SCE&G proposes $4.8 Billion solution to replace new nuclear project
Cayce, SC - South Carolina Electric & Gas Company (SCE&G), principal subsidiary of SCANA Corporation (SCANA) (NYSE:SCG), has proposed a comprehensive solution to outstanding issues regarding the abandoned V.C. Summer Station nuclear construction project, by significantly reducing costs for customers while simultaneously expanding energy production.
The proposal provides approximately $4.8 billion in benefits to SCE&G customers, and includes the following:
1. A rollback of residential electric rates to where they would have been in March 2015, resulting in an immediate annual reduction to rates by approximately $90 million, or 3.5% (the monthly bill of a customer using 1,000 kilowatt hours of electricity would decrease more than $5).
2. SCANA’s shareholders will absorb the net nuclear construction costs through lower earnings over 50 years.
3. The addition of a 540-megawatt, natural-gas-fired power plant to SCE&G’s system, replacing more than 40 percent of the projected power that was to be provided to SCE&G from the V.C. Summer nuclear construction project. (Acquisition cost to be borne by SCANA shareholders.)
4. The addition of approximately 100 megawatts of large-scale solar energy to SCE&G’s system (an approximate 50-percent increase in non-rooftop solar capacity).
“We’ve heard our customers’ frustrations about paying for a power plant and having nothing to show for it. This proposal gives customers additional power generation while also lowering rates for customers,” said Keller Kissam, who is currently SCE&G’s President of Retail Operations and will become its President and Chief Operating Officer Jan. 1, 2018.
“We hope interested parties will endorse the proposal so that we can obtain approval from the Public Service Commission and get this relief to customers,” said Jimmy Addison, who is currently SCANA’s Chief Financial Officer and will become its Chief Executive Officer Jan. 1, 2018. “Current projections indicate that if this proposal is adopted, we would not need an additional generation source for several years. This is a key step to meeting South Carolina’s robust economic growth.”
Approximate benefit to customers $2.9 billion Reduced shareholder earnings over 50 years as they absorb nuclear construction amortization costs. $810 million Company write-off (includes $210 million impairment charge from third quarter of 2017). $680 million Additional generation (includes purchase price of $180 million & foregoing of shareholder return over the life of the plant). $450 million Five-year benefit of immediate 3.5% reduction to customer rates. $4.84 billion TOTAL BENEFIT