Utility drops bid to recoup billions after bailing on plant
A utility on Tuesday suspended its request to recoup billions more from customers for a South Carolina nuclear power project it bailed on last month.
South Carolina Electric & Gas voluntarily withdrew its request that state regulators approve its plans for abandoning the expansion of V.C. Summer Nuclear Station north of Columbia. But utility executives emphasize that their plans haven't changed.
"To be clear, our decision to withdraw the filing does not mean we are reconsidering the decision to cease construction," said Rhonda O'Banion, spokeswoman for SCE&G's parent company, SCANA.
SCE&G and state-owned utility Santee Cooper decided July 31 to halt construction on two partly built reactors they've already jointly spent $10 billion on, much of it paid by customers through rate hikes since 2009. The next day, SCE&G filed a request to recoup $5 billion over 60 years, with at least $2.2 billion of that coming from customers' bills.
A backlash from lawmakers and the public followed the project's abrupt end, which also left about 6,000 people jobless.
By law, the state Public Service Commission must approve the private utility's plans. The agency has no authority over state-owned Santee Cooper.
The utility had asked state regulators to rule quickly. Legislators have publicly warned the commissioners, whom they elect, not to do so. But, as filed, state law required a ruling by February or the petition would have been automatically approved. That left little time for legislators to act, as they're not slated to return to Columbia until mid-January.
SCANA executives said Tuesday's move allows legislators more time to review why the utilities made their abandonment decision. SCANA CEO Kevin Marsh plans to explain the withdrawal to financial analysts in a teleconference Wednesday morning.
"We understand the magnitude of this decision and the impact it has had on many people," O'Banion said. "So before moving forward with the regulatory process, we believe it would be appropriate to allow more time for our state's governmental officials to fully review and understand how we arrived at our decision to file for abandonment."
She declined to specify when the utility would refile its petition. She also did not answer whether the utility would refile under a different section of state law, as advised by the Office of Regulatory Staff.
Legislators are looking to undo the damage of a 2007 law they passed that gave utilities the ability to charge customers for reactors as they're being built and recoup money even if a project's never finished.
A Public Service Commission ruling that SCE&G spent "prudently" would enable the utility to recoup that $5 billion.
The Office of Regulatory Staff, which represents the public in utility regulation, recommended last week that state regulators dismiss the utility's petition. It argued SCE&G made its request under the wrong section of that decade-old law.
According to its motion, refiling under the correct section would force SCE&G to prove to regulators it spent prudently, instead of requiring critics to prove it didn't — a very high hurdle.
The project was already years behind schedule and billions over budget when lead contractor Westinghouse declared bankruptcy in March, voiding fixed-price contracts designed to limit costs to $14 billion. Utility executives said they were forced to give up after determining the price tag for completing the project, budgeted at $11 billion in 2008, had soared beyond $20 billion. The post-bankruptcy-analysis also concluded both reactors could not be operational until 2024.