OPINION: A 9.75% rate cut at least should be yours

OPINION: A 9.75% rate cut at least should be yours

Lexington County Chronicle
March 1, 2018

By Frank Knapp Jr.

If you are an SCE&G customer, remember 9.75%.  Focus on it.  Demand it.

9.75% is the rate cut SCE&G itself had internally determined it could withstand without causing a financial crisis for the utility.  The utility came to that conclusion shortly after the company had offered back in November to reduce rates by 3.5%—an offer that was roundly rejected.

But we didn’t learn about the 9.75% figure until February when a reporter with the Post and Courier discovered it buried in some regulatory disclosures.

We never heard about it because SCANA, SCE&G’s parent company, found a better deal for their shareholders and executives to get out of their nuclear plant fiscal disaster—agree to be bought by Dominion Energy of Virginia.

Dominion offered to cut SCE&G customer rates by 5%, not much of an improvement and largely a function of the company’s federal tax cut. Dominion also offered a shiny $1000 rebate to the average customer for past rate hikes.  Critics countered that the $1000 already belonged to customers because it came from a settlement with Toshiba, Westinghouse’s parent company, and so was no sacrifice by Dominion.

Let me be clear.  A 9.75% rate cut is not what SCE&G electric customers deserve.  We deserve an 18% electric rate cut.  That’s how much rates have increased since 2009 to pay the construction financing costs of the two nuclear plants now abandoned.  We also deserve all the extra money we’ve already paid since 2009—approximates $2 billion in total.

But first we must have the state legislature or the SC Public Service Commission determine that the law that allowed SCE&G to raise rates for the nuclear project was unconstitutional.  Or even if it was Constitutional, that SCE&G hid information and made imprudent management decisions that would have led to the denial of rate hike requests had they been know.

However, this decision might not be made until December.  That’s 10 more months of SCE&G collecting $37 million a month from ratepayers for the nuclear debacle.   The SC House has voted to stop SCE&G from collecting the 18% until a decision on the matter is made.

SCANA has loudly proclaimed that such an action would force the company into bankruptcy and the utility would take the state to court to stop the imposed 18% rate cut.

The SC Senate so far has not agreed with the House about temporarily forcing SCE&G to cut rates by 18%.  Some Senators are now echoing the SCANA/Dominion lobbyists saying that we can’t risk putting the utility into bankruptcy or get involved in a lengthy and costly lawsuit or lose the Dominion deal.

First, the Dominion offer is not well liked by anybody but Dominion, SCANA and their lobbyists.  They’ll be another offer from another suitor to follow.

Second, no matter what actions the state takes to reduce SCE&G rates to benefit the customers, the utility will fight it in court.  A lawsuit is coming regardless and our Attorney General has the resources to fight it.  So the sooner it starts, the sooner it will be over.

Third, nobody wants SCANA to go bankrupt. So if our Senators are worried about that, then they should vote to accept SCE&G’s own figure it can live with for a temporary rate cut—9.75%.

You deserve at least a 9.75% electric rate cut from SCE&G.  Let your legislators know.

9.75%.  Demand it.

Mr. Knapp is the president and CEO of the South Carolina Small Business Chamber of Commerce.