The South Carolina House and Senate have passed a compromise which would temporarily reduce SCE&G customers’ power bills until state regulators make a final decision on how much it can charge for its nuclear-related debt
A measure approved overwhelmingly on Wednesday would temporarily repeal all nuclear-related rate hikes from SCE&G power bills after 2010 — or roughly 15 percent.
“There was no evidence of imprudence (by SCE&G) before 2011, so we did not feel we could go back any further,” State Rep. Kirkman Finlay, R-Columbia, said on the House floor.
The final number is a middle ground from the original House plan which would have repealed the entire 18 percent of customer bills that went towards the ill-fated V.C. Summer nuclear project’s expansion and the Senate plan which would have repealed the 13 percent its auditors estimated SCE&G could absorb without risking bankruptcy.
But Gov. Henry McMaster has indicated he will veto the bill in its current form because it does not repeal the full 18 percent. He was joined by his Democratic opponent this fall State Rep. James Smith, D-Columbia, who was one of just four House members who voted against the compromise. Wednesday’s margin would clear the two-thirds majority required to overturn any veto.
“Why in the world would anyone want to veto that when, by all accounts, if that veto was sustained (the nuclear percentage of power bills) goes back to 18 percent?” State Rep. Russell Ott, D-St. Matthews, asked rhetorically.
Meanwhile, State Sen. Brad Hutto, D-Orangeburg, has threatened a filibuster in the Senate once that veto happens.
“We’ve got to come back here again (after the veto) and you’ve got to listen to me all over again,” Hutto told fellow senators. “And I’m going to tell you why it’s not a good idea one more time.”
Hutto insists the legislature does not have the authority to set power rates — a responsibility they have instead given the state Public Service Commission. Those arguments were also raised by Dominion Energy CEO Tom Farrell, whose company is proposing to acquire SCE&G’s parent company. Dominion insists any deal must include the ability to continue charging customers to pay back the project’s debt, although they have tried to sweeten the deal by offering customers an average $1,000 rebate for money already spent on the project.
“The South Carolina Legislature is playing a high-stakes game where they are gambling with the money of customers and taxpayers,” Farrell said in a statement. “All of this for a few headlines and a temporary rate reduction that has good odds of being overturned in court. It is a disappointing and short-sighted action that is counter to the best interests of South Carolina and its people.”
In a statement to investors after the votes, SCE&G insisted the bill was unconstitutional.
On Wednesday, the House and Senate also approved a separate bill which orders the PSC to delay any decision on rates or the Dominion merger until at least December. Lawmakers said they wanted to give regulators more time to study the issue, particularly as SCE&G and utility watchdog Office of Regulatory Staff seek a judge’s order on which documents can be produced.
State Rep. Peter McCoy, R-James Island, said current law would otherwise require the PSC make a decision within six months of Dominion’s announcement (roughly July 12). “What we’re doing here is giving the PSC more of an opportunity… to look at the merger documents,” he said.
The bill approved Wednesday would also put new definitions on “prudent” spending by utilities to justify rate hikes. Finlay said legislators hope could the definition could apply to spending by SCE&G when it knew the V.C. Summer project was increasingly unlikely to finish. The bill would also repeal the Base Load Review Act for any future nuclear projects and creates new ratepayer protections. It would create a consumer’s advocate position to represent customers during future rate hike proposals and give ORS subpoena power.