The Post and Courier
By Andrew Brown and Thad Moore
COLUMBIA — After months of delays, South Carolina lawmakers agreed on a plan Wednesday that would temporarily slash S.C. Electric & Gas customers’ power bills, ending a drawn-out debate over charges for unfinished nuclear reactors and likely throwing the state into a legal battle with a utility company that holds immense influence inside the Statehouse.
The agreement, which is still a couple of steps from becoming law, would temporarily eliminate most of the $37 million per month that SCE&G charge ratepayers for its unfinished V.C. Summer nuclear project in Fairfield County.
It would also strengthen South Carolina’s utility watchdog agency and prevent future projects from using the 2007 law that enabled the V.C. Summer project in the first place. That law stuck electric customers with the financial risk of building the now-abandoned reactors.
SCE&G ratepayers’ bills would drop by nearly 15 percent through the end of the year under the agreement — a savings of about $22 a month for the typical home. That covers most, but not all, of the money that customers hand over to the utility each month for the project.
But the deal struck by House and Senate negotiators does not resolve the nuclear question for good.
The issue of what will happen to SCE&G’s rates in the long term is left to the state’s Public Service Commission. Lawmakers are giving the commission’s seven members until December to decide whether SCE&G’s ratepayers or its shareholders will pay for the billions of dollars of debt it accumulated on the project.
Some lawmakers believe that the Legislature’s insistence on cutting out the nuclear charges baked into SCE&G power bills will send a strong signal to the regulators, who they hand-pick.
What’s more, the legislative compromise also tries to make it easier for state officials to show that SCE&G, and its parent company, SCANA Corp., didn’t properly manage the $9 billion nuclear project over the past nine years.
The panel of lawmakers who hashed out the deal moved to narrow the legal definition of what is “prudent.” That’s important, because under South Carolina law, customers only have to pay for SCE&G’s construction bill if the utility acted responsibly as it racked up the expenses.
The plan is still a few steps away from becoming law, however. The House and the Senate will have to approve the measure while they’re in Columbia this week. Then the final bill will need make it past Gov. Henry McMaster’s desk.
McMaster, who secured the Republican nomination for governor Tuesday, has vowed to veto the bill if it doesn’t eliminate all of SCE&G’s nuclear charges, which currently make up a full 18 percent of ratepayers’ bills.
But the bipartisan group of lawmakers pushing the plan believe they have enough votes to override McMaster.
The compromise also raises new questions about SCE&G’s future. Virginia-based Dominion Energy is trying to buy the utility’s parent company, and the Legislature’s proposal would likely give it legal cover to walk away if it becomes law. It’s not clear whether Dominion will take the opening.
If the rate cut becomes law, SCE&G could still throw a wrench into lawmakers’ plans. The utility’s leaders have threatened to sue if the Legislature meddles with its rates. The company is likely to seek a court decision that stops the temporary rate cut from going into effect, meaning SCE&G customers may not feel the effects of the Legislature’s actions anyway.
It was that legal threat, along with warnings of a financial unstable utility, that made state senators reluctant to push for a total rollback of SCE&G’s nuclear rates in recent months. They feared punishing the utility too much financially and opening the state to an unwinable lawsuit.
But a government-commissioned report released this month, along with another study commissioned by the Senate, gave lawmakers the evidence they needed to cut SCE&G’s rates, arguing the utility could survive a hit to its revenue.
SCE&G’s electricity rates have loomed over the Legislature since the nuclear project was called off last July. The scuttled project costs the typical home $27 a month, which has gone toward a mountain of debt and payouts for its parent company’s shareholders.
And while Wednesday’s agreement answers some of the questions looming over the state’s energy sector, it doesn’t answer them all. Lawmakers still need to resolve the future of Santee Cooper, the state-owned utility that owned just under half of the project.