A judge has given preliminary approval to a $520 million settlement that would provide refunds to Santee Cooper customers whose utility rates were increased to pay for the failed V.C. Summer nuclear project.
Judge Jean Toal wrote in her approval that the settlement agreement was the result of “a marathon two-day mediation session” on Feb. 18 and 19, which included a 16-hour session on the second day.
“At this preliminary stage, the court finds that the proposed settlement is within the realm of a fair, reasonable, and adequate resolution,” Toal wrote.
The settlement includes customers who received power from Santee Cooper or associated electric cooperatives between Jan. 1, 2007 and Jan. 31, 2020.
Dominion Energy, which acquired S.C. Electric & Gas parent company SCANA Corp. in early 2019, agreed to pay $320 million of the settlement funds, with Santee Cooper paying the other $200 million in three annual installments of $65 million, $65 million and $70 million.
SCE&G co-owned twin nuclear reactors at the V.C. Summer nuclear power station in Fairfield County. The project was abandoned in July 2017 amid rising costs and mounting delays and in the face of a bankruptcy declaration by contractor Westinghouse.
Recipients would receive their settlement payments by check if they are owed more than $25 or if they are no longer a Santee Cooper customer, or by bill credit if they are owed less than $25.
In addition to refunds, the settlement also requires Santee Cooper to freeze rates until the end of 2024.
Dominion and Santee Cooper may not pass on the cost of the settlement to customers in the form of rate increases or other charges. Santee Cooper also agrees not to defer any costs or expenses incurred during the rate freeze period to after the rate freeze is listed.
“It is the intent ... that the customers of Santee Cooper realize meaningful rate relief from this rate freeze and that Santee Cooper’s customers do not end up effectively paying, over time in one form or another, for the intended benefits of the rate freeze,” the settlement says.
A fairness hearing for the settlement is set for July 20 in Richland County, after which time the settlement may receive final approval.
Toal wrote in her preliminary approval that the proposed settlement compares “very favorably” to what the class of plaintiffs could have received at trial.
“The common fund to be established by the settlement of $520 million is over 90% of the $541 million the class paid from the inception of the project to the date of abandonment,” Toal wrote. “This is also approximately the amount the class paid after April 2012, when defendants formally committed to continue project.”
The settlement comes as the General Assembly contemplates the future of the state-owned utility.