COLUMBIA — A compromise being considered by state lawmakers would temporarily halt nuclear-related payments to SCANA until regulators and the state's courts decide who should pay for the cancelled reactors at V.C. Summer.
The South Carolina House is set to amend legislation that would roll back the 2007 law that put in motion the eventual $9 billion construction failure in Fairfield County, according to three sources familiar with the amendment.
House leaders briefed the Republican and Democratic caucuses about the amendment Tuesday afternoon. The measure could be brought up for a vote as early as Wednesday.
After canceling a meeting on its own bills Tuesday, Senate leadership is planning to move forward with the House's proposal as lawmakers seek to avoid a lengthy back-and-forth between the two chambers.
"We support the House's experimental rate proposal," said Senate Majority Leader Shane Massey, R-Edgefield. "I think that's important."
Suspending the law could be enough to kill SCANA’s plans to be purchased by Dominion Energy. Under terms the companies agreed to, Dominion can walk if the Legislature puts a stop to the $37 million per month SCANA collects for the unfinished power plants near Jenkinsville.
Dominion declined to say whether it would cancel the deal if the proposal became law.
"We have not seen the proposed legislation and won’t speculate on it," spokesman Chet Wade said.
The amendment would leave a clause intact that allows SCANA to recoup abandonment costs from the project, but the legislation would force SCANA to prove to utility regulators that the decisions they made over the past decade were “prudent.”
For months, state lawmakers considered punishing SCANA themselves but became concerned their actions could be judged unconstitutional.
Lawmakers believe the changes will pass constitutional muster and prevent them from losing what many people expect to be a contentious case that could wind up before the state Supreme Court.
The amendment would ensure SCANA customers do not pay for the reactors while the protracted legal battle plays out and the Public Service Commission decides what customers should have to pay for the project moving forward.
Lawmakers also propose changing the law to make it harder for SCANA’s attorneys to argue the company did everything by the book. The bill would allow judges and state regulators to hold the utility company accountable for withholding a critical 2016 audit of the project. It would also ensure the utility is responsible for the mistakes made by its primary contractor, Westinghouse Electric.
Even with the changes, the bill would not return the more than $1.8 billion SCANA customers already paid for the project over the past decade. Lawmakers believe that issue must be handled in the courts, where at least five class-action lawsuits are pending over the nuclear-related charges.
The legislation also does nothing for electric customers with Santee Cooper and the state's electric cooperatives that are served by that state-run utility. Santee Cooper owns 45 percent of the abandoned reactors.
If approved, SCANA warned the House plan could trigger a domino effect of financial damage, crippling the power company for years to come.
The company would have to drop the unfinished reactors from its books, which could cut off its ability to borrow money for day-to-day operations, SCANA officials have said. It could also cause credit analysts to rate SCANA as a risky business, discouraging investors from parking money in the utility.
The chain reaction could lead the company to insolvency, SCANA has said.
A government report this month said there was a one-in-three chance of bankruptcy if the company is forced to stop charging for the nuclear plant. SCANA has disputed that report.
SCANA spokesman Eric Boomhower said the company “will not speculate on the accounting consequences” of the House proposal because it hasn’t seen the legislation.
Even so, SCANA says it’s prepared to take the Legislature to court if it passes a law that prevents it from collecting the money it spent on the nuclear project.
If the Legislature changes the rules “in a way that would inflict severe damage on the company,” Boomhower said, “the company would have no choice but to seek legal recourse.”
For its part, Wall Street weighed in decisively Tuesday: SCANA’s shares plunged 5.9 percent, suggesting investors think the proposed amendment could torpedo the Dominion deal.
SCANA's stock is trading about a quarter below its equivalent in Dominion shares.
Gov. Henry McMaster told the General Assembly last week he will veto any legislation that does not cut off nuclear-related charged altogether. Brian Symmes, McMaster's spokesman, declined to weigh in Tuesday on whether the House's plan would satisfy the governor's litmus test, saying McMaster would need to see the amendment language before reaching a determination.
Thad Moore contributed to this report.