South Carolina regulators on Friday approved a deal to rescue a utility company reeling in the wake of a multibillion-dollar nuclear construction failure.
Following more than an hour of comment and debate, the Public Service Commission voted to OK Virginia-based Dominion Energy's roughly $15 billion cash and stock bid to buy SCANA Corp., the parent company of South Carolina Electric & Gas. The deal approved by commissioners would cut customer rates by about $22 a month.
FILE - In this July 18, 2016 file photo, South Carolina Small Business Chamber of Commerce President Frank Knapp announces his organization is joining a group of environmental and social work organizations to oppose a rate increase by South Carolina Electric & Gas to pay for cost overruns on two new nuclear plants in Columbia, S.C. South Carolina regulators have a couple of billion-dollar decisions Friday, Dec. 14, 2018. The Public Service Commission will determine at a meeting how much to cut rates for 737,000 South Carolina Electric & Gas customers who have already paid more than $2 billion for a pair of nuclear reactors abandoned during construction. (AP Photo/Jeffrey Collins, File)Friday's vote marked a pivotal point in the unraveling of South Carolina's nuclear debacle, which started in the summer of 2017 when privately-owned SCANA and its minority partner, state-owned Santee Cooper, gave up on the reactors they had spent a decade planning and building at the V.C. Summer Nuclear Station.
The main contractor, Westinghouse, went bankrupt as it failed to make good on its promises of cheaper, easier construction methods. Projections of soaring electricity demand never materialized, thanks to energy efficiency and the advent of cheap natural gas.
About 737,000 SCE&G ratepayers have already paid more than $2 billion toward the project. Thousands of project workers lost their jobs, and the debacle spawned a myriad of lawsuits, as well as state and federal investigations. On Friday, commissioners defeated an amendment that said SCE&G had lied to them about the project in order to get rate increases.
For most of the past 18 months, South Carolina political leaders told SCE&G and Dominion they weren't doing enough to ease the ratepayers' burden. But Attorney General Alan Wilson and House Speaker Jay Lucas ultimately backed Dominion's latest offer, which the state's own consumer advocate and environmental and consumer groups said fell short.
Dominion's latest offer gets rid of the $1,000 rebate checks to SCE&G customers that dominated much of the merger discussion in 2018. Instead, Dominion proposed keeping SCE&G rates at the same level set by legislators who passed a temporary 15 percent rate cut earlier this year that knocks about $22 off the typical monthly bill.
In 20 years, SCE&G customers would add $2.3 billion to the $2 billion they already paid for the mothballed project.
Most of the consumer advocacy groups had pushed for more. Watchdogs in the state's Office of Regulatory Staff wanted about a 20 percent rate cut, removing closer to $30 from monthly bills, and eliminating most of the extra charges for the reactors. Consumers and environmental groups wanted a bigger cut.
Dominion Energy said a larger rate cut would force them to walk away from the SCE&G deal, although they made the same threat when lawmakers considered the temporary cut. When that passed, they altered their merger proposal.
SCE&G said a significant rate cut without the extra money from the Dominion deal would mean bankruptcy, although utility executives testified before regulators they could not guarantee that is what they would do.
Public Service Commission Chairman Randy Comer said the regulators' hands remained tied by a law passed in 2007 that greatly reduced their ability to scrutinize rate hikes.
The Base Load Review Act allowed the utility to get rate increases to essentially pay in advance for the reactors without risk to its shareholders, and set a high bar to get that money back. There have been legal challenges, but the law is still in place.