Monopolies belong in the 19th century

One does not have to look past the practices of SCE&G to know that monopolies are detrimental to the people subjected to them. SCE&G was granted its monopoly when electricity could be more economically produced using economies of scale without duplication.

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Now distributed generation technologies are commercially available, which create dis-economies of scale — meaning electricity can be generated locally, in small amounts, more cheaply than in large generation stations. This can be seen in the commercial use of solar cells, fuel cells and microturbines.

The opposite can be seen with the use of obsolete technology with the promise that a huge capital expenditure, funded by the public, will result in a lower cost of electricity to the public over the long term. Units 2 and 3 of the V.C. Summer nuclear plant were sold to the public as the lowest cost alternative.

In reality, SCE&G needed the 10.5 percent rate of return on a $14 billion capital investment in order to service its debt and pay its dividends. Constructing a gas turbine plant for less than $1 billion would not do this. A business model built on economies of scale needs ever larger and more expensive plants in order to survive financially.

Even without fuel, decommissioning. modifications, operation and maintenance, the cost of the Unit 2 reactor exceeds the price that SCE&G charges the electric cooperatives for electricity.

SCE&G charges the public the highest rates in the Southeast. If it were well-run, it would have rates at or below the average.

This being the case, it is apparent that rather than serve its customers, SCE&G, like all monopolies, is preying upon its customers to the sole benefit of Wall Street and SCE&G executives.

It is also apparent that the S.C. Public Service Commission is not protecting the public.

This story was originally published January 4, 2017 at 5:47 PM with the headline "Monopolies belong in the 19th century."