IT’S EMOTIONALLY satisfying to see the “retirement” of the dour Kevin Marsh, who kept droning on about how prudently he squandered $9 billion of other people’s money before prudently abandoning the half-built nuclear reactors at the VC Summer facility, and whining about how the secret, and devastating, audit of the project wasn’t “secret” but instead “confidential.” People who oversee such colossal failures should go.
But let’s not get confused about what’s going on here — and what needs to go on here.
Mr. Marsh told investors last week that SCANA was working on a “comprehensive settlement that would be in everybody’s best interest and mitigate costs to customers going forward,” and suggested that he was negotiating with legislative leaders to come up with that settlement.
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But SCANA doesn’t get to decide how much of the $4.9 billion that SCANA spent on the project is paid by customers and how much is absorbed by the company and its stockholders. That issue is subject to negotiation only to the extent that our Legislature decides it will be subject to negotiation. For that matter, the question of whether ratepayers will be reimbursed for any of the $1.7 billion we’ve already spent in carrying costs is subject to negotiation only to the extent that our Legislature decides it will be subject to negotiating.
By promoting the more outgoing and forthcoming Jimmy Addison to lead the utility company, and promoting the personable Keller Kissam to SCE&G president, SCANA has changed its face. It’s a prettier face, a more open face. And I’m sure legislators will feel better about dealing with the friendlier executives. It’s important to remember, though, that SCANA didn’t bring in outsiders; it promoted top insiders. And regardless of who’s in charge, SCANA is going to try to keep customers paying as much of the cost of the nuclear project as it can get away with, and saddle its stockholders with as little of that cost as possible.
That’s its job.
It’s the job of our Legislature — not of SCANA — to decide what will be allowed.
That decision isn’t as easy as it sounds.
On the one hand, there is no scenario under which it is fair for ratepayers to continue paying for construction that is not continuing. And although the project started out on a sound basis, it’s difficult to justify even the $1.7 billion we’ve already paid when you consider how long construction continued after utility executives knew it was doomed — and when you consider that SCANA shareholders have been rewarded with $1.4 billion in dividends in just the past four years.
On the other hand, the Legislature has to recognize that forcing SCANA to bear too much of the cost will drive down stock prices even more, and subject the company to takeover from an out-of-state utility. And it has to consider how much it would cost our state to lose a corporate headquarters, and the philanthropy and leadership that come with that.
Lawmakers might decide that making customers whole is worth the destruction or takeover of SCANA; they might decide it’s not.
But that’s a decision that needs to be reached after careful consideration.
And it needs to be reached based on facts instead of the friendships and comfortable professional relationships that play far too large a role in legislative decisions.
Should the Legislature listen to SCANA’s arguments? Of course so. Just as the Legislature should listen to arguments made by and and behalf of ratepayers.
Lawmakers should only give extra weight to SCANA’s arguments if it concludes that it’s worth giving the utility a little more in order to get its cooperation and avoid long and expensive legal fights over the constitutionality of its actions. Not because the folks in charge of SCANA are more open and friendly than they used to be.
Ms. Scoppe writes editorials and columns for The State. Reach her at firstname.lastname@example.org or (803) 771-8571 or follow her on Twitter or like her on Facebook @CindiScoppe.
Here are some other pieces I’ve written about this that you might find helpful: