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.
This story was originally published March 20, 2019 at 12:20 PM.
