Updated 10:01 p.m.
Customers of one S.C. utility are set to see rates cut by nearly 15 percent, after legislators on Thursday rejected Gov. Henry McMaster’s veto of a bill to give temporary rate relief.
The cut gives customers roughly $31 million in rate relief monthly until regulators decide later this year how a bungled nuclear project should be paid for. But that cut could face a legal challenge by the utility in charge of the project.
Customers have been paying an extra 18 percent on their monthly bills for the project.
The new law repeals, prospectively, the 2007 law that made it easier for South Carolina Electric and Gas—and other utilities—to hike rates to fund projects like the two Fairfield County nuclear reactors abandoned in July by SCE&G and its junior partner, state-owned Santee Cooper.It is unacceptable, irresponsible, and unconscionable for any South Carolinian to pay another dime to SCANA for the abandoned V.C. Summer reactors in Fairfield County. Click To Tweet
“To be clear, I applaud the General Assembly for including several critical reform initiatives in this legislation, such as strengthening the Office of Regulatory Staff and restoring the role of the consumer advocate for future utility cases,” wrote McMaster in his veto message to the state House.
“However, I am vetoing this bill because it is unacceptable, irresponsible, and unconscionable for any South Carolinian to pay another dime to SCANA for the abandoned V.C. Summer reactors in Fairfield County.”
The House overrode McMaster’s veto 110 to 1. The lone dissenting vote was from Rep. Jonathon Hill, R-Townville. The Senate rejected the veto 39 to 0.
McMaster, who narrowly won the Republican primary runoff for governor on Tuesday, repeatedly promised to veto any bill that didn’t cut SCE&G’s rate by 18 percent.
“This is nothing but a political move by our governor,” said Rep. Russell Ott, D-St. Matthews.
Ott, vice chairman of a special House committee to review the nuclear debacle, said McMaster’s veto was to make him look a lot stronger and tougher on the issue than he is.
The House version of the bill aimed for an 18 percent cut, but Senate leaders originally opted for a 13 percent cut that was considered able to withstand a legal challenge. Senators also had aimed for rate relief that wouldn’t doom the Cayce utility.
The law will slash customer rates by 14.81 percent until the matter is scheduled for review by the Public Service Commission by December 21. The PSC, overseen by a group of three members of the public and six legislators, already has approved nine rate increases to pay for the project.
The bill also creates a consumer advocate for customers and more clearly defines “prudent” and “imprudent.” Under the 2007 law, SCE&G has maintained its actions—including pursuing abandonment—were prudent.
The new law could jeopardize Virginia-based Dominion Energy’s plan to buyout SCE&G’s parent company, SCANA.
Dominion CEO said in a Wednesday statement—
“The South Carolina Legislature is playing a high-stakes game where they are gambling with the money of customers and taxpayers. Legislators are risking cash payments to SCE&G’s electric customers of $1.3 billion–equal to $1,000 for the typical residential customer – and a permanent rate reduction of 7 percent. They are jeopardizing total customer benefits of more than $12 billion and another $19 billion in economic activity. And, they are promoting continued turmoil for South Carolina’s energy and business future. 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.”
Regulators and SCANA shareholders must approve the merger. According to a deal outlined in January by the two utilities, shareholders could gain more than six-tenths of a Dominion share for every SCANA share held.
SCANA shareholders are set to meet at the end of July, one year after SCE&G abandoned the nuclear project.
SCANA and SCE&G are evaluating legal options in response to the legislation, which cleared a House-Senate conference committee Wednesday after weeks of gridlock.
The businesses have said they believe the legislation is unconstitutional.