers — would cost about $3,000.
Under SCE&G’s previous plans, which it would pursue if the Dominion proposal falls through, the typical customer would pay thousands more than that over the next half-century.
Lucas asked Regulatory Staff to consider the Legislature’s $21-a-month rate cut — similar to Dominion’s latest offer — because it already has been upheld in court after SCE&G challenged it.
“It would be the worst possible case for ORS to convince the PSC to set an unobtainable rate or for SCANA to successfully challenge that rate in court,” Lucas wrote. “Either scenario would allow SCANA to collect what we now know to be a completely unjustified nuclear premium that serves no purpose but to fund golden parachutes and stockholder dividends.”
A Regulatory Staff spokesman said executive director Edwards was out of the office Monday afternoon and had not had a chance to review Lucas’ letter.
However, a Dominion Energy spokesman said that utility “is encouraged by the letter from Speaker Lucas.”
“Since Day 1, Speaker Lucas and the South Carolina House have focused on long-term rate relief for South Carolina citizens,” said spokesman Ryan Frazier. “Through the Dominion Energy alternative (rate) proposal, South Carolina rates can be stabilized and reduced under a private-sector solution that limits a protracted legal battle.”