Senate votes to repeal Base Load Review Act

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The S.C. Senate voted 43-0 on Thursday to repeal the Base Load Review Act, a 2007 law that allowed utilities to charge ratepayers for projects that were not complete.

The Senate also voted 43-0 to give the state Office of Regulatory Staff subpoena powers and to create a consumer advocate. The measures, which have already cleared the S.C. House, are now one step closer to becoming the first legislation to be made law in response to the V.C. Summer nuclear debacle.

H.4375 also defines “prudent” for the S.C. Public Service Commission as “a high standard of caution, care and diligence in regard to any action or decision,” removing some of the interpretive leeway in the BLRA which allowed Cayce-based SCANA to request and receive nine rate increases during the past decade related to the now-abandoned nuclear reactor project in Fairfield County.

The Public Service Commission is set to rule on the prudence of those increases by Dec. 21 and decide, by extension, whether customers of SCANA subsidiary S.C. Electric & Gas, SCANA shareholders, or both should be left to pay off the billions of dollars in remaining debt from the project. The reactors were abandoned in July after SCE&G and co-owner Santee Cooper had poured $9 billion into their construction, and SCE&G collects approximately $37 million a month from ratepayers in related fees.

A PSC ruling is also expected in December on SCANA’s proposed merger with Virginia-based Dominion Energy, though Thursday’s legislative developments cast more doubt on that deal. Dominion has proposed rebates for SCE&G customers and a truncated fee collection schedule but has said that it must be allowed to continue to recoup costs related to the abandoned reactors.

Last month, the Senate moved to reduce SCE&G rates by 13% for the remainder of 2018. A similar measure passed by the House called for a larger reduction.

In March, Dominion president and CEO Tom Farrell said that legislative intervention in utility rates “materially changes the grounds for Dominion Energy’s proposal.” In a statement in response to the April Senate vote, the company said: “If the Senate bill becomes law, we stand by the previous statement of our chairman that this would be a material event that could eliminate all of these benefits” related to the merger, including an average refund of around $1,000 and a rate decrease of approximately 7%.