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Dominion Sweetens The Pot

Tax cuts allow company to pass on additional relief to ratepayers as part of proposed SCANA purchase …

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Virginia-based Dominion Energy is moving closer to a threshold identified by key South Carolina lawmakers as an acceptable rate reduction for consumers victimized by #NukeGate – the Palmetto State’s spectacularly failed government intervention in the energy economy.

According to testimony provided by Dominion chief executive officer Thomas Farrell, tax cuts approved by “Republicans” in Washington, D.C. last year will enable the company to provide anywhere between 6.5 and 7 percent reductions in future power bills.

That’s more than twice the amount of ratepayer relief previously offered by SCANA, the crony capitalist utility that partnered with state-owned Santee Cooper on the abandoned V.C. Summer nuclear power plant expansion project in Fairfield County, S.C.

SCANA and Santee Cooper were allowed to place a roughly 18 percent “nuclear surcharge” on customers via the now-notorious “Base Load Review Act” – a piece of special interest legislation advanced by liberal lawmakers and allowed to become law in 2007 by former governor Mark Sanford.

Lawmakers are currently seeking to undo this hated law, although they face a dubious legal future in doing so – and could risk scuttling Dominion’s proposed purchase of SCANA.

In addition to trimming some (but not all) of the future costs associated with this abandoned project, Dominion’s proposal would provide an estimated $1.3 billion in reimbursements to consumers (roughly $1,000 to each SCANA residential customer).

In private negotiations, state lawmakers have made it clear they want Dominion to include a nine percent reduction in ratepayers’ future bills – basically cutting the hated “nuclear surcharge” in half.

If lawmakers stick to this position, that would mean the two sides are now between 2 and 2.5 percent apart – well within striking distance of a possible negotiated settlement.

Would such a settlement be fair to ratepayers?  Hell no …

South Carolina’s politicians sold their constituents down the river over a decade ago when they enacted the Base Load Review Act, and there is no offer on the table (or contemplated) that is ever going to make them whole again.

The question is simple: What is the best deal to be gotten without torpedoing the whole process and ushering in a debilitating, multi-year legal battle? 

The uncertainty from such a protracted court fight could cost the state billions of dollars in economic activity and tens of thousands of jobs, sources close to the debate tell us.  In fact as we exclusively reported last week, it’s reportedly already costing the state jobs.

As we’ve stated from the beginning of this drama, we don’t trust the politicians who created this disaster to get us out of it.  At all.  Nor do we believe sufficient ratepayer relief is currently on the table – although Dominion’s latest announcement is another step in the right direction.

“Our goal is simple: A reasonable settlement that maximizes ratepayer relief, within the confines of what the courts will accept and the markets will bear,” we wrote last month.

Let’s hope we continue to take steps in that direction …

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