U.S. district court judge Michelle Childs has set an expedited July 30 court date to hear preliminary arguments in the #NukeGate legal battle between crony capitalist energy provider SCANA and state regulators.
Childs also set a July 20 deadline for lawmakers and a class of SCANA customers to file motions to dismiss the embattled utility’s lawsuit.
In other words, game on …
Earlier this month SCANA’s subsidiary, SCE&G, challenged the constitutionality of a new South Carolina law “significantly reducing company revenues from electric rates authorized by state law and previous orders of the Public Service Commission of South Carolina (SCPSC).”
In its suit, the utility “seeks a declaration that the law is unconstitutional and asks the court to issue an injunction prohibiting the SCPSC from implementing the new law.” The suit further alleges that “the rate reduction and other aspects of the new law constitute an unlawful taking of private property, deny (SCE&G) due process of law, and constitute an unlawful bill of attainder, all in violation of various provisions of the United States Constitution.”
The suit is the latest fallout related to #NukeGate – the Palmetto State’s spectacularly failed command economic intervention in the energy industry.
As we exclusively reported last month, legislative leaders reached a deal that they insist will undo the damage they did over a decade ago when they allowed two utilities (one of them owned by the government) to squander more than $10 billion on a pair of now-abandoned reactors in Fairfield County, S.C. Of that sum, $2 billion was collected directly from ratepayers – essentially socializing a significant chunk of the investment risk related to this doomed project.
We’re referring, of course, to the notorious Base Load Review Act (BLRA) – legislation advanced by liberal state lawmakers and allowed to become law in 2007 by former governor Mark Sanford. Under the terms of this glorified handout, SCANA was allowed to impose an eighteen percent “nuclear surcharge” on ratepayers – a charge they are still paying.
Government-run utility Santee Cooper was also allowed to raise rates on consumers in connection with the project.
In fact Santee Cooper – which is drowning in debt and the focus of a major federal investigation – filed a suit with the S.C. Supreme Court last month seeking to affirm its right to “set and collect rates sufficient to cover all of its expenses, including debt obligations.”
Lawmakers – who appoint justices to the S.C. Supreme Court – want the SCANA case under the state court’s jurisdiction. In fact, they are currently seeking to make themselves parties to the lawsuit in the hopes of having the case moved.
Will they be successful?
We shall see …
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For those of you uninitiated, #NukeGate was supposed to have produced a pair of next generation, pressurized water reactors at the V.C. Summer nuclear generating station in Jenkinsville, S.C. – a town of around fifty people located just north of the state capital of Columbia, S.C. The reactors were supposed to have been operational in 2016 and 2017, respectively, at a cost of $9.8 billion.
That obviously didn’t happen …
The money was spent, the reactors just 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.
After months of indecision, lawmakers finally moved last month to cut a nuclear surcharge collected by SCANA from 18 percent of ratepayers’ bills to 3.2 percent – which is projected to save an estimated $270 million over a nine-month period.
Of course as we exclusively reported earlier this week, that deal was already on the table.
SCANA offered to give this entire pot of money to ratepayers in addition to the $1.3 billion in upfront cash payments promised by Virginia-based Dominion Energy. Additionally, Dominion has agreed to absorb $1.7 billion of the debt associated with the botched project and make other energy infrastructure investments in the Palmetto State.
Lawmakers rejected SCANA’s offer, though, and they appear intent on running Dominion out of town on a rail.
Leading that charge? Senate “Republican” leader Shane Massey, who previously argued that the state could not cut the surcharge below a certain level without risking a constitutional challenge.
That challenge is now the focus of SCANA’s court case …
This news site explicitly warned on numerous prior occasions that “the uncertainty from a protracted court fight could cost the state billions of dollars in economic activity and tens of thousands of jobs.” Hell, it already is costing the state jobs. Accordingly, we have pushed from the very beginning of this process for “a reasonable settlement that maximizes ratepayer relief, within the confines of what the courts will accept and the markets will bear.”
Alternately, we urged them to stop playing politics and immediately and completely repeal the BLRA.
This “mushy middle” option is frankly unacceptable to us …
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