House passes bill that would remove SCANA's nuclear surcharge fr - - Columbia, South Carolina

House passes bill that would remove SCANA's nuclear surcharge from ratepayer bills

Construction site at V.C. Summer Nuclear Generating Station (Source: WIS) Construction site at V.C. Summer Nuclear Generating Station (Source: WIS)

The South Carolina House of Representatives has passed a bill they are calling the "first step to relief" for ratepayers who saw their power bills go up in the wake of the construction and eventual cancellation of the VC Summer project.

By a vote of 119-1, the House voted in favor of the act that would, according to House officials, drop the 18 percent nuclear surcharge on SCE&G customers’ bills to 0 percent and pushing the Public Service Commission to keep rates low while SCANA's merger with Dominion Power is completed.

House Speaker Jay Lucas praised the passage of the bill after his own speech on the House floor received raucous applause.

"Since last August, the House has worked diligently to develop a responsible plan forward that protects ratepayers and prevents them from paying for a failed nuclear project. Today, our members followed through with our commitment to halt SCE&G from recouping more of its customers’ hard-earned dollars for the failed VC Summer nuclear project," Lucas said in a statement.

 “Once today’s bill is signed into law, consumers can rest assured that utility companies will never take advantage of ratepayers' trust under the Base Load Review Act again. Setting the nuclear premium rate to zero percent provides South Carolina ratepayers with immediate relief while private sector business negotiations continue before the Public Service Commission. As this innovative approach works its way through the legislative process, I am hopeful the Senate will act quickly in an effort to protect ratepayers from corporate greed.”

One Columbia business owner says he is happy to hear this news. Eddie Wales, owner of Motor Supply Bistro in Columbia, would save more than $500 per month.

“Our bill averages around $3,000 a month, so it’s significant," Wales said. "Heating, lights, stove, refrigeration, so we probably use more than most. The cost of your electric bill is the cost of doing business."

The bill also repeals the Base Load Review Act, the mechanism that was used by SCANA and Santee Cooper to raise rates ahead of construction on the project.

“And we are taking the position that it would be best for us to go back to the way it was before where a utility would ultimately have to construct the project and ensure that it was in use before they started charging the customers," Rep. Russell Ott said.

The utility company Dominion Energy, which is looking to merge with SCE&G, says this would threaten that deal. They want to give one-time refunds to ratepayers this fall.

“I can’t impact that, but I can impact the rates that I think are being unfairly paid by the citizens of this state.”

That bill still has to pass the Senate, to become law. But the chances are looking good. The governor’s office also told me he would sign it, as is. 

Dominion Energy released a statement about the bill, saying: 

We did not see the proposed changes to South Carolina House Bill 4375 prior to introduction today, and are in the process of reviewing them.

While our review is continuing, it is clear that if the legislation became law it would put a standalone SCE&G in a precarious financial position.

The House action, assuming it becomes law and survives legal challenges, could offer temporary relief for SCE&G customers, but unfortunately could threaten the permanent solution offered by Dominion Energy.

Regarding our combining with SCANA, as we have said from the beginning any change in law that has a significant financial impact on our proposed transaction would create a path for Dominion Energy to walk away from our proposal and eliminate the immediate positive benefits for South Carolina. We will continue to evaluate any proposals in the House or Senate utilizing that standard of measure. 

Significant financial consequences would not allow us to provide $12 billion of relief to SCE&G’s customers.

When we first approached SCANA, our goal was to propose a solution that provided a path forward for their customers and the State of South Carolina. We continue to believe our proposal offers the best and most-certain long-term relief for customers — $1.3 billion in cash payments, a permanent rate reduction and rate stability for the future. Our proposal provides benefits for all stakeholders.

To recap the positive benefits of the Dominion Energy proposal for SCE&G electric customers, it would:

Provide $1.3 billion in cash payments to SCE&G customers – payments that would provide $1,000 to the average residential customer, as well as substantial payments to South Carolina businesses and industries in the SCE&G service area;

Cut overall rates to customers – not just rates for the nuclear portion of customer bills – by 5 percent immediately, and would shorten the terms of payment for the nuclear portion of customer bills from 50 years to 20 years, producing over $8 billion in customer savings from the debt load;

Offer job protections to SCE&G employees until 2020, and also preserve the headquarters in Cayce, South Carolina; and

Increase annual charitable giving by $1 million, a 33 percent increase. 

We look forward to presenting our perspective to regulators and policy makers in South Carolina.

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