Dive Brief:

• The South Carolina Attorney General's office called the rate hikes of South Carolina Electric & Gas (SCE&G) "unconstitutional," in a filing related to one of several civil lawsuits aimed at the utility's recovery of the sunk cost of the V.C. Summer nuclear expansion, The State reported. Ratepayers have continued getting charged since SCE&G and its state-owned partner Santee Cooper abandoned the nuclear project last year.

• The AG's comments were filed as part of a circuit level case questioning the constitutionality of the Baseload Review Act that plaintiff LeBrian Cleckley brought on behalf of SCE&G ratepayers against the utility and the state. The plaintiffs also seek to recover roughly $333 million that SCE&G billed customers since the project's abandonment, the Post and Courier reports. The AG is representing the state in the case, despite it also being named a defendant in Cleckley's suit. 

• The case could further jeopardize Dominion Energy's bid for SCANA Corp., SCE&G’s parent company. Dominion had warned of abandoning the deal in the event of a rate cut as state lawmakers are pushing through a bill aimed at reducing the amount customers pay for the Summer expansion. 

Dive Insight:

Cleckley recently filed a motion on behalf of himself and other customers asking Circuit Judge John C. Hayes to determine the constitutionality of the Base Load Review Act. The plaintiffs seek to recover roughly $333 million that SCE&G billed customers since the nuclear project was canceled last July. This lawsuit is one of 20 aimed at the utility over the failed nuclear project. 

The AG's response to Cleckley's legal challenge of the BLRA is the latest in the backlash after SCE&G and Santee Cooper abandoned the nuclear expansion in Fairfield County. The project costs were estimated to reach $25 billion, more than double the original projections. Currently, about 18% of ratepayers' bills goes toward Summer construction costs. 

On Monday, SCE&G representative Eric Boomhower told Utility Dive that "the issues related to rates and customer refunds" would be best addressed through the state's Public Service Commission, instead of litigation and legislation.

The South Carolina AG had issued an opinion last fall calling the 2007 Base Load Review Act "constitutionally suspect," regarding its application to the Summer expansion. Dominion has threatened to pull out of its proposed $7.9 billion merger with SCANA Corp. should state officials and lawmakers cut the rates. The Virginia utility instead offered up a plan that would include absorbing some of the costs

 SCE&G would continue collecting $3.8 billion from customers over the next two decades under Dominion's plan, according to The Post and Courier. Dominion's plan would include a 7% rate cut, cash payments of $1,000 and absorb $1.7 billion of costs related to Summer. 

Dominion released an analysis of its SCANA deal last week, showing an $18.7 billion boost to the state’s economy. The release was scheduled ahead of a state Senate vote on a bill proposing a 13% rate cut. The House favored deeper cuts, which could have forced SCE&G into bankruptcy.