Politics & Government

SC House votes to give electric co-ops more oversight in wake of The State investigation

A proposal to make South Carolina’s 20 electric cooperatives more transparent to their customers passed the S.C. House Wednesday.

The bill — H. 3145 would allow the state’s utility watchdog, the Office of Regulatory Staff, to audit co-ops for the first time, raising red flags if a co-op is breaking state law or misspending money. It also would require co-ops to post details of their board pay, fringe benefits and other spending on their websites for customers — who jointly own the rural power companies — to see.

The House’s passage of the bill after a 104-6 vote comes 10 months after The State reported that part-time board members of the St. Matthews-based Tri-County Electric Cooperative had enriched themselves with high pay, expensive benefits and inappropriate perks.

The scandal led more than 1,500 Tri-County customers to call a historic meeting and fire the entire board. It also brought new scrutiny to the little known and scantly regulated world of electric co-ops, where part-time boards have enjoyed high pay and expensive perks paid by unwitting customers.

“This is about bringing transparency to the process,” said state Rep. Russell Ott, D-Calhoun, who sponsored the legislation. “In the wake of V.C. Summer, I don’t understand why we would not want to have any utility in this state providing as much transparency to their customers as possible.”

Ott continued: “For a very long time, I was under the assumption that the board at my co-op was doing everything the way they were supposed to be doing. Unfortunately, I think a lot of folks did as well, which is why it was so surprising to people that we represent ... when things were finally brought to light in a way that they should’ve never had to be brought to light.”

The House bill now heads to the Senate, where state Sen. Darrell Jackson, a Democrat who represents some of Tri-County’s customers in lower Richland County, has filed an identical proposal.

Another Democrat who represents Tri-County customers, state Rep. Wendy Brawley of Hopkins, voted against the proposal. She said co-op customers already are equipped to police board misbehavior — as Tri-County customers did last summer — and don’t need additional state oversight.

Ott’s proposal, if it becomes law, also would require co-ops to:

Notify their customer-owners of board meetings 10 days in advance and publish records of their meetings for customers to review. Before last year, that information was rarely available.

Prohibit S.C. co-op board members from filling board vacancies themselves. In the past, co-op boards have filled vacancies with friends and relatives.

Steer co-ops away from self-dealing by barring board members from having a business relationship — such as working as a contractor — with the utility they governor. The proposal also prohibits co-op directors from having the co-op hire their family members.

Make it easier for co-op customers to vote in board elections by holding early voting and requiring polling machines to stay open for at least four hours on voting day.

Prohibit board candidates from campaigning within a certain distance of a co-op’s annual meeting, where elections are held.

Staff writer Maayan Schechter contributed to this story.

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Avery G. Wilks is The State’s senior S.C. State House and politics reporter. He was named the 2018 S.C. Journalist of the Year by the South Carolina Press Association. He grew up in Chester, S.C., and graduated from the University of South Carolina’s top-ranked Honors College in 2015.