SCE&G Files Federal Lawsuit Challenging New South Carolina Law

Written By: Jen Neville
July 2, 2018

South Carolina Electric & Gas Company, a subsidiary of SCANA Corporation, today filed a lawsuit challenging the constitutionality of a 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. In the lawsuit, SCE&G 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 lawsuit was filed in the United States District Court for the District of South Carolina, Columbia Division.

In addition to the reduction of SCE&G's electric rates previously approved by the SCPSC from approximately 18 percent of an average residential customer's bill to approximately 3.2 percent, 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. In its lawsuit, SCE&G asserts the rate reduction and other aspects of the new law constitute an unlawful taking of private property, deny it due process of law, and constitute an unlawful bill of attainder, all in violation of various provisions of the United States Constitution.

The new nuclear project ended after the project's contractor, Westinghouse Electric Company, filed for bankruptcy in March 2017 and stated that it would take advantage of the bankruptcy process to reject the fixed-price contract for the project; the cost to complete the project was determined to materially exceed prior Westinghouse estimates; and the Board of Directors of the project's co-owner, the South Carolina Public Service Authority, decided in July 2017 to halt funding Santee Cooper's share of remaining construction costs.

SCE&G and Dominion Energy, Inc. have petitioned the SCPSC for approvals related to the proposed business combination of SCANA and Dominion Energy that would provide significant benefits to SCE&G's electric customers to offset previous and future costs related to the new nuclear project. This proposal includes the purchase of a power plant by SCE&G at no cost to its customers that would partly offset the loss of generating capacity projected from the new nuclear units. SCE&G acquired a natural gas-fired power plant in May 2018 that replaces more than 40 percent of the projected generating capacity from the SCE&G portion of the new nuclear project.

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