Dominion asks PSC to dismiss Santee Cooper request

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Dominion Energy has asked the S.C. Public Service Commission to dismiss a request from state-owned utility Santee Cooper for a piece of the refunds the Virginia-based utility has offered customers of SCANA subsidiary S.C. Electric and Gas.

Dominion had promised SCE&G’s 730,000 customers an average upfront refund of $1,000 if its $14.6 billion proposal to acquire Cayce-based SCANA was approved. On Oct. 26, Dominion amended that proposal to remove the upfront refund in exchange for a greater long-term rate reduction of 14% instead of the originally proposed 7%.

Also on Oct. 26, Santee Cooper asked the PSC to set aside $351 million of the proposed refund for its roughly 2 million customers.

Dominion responded to that request Tuesday by asking the PSC to dismiss and strike that request as “untimely, unlawful, and unsupported by evidence.”

In its motion (.pdf), Dominion said the request by Santee Cooper is outside the jurisdiction of the PSC, which set to take up the acquisition question in November, and represents a “legally unjustified attempt at regulatory extortion.”

“Setting aside the disrespect Santee Cooper’s conduct exhibits, its concealment of this $351 million claim until the deadlines for both discovery and the pre-filing of direct testimony have closed is unlawful and inexcusable because it represents a blatant attempt to violate joint applicants’ (Dominion and SCE&G’s) due process rights,” Dominion’s argument says.

SCE&G ratepayers have ponied up $2 billion by way of an 18% rate increase to pay for abandoned twin nuclear reactors at the V.C. Summer Nuclear Power Station in Fairfield County. SCE&G and project co-owner Santee Cooper poured more than $9 billion into the decade-long construction of the reactors before abandoning the project in July 2017 after a series of rising costs and mounting delays and in the face of contractor Westinghouse’s bankruptcy three months earlier.

Allegations of project mismanagement have sparked public outcry and legal action. Ramifications from a class action lawsuit filed by SCE&G ratepayers seeking to halt V.C. Summer-related payments pose a potential threat to the Dominion proposal. A circuit judge assigned to that case has asked attorneys for both sides to draft orders containing language that says the Base Load Review Act is unconstitutional.

The BLRA, a state law passed in 2007, is the mechanism by which SCANA asked state regulators to approve the nine rate increases it received to fund the reactors. Dominion has said an outright repeal of the BLRA would torpedo the deal, as the Virginia company has said it must be allowed to continue to recoup V.C. Summer-related costs from SCE&G ratepayers.

The Dominion deal has received several key approvals but awaits the go-ahead from the public service commissions of South Carolina and North Carolina, among other conditions. The S.C. commission was barred from ruling on the proposal until November as part of legislative action taken in June that also temporarily reduced SCE&G customers’ bills by 15%.

Dominion has kept tabs on that action, as well as the flurry of legal responses from SCE&G, which twice saw requests to block the rate reduction denied by a federal judge.