Post and Courier, BY TERESA ARNOLD May 29 2016 Did you know that South Carolina law allows utility companies to charge consumers more for cost overruns on big projects like building a nuclear power plant?
It sounds shocking, but the Office of Regulatory Staff (ORS) just published a report showing that SCE&G’s V.C. Summer project has cost $1.5 billion more than originally estimated.
And guess who is footing the bill? South Carolina consumers, many of whom live on modest incomes and cannot afford these additional costs.
AARP South Carolina continues to raise concerns about the cost overruns that have resulted during the current SCE&G capital improvement projects. The most serious questions we raised about the state regulations that allow SCE&G to charge consumers for cost overruns remain unanswered.
AARP South Carolina asked the Office of Regulatory Services to answer the following questions:
1) Is there less incentive for a utility like SCE&G, operating under current state law, to prevent “risk shifting,” since the monetary risk or cost overruns are being borne by consumers, rather than the traditional method that expects the utility to bear that risk? The analysis ORS commissioned does not answer this question.
2) ORS has acknowledged that the current state law governing utility capital improvements, in this case — V.C. Summer nuclear plants — prevents refunds or rebates to the consumer, if a project goes bad. But are there any actions that ORS could take under the law to ensure that cost overruns are not borne by captive consumers? Or does state law prevent ORS from taking action to protect consumers from cost overruns?
3) Is there any other provision in current law that would allow SCE&G to provide voluntary rebates or future rate increase offsets to consumers?……….http://www.postandcourier.com/20160529/160529294/consumers-keep-footing-the-bill-for-nuclear-project
