A federal judge will allow South Carolina Electric & Gas customers’ power bills to drop while she considers the company’s lawsuit.
The 15 percent drop ($22 for the average residential ratepayer) approved by legislators this summer over SCE&G’s objections is set to take effect Tuesday. The company is suing, claiming the law unconstitutionally changed how it could recover nuclear debt after it had already sunk $5 billion into the ill-fated V.C. Summer expansion.
But District Judge Michelle Childs rejected the company’s motion to stop the rate decrease until their case is heard, disagreeing that it would put the company’s financial status at risk. “SCE&G has not made a clear showing that it will likely succeed on the merits because the law on the questions at the heart of the dispute does not favor its positions,” she wrote in the 34-page order. She also argued the court seemed it unlikely SCE&G would succeed on the case’s merits.
The ruling means SCE&G customers will have the temporary lower rates until the state Public Service Commission makes a final decision on permanent rates later this year. The PSC is also considering a proposal by Dominion Energy to acquire SCE&G’s parent company SCANA.
“We will review the court’s order and decide quickly whether to appeal the decision,” SCANA said in a brief statement after the ruling. “In the meantime, the company will strive to offset the operational impact of the temporary rate reduction by continuing to cut costs and delaying spending without sacrificing safety and reliability.”
Legislators praised the ruling, saying it justified their decision this summer to approve the temporary rates. “The federal court’s ruling (Monday) confirms that our members’ commitment to solving this most difficult issue remained well within the General Assembly’s responsibilities,” House Speaker Jay Lucas, R-Hartsville, said in a statement. “More importantly, the court’s decision demonstrates the judicial system’s impartiality in prioritizing the interests of honest and hard-working South Carolinians over SCANA’s corporate greed.”
“This will be the first rate relief the ratepayers have had since this thing started,” Senate Minority Leader Nikki Setzler, D-Lexington, said.
“The policy is very simple and that is the legislature should have the authority under law to cut that rate,” said Governor Henry McMaster. “That is for reactors — charges for reactors that are not — apparently, not going to be built. It makes perfect common sense. Now getting there in the law is difficult but I helieve the judge made the right decision.”
Lawmakers have insisted the 2007 Base Load Review Act which SCE&G cited does not apply because the utility did not act prudently in its decision to continue building the plant as costs exploded and a construction timeline became increasingly unrealistic. They also maintain SCANA misled regulators to hide underlying problems on the project in order to get its rate hikes approved after 2010.
“As we get more information we see some very poor decisions were made. Well that’s got to be fixed and we’re working hard to fix it,” McMaster said.