SCE&G files emergency motion for injunction

Listen to this article

SCE&G has filed an emergency motion for an injunction to halt a temporary rate cut ordered by a state regulatory agency with the U.S. Court of Appeals for the 4th Circuit, though customers are already seeing reduced bills.

The utility, the primary subsidiary of Cayce-based SCANA Corp., is appealing a district court’s denial of the injunction.

In a motion (.pdf) filed Wednesday, S.C. Electric & Gas reiterates its claim that the 15% rate cut, passed by the General Assembly in June and enacted by the S.C. Public Service Commission in July, represents an unconstitutional taking of company revenue collected under state law.

The PSC ordered that the new rates begin with SCE&G's first August billing cycle and also mandated credits for bills from April through July.

The cuts will be reflected on bills issued on and after Aug. 7, according to a statement on SCE&G’s website. August bills also include a one-time credit for the April-July charges. The reduction will be effective through December, or until a final PSC decision.

“The act is confiscatory in both effect and purpose,” the motion said, referring to two bills passed by the Legislature that established the lower rates and repealed the 2007 Base Load Review Act. “As its text makes clear, and as members of the legislature have admitted, the act is designed to take property from SCE&G (and its shareholders) and to transfer it to ratepayers. The act has no justification other than retroactively punishing SCE&G.”

Under the Base Load Review Act, SCANA asked for and received nine rate increases while twin nuclear reactors, co-owned by SCE&G and state-owned utility Santee Cooper, were being constructed at the V.C. Summer power station in Fairfield County. The reactors were abandoned last July after a series of mounting delays and rising costs and after the utilities had sunk $9 billion into the project.

SCE&G’s 727,000 customers pay $37 million a month, or an average of $27, in V.C.-Summer related costs.

On Monday, a federal judge denied for the second time SCE&G’s request for an injunction. The U.S. District Court for the District of South Carolina, Columbia Division, had previously dismissed a lawsuit filed by SCE&G immediately after the legislation was passed — a process that included an override of a veto from Gov. Henry McMaster — but SCE&G appealed that decision.

The legislation also postpones until December a final decision by the PSC on who must ultimately pay for the reactors and how those costs will be recouped.

SCANA cited the pending rate reductions and ongoing legal costs in an Aug. 2 announcement of a $113 million drop in earnings for the second quarter of 2018 compared to the same period last year. That earnings report came three days after SCANA shareholders approved a proposed merger with Dominion Energy.

Richmond, Va.-based Dominion has said the $14.6 billon deal hinges on being able to recoup some of the V.C. Summer-related charges from SCE&G customers. Dominion’s offer includes a permanent 7% rate reduction and what that company has said would be an average refund of $1,000 to residential customers.

Dominion is taking a wait-and-see approach as the legal battle plays out, with an eye toward the PSC’s December decision.