AG Alan Wilson: Law at heart of failed nuclear reactors “constitutionally suspect”

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COLUMBIA, S.C. (WCBD) — South Carolina Attorney General Alan Wilson released an opinion that the law at the heart of the failed nuclear reactors that were being built by SCE&G and Santee Cooper is “constitutionally suspect.” Four state House members requested the opinion on the Base Load Review Act, which lawmakers passed in 2007.

“The Base Load Review Act, which is constitutionally suspect, is unprecedented in South Carolina history,” Attorney General Wilson said. “Our citizens have paid billions of dollars and got absolutely nothing from it but a money pit.”

The more-than-50-page opinion says the state Constitution allows the General Assembly to regulate publicly owned and private utilities “to the extent required by the public interest.” The opinion concludes that, “It cannot be considered to be ‘in the public interest’ to charge ratepayers for capital costs of an unfinished and abandoned plant,” and, “It is not ‘in the public interest’ to increase the power bills of consumers who receive nothing in return.”

Solicitor General Bob Cook wrote the opinion, saying the Base Load Review Act must be presumed to be constitutionally valid and only a court can declare the act, or any part of it, unconstitutional. But the Attorney General’s Office opinion brings up potential constitutional issues that would likely arise if the law were challenged in court.

RELATED: Opinion on the constitutionality of the Base Load Review Act of 2007

State lawmakers passed the Base Load Review Act as a way to allow SCE&G and Santee Cooper to raise rates before the nuclear plants were operating, in an effort to prevent larger rate hikes once they were online. However, the utilities have now abandoned plans to finish the reactors, meaning their customers have paid billions of dollars and gotten nothing in return.

The opinion points out that, under South Carolina law, a power plant must be “used and useful” to recover the cost of building it. However, under the BLRA, “… the utility may still recoup, through rate increases, its capital costs, construction costs and a return on investment for utility investors. Yet, consumers receive nothing in return.” That provision may be seen by a court as an unconstitutional “taking” of property for private use, which violates the U.S. Constitution’s Fifth Amendment protection against private property being taken without due process and a similar provision in the South Carolina Constitution.

The opinion also looked at whether it would be constitutional for state lawmakers to retroactively change the BLRA. The opinion came to the conclusion that if the legislature does act it could do so constitutionally if lawmakers balance consumer and investor interests to avoid creating a “taking” from either side.

The opinion advises members of the General Assembly that they may constitutionally take action to provide relief to ratepayers.

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