South Carolina legislative leaders have reached a compromise they insist will satisfactorily resolve #NukeGate – a disaster of their own making that allowed two utilities (one of them owned by the government) to squander more than $10 billion.
Of that sum, $2 billion was collected directly from ratepayers – part of a command economic “socialization” of their investment risk related to the botched construction of a pair of now-abandoned nuclear reactors.
Terms of the compromise were not immediately made available to this news site, however we are told the deal agreed upon by a legislative conference committee incorporates elements of both the S.C. House of Representatives’ preferred plan and the proposal submitted by the S.C. Senate.
The final deal – which must still be approved by a majority of both chambers – was reportedly hammered out via a direct negotiation early Tuesday afternoon between S.C. speaker of the House Jay Lucas and Senate minority leader Nikki Setzler.
No lawmakers would speak to us on the record about the specific terms of the agreement, but one ranking “Republican” leader in the S.C. House referred to it as “middle ground and common ground” between the two chambers.
“This is the best deal any of us could have hoped for under the circumstances,” the lawmaker told us.
According to our sources, SCANA approached lawmakers with a proposal that would have added additional ratepayer relief to the deal currently on the table from Virginia-based Dominion Energy – which has offered $14.6 billion (including $1.3 billion in rebates to ratepayers) to purchase SCANA.
That proposal certainly appears to be in significant danger of being pulled off the table.
“We extended our hand in good faith and it was slapped,” a source close to SCANA told us.
Whoa … we can’t wait to see where this story is going …
Along with debt-addled government-run utility Santee Cooper, in 2007 SCANA announced its intention to build a pair of next generation nuclear reactors near Jenkinsville, S.C. The reactors were supposed to have been operational in 2016 and 2017, respectively, at a cost of $9.8 billion.
That clearly didn’t happen …
The money was spent, the reactors simply weren’t completed … and the utilities couldn’t afford the $10-16 billion price tag necessary to finish them. Eleven months ago, Santee Cooper pulled the plug on the project – killing an estimated 5,600 jobs and throwing the Palmetto State’s energy and economic future into chaos.
Lawmakers are on the hook for this debacle because they allowed SCANA and Santee Cooper to socialize more than $2 billion of the cost of the reactors via the notorious Base Load Review Act (BLRA). This law paved the way for the utilities to impose an eighteen percent “nuclear surcharge” on ratepayers – a charge they are still paying.
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(Via: High Flyer)
Under the terms of the Senate proposal, this surcharge would have been lowered from 18 percent to five percent immediately. This five percent rate would only be locked in for six months, though. Unelected bureaucrats on the embattled S.C. Public Service Commission (SCPSC) – which is the entity responsible for setting rates – would have been allowed to raise them again if they wanted.
The House proposal was even more complicated. It would have set an “experimental rate” of zero, however the SCPSC would have soon been called upon to replace that rate with an “interim rate.” And eventually this “interim rate” would have in turn been replaced by an “actual rate.”
According to our sources, the compromise plan meets somewhere in the middle on the size of the rate cut, as well as the date upon which it would be retroactively applied (House members wanted to put it into effect dating back to August 1 of last year, Senators wanted it to take effect upon passage of the new legislation).
Obviously, either of these deals would appear to be a death knell for Dominion’s bid to purchase SCANA.
Dominion’s deal would lower the surcharge from 18 to 11 percent over the next seven years and from 11 percent to zero over the next 12 years. Of course it includes something neither the House nor Senate can provide – $1.3 billion in upfront relief to ratepayers.
That money would likely vanish under any of the currently contemplated legislative proposals.
News of the legislative compromise – which again, still has to clear both chambers – is the second major #NukeGate development this week. On Monday, Santee Cooper asked the S.C. Supreme Court to uphold its “statutory mandate and duty to set rates that cover its expenses.”
This is the same bureaucracy which tried to raise rates on customers just one week before pulling the plug on its multi-billion dollar failure. It is also the same entity which gave its disgraced former CEO a $16 million golden parachute.
As we’ve noted on several occasions in the past, Santee Cooper is on the verge of a spectacular implosion. It is also at the center of a massive federal investigation over the lies it told while running up that massive debt.
So far no legislative “solution” has addressed those issues …
WANNA SOUND OFF?
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