South Carolina lawmakers’ multi-billion dollar gamble with utility ratepayers’ money – which they rolled the dice on over a decade ago via a now-notorious crony capitalist handout – suffered a significant setback on Thursday when a federal court judge ruled that embattled West Columbia-based utility SCANA could proceed with its lawsuit against the state.
A week ago, U.S. district court judge Michelle Childs ruled that the case – brought by SCE&G (a subsidiary of SCANA) – would be tossed on a technicality if the utility’s attorneys didn’t correct errors in its initial filing.
News of Childs’ first ruling was reported exclusively by this new site, by the way.
SCANA’s lawyers did correct the errors … and as a result Childs has determined the case will be heard.
SCANA is challenging the constitutionality of a new South Carolina law “significantly reducing company revenues from electric rates authorized by state law.”
Specifically, it says lawmakers efforts to roll back previously approved rate hikes “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.”
Childs did not rule on the merits of the suit (which lawmakers were hoping she would toss) she simply determined the case could go on.
The legal brinksmanship is the latest chapter in the ongoing #NukeGate debacle, in which state lawmakers socialized nearly $2 billion in investment risk related to a pair of since-abandoned nuclear reactors in Jenkinsville, S.C.
The reactors at the V.C. Summer nuclear generating station were supposed to have been operational in 2016 and 2017, respectively, at a cost of $9.8 billion. They weren’t – and never will be.
The money was spent, the project simply wasn’t finished – and the two utilities couldn’t afford the estimated $10-16 billion price tag necessary to complete them. A year ago, government-run Santee Cooper (which partnered with SCANA on the reactors) pulled the plug on the project – killing an estimated 5,600 jobs in the process.
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[/timed-content-server]The socialization of this $2 billion was accomplished via the notorious Base Load Review Act (BLRA) – legislation advanced by liberal state lawmakers and allowed to become law by former governor Mark Sanford. Santee Cooper also imposed rate hikes on consumers related to the project.
Santee Cooper is now drowning in debt – and has filed suit with the S.C. Supreme Court in an effort to continue raising rates related to the abandoned project.
SCANA? It is hoping to be acquired by Virginia-based Dominion Energy – which has submitted a deal for the company that includes $1.6 billion of ratepayer relief (roughly $1,500 per customer) and gradually reduced energy bills over time.
This agreement was approved by a whopping 98 percent of SCANA shareholders on Tuesday. Those same shareholders also voted to return an estimated $110 million set aside for executive compensation in the event the Dominion deal goes through.
We chided that compensation arrangement in this post earlier this week …
State lawmakers have offered up an alternative plan that would prove significantly less up-front relief but lower rates more drastically – at least on a temporary basis.
That’s the proposal SCANA is suing to block …
Where will the case end up? We’ve got some idea …
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