More troubles for Dominion-SCANA merger

The South Carolina House yesterday passed a bill to remove a $27 monthly charge that customers of SCANA’s South Carolina Electric & Gas are paying for the two failed V.C. Summer nuclear plants. The legislation is another setback to Dominion’s $14.6 billion offer to buy SCANA, as Dominion has said the deal is off if the nuclear payments end.

Under the agreement between Dominion and SCANA, rates would continue to include cost recovery of the Summer fiasco for 20 years. The House legislation guts the 2007 law that allowed recovery of the nuclear costs as the plant was being built, the “Base Load Review Act.” Since 2009, according to the Greenville Index-Journal, SCANA has collected “nearly $2 billion from ratepayers for costs related to the scrapped nuclear venture.”

SC House Speaker Jay Lucas

As the repeal legislation was under consideration, Republican House Speaker Jay Lucas spoke from the floor supporting the bill, an unusual act. Lucas offered an amendment that would stop the BLRA costs, called the “nuclear premium,” which amounts to about 20% for the average customer, until the South Carolina Public Service Commission determines who will eat the costs of the failed project. SCE&G is collecting about $37 million per month in BLRA charges.

The House adopted the bill by a 119-1 vote and the state Senate is expected to take it up today. Gov. Henry McMaster has said he supports gutting the BLRA but won’t support any proposal that leaves the utility’s customers paying any portion of the remaining costs for the project.

Before the Wednesday vote, Virginia-based Dominion and SCANA were arguing that killing the cost recovery and making SCE&G shareholders eat them will lead to even higher electric rates, as investors will seek higher returns as a result of the increased financial risk.

The Charleston Post and Courier reported that the utilities’ “case is falling flat with a core group of lawmakers who insist that it’s unfair for customers to pay billions into a project they’ll never benefit from.” The newspaper quoted House Speaker Lucas, “SCANA continues to be like ‘the boy who cried wolf.’ The company has lost all credibility amongst ratepayers and lawmakers.”

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