COLUMBIA — Undercutting arguments that a legislative-approved electric rate cut will critically damage the parent of S.C. Electric & Gas, lawyers revealed in federal court on Monday that SCANA Corp. has set aside $110 million to pay its executives if they lose their jobs in a proposed takeover.
Attorneys representing the state lawmakers also cited at a hearing that SCANA continued shelling out multi-million dollar dividend payments to investors in the year after the $9 billion nuclear project was cancelled. SCANA's board just suspended those payments in June.
The Cayce company has been criticized for excessive executive pay and bonuses while struggles to add two reactors at the V.C. Summer Nuclear Station were kept secret from customers and regulators for years.
A lawyer for SCE&G countered that state's leaders acted as "prosecutor, judge and jury" in temporarily slashing electric rates by 15 percent in the wake of the project's failure.
The arguments were part of a federal court hearing Monday between the power utility and the S.C. General Assembly to determine whether more than 700,000 SCE&G customers see their monthly electric bills drop. The average customers charges for the nuclear reactors could shrink from $27 per month to roughly $5 per month until the end of the year.
The high-profile case also will decide if more than half a year of legislative debate over what's considered South Carolina's largest-ever business failure actually results in anything.
As it has for months, SCE&G painted lawmakers' actions as vindictive in court on Monday.
Utility attorneys told U.S. District Judge Michelle Childs the Legislature sought to single out the company for the abandoned reactors in Fairfield County. And they suggested lawmakers were punishing SCE&G because of the failures of Westinghouse, the bankrupted contractor on the reactor project.
David Balser, one of SCE&G's attorneys from the Atlanta law firm King and Spalding, cited the 2007 state law, known as the Base Load Review Act, that allowed SCE&G to charge customers for the reactors before they were finished. And he noted that both S.C. House Speaker Jay Lucas and Senate President Pro Tem Hugh Leatherman voted for that law more than a decade ago.
"We are here because the General Assembly has changed the rules of the game after the game has been played," Balser said.
SCE&G asked Childs to stop the nearly 15 percent cut from going into effect in early August. SCE&G's attorneys argued that temporarily slashing the rates charged to customers would hurt profits and severely harm the company's finances.
The attorneys for the state House and Senate, however, pushed back, citing SCANA's dividend payments and the $110 million set aside in January to pay its current executives who might lose their jobs in a proposed $14.6 billion sale to Virginia's Dominion Energy. SCANA shareholders will vote Tuesday on the takeover.
All of it was to show that SCE&G's complaints about its financial condition were not as dramatic as its leaders let on.
"This isn't a game at all. We're talking about money," said Rob Tyson, a Columbia attorney who is representing the House Speaker. "We're dealing with the ratepayers hard-earned money."
SCE&G's attorneys also tried to make their case by warning Dominion could pull its takeover offer if the temporary rate cut is allowed.
But the lawyers representing the House and Senate pointed out that Dominion has shown no signs of walking away. Matthew Richardson, a Columbia attorney representing the Senate, pointed to a Post and Courier story from early July in which Gov. Henry McMaster's office said Dominion CEO Thomas Farrell assured him the company was still committed to the deal.
Richardson later asked SCANA Chief Financial Officer Iris Griffin if Dominion announced any plans to end the takeover because of the temporary rate cut.
"Dominion has not notified us that they plan to walk from the deal at this time," she said.
The hearing resumes Tuesday, the one-year anniversary of the nuclear project's cancellation.
Correction: The story previously quoted the wrong attorney representing the South Carolina House.