Lexington County Chronicle
August 18, 2016
Since the spring of 2015, we have reported on S.C. Electric & Gas’s excessive rate hikes.
It seems clear that the power company has legally but unfairly gouged its customers for overruns on its nuclear plant construction costs in Fairfield County.
The overruns resulted from mismanagement. The mismanager, not its customers, should pay the cost.
Further, the mismanager pockets 10.5% of those rate increases legally as a so-called Return on Equity.
In other words, our lawmakers have passed a law, authored by the mismanager, that gives it a blank check to abuse the rest of us.
Now a Stop the Blank Check Coalition has come together to oppose this abuse of customers.
When we give monopoly status, we don’t grant license to abuse your customers.
They propose reforms to:
- Better protect the public by requiring utility shareholders to pay additional construction financing costs beyond initial project estimates until plants are finished.
- Give the Public Service Commission power to adjust the Return on Equity so that mismanagers do not profit but their own mistakes.
- Place the burden on the utility to show that their management decisions were “prudent.”
- Make the Office of Regulatory Staff an advisory-only party to all contract negotiations and decisions for construction projects submitted to the PSC for approval.
- Require the company to show the prudence of transaction costs.
This is not some starry-eyed scheme but a reasonable way to regulate utilities that have been handed monopoly status.
As Rep. Todd Atwater of Lexington observed, nuclear power plant construction costs are predictable and overruns can be anticipated.
The power company should bear additional costs, not customers.
If this is to save customers money, then it should not cost them eight increases before the project is completed,” he said.
“It is a betrayal of our trust in the system. When we grant monopoly status in return for certain guarantees in the power industry, we don’t grant a license for abuse.”
We believe our county delegation will join Atwater in hearings to determine the best reforms of state law. As for the poor customers, they may never recover the costs they unfairly were forced to pay.