Opinion Extra

SCE&G ratepayers should hope that PSC corrects the errors in their order

Protestors briefly interrupted a meeting of the S.C. Public Service Commission before the commission voted last month to set SCE&G’s electric rates moving forward and to approve Dominion Energy’s offer to buy SCE&G’s parent company, SCANA.
Protestors briefly interrupted a meeting of the S.C. Public Service Commission before the commission voted last month to set SCE&G’s electric rates moving forward and to approve Dominion Energy’s offer to buy SCE&G’s parent company, SCANA. The State file photo

I and other intervening parties were disappointed in the results of the S.C. Public Service Commission (PSC) hearing on SCE&G’s failed nuclear project and Dominion Energy.

In its Dec. 21 order, the PSC allowed SCE&G to recover $2.3 billion from ratepayers for construction costs of the abandoned nuclear plants in Fairfield County. Ratepayers have already paid over $2 billion toward the financing charges for the project. The PSC also approved Dominion to buy the utility’s parent company, SCANA.

However, it wasn’t just that we thought that customers deserved more than a 15 percent permanent rollback on electric rates, a decrease already in place thanks to the state legislature.

The most alarming issue was that the PSC arguably did not follow the law or facts in arriving at some of its decisions.

The most egregious legal error was the PSC failure to find that SCE&G management acted imprudently when it deceived the regulatory agencies, starting at least in 2015, in order to obtain rate hikes and extensions for the project. The utility had both internal and external studies that concluded that the nuclear plants would cost hundreds of millions more and take years longer to complete than company executives were telling the PSC.

The PSC refusal to find that SCE&G executives acted imprudently in this matter is a very serious issue for three reasons.

First, the law clearly states that the utility should be allowed to recover its construction costs on the abandoned project unless it was found to have acted imprudently. The PSC did not make a ruling of imprudence yet disallowed the recovery of construction costs after March 12, 2015. The PSC did not follow the law and simply said that not allowing the utility to recover these costs without a finding of imprudency was justified due to SCE&G and Dominion agreeing with the PSC decision.

On its face, this is an absurd conclusion. A defendant in a court case agreeing to receive a penalty does not excuse the judge from following the law and finding that a crime had been committed. Likewise, SCE&G must be found to have been imprudent in order to receive the penalty. It’s the law.

The public should be incensed that the PSC could not bring itself to find that SCE&G executives acted imprudently given the record of repeated efforts to deceive regulators.

Second, by the PSC not following the law by finding imprudence, it opens the door to a future legal challenge of its order by Dominion, another legal entity created by Dominion or even SCE&G itself should Dominion spin the company off years down the road. In this possible scenario, ratepayers could wind up paying all the $5 billion of construction costs incurred by SCE&G, not just $2.3 billion — all because the PSC did not follow the law.

Third, should the PSC not correct its error, South Carolinians should be concerned that the laws of this state are only being followed at the discretion of those in control, especially when powerful interests are involved. With its completed purchase of SCANA and SCE&G, Dominion is now a dominant political player in South Carolina with assets totaling over $79 billion. It is appropriate to ask the question, does our state follow the law when it affects those with political or economic clout?

Petitions have been filed requesting that the PSC rehear or reconsider its order on this and other matters.

SCE&G ratepayers and everyone should expect that the PSC grants the requests and decides to follow the law.

Mr. Knapp was a pro se intervenor in this PSC hearing and the president/CEO of the South Carolina Small Business Chamber of Commerce.

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