The convoluted tale of South Carolina’s failed nuclear construction project, a year after SCANA Corp. and its South Carolina Electric & Gas subsidiary pulled the plug on the two-unit nuclear project, rolls on. Is an end to this story in sight? Not really.
Most recently, on August 6, a federal circuit court rejected SGE&G’s challenge to a state law passed earlier this year to cut the utility’s rates temporarily by 15% to reflect what the legislature viewed as a way to punish the company for its failures with the two-unit, 2,200-MW project. U.S. District Judge J. Michelle Childs of the federal district court for the South Carolina district, rejected a utility plea for a restraining order to halt the rate cut.
SCE&G responded the next day by saying it will appeal the decision to the U.S. Court of Appeals for the Fourth District, based in Richmond. The utility did not say what its grounds for appeal would be, but in the lower court argued that the action by the legislature to punish the company for its $9 billion failed nuclear project was unfair because the legislature changed the rules of the game “after the game has already been played.” That’s a reference to a state law that allowed the utility to charge customers for the project while it was under construction.
Childs was scornful of that argument. She concluded that the utility might not be able to collect any of the costs of the project because the state law specified that it would only be able to recoup costs on reactors “constructed or being constructed.” V.C. Summer is neither.
The impact of the federal court ruling on the proposed buyout of SCANA by Virginia-based Dominion Energy is unclear (which is an anagram of nuclear). Richmond-based Dominion has offered $14.6 billion for SCANA, but has said that’s contingent on keeping the rates in place to recover the lost costs of Summer. So far, Dominion has been silent on the most recent developments.
In the meantime, the fate of SCE&G’s almost 50% partner in the Summer fiasco is hanging in the balance. State-owned Santee Cooper is also facing a consumer revolt, as the Post and Courier newspaper reported in early August that the “typical Santee-Cooper electric ratepayer will pay more than $6,000 to pay off the utility’s share of the failed nuclear project, a bill they will pay in monthly $13 installments for the next four decades.”
The legislature’s temporary rate cut for SCE&G, which will backdate to April and run through the rest of the year, does not apply to Santee Cooper’s customers. Mostly, public power systems in the state buy wholesale from Santee Cooper and then pass the costs to their customers.
The customer cost estimates from Santee Cooper apply only to the utility’s 100,000 direct retail customers, not the state’s rural electric cooperatives, so it’s not clear how those customers will feel the V.C. Summer pain.
S.C. Republican Gov. Henry McMaster has said he wants to privatize the state-owned power system, which is burdened with some $8 billion in debt, half of that from the Summer disaster. A nine-member committee established by the legislature, which includes McMaster, is schedule to meet next Wednesday and every Wednesday until January to figure out what to do with Santee Cooper, which owes $4 billion of the Summer project’s $9 billion debt.
Finding common ground among the members of the committee may be difficult. While McMaster wants to privatize the public power system, the Republican chairman of the Senate Transportation Committee Larry Grooms is defending Santee Cooper. Many of the utility’s employees live in his district. Grooms is a member of the Santee Cooper committee.
To use a journalism cliché, this story has legs. But they are wobbly.
— Kennedy Maize