We have known for over a year that the SC Senate would not agree to sell Santee Cooper. And there have been serious doubts about whether the friends of the state concessionaire in the upper house would allow a reform measure to pass, despite the disaster that was Santee Cooper’s nuclear escape with the now defunct SCE & G.
Reform may still die on the Senate calendar, but, finally, we have at least one reform measure ready for debate. And it has the support of Santee Cooper and its biggest customer, the electric energy cooperatives.
The cooperatives are closed on a contract to buy energy from Santee Cooper until 2058 and cannot leave unless the concessionaire is sold, so the fact that they are happy with the deal suggests that the changes are significant.
As attorney John Frick told the Senate Judiciary Committee on Tuesday, S.464 includes four reforms that cooperatives deemed essential: some degree of regulatory oversight by Santee Cooper; routine legislative oversight; a requirement that the concessionaire take into account the interests of customers, and not just its own financial integrity and economic development; and two ex officio seats for cooperative employees on the board, to ensure that the Santee Cooper board hears their views on fees and other matters.
As much progress as these changes represent, they are far from perfect. Although state regulators had to approve Santee Cooper’s long-term construction and energy plans and commented on the rate proposals, and customers could appeal the rate increases to the state Supreme Court, Santee Cooper’s board would still set the company’s tariffs. dealership. In other words, Santee Cooper would continue to act largely as an unregulated monopoly.
Lawmakers say Santee Cooper’s open bond clauses make it financially impossible to subject them to the fee revision by the Public Service Commission, and they are probably right. But they could – and should – prohibit the concessionaire from issuing more bonds with these restrictions, so that the PSC could regulate its fees as soon as the old bonds are paid. Unfortunately, neither S.464 nor a reform measure passed by the House, H.3194, would do that.
And at the risk of sounding like a broken record, the package also lacks the most important overhaul: the Santee Cooper board would remain almost completely autonomous.
The bill allows the governor to dismiss a board member, in the absence of strict normal requirements, if a legislative committee recommends that the member be removed “with just cause”. But it is worth remembering that the Public Utility Review Committee looked the other way while Santee Cooper and SCE & G continued to throw money at the VC Summer nuclear construction disaster.
And in the absence of an almost unanimous recommendation from the committee, the governor could not yet fire members of Santee Cooper’s board of directors before the end of their terms, unless they refused to attend meetings or committed impropriety, impropriety or other actions that could subject them to criminal prosecution under the state’s excessively wide misconduct in the law of the office. They still couldn’t be removed simply because they made hideous decisions that left taxpayers at risk for $ 4 billion for a pair of unfinished nuclear reactors that will never produce a single watt of electricity.
It is difficult to overstate the need to expand the governor’s authority: if Santee Cooper’s board members had known that the governor could fire them, they would almost certainly have warned their boss when things started to get worse in the summer of VC – and the governor it could have alerted the public Service Commission, so it could have stopped stamping SCE & G’s rate hikes until the dealership disconnected the plug or started exercising more supervision to get the project out of control back on track.
And yes, the other reforms in S.464 can provide the same type of protection. It could. But why shouldn’t lawmakers make the changes that will almost certainly protect us? After all, governors have had authority for decades to remove members of the Santee Cooper board for any or no cause, without any detrimental effect. Legislators only removed that power in 2005, for reasons that had little to do with preserving Santee Cooper’s integrity and almost everything to do with his animosity towards the then governor. Mark Sanford.
And based on what has happened in the two years since the Senate has refused to confirm Charlie Condon to chair the Santee Cooper board – Governor Henry McMaster hasn’t even tried to nominate anyone, so a board member he wouldn’t have chosen has taken the job. – We know that the Senate already has the tools to prevent a governor from exercising uncontrolled control over the concessionaire.
One of the mantras of those who want to sell the Santee Cooper is that the utility cannot be reformed. This is a case where they are absolutely right. But the Legislature certainly can.
S.464 is a good start and, with a few tweaks, you can turn Santee Cooper into a utility that will serve your customers and our state well – unless or until someone comes up with a good plan (NextEra is anything but) to take you out. taxpayers’ hands.
