A newly-released financial analysis commissioned by the South Carolina Senate found the parent company of South Carolina Electric & Gas (SCE&G) can stop collecting much of the $37 million in monthly charges for the failed VC Summer nuclear expansion project from customers without seriously destroying its budget.
The study by Washington, DC-based Bates White financial consulting firm speculated SCE&G’s rates could be reduced by 13 percent without compromising the utility’s solvency.
State Sen. Shane Massey, R-Edgefield, revealed the report’s findings to senators Tuesday. “It’s to deal with just an interim basis,” he said. “We’re not foreclosing that possibility on a permanent basis, we’re not pushing that.”
Lawmakers have asked the state Public Service Commission to delay any decision on power rates or the pending merger between SCE&G’s holding company SCANA and Virginia-based Dominion Energy. Senators want more time to review their options before acting.
The House earlier this year voted to strip all nuclear-related rates from the power bills of SCE&G’s customers. There is some concern in the Senate that any proposal to force a rate reduction could be unconstitutional. That has drawn frustration and criticism from House members who say customers should not continue to pay for the abandoned project.
Massey acknowledged that the report did not address the constitutionality of requiring SCANA to reduce its rates. “Specifically, (it was done) in relation to what we might be able to do with an interim rate,” he said. “It was limited to that scope.”
The Bates White report reasoned most of the savings could come if SCANA were to stop paying its investors a dividend. SCANA has previously argued it needs to pay back investors in the nuclear project or put its credit rating at risk.
A 13 percent cut for the typical residential electric customer would be equivalent to about $19 per month. If the reduction is enacted, state regulators and the courts would work out a lasting solution to the failed VC Summer nuclear excpansion project in Fairfield County.