A group of South Carolina lawmakers wants to roll back billions of dollars of electric rate increases and throw out three groups that oversaw the state’s failed effort to build nuclear reactors near Columbia.
Those are among the proposals floated Thursday by House Speaker Jay Lucas as part of a sweeping reform package that will be considered next year.
They represent some of the first concrete steps the Legislature could take after the $9 billion expansion of the V.C. Summer Nuclear Station was abandoned this summer.
Lucas says the legislation is meant to "gut existing law" and reshape South Carolina’s utility regulations to avoid another costly construction disaster.
The package also would punish the state’s largest company, SCANA Corp., by forcing it to eat billions of dollars of costs. Cayce-based SCANA, which owns South Carolina Electric & Gas, has said the proposal would bring the power company to its knees.
The reform would slash SCE&G ratepayers’ bills 18 percent by forcing the company to stop collecting money for the nuclear project. That adds up to $37 million a month, or almost $450 million a year.
If approved, a family using 1,000 kilowatt-hours of electricity a month would see its bill cut by $27.
It would also give state regulators permission to order refunds for the money customers have already paid, which totals roughly $1.8 billion, if they find "willful misrepresentation" or "poor management" on SCE&G’s part.
"The legislation introduced today lowers current rates and prevents consumers from paying a single penny more for the costly failed project," Lucas said in a statement. "The bills gut existing law and put proposals in place that advocate for the ratepayer rather than utilities and its investors."
SCANA didn’t immediately respond to a request for comment. In an affidavit filed with regulators last month, the company’s incoming chief executive called a similar proposal "radical and disruptive."
Jimmy Addison, who will become CEO as the Legislature reconvenes in January, said the company’s investors and lenders would be spooked if it’s forced to cover its share of the project’s $9 billion bill. That could make it harder to get funds for day-to-day needs, such as buying fuel for power plants, paying workers and hiring contractors for repairs.
"Changing the statutory standards now, after the project’s abandonment, could irreversibly damage our company’s ability to provide our customers with safe, reliable service," SCANA spokesman Eric Boomhower said.
The new House bill is hardly the first threat to SCANA's finances. Already, state regulators are considering a measure that would halt collections for the abandoned project in Fairfield County, which would have expanded the V.C. Summer Nuclear Station.
The mere suggestion already has scared off investors and lenders. SCANA's stock has plunged more than one-quarter since the project was canceled in July and since Wall Street analysts warned of a regulatory environment that has quickly turned negative. Credit-rating agencies also have dinged the company, citing regulatory and political uncertainty.
"I cannot overemphasize how radical and disruptive that request appears to the investors who provide the capital needed to operate our system," Addison wrote. "A write down of this magnitude would not allow SCE&G to function as a financially stable utility."
The House proposal also takes aim at SCANA’s partner, the state-owned power company Santee Cooper, and the state’s utility regulators.
Among other measures, it would fire the board of Moncks Corner-based Santee Cooper; remove the regulators currently sitting on the Public Service Commission, which oversees investor-owned utilities like SCANA; and replace the panel that interviews its commissioners.
The House would also give the Office of Regulatory Staff, a watchdog agency, the power to subpoena utilities, and it would hire a new consumer advocate to represent ratepayers’ interests.
The changes would be especially drastic at Santee Cooper, which sells most of its power to the state’s electric cooperatives. The proposed legislation would require new qualifications to join its board, and it would subject the power company to oversight by the Public Service Commission.
Santee Cooper spokeswoman Mollie Gore said the utility was reviewing the legislation and hadn’t taken a position on it.