Base Load Review Act

Base Load Review Act

Through December 2015 the SCE&G ratepayers have had 9 rate increases under the Base Load Review Act resulting in over $1.1 billion in additional electricity costs to both business and residential consumers.  These rate increases are being used just to pay for the financing costs to build the two nuclear plants in Fairfield County.  The construction project is $1 billion over budget and 3 years behind schedule largely due to imprudent business decisions by the utility.

The South Carolina Small Business Chamber of Commerce, the South Carolina Chapter of the Sierra Club and the South Carolina League of Women Voters formed the STOP THE BLANK CHECK COALITION and has propose four amendments to the Base Load Review Act to better protect the consumer from excessive rate increases.  Also in the coalition the Carolina Peace Resource Center, Kingdom Living Temple, National Association of Social Workers-SC Chapter, New Alpha Community Development Corporations, Sustainable Midlands and The Whitney M. Slater Foundation.

Below is a description of the four amendments:

  1. Utility Accountability – Allow the use of the BLRA to recover construction financing costs only on the original PSC approved budget for construction.  Any construction financing costs for additional construction expenses will be recovered in a general rate proceeding after the plant is used and useful (i.e. online producing energy for consumers).  This will focus the utility on making the most prudent cost projections and construction decisions because the company will have its own finances on the line or cost overruns and delays.
  2. Utility Transparency – The SC Office of Regulatory Staff shall be an advisory-only party to all contractual negotiations and contract decisions for construction projects being submitted to the PSC for approval.  Such an advisory-only role by the Office of Regulatory Staff does not constitute its approval of any eventual contracts nor is it to be construed that any subsequent contracts are prudent.  The SCE&G experience has shown that ultimately the ratepayer will be the victim of imprudent contracts between the utility and vendors.
  3. Utility Profit Regulation –  Allow the PSC to decide the utility’s Return on Equity under the BLRA.  This re-empowering of the PSC is essential to truly protect the consumers from a state-approved utility monopoly.
  4. Utility Responsibility – The utility shall demonstrate to the PSC the prudence of transaction costs, or decision by a preponderance of the evidence. Currently the burden to show that a construction decision is prudent is on a challenging party, not the utility.