SCANA’s chief financial officer testified at a South Carolina Public Service Commission (SCPCS) hearing Monday that, if a temporary rate cut for South Carolina Electric & Gas (SCE&G) electric customers becomes permanent, it would put the company into financial straits.
Iris Griffin told commissioners that the rate reduction proposed by the Office of Regulatory Staff (ORS) would create cash-flow problems as its revenue dropped and investors became nervous about the company’s future.
“Week to week, month to month, SCE&G needs both rate revenues and access to capital markets to have cash to pay its payroll and fund its operations,” Griffin told the commission.
SCE&G electric customers have been paying for the failed nuclear expansion project at the VC Summer plant in Fairfield County. But legislators approved a temporary rate cut In August which slashed the amount the utility could charge customers for the ill-fated VC Summer project.
The rate cuts were calculated based on each customer’s electricity usage back to April and will end by December 31. Legislators anticipated the commission will set a permanent rate by then.
Griffin said, if the rate cut was to be made permanent SCE&G’s credit rating would suffer. “The company has calculated the metrics and determined that it would likely fall below the investment-grade range,” she said. “This puts SCE&G in danger of being rated as junk status at more than one rating agency.”
The commission will also decide whether Virginia-based utility Dominion Energy can finalize its proposed buyout of SCANA. Griffin noted the merger would likely cost hundreds of SCE&G management employees their jobs, including herself. However, Griffin has a guaranteed $3 million buyout in her contract should that happen.