State agency challenges SCE&G plans for VC Summer nuclear project

State agency challenges SCE&G plans for VC Summer nuclear project

August 10, 2017

By Jack Kuenzie

COLUMBIA, SC (WIS) – SCE&G’s plan for walking away from the VC Summer nuclear reactor project in Jenkinsville is getting some opposition. And some of it is coming from a state agency that advocates for utility consumers and a small business organization.

That state agency is the Office of Regulatory Staff (ORS). Authorized in 2004, ORS is responsible for inspecting, auditing, and examining public utilities. Basically, representing the public interest in utility regulation.

And now ORS is objecting to a key part of the VC Summer nuclear project abandonment plan.

The request sent economic shockwaves statewide and launched calls for legislative investigations. SCE&G, along with co-developer Santee Cooper, moved to pull out of a decade long effort to add nuclear reactors in Fairfield County. SCANA executives unveiled their plan to abandon the work nine days ago, looking to the state Public Service Commission for approval. But that plan as formulated by the  company has drawn objection from the Office of Regulatory Staff.

“We need to go under the proper statute. The proper statute would maintain the burden of proof on the utility,” ORS Director Duke Scott said.

Scott says the company’s proposal would force his office to show SCE&G did not follow a prudent course of action in its planning.

But ORS, along with the South Carolina Small Business Chamber of Commerce and House Speaker Jay Lucas say that burden to prove prudency should be the utility’s responsibility.

“They should have to explain why $4.9 billion dollars are prudently incurred costs. They need to be able to show abandonment is prudent,” Scott said. “They need to be able to show that the costs incurred were prudent. They need to have to show that they have tried to minimize those costs.”

Scott’s agency has argued to help ratepayers for as long as the reactor project has existed. He says ORS has been effective, achieving agreements that have helped large and small business concerns and electric co-ops, while managing to win approval of lower returns for utility shareholders.

“We negotiated return on equity from 11 percent to 10 and a quarter percent so far. So that alone saves customers, the ratepayers a lot of money,” Scott explained.

The Small Business Chamber’s Frank Knapp sent a letter to the PSC agreeing the company’s motion to abandon is filed under the wrong section of state law. He says that part cited by the utility pertains to new or revised construction for the purpose of moving a project to completion – not abandonment. Knapp says the commission should be able to lower returns for stockholders, considering questions swirling around the company’s performance on the reactor project.