The Lexington County Chronicle
August 25, 2016
By Jerry Bellune
An audit of S.C. Electric & Gas fails to show how cost overruns hurt customers.
That’s the contention of members of the Stop the Blank Check Coalition.
It’s why they want an independent analysis of what SCE&G’s rate hikes under a state law are doing to the company’s customers.
SCE&G spokesman Eric Boomhower responded that professional accountants confirmed that the state law benefits customers.
He said the law has lowered the total cost of new nuclear units to customers.
Critics contend that state law was written in error to give SCE&G a blank check to profit from accelerating costs of its nuclear plants, all paid for by customers.
“The SCE&G pitch is that the law (the Base Load Review Act) will save consumers money,” said S.C. Small Business Chamber of Commerce CEO Frank Knapp.
“They even point to a study conducted for the Office of Regulatory Staff that says that. But the issue has never been that paying the construction financing costs right away instead of letting the interest build up until construction is completed will save money.
“Any high school economics student can tell you that.
When the American Association of Retired People and the Small Business Chamber asked for the study last fall, they wanted to know how many savings promised under law had been lost due to cost overruns and delays, he said.
“That’s not the analysis that was done,” he said.
The group proposes law reforms that will make it work better for consumers.
“The SCE&G pushback is a smokescreen to deflect from the poor construction management and lack of Public Service Commission ability to say no to SCE&G under the BLRA,” he said.
“Unfortunately some legislators who really don’t understand the law and how SCE&G has used it are inclined to fall for the tactic.”
The reforms require:
- Additional construction financing costs be paid by SCE&G, not its customers.
- Empower the Public Service Commission to adjust a 10.5% Return on Equity that gives SCE&G a profit when it raises rates.
- Force SCE&G to show its business decisions were prudent and not the result of mismanagement.
Article: http://lexingtonchronicle.com/do-rate-hikes-cancel-savings-p38814-550.htm