PERHAPS YOU heard that on Tuesday, in its first effort to right the wrongs that birthed the V.C. Summer nuclear debacle, the House voted to put the attorney general in charge of protecting the public against regulated utilities and bar him from accepting campaign donations from those utilities.
And that the next day, representatives voted to extend that prohibition to the legislators who serve on a reconstituted Utility Oversight Committee.
What you might not have heard is that the House went much further.
It also barred oversight committee members, the attorney general and everyone on his staff from accepting “lodging, transportation, entertainment, food, meals, beverages, money, or anything of value” from regulated utilities. That’s the state’s no-cup-of-coffee rule, which currently bans gifts from lobbyists to legislators.
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Perhaps most significantly, representatives voted to prohibit members of the oversight committee from having “a business relationship with or receiv(ing) any form of income or compensation from a public utility, an affiliate of a public utility, an association representing a public utility, or other person or entity whose business is regulated, whether wholly or in part, by the Office of Regulatory Staff or the Public Service Commission.”
S.839 would ban all donations from regulated utilities, although not gifts or income
The thinking behind all of those restrictions is similar, and sound. And in a state where not that long ago it was routine for the largest utilities to keep all the top lawyer-legislators on retainer — which is to say they sent those legislators regular checks but didn’t ask them to do any work — they are revolutionary.
They also are deeply flawed, in a way that would almost certainly backfire, and give utilities even more influence over their regulators than they have today. And even if they weren’t flawed, they’d be insufficient.
Let’s start with the “sound” part.
H.4379 creates the new position of utility consumer advocate, who will represent the public interest, and only the public interest, in utility rate cases — which has not been anyone’s job since the Legislature abolished a similar position in 2004. This person will work for the attorney general, and House members want to make sure the consumer advocate isn’t compromised by a boss who feels beholden to those utilities.
H.4378 reconstitutes an oversight committee that holds life-or-death influence over the members of the Public Service Commission, which holds nearly life-or-death influence over regulated utilities. We can question whether legislators should serve on this committee — and we will, in a future column — but if they do, the House is right to try to prevent them from becoming beholden to the utilities.
We know that regulated utilities have targeted their donations to members of the current Utilities Review Committee, contributing nearly $300,000 to their campaigns since 2005. We have no idea how much income committee members have received from the utilities, because lawmakers didn’t have to report most of their business relationships until last year. I’m told reliably that one senator was on the House floor on Wednesday trying to convince House members not to approve the income restriction, which sort of illustrates its need.
Now, the proposals’ deep flaws: Under the House bills, the attorney general can’t accept campaign donations from regulated utilities. But anyone running against him can. Ditto the legislators on the oversight committee. Which makes it all too easy to imagine members of the oversight committee doing the utilities’ bidding out of fear that otherwise, the utilities will bankroll candidates to run against them. Or the attorney general leaning on the consumer advocate to advocate a little less strenuously for consumers.
It would be easy to fix the problem with the attorney general, simply by extending the bans to all candidates for attorney general. But extending the bans to legislative challengers is trickier: What if a legislator served on the committee for several years, but recently resigned, or vice versa? And if the purpose of the restriction is to keep oversight committee members from being influenced, what’s the justification for extending it to their challengers, who as newcomers wouldn’t be appointed to the committee?
Of course, there’s an even easier solution to this problem, which also solves the “insufficient” problem: Extend the bans to all legislators. And all legislative candidates.
The reason we have ethics laws — restricting the size of campaign donations and requiring that they be reported, prohibiting legislators from accepting gifts from lobbyists and requiring them to report gifts from others and now their sources of income — is to reduce the risk that legislators will put their own personal interests ahead of the interests of the public. The need to protect the public is greatest in the case of monopolies: where the state — which in South Carolina means the Legislature — quite literally decides who we have to purchase services from and how much we have to pay for those services.
The very same logic that justifies banning employment, campaign donations and personal gifts to the attorney general and members of the oversight committee applies to the legislators who elect the members of the Public Service Commission. And write the laws — such as the Base Load Review Act — that determine how much money regulated monopolies can make. The legislators who, for that matter, wrote the laws that gave utilities a monopoly. And have the ability to take away that monopoly status. Or not.
Here are some other pieces I’ve written about this that you might find helpful:
Ms. Scoppe writes editorials and columns for The State. Reach her at firstname.lastname@example.org or (803) 771-8571 or follow her on Twitter or like her on Facebook @CindiScoppe.