Officials from the South Carolina Office of Regulatory Staff will conduct a review of the Base Load Review Act, the legal mechanism which allowed South Carolina Electric & Gas (SCE&G) to increase rate-payers bills by 27.7% through a series of annual rate increases to collect funds to pay for the construction of two new nuclear reactors at the V.C. Summer nuclear power plant. The construction of the new reactors has been continually hindered by cost overruns and construction delays and is currently at least three years behind the original construction schedule.
The review will consider whether the Base Load Review Act is the best method for utilities to collect funds for large projects like the construction of nuclear power plants. The Base Load Review Act allows utilities to charge ratepayers for certain costs while the project is under construction, as opposed to the utilities using their own resources or loans to pay for construction costs and recovering fees from consumers only after the facility is producing power.
As a part of the review, the Office of Regulatory Staff will compare the costs of building the new nuclear reactors under the Base Load Review Act against the costs of building them under traditional financing methods. When completed the review will be presented to the Public Service Commission, but no timetable for its completion has been released yet.
Consumers and organizations like the AARP and the South Carolina Small Business Chamber of Commerce have been calling for a review saying that the rate increases are putting an unfair burden on rate payers with the greatest impacts being on the low-income families and the elderly. Critics of the Base Load Review Act say that it shifts the risk for the project onto consumers, who are forced to pay for a facility even if it never is put into operation.
SCE&G says that pay-as-you-go financing will lower the cost of building the reactors by $1 billion USD.