A state agency responsible for examining power utilities is calling for the rejection of South Carolina Electric & Gas’ plans to recover billions more from customers for a nuclear project it abandoned last week.
The Office of Regulatory Staff (ORS) filed a recommendation Wednesday that the Public Service Commission (PSC) dismiss the company’s submitted plan to have customers pay roughly $2.2 billion in financing costs the next 60 years.
State law allows SCE&G to have customers pay those costs if the commission deems it “prudent.” Regulatory Staff Director Dukes Scott said the ORS filing challenges the company’s contention that state regulators would need to prove it acted imprudently. Scott said the utility is making its abandonment request through the wrong section of the law. Instead, he said SCE&G needs to show it acted prudently in its roughly $4.9 billion in total abandonment costs.
“It’s much more difficult on us and other interveners to have to prove imprudence on the part of the utility than they’re having to show that what they did was prudent,” he said. “In other words, we would have to prove what they did was unreasonable, rather than them having to show what they did was reasonable.”
While seemingly a technicality, the commission’s decision could be critical. If the commission agrees the responsibility is SCE&G, it would then need to document why the $4.9 billion was spent properly.
The private utility and state-owned Santee Cooper decided last week to halt their expansion of V.C. Summer Nuclear Station after jointly spending $10 billion.
Consumers have already contributed $1.9 billion to the reactors in increased utility bills. SCE&G officials said they hope to only pass on $2.2 billion out of the $4.9 billion to customers. The difference could come through up to $2 billion in tax deductions and $700 million as part of a settlement with Westinghouse parent company Toshiba. But SEC&G said it may need to increase rates as a part of closing down the reactors.
As a state entity, Santee Cooper does not require PSC approval to proceed with any rate hikes.