Yesterday the S.C. Public Service Commission voted unanimously for “a thorough audit, inspection and examination of the company’s (SCE&G’s) books”. The South Carolina Small Business Chamber’s support for the action was cited in the motion.
February 1, 2018
By SAMMY FRETWELL
Dissatisfied with a report that downplays the prospect of SCANA’s bankruptcy, state regulators want a more detailed study telling them whether cutting electricity rates will send the Cayce-based utility into financial ruin.
The Public Service Commission voted unanimously Wednesday to require a second audit of claims by SCANA that bankruptcy is the likely result if it is not allowed to continue charging customers for its abandoned V.C. Summer nuclear reactor project.
In a Jan. 19 report, the state Office of Regulatory Staff said chances of a bankruptcy are not high. SCANA disputed that.
Regulatory Staff officials have until March 30 to provide the more detailed study, which likely will require the services of a certified accountant.
The Public Service Commission has multiple decisions looming that ultimately could decide whether SCANA’s SCE&G subsidiary can continue to charge its customers for the bungled project.
Regulatory Staff has asked the PSC to suspend those nuclear-related rates, now being charged to customers. Environmentalists also are seeking rebates of almost $2 billion that customers already have paid for the nuclear project.
The commission, which oversees electrical rates, must decide this year whether to suspend charges that SCE&G’s customers still are paying for the V.C. Summer project. The average residential customer pays about $27 a month — or 18 percent of his or her bill — for the project, even though it will not be finished.
SCE&G says it would lose $445 million a year in revenue if it cannot charge the higher rates. The utility quit the twin-reactor project July 31 after it and junior partner, the state-owned Santee Cooper utility, had spent $9 billion. That move cost more than 5,000 project workers their jobs.
“Given the magnitude of the issues’’ more study is needed, commissioner Bob Bockman said, calling for the detailed audit.
With SCANA struggling, Virginia’s Dominion Energy has offered to buy the S.C. utility. It has offered $1,000 rebates to SCE&G customers as part of that buyout, which the PSC must approve. However, the PSC declined Wednesday to speed up a hearing on that deal, as requested by SCANA and Dominion.
Wednesday’s decision to seek a more detailed audit comes as state legislators are moving to suspend charges for the nuclear plant.
SCE&G said it supports the commission’s order for a fuller review.
“While it’s unfortunate that many of our state’s policy makers were misinformed by the severely flawed ORS report, we believe it’s appropriate that the commission is taking steps to ensure compliance with its original order, directing the ORS carry out a thorough audit of SCE&G’s revenue requirements,’’ utility spokesman Eric Boomhower said in an email.
SCANA critics Frank Knapp and state Rep. Kirkman Finlay, R-Richland, agreed a detailed study is needed.
“More data is always better,’’ Finlay said. “If there is a debate about the facts, let’s figure it out.’’
Knapp, who heads the S.C. Small Business Chamber of Commerce, said Regulatory Staff’s Jan. 19 report didn’t provide potentially important details that would come in a second audit. The PSC gave Regulatory Staff only a month to produce the report, making it difficult to conduct a full-blown audit, he said.
“There is no way in the world they could have provided the Public Service Commission with the financial information about SCE&G to make a proper decision,’’ Knapp said. “They need all that.’’
In its mid-January report, Regulatory Staff said SCE&G probably could avoid bankruptcy if its rates were slashed. The agency estimated there is a 35 percent chance that SCANA would file for bankruptcy if it is barred from continuing to charge its customers for the failed nuclear project.
“A suspension of revised (nuclear-related) rates – a portion of the total revenues collected by SCE&G – is unlikely to force bankruptcy,” Regulatory Staff concluded in its report.
SCE&G has said the Regulatory Staff report was misleading and based on incorrect accounting assumptions. In fact, the company said its risk of bankruptcy is much greater than 35 percent. But even a 35 percent chance is too much to risk, it argued.