South Carolina’s 20 electric cooperatives are under pressure.
A handful of state lawmakers say the rural power companies, who supply electricity to 1.5 million South Carolinians, need more scrutiny after The State revealed last month that co-ops’ leaders have enjoyed high pay and expensive perks paid for by their largely unwitting customers.
Some of those lawmakers, citing abuses by the recently ousted board of Tri-County Electric in St. Matthews, say it is time for new laws requiring more openness and accountability at co-ops — where some directors have remained in power for decades.
After the Tri-County scandal, S.C. co-ops are open to that kind of change, according to their statewide trade group.
“We need to look at legislation that is going to dig deeper into that process,” state Rep. Gary Clary, R-Pickens, told The State. “It cries for some sort of regulation. We see a desperate need for more transparency and clarity for the members of the co-ops because there’s just a lack of worthwhile information that is provided to the members.”
The new attention to South Carolina’s little-known co-ops comes after The State revealed in May that one co-op, Tri-County, had paid its part-time directors about $52,000 a year, including health and life insurance plans, and $450-a-day payments for attending an unusually high number of meetings.
South Carolina electric co-ops operate with little regulation and scrutiny from their customer-owners, who face obstacles to attending board meetings, learning what their co-op’s directors are doing or running for board seats.
Statewide, co-ops pay their directors more than double the national average, spend about $120,000 a year each to send those board members to conferences across the country and have given board members insurance and retirement benefits that have been called into question in recent years.
State Rep. Russell Ott, who represents parts of Tri-County’s service area, says much of that spending stems from a lack of transparency.
The Calhoun Democrat, who has met with co-op leaders, has pledged to propose a new state law in the S.C. House that would require all co-op boards to post online their board meeting agendas and minutes; publish online all board pay, including mileage, travel and per diem; and make it easier for co-op customers to vote at annual elections.
State Sen. Marlon Kimpson, D-Charleston, told The State he likely will file a similar bill in the Senate, giving the proposal a better chance of passing.
“This is just another example of abuse and misuse in positions of power,” Kimpson said. “You can’t have too much transparency in these types of organizations.”
‘A lot of co-ops are ... doing a great job’
Not every legislator is so gung ho.
State Rep. Roger Kirby, a Florence Democrat who gets his electricity from the Santee Electric co-op, said he does not want the Legislature to penalize all 20 co-ops for the abuses of a few.
“A lot of our co-ops are actually doing a great job for our customers and doing a great job, period, with what they’ve got to work with,” Kirby said. “I would hate to see us make knee-jerk legislation because of a couple of bad decisions. I would be of a camp of walking that more slowly.”
Over the past two weeks, Mike Couick, chief executive of the Electric Cooperatives of South Carolina association for the state’s co-ops, said he has traveled the state talking to co-op leaders about how they can improve their operations.
“Media reports have increased their level of awareness of deficiencies, and where there have been extensive media reports of problems, those folks are more aware of the challenges,” he said.
Couick expects the co-ops to adopt a series of changes at their annual meetings next spring.
“Everything is being reviewed as it relates to issues raised by the Tri-County reporting — anything that’s been raised by Rep. Ott and his legislation, and his multi-hour meeting with the cooperatives in early July. ... I’ve yet to meet with the cooperative that’s not interested in being part of the solution rather than being part of the problem.”
‘We need to be taking care of the people’
In the meantime, co-ops will face questions from lawmakers.
On Sept. 19, co-op officials are scheduled to testify before a panel of lawmakers studying whether to sell the state-owned Santee Cooper utility, which supplies power to the co-ops. The co-ops should expect questions about their director pay and transparency, according to one of that committee’s co-chairmen, state Rep. Murrell Smith, R-Sumter.
“My preference is that it gets corrected internally within the individual co-op,” Smith said. “But sometimes that doesn’t necessarily occur, and there have to be legislative solutions.”
House Legislative Oversight Committee chairman Rep. Weston Newton, R-Beaufort, suggested lawmakers look into whether the co-ops’ rates be regulated by the Public Service Commission, which supervises investor-owned utilities.
Rep. Clary said customers need easy access to their co-op’s meeting notes and financial information. He also wants to delve into whether co-op board members should be allowed to earn perks, including insurance benefits, in addition to their regular per-diem pay.
Regardless, he said, lawmakers should protect co-op customers with the same zeal as they used to protect SCE&G customers who have been made to pay for the failed, $9 billion V.C. Summer nuclear expansion project.
“Let’s just make sure they are protected,” Clary said. “Last year, we took the steps to protect SCANA customers. This coming year, it’s our obligation to do the same for co-ops as well as Santee Cooper customers.
“At the end of the day, we need to be taking care of the people of South Carolina rather than executives and board members.”