Lawmakers tasked with investigating what led two utilities to abandon two Jenkinsville nuclear reactors in July need to be held accountable for accomplishing the most important part of their job—protecting ratepayers.
A Senate panel again met Wednesday to investigate the failure, this time hearing from the Office of Regulatory Staff, which is responsible for representing public interests before other regulatory agencies.
Created in 2004, the agency has no rate-setting authority.
A similar House panel will meet twice next week.
And they should. As legislators make decisions to minimize the impact on their constituents, they need to understand the system that enabled this failure.
But after eight similar hearings between lawmakers, and the utilities and regulators, it’s unclear whether officials have any viable solutions to the problem that left ratepayers holding part of the bill for a project they’ll never benefit from.
At issue is a 2007 law that made it easier for utilities, like state-owned Santee Cooper and South Carolina Electric and Gas, to finance projects through rate hikes, whether they finish those projects or not.
The Office of Regulatory Staff, The Public Service Commission, the 2007 Base Load Review Act—all these are components of a system to regulate and, apparently, facilitate utilities’ rate hikes. Lawmakers helped build that system.
Ratepayers already have shelled out roughly $2 billion in rate hikes for the project.
To their credit, lawmakers have decried this wrong. But saying it’s wrong for ratepayers to fund the failed project, and stopping the injustice are two distinct things.
Railing against the utilities, who were enabled by law to do business in this way, isn’t going to retrieve billions of dollars in customer losses. Plus, it’s debatable whether officials can undo the damage already done to customers.
Repealing the BLRA would be a good first step to protecting customers going forward. But it would only be a step.
Peeling back some of those layers of bureaucracy—like oversight agencies—that failed as a safety net for ratepayers would be another step.
How many millions of dollars in recurring funds is reasonable to pay to agencies, which are charged with protecting customers, when they fail in, or are unequipped to complete their mission?
But even this failure doesn’t indict the regulators. It indicts a bad law that put the burden of proof on outside parties to show the utilities’ rate requests, spending, or decisions are imprudent.
As Sen. Shane Massey, R-Edgefield, put it Wednesday, customers never had a chance. The law was designed to attract investment and minimize utilities’ risk.
Massey was not in office when the law passed.
But repealing the BLRA—and it should be repealed—isn’t enough to protect ratepayers.
Policy makers also have an opportunity to change South Carolina’s status as having among the highest energy rates in the Southeast.
Twenty-nine states and the District of Columbia have deregulated energy markets—either gas, electric, or both. South Carolina isn’t one of them.
Sixteen of those states with deregulated markets have lower average rates than South Carolina.
Regulators say many of the state’s utilities’ rates are competitive, and SCE&G’s rates skew the ranking.
Breaking up monopolies by letting customers shop for energy might not solve all our problems, but it’s a start. As an SCE&G customer, I’d be happy right now to shop just about anywhere else.
Source: Electric Choice