South Carolina's legislative leaders have formed separate committees to investigate decisions leading to last week's abandonment of a nuclear power project and what can be done to prevent residents from ponying up billions more through their utility bills.
House Speaker Jay Lucas said Wednesday a bipartisan Utility Ratepayer Protection Committee will study "every possible option" for better protecting customers who have already "spent their hard-earned paychecks on a service they will never receive."
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His announcement came a day after Senate President Pro Tem Hugh Leatherman created a similar Nuclear Project Review Committee.
"The negative impact of this failed project will touch nearly every home in our state," said Leatherman, R-Florence.
Last week, private South Carolina Electric & Gas and state-owned Santee Cooper bailed on their project after jointly spending roughly $10 billion. The expansion of V.C. Summer Nuclear Station north of Columbia was already years behind schedule and billions over budget when lead contractor Westinghouse declared bankruptcy in March, which voided fixed-price contracts aimed at controlling escalating costs. Utility executives said they were forced to give up after determining the price tag for completing the project, budgeted at $11 billion in 2008, had soared beyond $20 billion.
The project accounts for 18 percent of SCE&G's residential electric bills and more than 8 percent of Santee Cooper's. Neither utility expects to refund customers a dime. Now, Santee Cooper's board is considering hiking rates again in 2018 and 2019. And SCE&G wants permission from state regulators to recover $5 billion over 60 years. At least $2.2 billion of that would come from customers already paying among the highest rates in the country.
Legislators created the system allowing that to happen. In 2007, they quickly passed a law allowing utilities to bill customers in advance and, if a project fails, recover their investments. The proposal bypassed the normal committee process and received just six "no" votes.
Many of the same legislators who supported that law are among those now tasked with determining how — and if — they can undo the damage, or at least ensure future projects are better scrutinized to protect customers.
Lucas, among 104 in the House who voted for the Base Load Review Act, said he's encouraging his committee to review and potentially repeal that 10-year-old law, along with the authority of the legislatively elected Public Service Commission, which has approved all of SCE&G's requested rate hikes since 2009. SCE&G has asked those regulators to quickly approve its abandonment plans.
Some legislative leaders, including Leatherman, want a special session to stop that.
The Legislature should pass a resolution barring any action for a specified period, allowing time to figure out what went wrong and how to fix it, said Senate Majority Leader Shane Massey, appointed co-chairman of the new Senate committee.
"We need to put a pause on everything so we don't get locked in on a rate increase," said Massey, first elected six months after passage of the law now considered a mistake. "It seems to me the only responsible thing to do."
But Lucas has resisted calling legislators back to Columbia before they're slated to return in January. He reiterated Wednesday that "acting impulsively could potentially create greater turmoil."
He did, however, allow for the possibility of a special session if the House study committee completes its work and comes up with a "viable solution." The group's first meeting is not yet scheduled.
By law, the Public Service Commission must make a decision on SCE&G's request by February.
"There are reasonable steps we can and ought to take now to ensure no more harm gets done," said Rep. James Smith, D-Columbia, who announced last week the creation of a new, bipartisan Energy Caucus.
Meanwhile, Gov. Henry McMaster said he's talking with other utilities about the possibility of buying out Santee Cooper's 45 percent share of the project or even buying the state-owned utility as a way to renew the project.
According to its latest financial report, the utility had $12.5 billion in assets but $10.5 billion in liabilities — $8 billion of that long-term debt — as of Dec. 31. Kevin Marsh, the CEO of SCE&G's parent company SCANA, told regulators last week he tried unsuccessfully for four months to get another utility interested in being a co-owner and sharing the cost.