South Carolina

SC Senate votes to repeal 2007 law that set stage for VC Summer nuclear fiasco

The state Senate on Thursday voted to repeal the 2007 law that enabled the failed $9 billion V.C. Summer nuclear construction project.

The Senate's 43-0 vote also would set new legal definitions that could influence a state commission’s ruling on how much SCE&G's power customers will have to pay for two unfinished, abandoned reactors.

Moments later, the Senate voted — again 43-0 — to strengthen the state agency that polices utilities and to hire a state-appointed attorney to oppose rate hikes.

The proposals are close to becoming the first major reforms passed by the Legislature in response to South Carolina’s nuclear fiasco. Since the bills passed the House and were altered by the Senate, lawmakers will have to resolve differences in the proposals when they return to Columbia in May or June.

South Carolina's nuclear firestorm kicked off last July when Cayce-based SCE&G and the state-owned Santee Cooper utility pulled the plug on a decadelong effort to build two more reactors at the V.C. Summer Nuclear Station in Fairfield County.

That project already has cost SCE&G customers more than $2 billion in higher power bills and continues to cost the typical household about $27 a month, a surcharge included in the utility’s highest-in-the-region bills.

The S.C. Public Service Commission is set to decide in December who — SCE&G’s customers, its shareholders or both — should have to pay off the billions of dollars in remaining debt tied to the failed reactor project.

The same PSC ruling will decide whether Virginia-based Dominion Energy can finalize its buyout of SCE&G’s parent company, SCANA. Dominion wants to continue charging SCE&G's customers for the nuclear project over the next 20 years.

But while lawmakers will let the PSC answer those two questions, they are pushing legislation that could influence the commission’s rulings.

Lawmakers are hashing out plans to temporarily slash SCE&G’s power bills until the PSC’s December ruling. But they say passing H. 4375 — repealing the Base Load Review Act — would send a message to the PSC that it should look skeptically at SCE&G's request to continue charging its customers for the Summer project.

The bill would define the words “prudent” and “imprudent” for the PSC. The 2007 Base Load Review Act specified the PSC must determine whether decisions on major utility projects met the standard of prudency. But the law never specified what that word meant — leaving it up to each commissioner to decide.

H. 4375 would define prudency to mean "a high standard of caution, care, and diligence in regard to any action or decision taken by the utility ... affecting the project."

The definition would instruct the PSC to consider whether SCE&G acted swiftly to correct problems at the V.C. Summer construction site, exercised good judgment while building the reactors or committed fraud.

Groups hoping to claw back money that SCE&G's customers already have paid the utility for the nuclear project also hope to use the new definitions against the investor-owned company.

Bob Guild, an attorney representing the S.C. Sierra Club in the PSC case, said the bill gives legislators a chance to “sort of atone for their sins with the Base Load Review Act.”

“The Legislature has an opportunity to say, ‘We meant what we said when we said "prudence" and "imprudence," “ Guild said.

Repealing the Base Load Review Act for all future projects would not force SCE&G to cut its rates or issue refunds to its customers. But Dominion has said it would walk away from its deal to buy SCANA if the PSC rules that SCE&G managed the project imprudently and should not be able to recover its costs for the nuclear project from its customers.

The Senate on Thursday also passed legislation to strengthen South Carolina’s utility watchdogs after the nuclear fiasco.

The second bill passed, H. 4379, would give S.C. utility customers an attorney fighting only for them in rate-hike cases for the first time since 2004. Legislators abolished the office of "consumer advocate" in 2004 as part of a utility reform bill.

It also would toughen oversight of utilities by the Office of Regulatory Staff — removing the requirement that the agency protect utilities' finances. Senators also voted to give the agency subpoena power to demand documents from utilities.

In the months after the nuclear project's abandonment, Regulatory Staff officials told lawmakers the agency sometimes was conflicted by its dual mission — as outlined under existing law — of looking out for both S.C. power customers and the utilities that want to charge them more.

S.C. legislators also have been concerned Regulatory Staff did not have access to important information and utility documents needed to brief the Public Service Commission before it decided rate-hike cases. That includes the February 2016 Bechtel Corp. report, an outside study that diagnosed critical problems with the V.C. Summer project more than a year before its abandonment. That study was withheld from regulators by SCE&G.

Reach Wilks at 803-771-8362. Follow him on Twitter @AveryGWilks.
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