Cindi Ross Scoppe

It gets harder to slash SCE&G’s nuclear surcharge every day this bill doesn’t pass

Dominion buys out SCANA: How we got here

Since the V.C. Summer nuclear expansion project was abandoned, SC lawmakers and agencies have tried to keep SCE&G and parent company SCANA from overcharging power customers for the failed project. Here is a summary of what has happened.
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Since the V.C. Summer nuclear expansion project was abandoned, SC lawmakers and agencies have tried to keep SCE&G and parent company SCANA from overcharging power customers for the failed project. Here is a summary of what has happened.

IT’S THE ONLY thing most people seem to care about, but I’ve never been particularly worried about whether the Legislature slashes SCE&G’s nuclear surcharge. Even less so after the House decided to pursue an “experimental” rate cut — which would last only until regulators make a decision about how much, if any, the utility can keep charging ratepayers for its abandoned nuclear reactors.

And that decision would only apply until the courts reach their own decisions on a host of lawsuits, filed and probably yet to be filed.

Because with all the competing constitutional issues and all the litigious interested parties, the courts — not the Public Service Commission, and not the Legislature — are going to have the final say on our power bills.

That’s not to say it doesn’t matter whether the House’s bill to temporarily eliminate the surcharge remains tied up in a House-Senate conference committee that hasn’t met since it was appointed on May 10.

It matters a lot — because of all the other stuff in H.4375.

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Cindi Ross Scoppe

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Grading the 2018 Legislature: an abysmal failure but for that last-minute surprise

We’re bankrolling SCANA dividends with our payments for abandoned nuclear reactors

Why Santee Cooper’s customers pay a way lower nuclear surcharge than SCE&G’s

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

Ratepayers sued the state, and the attorney general’s office is helping them

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

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The most important thing the bill does is extend the Public Service Commission’s deadlne to decide whether SCE&G can keep charging customers $37 million a month for the unfinished reactors that will never provide any electricity.

State law is a bit vague, but many legislators are convinced the law requires the PSC to decide by mid-July, and they have long worried that the Office of Regulatory Staff wouldn’t have enough time to compile the research that the commission needs to make an informed decision by then.

Senate Republican Leader Shane Massey told me earlier this month that SCE&G and would-be buyer Dominion Energy had agreed to the Senate plan to extend the Public Service Commission’s deadline to December, but he expects the utilities to insist on the July ruling if the Legislature fails to pass the extension.

Concerns about the time line intensified when the Office of Regulatory Staff, which serves as the regulators’ research arm, complained that SCE&G was refusing to turn over records that could show that it was never entitled to part of the surcharge. Sen. Massey called SCE&G’s refusal to turn over the documents — including audit reports, information it has provided to the FBI, meeting notes about the Bechtel report and other documents — “an attempt to run out the clock, so that ORS can’t present a thorough case even in November.”

So at his urging, the Senate added another important element to H.4375: power for ORS to demand records from utilities without signing confidentiality agreements, which SCE&G suggested it might require, and power to subpoena information from companies that aren’t regulated by the state, such as the construction project’s prime contractor, Westinghouse, and even Bechtel, which produced the scathing report that said SCE&G wasn’t managing the construction project properly.

The third important element in H.4375 is a definition of “prudent.”

That word is the linchpin of the Base Load Review Act, which promised SCE&G that the more it spent on the project, the more profit it could make. Once state regulators decided that it was “prudent” for SCE&G and Santee Cooper to build two nuclear reactors, it became almost impossible to turn down any of SCE&G’s rate hikes. Opponents would have to prove that SCE&G had made “imprudent” decisions, and, most imprudently, the law said that imprudent decisions by the utility’s contractors wouldn’t count against it. But the 2007 law never defined prudent.

The House version of H.4375 says imprudency includes withholding important information from regulators — which House members believe SCE&G did — as well as pretty much everything else SCE&G is accused of doing. The Senate version isn’t tied as closely to SCE&G’s specific actions, which might make it safer in a court challenge. But it looks to me like the utility would have a hard time meeting either definition.

Although the courts will have the final say on how much SCE&G keeps charging us — and might very well set that rate themselves — I don’t think what those decisions will be is predetermined. They depend on what the law is when the lawsuits are heard, what the Public Service Commission does with the rates and its basis for doing whatever it does.

If the Office of Regulatory Staff has time to thoroughly investigate how the project failed, it can give the PSC good information for making its decisions; if not, it might not be able to.

The stronger the constitutional case the Legislature can make for any rules it has rewritten, and the stronger the constitutional case the PSC can make for its decisions, the better the state’s chance of prevailing in court — or at least coming closer than SCE&G to prevailing.

Oh, and that temporary rate reduction? The Senate stripped it out of H.4375, but it’s in another bill (S.954) that’s in the same House-Senate conference committee. Legislators are waiting until after the June 12 primaries to settle on the rate cut, but there’s no reason they can’t agree on the regulatory reforms sooner than that. And there’s every reason they should should pass those reforms.

Even if the extension is approved, the clock is still ticking. And the sooner the Office of Regulatory Staff has the power to force SCE&G, Westinghouse and Bechtel to hand over relevant information, the better its chance of putting together the case that could lead to permanent rate reductions.

More information

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

SC nuclear debacle, by the numbers

SC nuclear debacle: a timeline

The on-again, off-again love affair between the SC House and SCE&G is back on again

Santee Cooper is out of control. But that’s not a reason to sell it

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

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

Legislators’ micromanagement limits fix to regulatory system behind nuclear debacle

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

What else we learned from that SCE&G bankruptcy report

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

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.

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

Does anyone at Santee Cooper remember who Santee Cooper works for?

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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