Report: Expected ruling on Summer cost recovery could imperil Dominion-SCANA merger
- A South Carolina judge is expected to overturn the Base Load Review Act, the law that requires customers to pick up the tab for unfinished nuclear reactors, two sources told The Post And Courier.
- South Carolina Electric & Gas (SCE&G) is seeking regulatory approval to recover about $5 billion from ratepayers, based on its costs for the failed V.C. Summer nuclear project, using that law. If the Base Load Review Act is deemed unconstitutional, consumer protection groups and lawyers could have an opportunity to push regulators to refund SCE&G customers the billions they've already poured into the project.
- Dominion Energy and SCE&G's parent company, SCANA Corp., advanced their merger process earlier this month by reaching an agreement with the North Carolina Public Service Commission. Dominion has said it would walk away from the $14.6 billion merger if SCE&G's rates were substantially lowered.
No final order has been signed yet and Judge John C. Hayes III reserves the right to make changes to the orders drafted by the Base Load Review Act's challengers. But recent reports indicate that he intends to overturn the rule.
SCE&G's liability for the failed Summer nuclear project could scuttle the potential merger between SCANA and Dominion, as the latter had warned while state legislators tried to lower the amount that SCE&G could recover from customers. Those warnings from Dominion had in part stopped legislators from seeking a permanent rate cut.
"[W]e reserve the right on behalf of our shareholders to walk away from this merger if the commissioners are unable to approve something that preserves our merger plan’s economics," Ryan Frazier, Dominion spokesperson, said via email on Monday.
As the spokesperson in charge of the merger proceeding, Frazier viewed Hayes' highly anticipated conclusion with more optimism.
"We believe the parties, including customer advocates, are aligned in finding a solution that neither mires the state in legal limbo for many years nor pushes the incumbent public service company toward severe financial distress," Frazier said.
The South Carolina Public Service Commission held a series of public hearings at the end of September and the first half of October about SCE&G's rates focused on recovering V.C. Summer costs. Dominion had offered rate cuts and up to $1,000 in customer rebates as part of the merger, and SCANA had reportedly offered $1,500 refunds as well.
The Attorney General's office, one of the main parties that would be writing the proposed order that Hayes is expected to adopt, had issued an opinion at the end of September that raised issue with charging customers for plants that are not "used and useful."
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