In the game of Monopoly, owning the utilities is something of joke. However, as we wait to see where the dust settles with the SCE&G nuclear plant debacle, it would appear that the joke is on us … and it has been for a long time. Whether SCE&G customers will be on the hook for nearly $5 billion that SCE&G has spent on the construction of two South Carolina nuclear plants that will, most likely, never be completed, all hinges on the word “prudent.”

After a series of unfortunate events that included increasing construction costs, delayed completion dates, and the project’s contractor filing bankruptcy, SCE&G wants to scrap the project altogether. It’s easy to look at this scenario and just say, “too bad for them.” The problem is that it’s not too bad for them. It’s too bad for us. Not because we won’t be getting the energy, but because legislation has made it easy for the SCE&G corporation to recover all its money, plus interest from us, the customers.

We all need power and it needs to be reliable, so I can understand removing certain risks. However, what’s maddening is that these “monopolies” are allowed to exist, relatively risk free, and then given even more legal protections here in South Carolina.

You’ve probably noticed that your electric bill has been getting more expensive over the years. That is partially due to the power company increasing rates to recover money on this project more than 20 years before customers would get a single kilowatt of power from it. So far, SCE&G customers have contributed an estimated $1.4 billion to SCE&G to cover costs of these nuclear plants after, at least, nine rate increases. However, the Base Load Review Act (BLRA), another genius move by “our” representatives, makes it easy for SCE&G to not only increase our bills to pay for power we’ll never get, but to charge us for the cost of quitting the project as well. But that is nothing when you realize that it also makes it easy for them to ensure their investors not only get their money back, but a return on their investment. What this means is that we could pay over $10 billion, according to The State, to cover all these costs, including profits for investors.

It is the word “prudent,” though, that could save the customers from bearing the brunt of this nuclear fiasco. According to the BLRA, the power company’s right to our money is based on their prudence in managing the project. Were they cautious and careful? Did they make wise decisions? The whole project was initially approved without an actual assessment. A general cost analysis was used. Costs spiraled out of control. Completion dates continued getting pushed back, but that didn’t alarm SCE&G. They kept getting approval for the increased costs and delays. It wasn’t until legislation tried to hold the contractor to fixed costs that SCE&G rang alarm bells. That’s when the contractor, Westinghouse, filed bankruptcy and SCE&G, as well as Santee Cooper, were left with the responsibility, physical and financial, to complete the project. Santee Cooper dropped out and SCE&G followed suit. However, it wasn’t until Westinghouse left that they did an analysis of the true costs of construction and realized a timetable that was even later. Is this prudent management of such a large-scale project? Construction costs and completion schedules were adjusted into the negative multiple times, but it wasn’t until SCE&G itself was left with the responsibility that the prudence began to make itself known.

However, all is not lost. While SCE&G is using the BLRA to claim a right to recover and profit billions of dollars on a failed project, Scott Elliot says that same Act says SCE&G is not entitled to recover any more money. Elliot, a Utility Law expert out of Columbia says that because SCE&G was so far behind on the project and over budget, they do not have a right to recover that money. Furthermore, the BLRA states that the company had to be prudent in their decision making.

SCE&G has withdrawn its petition to abandon the project to allow legislators time to consider all the facts. However, they intend to refile and request the money. In the end, it is up to the legislators to decide whether SCE&G was “prudent” and if they are entitled to continue charging you and me billions of dollars for power plants that will never be built and to pay profits to investors.

Being simple minded children, we’re taught the glories of capitalism and the free market economy. We’re taught that socialism is evil, in public schools, mind you. Red, white, and blue are God’s colors and the best thing you can be is a responsible tax payer. So why should “consumers” have to pay billions of dollars to cover the losses of SCE&G? If this were any other business, they’d be out of luck. It would just be another bad investment.

But maybe it wouldn’t. After all, we tend to play fast and loose with someone else’s money, while we’re generally more “prudent” with our own. The question is, how would SCE&G have acted if they were not protected by our cash? One thing’s for sure, if nothing changes, an investment in a power plant might be a sure thing.

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