The City of Orangeburg has filed a petition to intervene before the state's Public Service Commission regarding the proposed sale of SCANA Corp. to Virginia-based Dominion Energy Inc.
SCANA is the parent company of South Carolina Electric & Gas, from which the city's Department of Public Utilities purchases wholesale power.
"No other party can adequately represent Orangeburg’s interests in this matter," the seven-page petition filed Feb. 21 states.
According to the petition, the city cites the proposed sale and its ability to intervene as "in the public interest."
"We have not taken a formal position on the Dominion/SCANA merger," DPU Manager Warren Harley said in an emailed response. "Our decision to intervene is purely to be in a position to protect our interest related to our current wholesale power contract with SCANA/SCE&G."
As part of its petition, the city is asking that it be allowed to "appear as a party; engage in discovery; make motions; participate in hearings by offering testimony and exhibits, and cross-examining witnesses; and receive service of all notices, documents, exhibits and data submitted by all parties and the Commission’s staff."
Orangeburg's petition notes the matter of SCE&G's sale "impacts Orangeburg’s access to future power supply at reasonable rates" and adds as a result the city "has a substantial and material interest in the subject matter of this proceeding."
Currently, a joint application and petition by SCE&G and Dominion is before the PSC for review of the proposed sale. The application also asks for a "prudency determination" regarding the abandonment of the V.C. Summer plant project and "associated customer benefits and cost recovery plans."
Dominion and SCANA announced Jan. 3 they would merge.
The $14.6 billion deal includes about $1.3 billion in refunds to SCE&G customers, who have so far been charged about $2 billion to fund the company's debt on the failed nuclear project in Fairfield County.
The proposed merger comes on the heels of SCE&G abandoning construction of new reactors at the V.C. Summer Nuclear Station last summer after the bankruptcy of contractor Westinghouse.
SCANA and Santee Cooper, South Carolina's state-owned utility, had spent about $9 billion on the project, which now sits idle. Thousands lost their jobs in the failure, and state and federal authorities are investigating.
Dominion says its offer to buy is contingent upon being able to continue charging ratepayers over 20 years for the nuclear project. Though the timetable and amounts are reduced from what SCANA had planned, S.C. lawmakers have balked at the idea of ratepayers continuing to pay for the nuclear project.
SCANA is charging electric ratepayers $37 million a month for the failed nuclear project, and the legislature is considering shutting down those payments at least temporarily. A measure has already passed the S.C. House.
DPU has purchased power from SCE&G and its predecessor companies for more than 100 years, the petition notes.
"Orangeburg currently meets its supply needs through a long-term requirements arrangement with SCE&G under a Power Supply Agreement that ends December 31, 2022 (although it can be extended by SCE&G one year to December 31, 2023)," the petition states. "Following the expiration of Orangeburg’s power supply agreement with SCE&G, Orangeburg will be a potential customer of SCE&G."
The contract between DPU and SCE&G is $700 million.
"Our assurances with respect to our rates are based on the current contract, which goes through 2022," Harley said. "This agreement provides that DPU’s current rates would not change until the nuclear reactors were completed and operational, which has not occurred."
Harley said the utility has not met or discussed the contract with Dominion but does communicate regularly with SCANA officials.
City attorney James Walsh referred all questions to Washington-D.C.-based attorney James Horwood, who is also representing the city's interests.
Horwood said the city's current contract with SCE&G does have fixed rates and so there are no concerns over short-term impact through the end of the contract, but long-term concerns about potential rate changes exist.
"In the future Orangeburg will be buying from either SCE&G or another supplier and wants to be in a position to purchase from the most appropriate supplier in terms of rates and reliability of service," Horwood said. "Orangeburg wants to be in a position to have many desirable options available to it."
The petition notes DPU provides power to about 75,000 people in both the city and Orangeburg County and has an annual peak load of approximately 182 megawatts.
"Orangeburg has a limited amount of generation and a modest allocation of Southeastern Power Administration power," the petition states. "In order to meet its power supply needs reliably, Orangeburg must purchase wholesale power."
Horwood's law firm represented the city a few years ago when the city wanted to enter into a contract with North Carolina-based Duke Energy.
In May 2008, Orangeburg signed a $500 million power-buying deal with Duke.
It marked the first time DPU planned to purchase the bulk of its electric energy from a source other than SCE&G or its predecessor in almost 90 years.
But the agreement fell apart in April 2009 when North Carolina regulators rejected Duke’s plan to sell power to DPU, saying it could raise costs for Duke’s North Carolina customers.