COLUMBIA (AP) South Carolina lawmakers temporarily cut electric rates of a private utility by 15 percent June 28 to remove most of the charges they are paying for two nuclear plants that were never finished.
Both the House and Senate overrode Gov. Henry McMaster’s veto of the rate cut in just minutes. In his veto message, McMaster asked lawmakers to stay and pass a bill that fully eliminates the 18 percent surcharge on South Carolina Electric & Gas bills because that was the only fair solution.
The rate cut will stay in place until the end of the year, knocking about $22 a month off the average SCE&G customer’s bill. State regulators would then set a permanent rate.
The General Assembly approved each SCE&G rate hike over a decade that led to the 18 percent surcharge for planning and construction of the two reactors that never generated a kilowatt of power before being shuttered last summer.
Part of the bill that reduces the rate also eliminates the law, called the Base Load Review Act, which allowed utilities to have customers pre-pay for the plants.
The rate cut could scuttle a proposed merger by SCE&G’s parent company SCANA Corp. with Virginia-based Dominion Energy. The Virginia utility has offered rebates of around $1,000 to SCE&G customers, a smaller cut in rates and a promise not to raise rates for three years.
In a statement June 28, Dominion appeared to back off those threats, saying it regrets that “a permanent solution — with refunds and rate cuts — will be delayed until later this year as the legal system sorts out these matters” and it hopes a solution will be worked out soon for SCE&G customers.
SCE&G has said it will likely sue to stop the rate cut, saying only the Public Service Commission can set electric rates. Parent company SCANA declined to discuss the legislation.
McMaster’s veto came as he stuck to a promise made at the start of the Legislature’s session that he wanted the full 18 percent rate cut. The House went along with him, but the Senate refused with a 13 percent rate cut before both chambers compromised earlier this week on the 15 percent cut.
“It is unacceptable, irresponsible, and unconscionable for any South Carolinian to pay another dime to SCANA for the abandoned V.C. Summer reactors in Fairfield County,” McMaster wrote in his veto message.
McMaster also wrote that while SCANA and the state-owned utility Santee Cooper — which had a 45 percent stake in the nuclear plants — may have fraudulently misled the Legislature while being aided by the Base Load Review Act, lawmakers didn’t do what they could after the fact to fully help ratepayers and made them at least continue to pay for part of the “fraud, misfeasance, or imprudence” by the utilities.
“While it can be said that the General Assembly was an unwitting accessory before the fact in this venture, I will not be an accessory after the fact,” said McMaster, a former state attorney general.
Lawmakers said they deliberately settled on the 15 percent cut because they could not prove that SCANA had worries about the project when the other 3 percent of hikes passed before 2011.
The bill does several other things other than cut rates. It also creates a consumer advocate position to act on behalf of utility customers; gives the state’s watchdog Office of Regulatory Staff the ability to subpoena in their oversight role; and defines terms the Public Service Commission can use to decide what charges were “prudent” or “imprudent” when it sets utility rates permanently in December.
The bill does not affect rates paid by state-owned utility Santee Cooper, which owned 45 percent of the plants and has about $8 billion in debt. McMaster has urged the state to sell the utility, and the House passed a bill creating a committee to study the move.