South Carolina Utility sues State over Rate cut tied to Abandoned Nuclear Project

One of the two utilities responsible for abandoning work at a South Carolina nuclear plant is suing to challenge the constitutionality of a temporary rate cut approved by state leaders last week.

South Carolina Electric and Gas filed a lawsuit against the new state law which implemented a 15-percent rate cut while the state looks at who will pay for billions of dollars run up in construction on reactors at the V.C. Summer generating station. SCE&G and partner Santee Cooper abandoned work on the $9 billion facility in August 2017 after years of work, delays and cost overruns.

Last week, South Carolina state leaders passed a bill authorizing the temporary rate cut reducing much of the amount of the customers were paying for the ill-fated Summer work. Customers have already footed about $2 billion in costs for the nuclear reactor project.

SCE&G, which is a subsidiary of SCANA Corp., asked for an injunction prohibiting the South Carolina Public Service Commission from implementing the new rate reduction law. The case was filed in Washington D.C. federal court.

In addition to cutting previously approved rates, the new law “supplies definitions of key terms that would heighten the evidence required to establish SCE&G’s ability to recover its costs associated with the new nuclear project,” reads a company statement announcing the utility’s lawsuit. “In its lawsuit, SCE&G assets the rate reduction and other aspects of the new law constitute an unlawful taking of private property, deny its due process of law, and constitute an unlawful bill of attainder, all in violation of various provisions of the United States Constitution.”

SCE&G and Santee Cooper have put much of the blame for the Summer project failure on contractor Westinghouse Electric’s March 2017 bankruptcy. Utility officials also said they went to the Trump Administration for help and were denied.

Virginia-based Dominion Energy, meanwhile, is trying to acquire SCANA in a deal valued at between $10 to $15 billion. The potential merger partners have promised to cut rates if and when the deal is completed.