The seven-member South Carolina Public Service Commission today (Dec. 14) unanimously approved the sale of the state’s flagship investor-owned utility, SCANA Corp., to Virginia-based Dominion Energy for $14 billion. The SCANA takeover is the result of the disastrous decision of the South Carolina company to build two new nuclear power plants at its existing V.C. Summer nuclear station.
The Summer addition crashed in July 2017 amidst a multitude of problems including being billions of dollars over budget and a decade behind schedule. The project also entangled a nearly one-half partner in the statewide public power system, Santee-Cooper, whose fate remains uncertain. A nearly twin project in Georgia at the existing Vogtle nuclear station is also facing the same problems. But Georgia utility regulators appear to unyielding in supporting the Atlanta-based Southern Company’s plan to finish the two Westinghouse AP1000 pressurized water reactors.
When it became apparent that SCANA was financially underwater because of the failed Summer project – and Santee Cooper pushed its abandonment– Dominion stepped in with a $15 billion bid for SCANA. After much negotiating and politicking, including various offers by Dominion to South Carolina ratepayers for some relief from bills they were paying to finance construction under a state law permitting utilities to recover costs as they are incurred,not just when the projects are commercial, the regulators okayed the deal.
Under the deal approved today, SCANA customers will see a 15% rate cut – from an average of $147.53 per month to $125.26 per month. As the statewide political blog FITS news noted, “In approving the merger, the SCPSC rejected a 20 percent cut advocated by the S.C. office of Regulatory Staff (ORS), a deal which would have likely scuttled the merger – and invited a protracted legal battle the state was unlikely to win.”
But the SCANA customers will still be on the hook for $2.26 billion over the next 20 years for the abandoned plant, in addition to more than $2 billion they have already paid in rates for the doomed nukes. According to The State newspaper, “Since 2009, [SCANA] customers have had their electric rates raised by 18 percent for the failed project.”
FITSnews commented, “In making the motion, SCPSC commissioner Elliott Elam termed the proposed merger the ‘least-worst remedy’ to the dire straits in which SCANA has found itself. That’s about the best description of the situation we have heard.”
What happens with Santee-Cooper is still unknown, as Republican Gov. Henry McMaster has been calling for years for the sale of the state-owned generating and transmission system that sells wholesale power to the states politically-potent rural electric distribution cooperatives. No offers have come in, although Dominion has offered to run Santee-Cooper under a management contract.
The state PSC’s decision to approve the merger is not the end of this particular chapter in the long-running fiasco. The ORS has not said whether it will seek to challenge the PSC’s decision. Environmental groups,which opposed the sale, may also seek an appeal and litigation to oppose it.
The state law that permits the utilities from recovering costs during construction, the Base Load Review Act, is also under fire. FITSnews, a conservative free-market voice, editorialized, “Frankly, if South Carolina is going to roll the dice on its energy future like this we would recommend doing it via a total repealof the crony capitalist Base Load Review Act (BLRA) – the law that enabled SCANA to socialize its investment risk in this project.”
A long-time observer of nuclear power in the U.S. commented, “SCANA bet the company on Summer. They lost.”
— Kennedy Maize