A pair of South Carolina senators introduced legislation that guts cost recovery for the abandoned V.C. Summer nuclear project and makes sweeping changes in state regulatory oversight.
Senate Bill 754, prefiled Dec. 6 in the South Carolina General Assembly by state Sen. Nikki Setzler and Sen. Shane Massey, amends South Carolina law to "disallow recovery of costs for a Base Load Review plant not currently generating power."
The state's Base Load Review Act, or BLRA, drafted to support the construction of the V.C. Summer project, allows investor-owned electric utilities to annually request revised rates to recover financing costs for baseload plant construction. Abandonment provisions under the BLRA also allow the utility to recover capital costs and allowance for funds used during construction if "the decision to abandon construction of the plant was prudent."
SCANA Corp. utility South Carolina Electric & Gas Co. and project partner Santee Cooper, known legally as South Carolina Public Service Authority, decided July 31 to halt construction of two new 1,117-MW reactors at the V.C. Summer site in Fairfield County. SCE&G then submitted a petition to the Public Service Commission of South Carolina seeking approval under the BLRA to recover $4.9 billion, later reduced to $2.2 billion, in capital costs spent on the unfinished units.
Lawmakers heading special committees in the South Carolina House of Representatives and state Senate have vowed to protect ratepayers from the more than $9 billion in sunk costs tied to the project.
Similar to bills that have advanced in the House of Representatives, the Senate legislation includes a provision designed to prevent SCE&G from collecting $37 million per month in revised rates tied to the project, representing an 18% reduction in customers' electric bills. This would add up to about $445 million a year in lost revenue for SCANA.
The Senate proposal also would strip cost recovery tied to the project from state-owned utility Santee Cooper. Santee Cooper, which is not regulated by the PSC, revealed to lawmakers that it has implemented five rate increases since the project's approval in 2009, with 4.3% of the 15.7% overall rate hike tied to the nuclear plant.
The legislation also would reduce the PSC to five from seven commissioners, while increasing their salary and implementing staggered elections. While the V.C. Summer Nuclear Project Review Committee, headed by Setzler and Massey, failed to reach consensus on requiring Santee Cooper's rates to be approved by the PSC, they unanimously approved a motion that any public-private utility partnership's rate increase or cost recovery be approved by the commission.
Therefore, S.B. 754 requires that the PSC "supervise and regulate any joint ownership project and facility, in its entirety, between a public utility and the Public Service Authority." The bill also increases legislative oversight of bonds issued by Santee Cooper, such as those issued to finance V.C. Summer construction.
The senators propose creating a consumer advocate within the South Carolina Office of Regulatory Staff, while the House plan puts the consumer advocate in the attorney general's office.
The Senate bill also would essentially repeal the BLRA as of Nov. 21, thus preserving protection for projects previously approved under the law, while deleting provisions related to the abandonment clause.
The senators also filed joint resolutions designed to require a valuation of Santee Cooper and the state's 45% ownership in the scrapped nuclear reactors.
South Carolina's governor has been simultaneously pushing the sale of Santee Cooper and its ownership interest in the V.C. Summer project.
