New group wants SC to stop passing on nuclear plant costs

New group wants SC to stop passing on nuclear plant costs

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July 18, 2016

By JEFFREY COLLINS Associated Press


A group of small businesses, community leaders and environmental groups is asking state regulators to stop letting South Carolina Electric & Gas pass all the costs of two nuclear plants under construction on to ratepayers.

The two new plants in Jenkinsville are years behind schedule, and cost at least $4 billion more than first thought. SCE&G is now asking the state Public Service Commission for its ninth rate increase since 2009 to pay for the plants — this one to pay off an additional $846 million in increased costs.

“We have to stop giving SCE&G a blank check,” said Frank Knapp, president of the South Carolina Small Business Chamber of Commerce.

The increase will be paid for by SCE&G’s 700,000 customers, but also must be shouldered by a number of smaller electric cooperatives through state-owned utility Santee Cooper, which owns 45 percent of the plants and their costs, Knapp said.

Knapp’s group is joining with the Sierra Club and several community groups to create an organization called Stop The Blank Check that will ask regulators to force SCE&G shareholders to pay for any additional extra costs for the plants or at least approve a smaller rate increase when they meet in the fall. It is the first time all the groups have joined together.

The plants 30 miles north of Columbia were supposed to cost $10 billion when proposed in 2008, but the price tag is now $14 billion. They are set to open in 2019 and 2020, at least three years behind schedule.

“There has been a history of imprudent management decisions,” Knapp said.

SCE&G said it has managed the project the best it can.

“Whether you are building a house or a complex power plant, every construction project has challenges along the way,” SCE&G spokesman Eric Boomhower said.

Boomhower said SCE&G’s final cost estimate when the project was approved in 2009 was $11.4 billion. He said the utility is asking regulators to approve fixing the costs of the final four years of construction to save the company and its customers money.

Under a law passed in 2007 and reviewed by the state Supreme Court several years later, the utility can have ratepayers pay for the plants before a single kilowatt of power is generated.

Opponents liken it to paying for a car before the first part hits the assembly line, but SCE&G points out the State Office of Regulatory Staff commissioned a study that found the arrangement is saving the utility money that customers would have been paying after the plants come online.

But that also means there are SCE&G customers paying for a power plant they will never use if they move away or die before the electricity is made in an arrangement that no other business is given, said the Rev. Leo Woodberry of Kingdom Living Temple.

“Rates go up and people suddenly have to skip their blood pressure medication every other day to pay for a basic need of life,” Woodberry said.

Boomhower said SCE&G has programs to help low-income customers pay their bills.

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