In South Carolina, Dominion Energy’s Proposal to Combine with SCE&G Hangs in the Balance
GroundBreak Carolinas Guest Column
This is a critical week in deciding which path South Carolina takes on a vital question of economic and energy policy. Will the state Senate support a permanent solution to the new nuclear failure at the V.C. Summer plant or go with a temporary action that could be damaging in the long term?
At the center of this decision is Dominion Energy’s proposal to merge with SCE&G and SCANA. Our proposal includes $1.3 billion in cash payments to SCE&G electric customers to return much of what they have paid on the failed nuclear project. This includes $1,000 for an average residential customer as well as hundreds of millions of dollars to small and large businesses, charitable organizations and government agencies.
We also would reduce rates immediately by about 7 percent and continue to lower the nuclear-repayment portion of electric bills until it is eliminated in less than half the time proposed by SCANA.
Dominion Energy, in addition, would absorb $1.7 billion in V.C. Summer costs already spent by SCE&G that are not yet in customer rates. And we would freeze rates for at least three years except for the usual fuel adjustments.
When you total it all up – the money going directly to customers and the costs customers won’t have to pay in the future – the customer benefits exceed $12 billion.
The days ahead are critical time of determining whether the combination of Dominion Energy and SCE&G can move forward. South Carolina lawmakers are poised to debate a bill that could mean the prospect of a continuing, unresolved controversy hanging over the state.
That bill, Senate bill 954, would temporarily reduce SCE&G electric bills by 13 percent, removing some of the nuclear repayment portion. While this might seem like a good idea, in reality it could not only damage SCANA’s finances and raise power bills of SCE&G customers in the long run, but also hinder Dominion Energy’s ability to move forward with our proposal.
Dominion Energy has been open and transparent in its desire to merge with SCANA and help resolve South Carolina’s energy and economic crisis stemming from the failed V.C. Summer project. If the legislature intervenes and enacts policy into law, such as amended S. 954, this materially changes the grounds for Dominion Energy’s proposal.
Dominion Energy believes our proposal provides the certainty SCE&G customers and the state need and would be a much better option than the Senate bill.
First, the Senate bill would bring a temporary rate reduction that is just that, temporary. It is premised on awaiting action of the Public Service Commission, which also would likely be subject to litigation. A decision by the PSC or courts that the rate reduction is unconstitutional, too large or not justified at all could put rates even higher than they are now.
By contrast, Dominion Energy’s proposal reduces rates up front and has a plan to completely eliminate the nuclear-related charges in less than half the time proposed by SCANA.
Another concern with the Senate bill is that customer service and reliability could suffer. SCE&G may end up delaying less-than-essential capital investments or otherwise tightening its expenditures on non-essential items. By contrast, Dominion Energy has a strong track record of investing in undergrounding and other reliability enhancements, economic development, grid security and cleaner energy.
The Senate bill also opens the risk of no money back to customers. Because of that, it would take nine years under the rate reduction proposed in the Senate for customers to match the benefits of the Dominion Energy proposal.
Finally, the General Assembly stepping in to set utility rates sends a bad message for business. Undue government intervention can damage a state’s reputation as a good place to do business. What Dominion Energy is offering is a business resolution to a business problem.
Dominion Energy’s proposal remains the only permanent and sure solution presented to resolve the failed V.C. Summer nuclear project. It is the only one that does not bring risky, lengthy and expensive litigation that would damage South Carolina’s reputation. And, it remains the only solution to promote future investments in reliability, grid security, and cleaner energy.
Dan Weekley is vice president–Southern Operations, Dominion Energy. He is responsible for working with the Energy leadership team to identify further business growth opportunities in the southern region of the United States. For more information on Dominion Energy’s proposal, please visit www.brighterenergyfuture.com.
