This article was originally published by the Post and Courier on June 28, 2018.
Imagine taking $324, stacking it into a pile and lighting it on fire. That’s effectively what the average South Carolina family that buys electricity from SCE&G has been forced to do in the year since two nuclear reactors were abandoned in Fairfield County.
In the meantime, the Legislature has endlessly dithered about how to resolve one of the largest economic crises the state has ever faced. It took them until the very last moments of the very last days that lawmakers will meet in Columbia this year to finally come up with a reasonable compromise.
On Wednesday, they finally passed a sensible plan.
And even that compromise, which gives SCE&G customers a temporary 15 percent rate cut, prevents new projects from taking advantage of the disastrous 2007 Base Load Review Act, and provides for greater consumer advocacy before state regulators, remains vulnerable.
Gov. Henry McMaster, who won the Republican party’s nomination in the race for governor on Tuesday, has threatened to veto any bill that fails to cut the full 18 percent of their bills that SCE&G ratepayers spend on the failed nuclear project. Mr. McMaster’s steadfast defense of thousands of electric customers is welcome, but he would be unwise to oppose this compromise.
State regulators, law enforcement officials and the courts will have the final say over who pays for the nuclear reactors and how. And a 15 percent rate cut, even just until the end of the year, would provide some relief for families who struggle with exorbitant electric bills.
The state House and Senate passed the nuclear bills with easily veto-proof majorities on Wednesday. But Mr. McMaster should not be allowed to have his rate cut and eat it too, so to speak. He ought to either voice his disapproval of a sensible if imperfect bill or sign it.
Far more troublingly, SCANA has threatened to sue if the Legislature meddles with rates, arguing that lawmakers have no legal authority to do so. A lawsuit could run out the clock on the temporary rate cut before it ever goes into effect.
Suing the state to stop the rate cut would be a callous thing for SCANA to do. Multiple reports show that the utility could easily absorb the financial impact of a rate cut in a variety of ways, including simply trimming dividend payments to shareholders.
SCANA shareholders have earned hundreds of millions of dollars in dividends since the project was abandoned last year, all while SCE&G customers continue to pay a collective $37 million per month for a power plant that will never go online.
That is unconscionable.
Dominion Energy, a Virginia-based utility that has offered to buy SCANA, has threatened lawmakers that it might walk away from the table if they passed a bill like the one on Wednesday. Frankly, that threat should be of little concern.
Their deal would offer only partial relief for ratepayers. Until we know what alternatives are on the table, it can hardly be considered the best option.
Santee Cooper customers also continue to pay higher rates for the nuclear disaster. And without action, Santee Cooper customers could find themselves facing an even higher burden in the long run than SCANA ratepayers.
At the beginning of this legislative year in January, we urged lawmakers to proceed cautiously with policy changes that will significantly impact the state’s economy. We did not anticipate, however, such drawn-out controversy over saving South Carolina ratepayers money.
Nevertheless, Wednesday’s vote is a win for SCE&G customers. May it be the first of many.