COLUMBIA -- South Carolina regulators overstepped their authority when they let a utility include a $438 million contingency fund in its estimate of the costs of building a nuclear plant, an attorney for a group of industrial power users told the state Supreme Court on Tuesday.
Scott Elliott, attorney for S.C. Energy Users, said if the contingency fund is allowed to stand, South Carolina Electric & Gas customers will have no guarantee that the money will be spent wisely, as required by the law, allowing the company to recoup the costs of building new power plants.
"We have no idea what the costs are or whether they will be incurred," Elliott said at a hearing before the court.
Justice Don Beatty said it sounded like regulators were giving SCE&G a "slush fund" to spend as it pleases.
SCE&G attorney Belton Zeigler said the South Carolina Office of Regulatory Staff would monitor all expenditures on the reactors.
The contingency costs were included in a rate increase regulators approved last year. The company is charging electricity customers an average of 2.5 percent more each year over 10 years to help pay for the $10 billion project at its V.C. Summer nuclear facility in Jenkinsville.
SCE&G is building the new reactors with state-owned utility Santee Cooper, which also is a partner in the reactor currently operating at the facility.
Zeigler argued that the law allowing the company to recoup its financing costs before building the plant was intended to make it easier to build nuclear reactors.
"The real question is, do we want to make nuclear power possible in this state," Zeigler said.
The high court heard another challenge to the plant last month from an environmental group, saying regulators should have given SCE&G's request greater scrutiny because it is the first time a company has been allowed to charge for a plant before it has been built.
The justices gave no indication of when they would issue a ruling in either case. As in the previous case, Chief Justice Jean Toal recused herself and was replaced by retired Justice James Moore of Greenwood.