At too many turns along the way, the news from the ongoing saga of the abandoned nuclear reactors at the V.C. Summer plant in Fairfield County has been anything but positive for the utilities.
The very idea of those at the helm at South Carolina Electric and Gas Co., its parent firm SCANA Corp. and Santee Cooper profiting in any way from the debacle infuriates just about everyone, not the least of those being South Carolina lawmakers determined to provide relief for ratepayers picking up the tab for the failed project.
While it’s not hard to get most South Carolinians to go along with the idea that they’ve paid enough for the project, the fact is the General Assembly cannot solve the problem as much as it wants the public to believe it can.
Before leaving Columbia at the session’s end this past week, both the House and Senate passed legislation mandating rate reductions by SCE&G for the tab being charged to electric customers for the nuclear project. (The Legislature and PSC have no power regarding Santee Cooper rates.)
The House and Senate versions differ and there is no guarantee of a compromise, though lawmakers are anxious to tell voters they did something on the issue ahead of June’s primaries.
The House version removes the rate hikes for the nuclear project authorized under the Base Load Review Act, the 2007 law approved by the General Assembly that gave SCE&G the right to make such charges whether the project was successful or not. The House extends the rate relief until the Public Service Commission makes a decision on whether SCE&G and SCANA are responsible for the nuclear debt. The reduction would also last through any court cases resulting from appeals.
The Senate lifts the rate hikes imposed after 2011, leaving 2009-2010 rate hikes intact. It gives relief for 30 days.
There are real questions regarding the legislature’s legal power to mandate a rate reduction, but even if the reductions occur, they are short-lived.
With the PSC ruling scheduled for later this year, rate relief would range from one month (the Senate) to about five months (the House). By year’s end, the PSC would have to decide on SCE&G/SCANA’s liability and whether Virginia-based Dominion Energy’s proposal to purchase SCANA will be approved.
The much-publicized merger of the utilities would mean implementation of Dominion’s plan to refund SCE&G’s customers about $1,000 each and reduce rates for the nuclear project by about 5 percent, but the remainder of the 18 percent being charged now would remain for 20 years. Dominion has said it will not go through with the merger if lawmakers or regulators remove its ability to recoup nuclear project monies. Without the merger, SCANA has said it would continue to charge for the plant for up to 60 more years.
Doing away with the Base Load Review Act is within lawmakers’ power, but retroactively undoing SCE&G’s ability under the law to charge for the nuclear project is certain to be challenged in court. And all the while this saga plays out, the future of SCANA Corp. and SCE&G is left hanging. Despite the claims and counterclaims of the utility’s ability to survive if it is saddled with all nuclear plant debt, such a scenario would not be good for SCE&G, which is vital to development and quality of life in a big part of South Carolina.
A famous Yogi Berra quote is “It ain’t over til it’s over.” Well, it seems South Carolina’s experience with the failed nuclear project is anything but over, even if lawmakers come to agreement in the coming weeks on rate reductions. The fight then, in some ways, will have just begun. And the future of the Dominion deal, which remains the best solution all around, will be in further doubt.