SCE&G hikes under fire

Lexington County Chronicle
February 3, 2016

By Jerry Bellune

An activist coalition wants to change state law to protect utility customers.

State law, they say, cost S.C. Electric & Gas customers millions of dollars to pay for “imprudent” decisions in the long-delayed construction to two nuclear plants.

In its amendments to the Base Rate Review Act, the coalition said SCANA, the Cayce-based company that owns SCE&G, had tried to add employee Zumba classes and $50 a glass Scotch to what customers pay.

The coalition includes the S.C. Small Business Chamber of Commerce, League of Women Voters and environmentalist Sierra Club.

Small Business Chamber President Frank Knapp gave examples of SCANA’s “imprudent” decisions that resulted in massive cost overruns and schedule delays resulting in excessive costs to SCE&G customers:

  • SCANA imprudently contracted with Westinghouse for a nuclear design that had been revised 16 times and federal regulators had not approved.
  • SCANA imprudently decided to include only $86 million in liquidated damages in its contract. That was less than 1% of the estimated cost of nuclear construction. The utility admitted the damages were not sufficient to motivate the timely and on-budget completion of the plants.
  • SCANA rejected a fixed price contract with Westinghouse but has now learned its lesson, SCANA Chairman Kevin Marsh has said. In renegotiating its contract, SCANA is entertaining the idea of a fixed price that will cost its customers $774 million more than the now $1.2 billion over-budget nuclear project, Knapp said.
  • SCANA imprudently agreed to “progress payments,” a mistake, Marsh said, because vendors were paid even though no progress was being made and vendors were fighting with each other — a situation SCE&G did not know about. “They kept falling further behind,” he said.

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