Cindi Ross Scoppe

This is what has to change after the SC nuclear meltdown

SC legislators aren’t actually applauding SCE&G and Santee Cooper in this photo, but they might as well be, given the way they’ve treated the utilities.
SC legislators aren’t actually applauding SCE&G and Santee Cooper in this photo, but they might as well be, given the way they’ve treated the utilities.

IF SCE&G AND Santee Cooper were free-market businesses, they’d probably be out of business in the wake of South Carolina’s nuclear meltdown. Or they’d have new management. Or they would have abandoned their nuclear reactors years ago — if they had ever started building them.

If SCE&G were even just a regular regulated monopoly — one that didn’t have the Legislature’s blessing to charge ratepayers $1.4 billion, and keep charging us even more, for electricity we will never receive — it probably would have walked away from the project much sooner. Or, like every other regulated monopoly in the nation without such legislative protection, never started it.

But state law reduced SCE&G’s risk and made it financially and psychologically easier for the company to pursue a high-risk plan to build the nation’s first new nuclear reactors in decades. And state law allowed Santee Cooper to join the venture without even the modicum of oversight that SCE&G had.

Santee Cooper is not regulated by the Public Service Commission, and its management answers to a politically appointed board whose members cannot be removed unless they break the law. Both conditions need to change. The governor should be able to remove his appointees for any or no reason, and the utility should be subject to the same regulation as privately owned utilities. And serious questions need to be asked about whether President Lonnie Carter deserves to be the highest-paid person in state government — or even remain employed.

What to do about the laws that govern SCE&G is less clear — and figuring that out needs to be the focus of legislators when they begin hearings later this month on how a $14 billion nuclear-construction project fell apart after both companies’ ratepayers sank more than $2 billion into it.


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First and foremost, we need to know how much blame goes to the 2007 Base Load Review Act, which allowed SCE&G to charge customers for electricity they will never receive, and which the company hopes to use to charge us up to $5 billion more.

Was the whole concept of that law flawed? Are we guaranteeing irresponsible decision-making when we allow a regulated monopoly to charge customers up front for nuclear and coal-fired production facilities, and keep charging them even after the project is abandoned? Or would that mechanism, which is intended to reduce interest costs, make sense if the utility had to put more of its investors’ money at risk?

What about the Public Service Commission? Did commissioners have enough room to turn down any of the nine rate increases they approved for SCE&G? The law allows them to reject increases if there has been “a material and adverse deviation from the approved schedules, estimates, and projections” — which certainly happened here — but only if the utility was “imprudent” in failing to anticipate or avoid the changes.

If the commission didn’t have enough authority to reject rate increases, that needs changing. If there was enough authority but commissioners failed to use it, then perhaps it’s the commissioners who need changing.

Or did legislators — who elect commissioners to the well-paid political posts — make it too clear that they were not to reject rate increases? If so, we need to change how commissioners are selected. (Yes, legislators would need to change as well, but that’s up to voters.)

The Office of Regulatory Staff is supposed to conduct “on-going monitoring” of nuclear construction projects and “review and audit” rate requests, hiring outside experts as needed. Did it have the authority it needed to protect the public? If not, that needs changing. (The law that created that office, by the way, requires it to protect the “public interest,” which includes “preservation of the financial integrity of the state’s public utilities and continued investment in and maintenance of utility facilities.”)

If the office has sufficient authority, did it do its job but get overruled by the PSC? If not, then perhaps that staff needs changing, and perhaps the way it’s selected. The executive director is nominated by a legislative committee and technically appointed by the governor, sort of like magistrates.

What happens when SCE&G builds the new capacity that nuclear reactors will not provide? If it builds a natural gas plant, it won’t be allowed to charge ratepayers for construction unless or until the plant produces electricity. But should SCE&G ever be allowed to charge us for a facility that replaces an abandoned facility we’ve already paid $1.4 billion toward?

And what about the whole idea of monopolies? I doubt we’ve reached the point where small carbon-based or alternative-energy plants can provide everyone in the state access to electricity, which we’d need before we could switch to a free-market system. But a lot of people believe that time is coming. If lawmakers are going to spend a lot of mental energy on our state’s energy future, they ought to start thinking about how we get to that place, and what we do once we’re there.

Finally, a question legislators will avoid if we let them: Should a monopoly be allowed to make campaign donations to the legislators who have the power not only to revoke its monopoly status but also to shield it even more from the consequences of its decisions? And if so, how on earth do you justify that?

Ms. Scoppe writes editorials and columns for The State. Reach her at or (803) 771-8571 or follow her on Twitter or like her on Facebook @CindiScoppe.