The energy fiasco before customers of two South Carolina utilities has no painless solution, and any official or business representative pedaling another idea is either deceived or lying.
The best deal ratepayers were ever going to get expired in May, 2007, after utilities successfully wooed lawmakers with whispers of cheap energy in exchange for minimizing their risk in undertaking such projects as the now-doomed V.C. Summer nuclear project.
At least, that’s what resulted from the Base Load Review Act. The law, however, was dressed as an act “to protect South Carolina ratepayers by enhancing the certainty of investments in the infrastructure of electric utilities serving consumers”.
In it, “prudent,” “imprudent,” or some variation on which rate hikes hung, were mentioned 33 times. Nine times since its passage regulators have approved rate hikes to fund senior partner, South Carolina Electric and Gas’s construction of the two Fairfield County nuclear reactors.
Affordable nuclear energy was promised to customers of SCE&G and partner, state-owned Santee Cooper.
SCE&G’s parent organization, SCANA has maintained that its steps—from inception to abandonment—were prudent.
To date, and to my knowledge, no one has successfully proven otherwise beyond a reasonable doubt.
With the second best deal—some form of repeal—comes a reasonable expectation of pain. The utilities have painted a picture of lengthy legal battles and of SCANA’s possible bankruptcy.
A possible bankruptcy would likely impact shareholders, nearly 6,000 SCANA employees and development along 12th Street, which is home to its Cayce headquarters.
But whether SCANA falls or stands, as some lawmakers have suggested it could under bankruptcy, who wants to do business with a company that took millions from ratepayers in exchange for a failed investment?
And who wants to be represented by lawmakers who won’t protect their constituents from future abuses by utilities because they’re afraid of the short-term pain resulting from the Legislature’s decade-old mistake?
To not obstruct this merger is to shield SCANA from the consequences, robbing ratepayers of any justice.
Alternatively, the proposed $14.6 billion Dominion-SCANA merger would alleviate some of the pain felt by SCE&G customers.
The deal, which hinges on leaving the BLRA in tact, would refund $1.3 billion to SCE&G electric customers, equal to a $1,000 refund for the average customer. To date, customers have paid roughly $1.8 billion in rate hikes for the reactors.
The deal, which leaves customers on the hook for funding the abandoned reactors, would also roll back rates by five percent—a roughly $7-a-month reduction. It requires approval by the Public Service Commission and by a two-thirds majority of SCANA’s shareholders.
The proposed merger could allow for the expansion into South Carolina of the planned natural gas Atlantic Coast Pipeline, which spans 600 miles across West Virginia, Virginia and North Carolina, according to a report by the Associated Press.
“Scott Elliott, an attorney for the South Carolina Energy Users Committee, an association of industrial users of electricity and natural gas, said there’s strong support from the business community and some influential legislative leaders for the pipeline,” according to the story, which was also published in The [Charleston] Post and Courier.
For now, a groundswell of support for repealing the BLRA appears to be threatening the deal. Policy makers should heed those calls for repeal.
And if they won’t, they should abandon this dog and pony show of righteous anger on behalf of ratepayers and not obstruct the Dominion deal.