A coalition made up of state business and social service groups announced its opposition today to a request made to state regulators by S.C. Electric & Gas Co. to approve an $852 million increase in the cost of building two nuclear reactors in Fairfield County, saying the increase would result in an undue burden on consumers.
The Stop the Blank Check coalition, with representatives from the S.C. Small Business Chamber of Commerce, the League of Women Voters of South Carolina and the state chapter of the Sierra Club, among others, also advocated for changes to the Base Load Review Act, which allows utilities to collect construction finance costs on nuclear construction projects prior to the completion of the plants.
Under that act, SCE&G has requested nine electric rate increases related to the construction financing costs of two new reactors at the V.C. Summer Nuclear Station in Jenkinsville, first announced in 2008. In late June, the utility, the principal subsidiary of Cayce-based SCANA Corp., applied for a 3.06% increase in electric rates to offset the project’s construction financing costs.
Frank Knapp, president and CEO of the small business chamber, said the Base Load Review Act amounts to writing a blank check to the utility.
“The act emasculated the Public Service Commission from its proper role of being able to say no to SCE&G,” Knapp said today in a news conference at the Statehouse. “The members we serve don’t want to pay any more than necessary to construct the nuclear plants.”
SCE&G spokesman Eric Boomhower said that recovering the financing costs along the way, rather than allowing them to accumulate during construction, reduces the total project cost by $1 billion and saves customers about $4 billion over the life of the new nuclear units.
“It brings more structure and consistency to the process that we have to follow as a regulated utility to license and build the units,” Boomhower said.
In 2014, the S.C. Supreme Court affirmed SCE&G’s right to raise utility rates to pay for ongoing construction costs.
SCE&G decided in October 2015 to replace the nuclear construction project contractor, resulting in a higher projected cost. Published reports have said the estimated price tag of $9.8 billion initially announced in 2008 has grown to $14 billion, an increase of about 48%.
Boomhower disputed those numbers, saying that the original project filing noted that the $9.8 billion figure did not include potential additional costs, such as owner-related expenses. He said that the approved filing in February 2009 included an “all-in” cost of $11.4 billion, and that ensuing increases to $13.8 billion represent an increase of 21.6%.
The new coalition charged that if the rate increase is approved, SCE&G customers will have had their rates increased by approximately 20% since 2009.
“Unlike other construction projects that are often fraught with problems, this one has a direct impact on us, the ratepayers,” said Susan Corbett, state chair of the S.C. Sierra Club.
Joanne Day, co-president of the League of Women Voters of South Carolina, said, “All of our citizens deserve access to the basic necessities of life, including shelter and utilities. When consumers are held prisoner to massive cost overruns that point toward serious errors in management decision-making, this access is endangered for many of our low-income and fixed-income citizens.”
Boomhower encouraged SCE&G customers struggling to pay their bills to contact the utility to learn about available assistance. He also emphasized that the nuclear plant project has long-ranging future implications.
“We’re not just building two new nuclear power plants,” Boomhower said. “We’re building a clean, reliable energy future for the people who live and work in South Carolina.”
The Stop the Blank Check coalition contends the price tag for that future is out of control.
“There’s a giant rate increase asked for, higher than they’ve asked for in any of the preceding years. We see the writing on the wall,” Knapp said. “Next year, that rate increase is going to be even higher. I think the public and a lot of members of the General Assembly are simply tired of this blank check that SCE&G has, and they would like to see it reined in.”