SCE&G injunction request denied again

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Editor's note: This story has been updated to include SCE&G's decision to appeal Monday's ruling.

A federal judge has denied for the second time S.C. Electric & Gas Co.’s request for an injunction to prevent temporary rate reductions ordered by the S.C. Public Service Commission from going into effect.

SCE&G will appeal Monday's decision and ask for an expedited ruling, parent company SCANA Corp. said Tuesday.

The U.S. District Court for the District of South Carolina, Columbia Division, dismissed a lawsuit by SCANA Corp. subsidiary SCE&G on July 27, but SCE&G appealed that decision. The lawsuit, in requesting the injunction, challenged the constitutionality of the PSC ruling, which came on the heels of the passage of new state laws by the General Assembly during a specially called session at the end of June.

That legislation called for the temporary cut for SCE&G customers, who have seen their electric bills increase an average of $27 a month because of costs related to the failed V.C. Summer nuclear project, and repealed the Base Load Review Act, a controversial 2007 law that allowed SCANA to request and receive nine rate increases during the decade-long construction of the twin reactors.

The legislation also postponed until December a final decision by the PSC on who must ultimately pay for the reactors, abandoned last July after a series of mounting delays and rising costs, and how those costs will be recouped.

Monday's ruling (.pdf) said that the legislation does not establish "the specific experimental rate that SCE&G alleges constitutes a taking" as it does not issue a final rate determination. 

SCANA said in a statement Monday that "the company will strive to offset the operational impact of the temporary rate reduction by continuing to cut costs and delaying spending without sacrificing safety and reliability.”

SCANA stock dropped nearly 5% after Monday’s ruling, falling to $39.40 per share at 4:40 p.m. before rebounding to $42.18.

The PSC ordered that the new rates begin with SCE&G's first August billing cycle and also mandated credits reflecting the cuts for bills from April through July.

SCANA cited the pending rate reductions and ongoing legal costs in an Aug. 2 announcement of a $113 million drop in earnings for the second quarter of 2018 compared to the same period last year. That earnings report came three days after SCANA shareholders approved a proposed merger with Dominion Energy.

Richmond, Va.-based Dominion has said the $14.6 billon deal hinges on being able to recoup some of the V.C. Summer-related charges from SCE&G’s 727,000 customers. Dominion’s offer includes a permanent 7% rate reduction and what that company has said would be an average refund of $1,000 to residential customers.

Dominion is taking a wait-and-see approach as the legal battle plays out, with an eye toward the PSC’s December decision.