(For coverage of Day 8, click here)
Day 9 of the PSC hearing started with Ronald Binz, a public utility and energy policy witness for the Southern Environmental Law Center (SELC). Much of his testimony addressed the use of securitization as a tool to cut costs for ratepayers when it comes to recovering approved construction costs for the nuclear project.
Mr. Binz said that history has shown that with using securitized bonds, utilities come out much financially healthier. The interest rate could be as low as 3.2%. He said that Duke Energy has used securitization and save their customers $600-$700 million.
Mr. Binz said that the PSC could make using securitization a condition of approving a merger even though Dominion says that it will walk away if this happens. The Commission can order the use of securitization by SCE&G with out without the merger.
SELC’s next witness was Dr. Uday Varadarajan with the Rocky Mountain Institute. Dr. Uday agreed that the use of securitization could help SCE&G recover financially.
Gregory Lander, SELC’s next witness who specializes in natural gas pipeline mergers and acquisition transactions, expressed concern that with a merger Dominion could purchase natural gas from its own affiliates—a process called “self-dealing” that could end up costing consumers more money than necessary.
The fourth witness of the day was Kevin O’Donnell put up by the SC Energy Users. Mr. O’Donnell said that SCE&G did not deserve to recover any of the construction costs of the abandoned nuclear project, about $5 billion.
Mr. O’Donnell also said that SCANA could mitigate any credit concerns from a rate cut larger than the one proposed by Dominion because:
- SCANA continues to pay $70 million yearly to its shareholders
- SCANA owns Public Service of North Carolina, valued at $2.2 billion, which it could sell to cover the construction costs ORS says should not be recovered from ratepayers.Frank Knapp