In 2007 the S.C. Legislature passed the Base Load Review Act (BLRA) to guarantee that a utility building a new power plant can hike electrical rates for its customers every year to pay for the construction financing costs of the project. As written, once the South Carolina Public Service Commission approves the project the utility can request an increase in allowable costs annually and be virtually guaranteed approval by the PSC. Additional costs result in higher annual rate increases.
In 2009, Public Service Commission approved a budget for SCE&G to build two nuclear plants in Fairfield County with its partner, Santee Cooper. SCE&G would own 55% of the capital project and Santee Cooper, the state-owned power company, would own 45%.
Since 2009 SCE&G has been approved under the BLRA to increase the costs to build the nuclear plants far above the original budget. The utility has also raised rates under the BLRA 7 times since 2009 for a total of a nearly 17% increase. Today SCE&G customers have paid an additional $1.1 billion under the BLRA. This is in addition to the 17% increase in rates approved since 2009 for SCE&G’s current electricity generation. The completion of the nuclear plants has been delayed by three years and they are now projected to go online in 2020.
SCE&G has now filed with the Public Service Commission to raise rates again by 3.06% and also to add $846.6 million to the construction costs. This increase in costs is largely due to the utility asking for approval of a “fixed-price option” and would result in the project being 43% over the original budget.
The BLRA has turned into a blank check for the utility all paid for by the SCE&G, Santee Cooper and Electric Co-Operative customers.