With customers angry that they're still paying for a defunct multibillion-dollar nuclear reactor project, a co-owner of the South Carolina plant says it now wants to cut power rates and offer other givebacks.
South Carolina Electric & Gas Co. incoming President Keller Kissam on Thursday announced plans to seek an immediate 3.5 percent rate reduction, which he said would save customers $450 million over five years.
In addition, Kissam said the company's shareholders will be responsible for net construction costs remaining from the failed V.C. Summer nuclear construction project, taking lower earnings payouts over the next 50 years.
"We've heard our customers' frustrations about paying for a power plant and having nothing to show for it," Kissam said during a Thursday news conference, at the company's Cayce headquarters. "Our customers deserve this solution, and this is a forward looking solution."
Some of the company's more than 700,000 electric customers across South Carolina have voiced anger at continuing to be charged for the failed project, shuttered by SCE&G and co-owner Santee Cooper in late July following the bankruptcy of lead contractor Westinghouse.
Thousands of people lost their jobs when the project failed. More than half a dozen lawsuits have been filed, some by SCE&G customers who have been charged nearly $2 billion toward interest on the company's debt, via a series of rate hikes since 2009, without any power being generated.
That amounts to about $27 per month for each ratepayer, charges that continue despite the project's failure.
State, federal and financial authorities are investigating the debacle, particularly actions of SCE&G and its parent company, SCANA. South Carolina lawmakers this week advanced a half-dozen bills that would do everything from paying back customers to, in the words of Speaker Jay Lucas, "gut existing laws" that allowed utilities to charge customers before the reactors were complete.
Another of Lucas' proposals would cut SCE&G customer rates by 18 percent — the amount they're currently paying for the project. That would cost SCE&G about $37 million per month, or nearly $450 million per year. On Thursday, Lucas said lawmakers would continue to pursue legislative fixes, saying the company's proposal "provides further proof that SCANA has consistently prioritized the company's profits over protecting its consumers."
The plans Kissam outlined Thursday include adding about 100 megawatts in solar power to SCE&G's system. They also include purchasing an existing 540-megawatt, natural-gas-fired power plant in Calhoun County. Kissam said it would replace more than 40 percent of the projected power that would have been generated by the new nuclear reactors. The $180 million price tag will also be footed by shareholders, Kissam said.
Since July 31, when SCE&G and Santee Cooper decided to halt construction, SCANA's stock has tumbled about 30 percent. Two of SCANA's top executives have announced their departures from the company, as has Santee Cooper's longtime leader.
Investors seemed to like the plan, with stock prices up as much as 5 percent in early trading following the announcement. Asked why it took more than three months to roll out these proposals, which still must be approved by state regulators, Kissam said the company needed time to consult lawmakers and shareholders.
"We learned a lot through this process," he said. "We are anxious to move forward."
Critics of the overall project weren't impressed. Blan Holman, an attorney with the Southern Environmental Law Center, said SCE&G was "treating its customers like a bottomless cash pit" by making them beholden to the new natural gas project. In comments sent to investors and provided to the media, Tom Clements of Friends of the Earth asked why the company hadn't pursued such a solution earlier, when the nuclear project fell behind schedule and soared over budget.