Santee Cooper has far less outside review than others

November 19, 2008 

REQUEST DENIED. Like public schools, electric utilities try to build now for the growth to come. And building big now can be cheaper than building small and expanding later.

But, sometimes, a regulatory board will reject expansion plans as unnecessary or too expensive for ratepayers.

In North Carolina last year, Duke Energy asked the state utilities commission for permission to build two large coal-fired plants. But the commission ruled Duke failed to show it needed two units. It allowed only one.

SANTEE COOPER DIFFERENT. Santee Cooper is subject to an array of pollution and wetlands regulations.

But unlike Duke, SCE&G or Progress Energy — all investor-owned utilities — Santee Cooper avoids justifying to outsiders a need for a new plant. That’s because the law exempts Santee Cooper, a state agency, from that kind of oversight. Only its own board members may weigh in.

That means Santee Cooper escapes the scrutiny of the state utility watchdog, the Office of Regulatory Staff. The 66-person state agency has engineers, lawyers and accountants who investigate an investor-owned utility’s claims that it needs a new plant. It also examines a proposed plant’s effect on the environment.

“We do all that to see if a plant is really needed,” said Office of Regulatory Staff executive director Dukes Scott. The office reports to the Public Service Commission, which decides whether new plants can be built and approves rate increases.

• More scrutiny good for environment and customers, some say

But chairman says Santee Cooper’s board is aggressive enough

NEED. Santee Cooper says its proposed coal plant could begin operating as early as 2013. The nuclear plant it has proposed for north of Columbia, to be co-owned with SCE&G, would go on line in 2017 at the earliest. The coal plant would bridge the gap, Santee Cooper said.

OVERSIGHT. O.L. Thompson of Mount Pleasant, chairman of Santee Cooper’s board of directors, said his 11-person board thoroughly vets staff members’ expansion proposals.

And, he said, unlike boards of investor-owned utilities, Santee Cooper’s has no personal stake in growth. Members are nominated by the governor and confirmed by the Senate. The chairman is paid $24,000 a year; board members make $10,000 a year. They all also get up to $2,000 a year for attending meetings plus a travel stipend.

John Crangle, president of the taxpayer watchdog group Common Cause/South Carolina, said “checks and balances” are missing in Santee Cooper’s quest for a coal-fired plant. “Why not give the Public Service Commission the same jurisdiction over Santee Cooper it has with Duke and the others?”

But Thompson said, for Santee Cooper, the Public Service Commission just would add “another level of bureaucracy.”

Absent any independent vetting, environmentalists are filling the void. For $100,000, the S.C. Coastal Conservation League has hired a consulting firm to check the data behind Santee Cooper’s claims.

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