A federal judge says SCANA has the right to file its lawsuit in federal court, ruling Thursday against a motion by South Carolina officials to dismiss the case.
District Judge Michelle Childs did not yet say whether she would issue an injunction to prevent required rate hikes from taking effect while she considered arguments by SCANA that the new rates are unconstitutional. SCANA claims it spent $5 billion on the V.C. Summer nuclear expansion with the understanding that state law would allow it to recover those losses from customers if the project failed.
Legislators passed a new temporary rate earlier this year until the state Public Service Commission acts. It also orders the commission to consider if SCE&G spent money “prudently” on the project before approving any future rates.
The state legislature and Public Service Commission had asked the judge to dismiss the suit. But Judge Childs said she did not think the state was immune from legal action, given that the Public Service Commission will make the ultimate decision on rates.
Childs did not yet say if she agrees with SCANA that the temporary rates are unconstitutional.
Legislators this summer voted to slash SCE&G’s rates by 15 percent in response to what they considered mismanagement of the V.C. Summer project and a failure to disclose the project’s problems while seeking permission to raise rates the past eight years. The law sets the rate until the Public Service Commission determines a permanent rate after December.
SCE&G filed to stop the new rates, which will start to take effect next week if Childs does not stay them, insisting the law unconstitutionally interfered with commerce. Legislators insist the 2007 law allowing SCE&G to charge ratepayers for debt is voided by the utility not acting “prudently” when they became aware of issues which would ultimately derail the nuclear project.