South Carolina Electric and Gas announced Thursday it has initiated several plans to reduce the cost ratepayers would contribute to the abandoned V.C. Summer nuclear project.
Keller Kissam, soon to be the company’s President and Chief Operating Officer, announced the plans from a warehouse usually reserved as a backdrop for storm response or disaster preparation briefings.
Kissam referred to the current situation involving billions of dollars spent and lost building a nuclear facility in Fairfield County as “another storm.” Twice while speaking to the media Thursday he offered apologies.
“Sometimes even apologies and accountability is still not enough,” he said. “A solution that will be a first step toward building back that trust, that confidence, that reliance that we will be there every day.”
The plan would reduce customer rates by 3.5%, returning them to the March 2015 level. Kissam also said that customers no longer will pay for costs related to the construction of the abandoned V.C. Summer nuclear reactors. Instead, shareholders will absorb the costs through lower earnings over the next 50 years.
“We’re going to take less of a return on that than what we normally would be allowed and it is going to be spread over 50 years,” Kissam said.
An initial proposal submitted by SCE&G in August would have tried to claw back lost financing costs on the V.C. Summer nuclear project through keeping current rates (inflated by nuclear construction costs) intact.
The company also plans to spend $180 million to purchase the Columbia Energy Center plant in Gaston. The utility had been buying power for the last several years from the natural gas plant. It would also rely more on solar energy generation.
“We have a need for power,” Kissam said.
“Today we look forward to a solution that has been brokered not because it was from us, like we’re the experts and we know everything,” he said. “It was brokered based on the feedback we received.”
The company claims the changes would have a $4.84 billion benefit to customers. Here’s how SCE&G breaks it down:
- $2.9 billion Reduced shareholder earnings over 50 years as they absorb nuclear construction costs
- $810 million Company write-offs
- $680 million Additional generation (includes purchase price of $180 million and foregoing shareholder return
- $450 million Five-year benefit of 3.5% reduction to customer rates
The changes announced Thursday will take effect once they pass the regulatory process.
“This is a best effort on our part to bring resolution to this and to provide a solution that is in the best interests of our customers as well as the state of South Carolina,” Kissam said.