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Utilities want a new gas plant. Some worry SC bill could leave customers paying for another fiasco.

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Utilities want a new gas plant. Some worry SC bill could leave customers paying for another fiasco.

Feb 28, 2024 | 10:22 am ET
By Jessica Holdman
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Utilities want a new gas plant. Some worry SC bill could leave customers paying for another fiasco.
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Rep. Rep. Jay West, R-Belton, center, and Rep. Bart Blackwell, R-Aiken, right, during a legislative hearing Tuesday, Feb. 27, 2024, on a bill aimed at expanding power generation in the state. Opponents say the legislation could inadvertently roll back consumer safety measures enacted following the 2017 failure of a $9 billion nuclear project in the state. (Jessica Holdman/SC Daily Gazette)

COLUMBIA — Opponents of legislation paving the way for a new power plant in South Carolina argue it’s eerily similar to a law rushed through the Legislature 17 years ago that ultimately left utility customers on the hook for billions of dollars they continue to pay for an abandoned nuclear power project.

Advocates say the comparisons are invalid. And utility executives promise the new project won’t skirt regulations.

Dominion Energy and state-owned utility company Santee Cooper are seeking permission to partner on a possible 2,000-megawatt natural gas plant on the site of a former coal-fired power plant along the Edisto River in Colleton County. They argue the plant is necessary to meet the power needs of South Carolina’s growing population, as well as major manufacturers the state continues to attract.

Opponents note those are the same arguments that led to the now-notorious Base Load Review Act.

That 2007 law, enacted with little opposition or debate just two months after it was filed, allowed utilities to charge customers upfront through their monthly bills and recoup money even if a project is never finished. And that’s precisely what happened at the V.C. Summer nuclear plant in Fairfield County.

When Santee Cooper and Dominion’s predecessor, South Carolina Electric & Gas, abandoned the plant’s expansion in 2017, they’d already jointly spent $9 billion.

Arguing they don’t want a repeat, environmental groups and utility customers converged Tuesday at the Statehouse wearing stickers that read “no blank check.”

They contend the 70-page bill sponsored by House Speaker Murrell Smith, R-Sumter, does far more than authorize the two utilities to cooperate. They point to loopholes that allow the utilities to potentially skirt regulatory review as well as roll back of some of the protections that legislators enacted in the aftermath of the V.C. Summer fiasco. And they worry legislators’ vocal support for the gas plant will prompt utility regulators, who are elected by the Legislature, to rubber stamp the project.

Utilities want a new gas plant. Some worry SC bill could leave customers paying for another fiasco.
Dominion Energy South Carolina President Keeler Kissam, left, and Santee Cooper CEO Jimmy Staton, right, testify during a hearing Tuesday, Feb. 27, 2024 at the Statehouse, seeking authorization to partner on a possible 2,000-megawatt natural gas plant in Colleton County. (Jessica Holdman/SC Daily Gazette)

It was the failed nuclear project that brought Virginia-headquartered Dominion Energy to South Carolina after SCANA, SCE&G’s parent company, spiraled into bankruptcy. Dominion Energy bought what was the only Fortune 500 company based in South Carolina, but the deal left SCE&G customers continuing to pay more than $2 billion over 20 years.

It wasn’t until after that project went belly up — leaving South Carolinians furious over what they’d already spent and would continue to spend for a project they’d never benefit from — that legislators dug into the Base Load Review Act to diagnose what went wrong in hindsight.

That law shifted risk for the massive nuclear expansion — the first of its kind and the first new nuclear construction in the country in 40 years — from the utilities to their more than 1.7 million customers.

It then made it more difficult for customers to fight off rate increases related to the nuclear project, which the utilities requested from regulators at the state Public Service Commission. And the requests were repeatedly and routinely approved.

The law also gave the project a shortcut around regulatory review.

Lessons learned

Utilities want a new gas plant. Some worry SC bill could leave customers paying for another fiasco.
Rep. Russell Ott, D-St. Matthews, questions state utility executives during a hearing Tuesday, Feb. 27, 2024 at the Statehouse, over extra provisions in a bill authorizing partnership on a possible 2,000-megawatt natural gas plant in Colleton County. (Jessica Holdman/SC Daily Gazette)

“What I am concerned about is removing processes that have been put in place in the wake of things like V.C. Summer, that people on this committee specifically put in place so that we don’t ever have a situation where we move too quickly,” Rep. Russell Ott said to utility executives at Tuesday’s hearing on the new piece of legislation authorizing Santee Cooper and Dominion to partner on a new project.

“I’m not interested in simply putting that to the side for this facility,” the St. Matthews Democrat added.

Rep. Jay West, R-Belton, who is co-sponsor of the bill and chaired Tuesday’s hearing, denied the comparison.

There is nothing explicit in this latest legislation that fast-tracks the new proposed gas plant nor does it allow the utilities to collect money upfront to pay for it. Utility executives also swore that is not their intention, and the plant would undergo full regulatory review and permitting.

Keller Kissam, the president of Dominion Energy South Carolina who was with SCANA before the nuclear debacle and subsequent buyout, told lawmakers the utility doesn’t want a repeat either.

After “what our employees have been through and losing their company and now being owned by an out-of-state utility,” hard lessons were learned, he said.

But opponents worry there’s a crack. They say utilities could exploit a broad definition included in the bill to short-circuit the public review process.

The legislation inserts extra language about “like facilities.” The concept has historically applied to replacing power generators that are being shut down, allowing installation of a new model without going back through months of stringent regulatory review. The latest additions grant that status to replacement power sources even if they don’t rely on the same type of fuel.

Because the proposed Colleton County gas plant would be replacing a coal plant, environmental and consumer groups worry it could go through without being certified through the Public Service Commission, the regulating agency, despite needing upgrades to at least 100 miles of natural gas pipelines that feed the site. Without that review, opponents say, the public may never learn the full cost of the project, estimated to be in the billions, that could then show up on their power bills.

“Help me understand why we need that language in this bill,” Ott said. “I just want to make sure that we all are on the same page. Is that not necessarily a way around what the PSC is currently doing?”

Signals of support

Utility executives told lawmakers they understand the worry and are working to narrow that definition. Leaders at Duke Energy also pointed to language in the bill explicitly encouraging the companies to go to the regulatory agency and apply for a certificate as proof of their intention.

But opponents argue those same “signals” of support from lawmakers would serve to essentially direct the agency’s board to approve the project without question, as well as signing off on rate hikes to pay for it.

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When deciding whether to allow utilities to charge customers more on their power bills, the board could “point to the law and say, well, the law says this plant is in the public interest by definition, so everybody’s got to pay for it,” said Eddy Moore, the Coastal Conservation League’s energy and climate program director said.

The House panel will meet again Thursday to take further testimony.

The bill will almost certainly pass the House, since it’s backed by House leadership.

What happens in the Senate, however, is uncertain. Senate rules make it easier for opponents to block legislation in the chamber that prides itself as being the “deliberative body.”