Regulators approve Dominion’s buyout of SCANA: What it means
You won’t get a $1,000 rebate check, but 730,000 S.C. electric customers will continue to see lower power bills under Dominion Energy.
After 17 months of sometimes furious debate, the S.C. Public Service Commission on Friday gave permanent relief — in the form of a rate cut — to SCE&G electric customers enraged by their high power bills, stemming from a failed nuclear project.
But those customers will pay $2.26 billion more over the next 20 years for two unfinished reactors, abandoned in July 2017.
Over the screaming protests of some ratepayers who interrupted Friday’s hearing, the PSC approved cutting SCE&G’s power bills by up to $22 a month for the average residential customer as part of a deal by Virginia-based Dominion Energy to buy SCE&G’s parent company, Cayce-based SCANA.
Those customers already have paid more than $2 billion — about $27 a month on average —in higher power bills for the nuclear project in Fairfield County. Since 2009, SCE&G customers have had their electric rates raised by 18 percent for the failed project.
A group of protesters interrupted the meeting as the motion approving the lower rates and Dominion buyout was read, standing up and chanting, “Dominion buyout, more of the same. We want solar, for a change.” The group circled the hearing room, holding signs, one of which read: “Meet the new boss, same as the old boss,” a lyric from a Who song.
Another man sitting in the audience yelled, “Shame! Shame!” Another woman looked at SCANA’s executives present at the hearing and said, “I hope you all have to go through a cold winter before this is all said and done — every one of you.” She then stormed out.
“We are still paying some of the highest rates in the country, and we’re one of the poorest states in the nation,” said protester Leslie Minerd of Columbia, adding she worries Dominion will be back in three years asking for a rate hike.
The $22-a-month rate cut approved is slightly larger than the 15-percent temporary cut passed by the General Assembly this summer. However, a small part of the savings comes from money already owed to customer due to federal tax cuts.
SCE&G customers won’t see a major impact on their bill since Dominion’s offer to cut rates closely mirrors the cut already enacted by legislators.
However, elected leaders said the PSC’s decision is a victory for consumers.
“Today’s decision by the PSC is a tremendous win for the ratepayers and validates the efforts of the House to maximize short- and long-term relief for SCE&G customers,” House Speaker Jay Lucas, R-Darlington, said in statement. “Through the efforts of the House in this matter the ratepayers will see the return (through lower rates) of the $2 billion already paid for this nuclear project and enjoy long-term rate relief that will save them billions more.”
The state’s utility watchdog, the S.C. Office of Regulatory Staff, and customer-focused groups had pushed for deeper rate cuts, accusing SCANA of withholding important information from the PSC in order to keep the project alive.
Under Regulatory Staff’s proposal, SCE&G customers would pay roughly $1,300 more for the two unfinished reactors over the next 20 years. The same customer would pay about $1,600 under Dominion’s offer, which the PSC approved, according to Regulatory Staff.
Friday’s ruling by the PSC would set the average residential power bill for a customer using 1,000 kilowatt hours at about $125.26 a month, slightly less than those customers now are paying, and down from $147.70 a month before the legislatively ordered rate cuts.
The PSC also required Dominion:
▪ To not charge SCE&G’s customers for the $180 million cost of buying a natural gas-fueled power plant in Gaston, purchased to replace power that would have come from the nuclear reactors
▪ Keep SCE&G’s headquarters and day-to-day operations in Cayce
▪ Absorb the legal expenses associated with the merger and the nuclear project’s abandonment, not pass them along to ratepayers
After the hearing, Regulatory Staff director Nanette Edwards said she still was digesting the PSC’s order.
“I do believe the commission had a hard decision to make, and I respect that it was a real challenge to take on this very complex, 15-day hearing,” Edwards said. “I do believe we will need to move on from here.”
Tom Clements with environmental group Friends of the Earth said he was disappointed in the PSC’s decision, contending the commission could have done more for ratepayers.
“It’s good that the rate’s been reduced 15 percent, but we’re going to be saddled with 3 percent of the bill for 20 years,” Clements said.
Adopting Dominion’s proposed rate cuts is the best way to provide long-term rate relief and certainty to customers, Public Service commissioners said.
Dominion has threatened to withdraw its offer to buy SCANA, bailing out the embattled utility, if the PSC adopted deeper rate cuts. The Cayce-based utility also had threatened — to much skepticism — that it could file for bankruptcy.
Dominion initially offered customers a $10-a-month rate cut and refunds of $1,000 a customer. However, commissioners said the better financial option for customers was to replace the refund with a deeper rate cut.
“Customers would have been paying back whatever they got in a short period” through higher rates, PSC member Elliott Elam said.
“This plan will create certainty in rates for customers, the business community and the economic development community.”