Government officials may have botched adequately representing the public as the project to construct two nuclear reactors in Fairfield County spun out of control, leading the partners to abandon the project this summer.
But legislators can take several steps to help customers who have been hurt by the decision and to prevent similar failures in the future.
The now-infamous Base Load Review Act, which made it easier for utilities to hike rates to fund projects, whether they reach completion or not, was initially billed as a ratepayer protection maneuver to fund clean energy.
In retrospect, the project’s failure was a fait accompli, leaving customers with no recourse to recoup the billions they were charged for a project they will never benefit from.
South Carolina Electric and Gas paid for the project partly through a series of nine rate hikes, totaling $1.4 billion.
SCE&G and its partner, state-owned Santee Cooper funneled $9 billion into the project before abandoning it.
Lawmakers should stop shielding utilities and, instead, protect the people they represent by taking these four steps—
Repeal harmful laws that helped the utilities exploit ratepayers, who had no other choice than to use their business if they wanted power.
This is the most likely step for lawmakers to take as they consider the impact of the BLRA or other similar legislation that favors the utilities. Officials are mulling whether to repeal—or adjust—the BLRA as they hold hearings to investigate what led to the project’s failure.
Get the government out of the energy business. The threat of SCE&G’s customers having no recourse to recoup their losses from the utility is bad enough.
Roughly two million power customers receive power directly or indirectly from state-created Santee Cooper, according to its website. The company’s 12-member board is appointed by the governor, screened by the Public Utilities Review Committee, and confirmed by the Senate.
The debate over whether the government should be involved in the retail business at all is worth having.
But officials should acknowledge that the failure of the state-sanctioned monopoly—as opposed to the natural monopoly represented by investor-owned SCANA—poses a threat to the taxpayer, at the very least. SCANA is SCE&G’s parent company.
The non-profit Santee Cooper, as part of its creation, is required to issue fair and just rates.
Because bureaucrats are totally qualified to determine a just rate.
Santee Cooper’s general service rate is 11.97 cents per kilowatt hour in the summer, compared to SCE&G’s rates of 13.09 cents and 13.95 cents, depending on usage.
Avoid potential conflicts and recognize the limits of legislative oversight. SCANA flooded the campaign accounts of lawmakers—the same lawmakers tasked with investigating them—with thousands of dollars since 2008. SCANA also paid more than $1 million to Statehouse lobbyists over the past nine years.
While it would have been difficult for legislative leaders to appoint committee members who didn’t receive any donations from SCANA, the public should be aware of potential conflicts.
Additionally, six senators and representatives are on the 10-member Public Utilities Review Committee, which oversees the Public Service Commission. That commission is tasked with approving—or rejecting—rate hikes by SCE&G. The PSC doesn’t regulate Santee Cooper.
As much as legislators extoll the virtues of legislative oversight (and why wouldn’t they), oversight didn’t protect customers from the nuclear project’s failure.
Break up monopolies. The power grid’s setup lends itself to monopolies. But for officials to best represent constituents, they should investigate avenues to break up monopolies as much as possible.
It seems like an obvious conflict of interest for one utility to produce and distribute energy within a given service area.
Officials should consider opening up the bidding process for companies to compete on the production side.
South Carolina energy customers pay some of the highest rates in the nation. But the Legislature can do a lot to change that. This list is a good place to start.