South Carolina electric customers can sue SCANA Corp. for refunds over a pair of abandoned nuclear reactors, a judge has ruled, rejecting the utility’s efforts to dismiss a collection of lawsuits filed against it.
SCANA, the Cayce-based owner of South Carolina Electric & Gas, wanted to settle the multibillion-dollar question of who pays for the reactors outside of a courtroom.
During a hearing in January, the power company argued that state regulators, not judges, should resolve disputes about electric rates.
Circuit Judge John Hayes III disagreed, rebuking SCANA with a decision issued Thursday that keeps a legal cloud hanging over the embattled utility.
SCANA owned more than half of a massive effort to expand the V.C. Summer Nuclear Station north of Columbia. That project cost roughly $9 billion before it was called off in July.
The question of who should pick up SCANA’s roughly $5 billion tab has roiled South Carolina ever since. Regulators are expected to hear arguments later this year and the Legislature is considering a slate of proposals that could stick SCANA with the bill.
Hayes’ decision means the courts will have a hand in that process, too.
While regulators and lawmakers remain focused on what customers should pay in the future, the courts can decide questions about what they’ve paid in the past, the order says.
Those are enormous questions: SCE&G customers pay $37 million a month for the reactors today — about a fifth of their monthly bills — and they have paid about $2 billion over the past decade.
Hayes’ order also says the courts could decide whether customers are entitled to money from a billion-dollar settlement SCANA reached with the project’s contractor. The courts, Hayes said, can also rule on whether it’s constitutional for a utility to charge ratepayers for an unfinished project.
SCANA was given that right by the 2007 Base Load Review Act, a law that faces constitutional questions from the state attorney general and others who contend the builders never met their obligations. The state's Solicitor General Bob Cook participated in the circuit court hearing in January.
"We have always maintained that the BLRA is unconstitutional, and we firmly believe the ratepayers should have their day in court," Attorney General Alan Wilson said in a prepared statement.
Some of the legal questions were raised by five lawsuits — all seeking class-action status — filed last year on behalf of customers. The cases are being heard together.
“We will continue to press forward to hold the company accountable,” said Ed Bell, a Georgetown attorney who brought one of the lawsuits, in a statement.
“It’s just plain wrong to charge ratepayers well into the future for the company’s failure,” he added.
The cases could also impact SCANA’s plans to merge with Dominion Energy, a Virginia-based utility giant. Dominion agreed to buy the company earlier this year in a deal worth $14.6 billion, with an offer of partial refunds and rate reductions.
But under the plan, Dominion would still charge customers for the scuttled project for the next 20 years. An order cutting off payments for the nuclear project would kill the merger if it’s handed down before the deal closes.
In a statement, SCANA suggested that was a better option than seeking refunds in court, because attorneys’ fees would cut into customer refunds.
Dominion has offered to refund about two-thirds of the money customers have already paid, in part by using settlement funds they might already have been entitled to. It’s also offering to cut about a fifth of SCE&G's nuclear-related rates going forward.
“We understand our electric customers in South Carolina want relief. We want to provide it to them, which is why we are seeking a combination with Dominion Energy,” SCANA spokesman Eric Boomhower said. “We will continue to defend the company from these lawsuits, in the best interest of our customers, shareholders and employees.”
SCANA said it still thinks the question of V.C. Summer payments should be left to regulators on the Public Service Commission.
That’s a position Hayes’ order specifically rejected.
The commission “has no authority to ascertain the negligence of corporate entities and their boards,” Hayes wrote, and it doesn’t have the jurisdiction to handle constitutional questions.