For first time since 2004, SC could hire advocate to fight utility rate hikes

Two proposals aimed at strengthening South Carolina's utility watchdogs after the state's $9 billion nuclear construction fiasco are headed to the state Senate floor, where they will need just one more vote to become law.

But the bills, passed months ago by the S.C. House before stalling in the Senate, could fall victim to the legislative calendar, which has just five business days left in this year's session.

A Democratic filibuster of a proposed "dismemberment" abortion ban up for debate in the Senate could take up the rest of the session, killing bills that still need to pass the General Assembly's upper chamber to become law.

If passed, the proposals would give S.C. utility customers an attorney fighting only for them in rate-hike cases for the first time since 2004. Legislators abolished the office of "consumer advocate" in 2004 as part of a utility reform bill.

However, lawmakers now want to bring back the consumer advocate after Cayce-based SCE&G won nine rate hikes in less than a decade from the S.C. Public Service Commission to bankroll the now-abandoned V.C. Summer nuclear expansion project.

SCE&G and the state-owned Santee Cooper utility quit that project last July after years of construction delays and cost overruns. SCE&G's 700,000 electric customers have paid more than $2 billion in higher power bills for the project. The typical SCE&G household continues to pay about $27 a month for the useless reactors.

The Senate Judiciary Committee also voted Tuesday to toughen oversight of utilities by the Office of Regulatory Staff by removing the requirement that the agency protect utilities' finances. Senators also voted to give the agency subpoena power to demand documents from utilities.

In the months after the nuclear project's abandonment, Regulatory Staff officials told lawmakers the agency sometimes was conflicted by its dual mission of looking out for both S.C. power customers and the utilities that want to charge them more.

S.C. legislators also have been concerned Regulatory Staff did not have access to important information and utility documents needed to brief the Public Service Commission before it decided rate-hike cases. That includes the February 2016 Bechtel Corp. report, an outside study that diagnosed critical problems with the V.C. Summer project more than a year before its abandonment. That study was withheld from regulators by SCE&G.

Legislators also want to ensure Regulatory Staff can get information from SCE&G, Bechtel and the project's lead contractor, Westinghouse, before the Public Service Commission decides later this year who must pay off the failed nuclear project's remaining debt, totaling billions of dollars.

“ORS can’t issue a subpoena. They can’t get stuff other than what SCE&G wants to voluntarily give up,” said Senate Majority Leader Shane Massey, R-Edgefield. “We’ve got to give ORS more teeth.”

Lawmakers also are seeking to give the PSC, which sets utility rates, more input on how to make its decision on who — SCE&G's customers, its shareholders or both — should pay for the abandoned project.

The Senate committee Tuesday passed a proposal defining the terms "prudence" and "imprudence" for the PSC. If passed, the commission's members will use those definitions to evaluate SCE&G management of the nuclear project. Those words are not defined in the 2007 state law that enabled the project, though the PSC frequently had to rule on whether SCE&G's costs and actions in connection with the project were prudent.

The S.C. House narrowly tailored new definitions in its proposal to include examples that fit SCE&G's actions in managing the nuclear project and withholding the Bechtel report from state regulators.

But, after debate, the Senate dropped those examples because of concerns SCE&G's attorneys could challenge the new law as explicitly instructing the PSC to rule against the utility in the upcoming rate case.

"If you’ve done the wrong, you can’t then benefit from the outcome," said state Sen. Stephen Goldfinch, R-Georgetown, who argued in favor of leaving the House's examples in the definitions. "Tell me how we’re inconsistent here.”

Massey replied SCE&G lawyers could argue lawmakers are stacking the deck against the utility.

“You give them a definition of imprudence and, then, let them make a decision," Massey said. "Let them make a finding.”

This story was originally published May 1, 2018 at 2:02 PM with the headline "For first time since 2004, SC could hire advocate to fight utility rate hikes."