Opinion Extra

We need to separate Dominion’s ‘generous’ offer from decision on SCE&G rates

Dominion CEO Thomas Farrell and SCANA CEO Jimmy Addison announce their merger, complete with $1,000 rebates.
Dominion CEO Thomas Farrell and SCANA CEO Jimmy Addison announce their merger, complete with $1,000 rebates.

Dominion Energy has flooded TV and radio with ads. The apparent intent is to convince the public that its offer to acquire SCANA is the best deal for ratepayers to resolve the financial crisis of paying for the abandoned nuclear plants in Fairfield County.

SCE&G ratepayers have had their electric bills increased by 18 percent since 2009 and collectively shelled out about $2 billion in higher utility rates because of this nuclear debacle.

According to the ads, Dominion promises to give the average family a check for $1000 as a rebate for past SCE&G rate hikes associated with the nuclear plant construction. The utility also promises to roll back electric rates by 5 percent, not counting an additional 2 percent from corporate tax savings.

However, this “generous” offer is available only if the S.C. Public Service Commission allows the Virginia-based utility to continue charging for much of the abandoned nuclear construction debt.

That’s what Dominion’s multimillion-dollar marketing campaign is now about: influencing the seven commissioners of the PSC.

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Frank Knapp Picasa

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In November, the PSC is scheduled to hold one hearing to consider two issues: how much SCE&G’s electric rates should be permanently rolled back and whether Dominion should be allowed to acquire SCANA.

Dominion’s calculation is that the PSC won’t want to deprive SCE&G customers of its “generous” cash-back and rate rollback offer if it is popular with the public. With this concern on their minds, the commissioners might be more reluctant to roll back rates too much, since this could result in Dominion dropping its offer to take over SCANA.

Dominion hopes you’re not particularly knowledgeable about math.

But exactly how generous is Dominion’s offer?

Most ratepayers think they are average and would receive the $1,000 Dominion check. But depending on how “average” is calculated, most families would get less than the $1000, possibly far less. Dominion hopes you’re not particularly knowledgeable about math.

Dominion acknowledges that $1 billion of the $1.3 billion it will use to write those customer checks is coming from SCANA’s settlement with Toshiba — money that was already supposed to go back to ratepayers. How generous is it to take credit for giving the customers money they were already supposed to receive?

Thousands of SCE&G customers will not get any check at all because Dominion says they would not be ‘eligible.’

Thousands of SCE&G customers will not get any check at all because Dominion says they would not be “eligible.” An eligible customer, according to Dominion, is one who is an SCE&G ratepayer as of the date Dominion takes over SCANA/SCE&G (sometime in 2019) and had SCE&G electric service in 2016. So if a ratepayer has had SCE&G service but will not have that service next year, there will be no check. If a ratepayer in 2019 was not an SCE&G customer in 2016, there will be no check.

It also turns out that Dominion’s $1,000 cash-back offer was only two-thirds of what the two utilities were willing to do. According to state legislators, SCANA offered to kick in another $530 for an average customer if it got concessions from the General Assembly. Legislators refused to be blackmailed, and Dominion took back the extra $530 per average family offer.

Then there is Dominion’s offer of a 5 percent to 7 percent rollback in electric rates.

Ratepayers deserve the undivided and Dominion-free attention of the PSC when it rules on SCE&G rates.

This is less than half of the 15 percent temporary rollback ordered by the Legislature and approved by the PSC. And the same logic that drove the decision for this 15 percent temporary rate reduction will be used to pursue a PSC order for a permanent 15 percent rate rollback.

But there’s a risk that the PSC won’t roll back SCE&G’s rates as much as they should be if it considers Dominion’s proposal to acquire SCANA as part of the same case.

The ratepayers deserve the undivided and Dominion-free attention of the PSC when it rules on SCE&G rates. The “generous” Dominion offer should not influence this critically important decision by the commissioners.

The PSC rate-reduction hearing and ruling should thus come first, without any input from Dominion. Only then should the PSC hold a hearing on Dominion’s desire to gobble up SCANA.

Mr. Knapp is the President and CEO of the South Carolina Small Business Chamber of Commerce; contact him at fknapp@scsbc.org.

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