BY MELINDA WALDROP
As legal wrangling between S.C. Electric & Gas Co. and state lawmakers continues to unfold, the company bidding to acquire the utility’s parent company is, like other interested players, waiting to see how everything shakes out.
But if recently passed legislation stands—the General Assembly repealed a state law that allowed SCE&G to raise rates to recoup costs of the V.C. Summer nuclear project, which failed—Richmond, Va.-based Dominion Energy said it could end up walking away from the deal.
“Our goal has always been to avoid getting everything tied up in long litigation,” said Chet Wade, Dominion’s vice president of corporate communications.
Dominion and SCANA Corp., of which SCE&G is a subsidiary, announced a proposed $14.6 billion merger in January. The potential deal received a quick endorsement from the board of Cayce-based SCANA and was approved by the company’s shareholders in July, but it has run into speed bumps in the Legislature, which also finds itself embroiled in a legal fight with the utility company.
In a special session at the end of June, lawmakers passed bills that temporarily lowered the rates SCE&G charges its 727,000 electricity customers to pay for the abandoned nuclear reactors.
The new laws also effectively repeal the Base Load Review Act, a 2007 law that allowed SCANA to receive nine rate hikes during the reactors’ construction. And the laws delay until December a final decision by the S.C. Public Service Commission on who is to pay for the reactors and how the costs will be recouped.
SCE&G immediately filed a lawsuit challenging the constitutionality of the new legislation and seeking an injunction against the rate reductions; but the PSC voted to enact a 15 percent rate cut beginning with August’s first billing cycle. It ordered that the reductions also be applied retroactively to bills from April through July.
A federal court dismissed SCE&G’s lawsuit on July 26, and the utility appealed. The court denied motions by the PSC and lawmakers to dismiss the refiled suit. On Aug. 6, the court again denied the injunction request, saying that the new legislation does not represent a taking of SCE&G earnings because it does not establish a permanent rate cut.
That could happen in December, and PSC action could undo or uphold the repeal of the Base Load Review Act. Dominion has said it is open to a restructuring but must be allowed to recoup some V.C. Summer costs.