Virginia-based Dominion Energy offered on Wednesday to buy SCANA and eat $1.7 billion in costs related to two now-abandoned nuclear reactors. Customers would see their power bills cut by about 5 percent and would receive up to $1,000 in a cash rebate within 90 days of the finalized sale.
All together, the deal would cut the amount of time SCANA customers can expect to spend paying for the failed reactors from six decades to about two.
That’s an impressive offer -- far better than the 3 percent rate cut SCANA previously proposed.
But state legislators quickly shot down the November deal, and they should proceed cautiously on this plan.
The Dominion offer goes a long way to provide relief to customers who have already paid $1.7 billion toward the reactors and who continue to pay 18 percent of their monthly bills for the abandoned project.
But ratepayers would individually still owe about $5,000 over 20 years. All for nuclear reactors that will never generate power.
Lawmakers and state regulators have the power to do much more.
For one thing, legislators have already proposed clawing back all of the rate hikes related to the reactors -- not just a portion of them.
They have also moved to begin a repeal of the devastatingly misguided Base Load Review Act that allowed SCANA to raise rates nine times to help pay for the project and leave customers vulnerable in its failure.
Accepting the Dominion offer could require leaving the BLRA intact, which would expose customers to future risk if it were to be used to pay for other new power generating projects.
That alone could be a deal breaker.
And regulators with the Public Service Commission have the power to force SCANA to eat much of the cost of the reactors if they can determine that expenditures were “imprudent.”
Nearly every day brings fresh revelations regarding the astonishing mismanagement of such an incredibly costly and critical project. Criminal investigations also are underway.
The PSC should not have a hard task in recouping costs for customers under the "imprudency" provision.
So the Dominion deal, while impressive, is premature.
Until lawmakers and regulators have had enough time to fully explore the options available to protect South Carolina ratepayers and recoup the money they have already spent on the nuclear failure, any offer involves speculation.
And with billions of dollars at stake, relying on speculation is unacceptable.
There is the risk, of course, that waiting for lawmakers and regulators to act could cause Dominion to back out of its offer, something Dominion chief executive Thomas Ferrell hinted at Wednesday. That risk should remain in legislators’ minds as they return to session next week.
Even so, lawmakers and regulators shouldn't back this deal prematurely. State officials first must provide the due diligence to ensure that hundreds of thousands of South Carolina residents are shielded from the fallout of this $9 billion disaster to the absolute extent possible.