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 and eventually must be paid for by the ratepayers.
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 two nuclear plants far above the original budget. The utility has also raised rates under the BLRA 9 times since 2009 for a total of a nearly 20% increase. By the summer of 2017 SCE&G customers had paid an additional $1.4 billion under the BLRA according to the Office of Regulatory Staff. This is in addition to the 17% increase in rates approved since 2009 for SCE&G’s current electricity generation.
Santee Cooper customers have seen 5 rate hikes since 2009 but because the utility is a state agency it is not required to provide details as to how much of these rate increases was due to the nuclear plants construction.
The construction at the two nuclear plants at the V.C. Summer Nuclear Plant has now been abandoned.
The BLRA turned into a blank check for the utility all paid for by the SCE&G, Santee Cooper and Electric Co-Operative customers. The Act provides that all construction costs and rate hikes under BLRA include a very generous Return on Equity (profit) to the utility thus creating an incentive to a private utility to go over budget in order to make more money.