Lexington County Chronicle
August 18, 2016
By Jerry Bellune
S.C. Electric & Gas foes of nuclear rate hikes want to do the improbable.
Change a state law. The Stop the Blank Check Coalition will ask lawmakers to rewrite a state law that allows power companies to charge customers excessive rates to finance nuclear plant construction.
The law allows SCE&G to pocket 10.5% of all rates hikes over the last nine years as Return on Equity.
State law gives SCE&G a blank check paid for by customers, said coalition leader Frank Knapp, Jr., CEO of the S.C. Small Business Chamber of Commerce.
The coalition want to amend state law to protect the public by requiring:
• Additional construction financing costs beyond initial project estimates be paid by company stockholders, not SCE&G customers.
• Empower the Public Service Commission to adjust the 10.5% Return on Equity and force the utility to show its business decisions were prudent and not the result of construction mismanagement.
The Chronicle has asked SCE&G officials for their response to the proposals but received no reply.
In 2007, state lawmakers passed the Base Load Review Act to guarantee that SCE&G could raise its rates to customers every year to pay for the construction financing costs of two new nuclear power plants.
Once the PSC approves a project, SCE&G is guaranteed an increase for costs annually. Additional costs result in higher rates.
In 2009, PSC regulators approved SCE&G plans to build the nuclear plants.
Since then, SCE&G mismanagement has increased the costs far above the original budget, Knapp said. SCE&G has raised rates under state law seven times costing its customers an additional $1.1 billion.
This is in addition to a 17% increase in rates approved for SCE&G’s current electricity generation, Knapp said.
The completion of the plants has been delayed three years until 2020.
He said SCE&G wants:
• To raise rates again by 3.06% including a 10.5% Return on Equity for itself.
• Another $846.6 million for construction costs.