Columbia, SC — Back in the day, when one needed money to start a business or expand an existing one, people used their own money, got it from investors by issuing stocks or borrowed from the bank. Investors were paid dividends for the use of their money and were vested owners in the company, and banks were paid interest for theirs.
Today, some companies have created a new way to finance growth. It’s “consumer finance,” whereby the company uses its customers’ money to finance expansion.
Here’s how it works with SCE&G: It goes to the “Public” Service Commission and gets a rate hike to begin building a nuclear reactor that won’t produce any power for years.
As building progresses, the utility goes back to the PSC for another rate hike and more money.
During the time SCE&G is using its customers’ money, they get no power from the project, nor do they get any interest for the use of their money. When the project is completed, the ratepayers have financed and paid for the project, but they get no benefit for the use of their money, and unlike other things people pay for, they do not own the reactor. SCE&G, along with its investors, owns the nuclear power plant.
An acquaintance retorted that people who rent or lease don’t own the asset in the end. And that’s true, but at least they get to use it. With SCE&G’s customer-finance plan, the ratepayer gets nothing.