South Carolina utility sues to block nuclear rate reduction

Monday , July 02, 2018 - 11:25 AM

CHARLESTON, S.C. (AP) — South Carolina Electric & Gas Co. is asking a federal court to stop state regulators from cutting the rates it charges to recover the costs of a failed nuclear project.

News outlets report the lawsuit filed Friday in U.S. District Court accuses South Carolina lawmakers of passing an unconstitutional law to force SCE&G to pay for the abandonment of two nuclear reactors under construction in Fairfield County.

The Public Service Commission was to meet Monday afternoon to consider cutting SCE&G’s rates by 15 percent while regulators decide who should pay for the project’s failure, a decision due by the end of the year.

State lawmakers last week ordered the PSC to cut SCE&G’s rates by 15 percent within five days. Eighteen percent of SCE&G customers’ rates are currently going to pay for the reactors. That rate amounts to $27 monthly for the typical residential customer. The law passed last week would cut that to $5 a month.

SCE&G says it’s unfair to cut its rates and change the rules for collecting ratepayers’ money for the project a decade after work stated. It says the law passed last week amounts to the state of unconstitutionally taking its property and denying it the due process of law.

SCE&G accuses the Legislature of playing to their constituents’ demands and trying to “change the proverbial rules of the game after it has ended.”

A state law approved in 2007 allowed SCE&G to begin charging customers for the reactors before they were completed. That law also ordered regulators to approve rate increases when needed to complete the project. The PSC has done so nine times since the project started.

SCE&G and the state-owned utility Santee Cooper had spent more than $9 billion when they abandoned construction last July 31. SCE&G largely blamed the bankruptcy of lead contractor Westinghouse for the failure of the reactors.

It’s unclear when a federal judge might consider the case. By filing the case in U.S. District Court, it avoids the state court system, whose judges are elected by the same lawmakers who ordered the rate cut.

SCE&G has asked the Public Service Commission to support the request for an injunction blocking an immediate refund, offering to set aside the money to be paid if a federal court eventually rejects the utility’s request.

Santee Cooper’s rates are not covered by the Public Service Commission. Its customers are also being charged extra for the failed project, although much less.

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