Clears way for legislative fix of law that created a blank check for the company
On November 9, 2016, the S.C. Public Service Commission (PSC) approved a settlement between SCE&G and intervening parties regarding the utility’s request for additional construction costs to complete the two nuclear plants at the V.C. Summer Nuclear Power Station in Fairfield County.
I was one of the intervening parties signing the settlement agreement with SCE&G. The other parties were the S.C. Office of Regulatory Staff, the Central Electric Power Cooperative, the Electric Cooperatives of South Carolina and the South Carolina Energy Users Committee.
It is clear that while this settlement will allow the total price of the construction costs to increase another $831.3 million bringing the nuclear plants’ price tag to about $14 billion—22% higher than the original estimate—it was the only chance we had to reign in future hikes in the construction costs (which the PSC would have certainly approved). In addition, the settlement reduced the return on equity for future construction financing costs of the project to 10.25% from 10.5% for a projected savings to the customers of about $26 million.
The settlement includes a Fixed Price option in which in exchange for the approval of an additional $505.5 million SCE&G “guarantees” the completion of the plants without further requests for more money from the customers (with some minor exceptions). If the final construction costs are higher, the utility’s shareholders and/or the prime contractor (Westinghouse) will be financial liable.
We must now focus on never allowing this kind of runaway spending of the consumers’ money for future large energy generation projects by amending the law that allowed for the blank check in the first place. The Base Load Review Act is the law needing to be changed and the STOP THE BLANK CHECK coalition is proposing amendments.
Consumers have been incensed over having their SCE&G electric bills increase by about 20% over the years just to pay for the nuclear plants’ construction cost financing. Most feel the construction costs have been out of control yet are always approved by the PSC.
The S.C. House of Representatives has responded by scheduling a public hearing on how these large energy construction project costs should be paid for going forward. Duke Energy also has its eye on building two nuclear plants near Gaffney in the future and would use the Base Load Review Act to pay for them.
Join us at the public hearing and let your voice be heard. Tell Select Committee on Energy Generation Financing how you feel about the SCE&G rate hikes.
If you are a Duke Energy customer, you really need to come to the public hearing to avoid the kind of rate hikes SCE&G customers have experienced.
This Committee will hold the all-day public hearing on Tuesday, November 29, starting at 10:30AM in room 403 of the Blatt Building in Columbia. If more time is needed for public testimony, the hearing will continue the following day.
I’ll see you on November 29th.
Select Committee on Energy Generation Financing
Public Hearing
Tuesday, November 29, 2016
10:30AM
403 Blatt Building
Columbia, SC