COLUMBIA — South Carolina lawmakers promised for more than half a year to cut the power bills of South Carolina Electric & Gas customers who have paid more than $2 billion for two abandoned nuclear reactors at V.C. Summer station in Fairfield County.
This week, they finally followed through on those promises. Nearly every lawmaker in the Statehouse voted Thursday to temporarily slash the utility's electric rates by 15 percent — a move that could reduce the average SCE&G customer's bill by $27 per month.
But the details of how that plan will be implemented aren't clear and the entire effort could be sidetracked if SCE&G follows through on its promise to sue lawmakers for meddling with its electric rates.
A lot of questions remain. Here's what we know and don't know so far.
Who decides when and how customers' electric bills are cut?
State lawmakers may have passed the law but it's up to the state's utility regulators on the Public Service Commission to implement the temporary 15 percent cut to people's power bills. That seven-member commission scheduled a meeting in Columbia on Monday to discuss the legislative orders. They will be in charge of hashing out the specifics of when and how people's bills begin to shrink.
How would a lawsuit by SCE&G affect the temporary 15 percent rate cut?
SCE&G has promised for months to sue the state if lawmakers intervened, but as of early Friday evening that legal challenge has not been filed. If the utility company successfully challenges the law, however, the entire plan could be put on hold as the courts decide whether lawmakers had the constitutional authority to set what they called an "experimental rate."
How many months would the 15 percent rate cut last?
The temporary rate cut is just that: temporary. The bill that lawmakers passed only drops people's power bills until December, when the Public Service Commission is set to decide who pays for the failed nuclear reactors in the coming decades. The temporary rate cut, however, will extend back to April 1, according to the legislation. That means people are likely to get credit for the additional power they purchased in April, May and June of this year. It will be up to the Public Service Commission to decide how customers are credited for that electricity they already paid for.
What does this mean for Dominion’s proposed takeover of SCANA, SCE&G’s parent company? Am I getting a $1,000 check from them?
Dominion was opposed to lawmakers taking action to temporarily cut SCE&G’s rates, but they have yet to announce that they are pulling their offer for the Cayce-based utility company. For now, Dominion’s proposed takeover is still on the table.
Dominion’s offer would reimburse the average SCE&G customer with a $1,000 check, reduce rates by 7 percent (that includes federal tax cut benefits) and continue to charge customers $3.8 billion over the next two decades for the reactors.
But the terms of that deal could be upended if the Public Service Commission rules that customers shouldn’t be charged for the nuclear project in the coming decades.
How will the permanent rate for SCE&G be set after this year?
There is no guarantee SCE&G’s electric rates won’t go back up after December. The amount of money SCE&G customers will have to shell out for electricity beyond 2018 will again be up to the Public Service Commission. The state’s utility regulators are set to hold hearings in November, where lawyers will argue whether SCE&G or its customers should foot the bill for the failed nuclear reactors moving forward.
The lawyers opposing the utility will try to argue that the company didn’t handle the nuclear construction project in a “prudent” manner. SCE&G’s lawyers will counter by trying to show they made the best decisions they could with the information they had at that time.
It’s essentially a court case. After all of the evidence and testimony is reviewed, the Public Service Commission decides how much SCE&G can charge customers for the unfinished nuclear reactors. That decision will be handed down Dec. 21.
What happens if people don’t like the Public Service Commission’s decision in December?
The Public Service Commission’s decision on whether ratepayers or shareholders should pay for V.C. Summer is likely to be challenged no matter who wins. The attorneys in the case can challenge the regulators’ decision to the South Carolina Supreme Court.
Two of the attorneys opposing SCE&G appealed other decisions related to V.C. Summer in past years but they were often met with defeat at the state’s highest court. This time, however, SCE&G is likely to face a stronger legal challenge with the state’s Office of Regulatory Staff and the state Attorney General’s office taking a tough stance on the cost of the abandoned nuclear project.