GOV. HENRY McMaster was absolutely right to 1) insist that Santee Cooper give him a copy of a secret report on problems at the now-abandoned nuclear expansion project at V.C. Summer and 2) release the report to the public, over the objections of the state-owned utility’s debacle partner, SCE&G.
The Bechtel report repeats a lot of what we’ve come to recognize since the two utilities announced July 31 that they were halting construction: Essentially, they weren’t exercising the basic level of oversight that any rational person would expect a business to provide for the multi-billion-dollar construction project.
But it could be significant legally because it’s a report the utilities commissioned, not our after-the-fact speculation. And whatever they did or didn’t do after receiving it, it makes it difficult to argue that they had been managing the project prudently up to that point. That makes it a crucial piece of evidence as state legislators decide how to change state law, as lawsuits seek to recoup some or all of the more than $2 billion that ratepayers have already paid and as regulators decide whether SCE&G parent SCANA can charge ratepayers up to another $4.9 billion on the failed project. This sort of situation is the very reason we require government to make nearly all information public; the idea that the public should have to fight to see it is outrageous.
Although we have no right to expect anything other than electricity from SCE&G parent SCANA, we should be able to expect a lot more than that from Santee Cooper. And both the report and the utility’s initial refusal to release it to the governor raise even more concerns about the way it operates and its attitude toward the public that owns it.
There was never any question that state law required Santee Cooper to give the report to the governor. Yet Santee Cooper vice president and general counsel Michael Baxley wrote the governor Friday saying it was commissioned by legal counsel to the two utilities and so was covered by attorney-client privilege, and SCANA had threatened to sue Santee Cooper if it was released.
It’s possible that Santee Cooper planned to give the report to the governor and was creating a legal defense against a SCANA lawsuit. That would be one way to explain the fact that Santee Cooper Board Chairman Leighton Lord was suddenly empowered — without a meeting of the board — to release the report two days after the vice president refused. On a Sunday.
But even if you assume the denial was a charade, Mr. Baxley’s letter raised red flags about how Santee Cooper views its obligations to the public. And it’s just the latest in a growing list of actions that call into question the wisdom of allowing state agencies to act like businesses.
It seems increasingly clear that our government has taken a hands-off approach to Santee Cooper for far too long. If the nuclear debacle itself wasn’t proof enough, check out that golden parachute the agency just strapped on the back of the CEO who oversaw the debacle. Whether or not state government ought to be in the electricity-generation business might be a moot point right now, given Santee Cooper’s massive debt, so that makes it even more important that we set good rules for how our utility can do business.
Santee Cooper had no more legal right to enter into an arrangement that required it to violate state law than you and I do. Such agreements — or at least the parts that require us to violate the law — are clearly unenforceable. Yet Santee Cooper apparently felt comfortable entering into and then defending, at least temporarily, an arrangement that required it to do precisely that, by refusing to give the Bechtel report to the governor.
Equally troubling was Mr. Baxley’s argument that allowing plaintiffs to see documents concerning the nuclear project “would be extremely harmful” to efforts “to defend any and all litigation” against Santee Cooper.
To translate: A government attorney is arguing that a government agency should be able to hide its reasons for making a $4 billion mistake from the ratepayers who are stuck with that bill, because the information might allow those ratepayers to prove that the government made reckless decisions. And you wondered why the Santee Cooper board kept kicking the public out of its meetings.
Not to put too fine a point on this, but government — and that includes government-owned utilities — exists to serve the public. Not the other way around.
One of the changes that ought to be made at Santee Cooper — and unfortunately this doesn’t apply just to Santee Cooper — is to prohibit it from acting like businesses and individuals when it gets sued. Businesses and individuals pull out all the legal stops to avoid losing, even when they’re wrong. They shouldn’t do that, but there’s nothing we can do about it.
We can do pretty much whatever we want about our government agencies.
When they’re wrong, they have a moral obligation to admit they’re wrong, rather than piling up legal bills fighting to defend themselves.
The Legislature needs to make that not just a moral obligation, but a legal one as well.
Ms. Scoppe writes editorials and columns for The State. Reach her at email@example.com or (803) 771-8571 or follow her on Twitter or like her on Facebook @CindiScoppe.