IT’S TIME TO pop some popcorn, curl up in a comfortable chair and enjoy the show. Might as well, because now more than ever, the fate of SCE&G’s nuclear surcharge, and our monthly power bills, is out of our hands.
As we approach Tuesday’s one-year anniversary of the decision by SCANA Corp. and state-owned Santee Cooper to abandon construction of two nuclear reactors that were 10 years and $9 billion in the making, the action has moved mostly to the quasi-judicial Public Service Commission and state and federal courts.
There are many, many, many things the Legislature still needs to do to improve our utility regulatory process and to improve the legislative process that laid the groundwork for the debacle. But those are about not making V.C. Summer-sized mistakes in the future — not about correcting the one it already made.
There also remains the whole huge question of what happens to Santee Cooper and its customers. Although the state’s electric co-ops have filed suit to try to force Santee Cooper to stop charging them for its 45 percent share of the construction costs, Santee Cooper doesn’t have shareholders who could help pay the bill. So ultimately the Legislature will decide whether customers pay the bills or the state sells the utility to a private company … which will charge either its shareholders or its customers to pay those bills.
But how much if any of the $37 million a month SCE&G customers will continue to pay for the abandoned reactors is now pretty much beyond the control of the Legislature, which means it’s beyond the control of ratepayers.
Really, it always has been.
Although lawmakers made a show of temporarily cutting the nuclear surcharge, even they realized that they wouldn’t be able to permanently reduce our rates — that at best they could put the state in a better position to argue for ratepayers in court. That’s because ultimately the courts will decide the complicated competing constitutional claims of SCANA and its ratepayers and, in so doing, how much this disaster costs us.
Not to worry, though; there are plenty more opportunities for courts to have a say.
U.S. District Judge Michelle Childs has set a hearing on Monday and Tuesday on SCE&G’s attempt to block the temporary rate cut the Legislature ordered last month. I’m not about to guess how she’ll rule, but the Public Service Commission made a strong case that the lawsuit is premature. We’ll probably get an answer fairly quickly on the temporary restraining order, since the PSC ordered SCE&G to start lowering rates Aug. 7. But the temporary reduction lasts only until the PSC rules on competing rate petitions by SCE&G, Dominion and environmental groups; legislators have ordered the PSC to rule on those petitions by Dec. 21. So if the judge refuses to enjoin the law, that could make the lawsuit effectively moot.
Not to worry, though; there are plenty more opportunities for courts to have a say. At least 15 other lawsuits are pending in state and federal courts, filed by SCANA stockholders and SCANA ratepayers. Some seek to stop the nuclear surcharge, some to claw back the $2 billion we’ve already paid for the abandoned reactors, some to strip the SCANA board of its authority and some to block SCANA’s merger with Virginia-based Dominion Energy.
The state Supreme Court designated Circuit Judge John Hayes to handle the state court suits, and he is methodically working his way through a dizzying array of procedural, legal and constitutional issues.
Although a criminal case wouldn’t directly affect the other matters, it could provide strong evidence that SCANA made decisions that were not prudent, and therefore had no right to collect as large a nuclear surcharge as it did.
Separately, environmental groups, business groups, the state Office of Regulatory Staff and the attorney general’s office have filed petitions before the Public Service Commission to end the nuclear surcharge, to force SCANA to refund customers the money they’ve already paid, and to prevent the merger, at least on the terms Dominion and SCANA propose. The PSC has consolidated those petitions with the request by SCANA and Dominion to continue collecting the nuclear surcharge, although at a lower rate, for 20 years.
The law that temporarily reduced SCE&G rates also said the PSC can’t rule on the matter before Nov. 1 but must rule by Dec. 21. But the parties will start filing their written testimony this month, beginning with SCANA, Dominion and their supporters on Thursday. Whatever the PSC decides will be appealed to federal or state court or both.
State and federal officials are conducting criminal investigations, at least in part into whether SCANA officials intentionally misled stockholders about the project in order to keep the stock price inflated, which increased their compensation. Although a criminal case wouldn’t directly affect the other matters, it could provide strong evidence that SCANA made decisions that were not prudent, and therefore had no right to collect as large a nuclear surcharge as it did.
Stockholders are delusional if they think they’re going to get a better deal.
Meantime, SCANA stockholders will gather at a conference center near Harbison on Tuesday — one year to the day after SCANA pulled the plug on the unfinished reactors —to vote on Dominion’s offer to purchase their stock.
I would much rather see SCANA survive as a South Carolina company, but I doubt I’d feel that way if I were counting on SCANA dividends for my retirement.
Stockholders are delusional if they think they’re going to get a better deal, since it’s highly unlikely that Dominion will be able to collect as much money from ratepayers as the company assumed it would when it offered to buy SCANA. And while it seems highly unlikely that SCANA will file for bankruptcy protection if the Dominion deal doesn’t go through, stockholders would lose everything if that were to happen.
Here are some of the other pieces I’ve written about this that you might find useful:
Ms. Scoppe writes editorials and columns for The State. Reach her at firstname.lastname@example.org or (803) 771-8571 or follow her on Twitter or like her on Facebook @CindiScoppe.