Cindi Ross Scoppe

Could the fate of the nuclear surcharge come down to a 3.5 x 7 piece of paper?

The inserts from my latest SCE&G bill. The one in front is a notificaiton of the proposed merger between Dominion Energy and SCANA.
The inserts from my latest SCE&G bill. The one in front is a notificaiton of the proposed merger between Dominion Energy and SCANA.

IN ADDITION TO the monthly power bill itself, my most recent correspondence from SCE&G contained four inserts, each measuring 3.5 inches wide and 7 inches long. The paper isn’t flimsy, but it’s not expensive card stock either. About the same weight as the bill.

One insert advertises rebates on Energy Star heating and cooling units. One is about a cash-back program for ditching old refrigerators. One touts the $1,000 refunds and other benefits of a SCANA/Dominion Energy merger.

And one is an official notice from the Public Service Commission, all black and white in type so tiny I can barely make out all the words with my contacts in. It tells customers how they can comment on the merger.

It’s the sort of notice we get whenever SCE&G applies for a rate increase that is not related to the nuclear construction project the company abandoned this summer.

It’s the sort of notice that we did not get on the nine occasions when the utility filed for permission to raise rates to pay for the nuclear construction project.

And the absence of those notices could decide the multi-billion-dollar battle over who pays for the failed project. That, in turn, could determine whether SCANA, South Carolina’s lone Fortunate 500 company, remains a Fortune 500 company, or goes bankrupt, or becomes part of Dominion, Virginia’s giant utility.

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Cindi Ross Scoppe

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Why the attorney general’s office isn’t representing the state in this lawsuit

SC nuclear debacle, by the numbers

SC nuclear debacle: a timeline

3 numbers you need to know about SCE&G, Dominion and our energy future

You’re not going to stop paying nuclear surcharge, even if House bill becomes law

How awful would it really be if SCE&G went bankrupt?

Read Article I, Section 22 of the SC Constitution

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I’ve been thinking for a while now that constitutional questions — mind-bogglingly complicated constitutional questions — will determine how much more money we pay for the unfinished nuclear reactors. As S.C. Solicitor General Bob Cook argued in an attorney general’s opinion last year, allowing SCANA to charge us for all the money it spent on the abandoned reactors (and potentially a 10 percent profit on that money) amounts to an unconstitutional taking of private property for private use — i.e., to enrich stockholders. But making the utility pay the full cost for a project that the state deemed necessary could be seen as a taking of the utility’s property — that is, the money it invested. So the solution has to carefully balance those competing interests.

But what if the court didn’t have to reach such a complicated balance? What if there were a much easier way to decide whether and how much we have to pay?

In a legal brief in the ratepayer lawsuit Cleckley v. SCE&G, Mr. Cook offers up a dozen pages of legal arguments over unconstitutional takings and what role a utility’s financial condition can play in constitutional decisions, and whether ratepayers have a “property interest” in their own money, and the surprisingly high standard our state constitution sets for protecting ratepayers. And then he throws in a much simpler argument: The Public Service Commission violated the state constitution by approving those nuclear rate increases without giving the public sufficient notice to be heard on the matter.

Now, from a purely practical standpoint, the lack of notice didn’t make a bit of difference. The way South Carolina’s Base Load Review Act is written, it was practically impossible for the PSC to reject any of the rate increases once it gave its initial blessing to the construction project. Moreover, the people could participate meaningfully in a rate hearing knew about the proposed increases and intervened. In one case, they not only intervened but, once they failed to stop the rate increase, appealed the decision to the state Supreme Court. Where they lost.

But the constitution is the constitution, and the South Carolina Constitution promises that “No person shall be finally bound by a judicial or quasi‑judicial decision of an administrative agency affecting private rights except on due notice and an opportunity to be heard.”

Apparently, someone got the idea that there should be some notice, so SCE&G took out legal ads in newspapers. But Mr. Cook notes that our state Supreme Court has found that legal ads should be used only as a last resort and the U.S. Fourth Circuit Court of Appeals has ruled that “service by publication is constitutionally insufficient where actual notice by mail is feasible.”

Clearly, notice by mail was feasible here.

“Certainly,” Mr. Cook writes in a memo in the ratepayer case, “ratepayers could easily have been informed of the proposed rate increases through bill inserts on each of the nine occasions before the revised rate increase had occurred, rather than after the increase became effective. Failure to do so violates Art. 1, Section 22.”

In fairness to SCE&G, the utility didn’t refuse to provide notice it was ordered to provide. The Base Load Review Act does not require any notification about rate increases filed under that law, and the PSC did not require anything more than the legal ads. But the fact that a law doesn’t comply with the constitution doesn’t mean it’s OK to violate the constitution. To the contrary, that’s why laws — along with their results — get struck down.

I don’t do predictions, so I’m not predicting that the outcome of our state’s biggest-ever business debacle will be determined by SCE&G’s failure to insert a smartphone-sized sheet of paper into our power bills. But it appears to be a legitimate argument, and courts do prefer not to base their decisions on grand, complex concepts if they can help it. And what could be simpler than a requirement to notify people before you take their money?

More information

Here are some other pieces I’ve written about this that you might find helpful:

These are the people who brought us the SCE&G/Santee Cooper nuclear debacle

Did South Carolina’s own ‘don’t ask, don’t tell’ law make the nuclear fiasco worse?

Our politicians are spreading false hope about the nuclear mess. Don’t listen.

Legislators’ micromanagement limits fix to regulatory system behind nuclear debacle

Why legislators shouldn’t be allowed to accept donations, jobs from utilities

There are 3 ways to cut Santee Cooper customers’ bills; 2 of them are worth exploring

Don’t be so sure SCE&G can pay for nuclear debacle without going bankrupt

What else we learned from that SCE&G bankruptcy report

Three ways the Dominion-SCE&G deal could fall apart

4 changes the Legislature needs to make after the $9 billion nuclear debacle

Is this the best deal SCE&G customers can get? Why finding out could cost us

Still want to run government like a business? That’s insane

Buying the benefit of the doubt: How donations secured SCE&G the means to squander billions.

Kapow! SCE&G punches back at Santee Cooper criticisms

How much worse was the original Bechtel nuclear report?

Where to hide nuclear secrets? Behind a lawyer, of course

Santee Cooper’s role in SC nuclear debacle looks worse by the day

How ‘waste not, want not’ became ‘spend more, profit more’

SCE&G nuclear fiasco: It’s complicated. Here are some explanations.

SCE&G law could cost you more than you imagine

Ms. Scoppe writes editorials and columns for The State. Reach her at cscoppe@thestate.com or (803) 771-8571 or follow her on Twitter or like her on Facebook @CindiScoppe.

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