Drum roll please.
Today (Tuesday) Dominion Energy announced that it will be introducing on Wednesday what is at least its third “best and final” proposal for buying SCANA/SCE&G and providing some benefits to ratepayers. SCE&G electric rates have been raised 9 times since 2009 totaling 18% for the failed nuclear project that has been abandoned.
Dominion’s original proposal was to reduce electric rates for SCE&G customers by 7% and give refund checks that could average $1,000 for the average household. Take our Plan A or we’ll walk and let SCE&G go bankrupt, said Dominion.
When that offer was heavily criticized and exposed as being misleading, Dominion didn’t walk away from a possible merger with the local utility. Instead it ditched the refund check idea (which was actually a consumer loan that ratepayers would have to pay back over 20 years) and offered a new plan.
The second “best and final” offer was Plan B in which rates would be rolled back by 13.9%. But this rollback was still not as good as the 15% temporary rate rollback that is in place today as instructed by the legislature. Commissioners have expressed interest in that being their order.
So, today on Day 14 of the PSC hearing that will yield a ruling on who will pay and how much for the construction costs of the abandoned nuclear project, Dominion announced that it would roll out another “best and final” offer on Wednesday. The new proposal would reduce rates by 15.1%.
Dominion believes that the Public Service Commissioners likes the legislatively-ordered 15% rate rollback. But the Virginia-based utility has a problem.
The legislature derived its 15% rollback from simply removing PSC orders for nuclear project rate hikes back to 2011. It took nothing else into consideration, like tax benefits the utility is getting from the 2017 tax law and any merger benefits form the Dominion acquisition of SCANA/SCE&G.
The tax benefits belong to ratepayers and most other utilities across the country have used them to reduce rates for their customers.
Testimony given during this hearing indicates that these tax benefits for SCE&G could be 4%-5%.
Now that Dominion is agreeing to accept the 15% legislative-ordered rate rollback, it must also pass on the tax benefits to customers.
That would add up to a 19%-20% permanent rate rollback putting it almost at the proposal of the Office of Regulatory Staff. supported by most of the intervenors including me.
With such an order by the PSC, Dominion will still not walk away.