“Strengthening ethical requirements and prohibiting outside influence from regulated utilities will ensure the PSC refocuses its efforts on the intended purpose of promoting fairness for South Carolina ratepayers.”
— House Speaker Jay Lucas
ON THURSDAY, the House passed a bill that very well might improve the caliber and the ethics of our state’s utility regulators. The bill prevents a screening committee from ignoring professional qualifications, as it has been allowed to do, and the bill should chill the too-cozy relationship between regulators and regulated.
H.4377 does not do nearly as much as I believe it should, but that’s not what troubles me about the promises the speaker made shortly after the House passed it by a vote of 108-1. What troubles me is that even if it did everything it needs to do, it would not live up to Mr. Lucas’ promises.
What troubles me is that this is just the latest example of our legislators (and governor, and political candidates) creating astoundingly unrealistic expectations for what the Legislature, or the Public Service Commission, or the courts will be able to do about the V.C. Summer nuclear expansion project.
Most of those false hopes of course are about the financial cost of the project, which SCANA and Santee Cooper plowed more than $9 billion into before abandoning construction of two nuclear reactors in July. Most outlandish is the idea that the Legislature will pass a bill that relieves us from paying any more for the project — and refunds the more than $2.5 billion we’ve already paid. Even those lawmakers who are warning about false hope are still suggesting that our future payments can be reduced dramatically, if not eliminated.
To be clear, that is what should happen. There is no scenario under which it is just for SCE&G or Santee Cooper or electric cooperative customers to pay another penny toward reactors that will never produce power for us. Nor is there any scenario under which it is just for SCANA stockholders to continue to benefit from this project — or to receive dividends at all as long as ratepayers are helping to pay for those abandoned reactors.
But what is fair and what is possible and what is smart are three very different things.
It’s hard to imagine that the courts will allow us to shift all of the cost to SCANA, and even if they did, it’s quite possible that the resulting damage to SCANA would harm our community and our state more than eliminating those charges would help us. As for Santee Cooper, well, the only ways to cut costs there are to streamline operations, sell property (both of which should be done) or sell some or all of the state-owned utility. And selling the utility could cost customers more in the long run than not.
Unfortunately, correcting the failures of the past is not the only thing lawmakers are creating unrealistic expectations about.
I hate to pick on Mr. Lucas, who is doing a respectable job of leading the House through one of the knottiest, most difficult problems lawmakers have faced in my three decades of covering them. But he is the one who declared that limiting how much regulated utilities can spend on our regulators ensure that those regulators put our interests first, always. Ensure.
He is the one, too, who declared: “The VC Summer nuclear fallout has exposed a significant lapse of oversight by the Public Service Commission in its approval of nine rate hikes for SCE&G customers. The passage of today’s bill prevents these mistakes from occurring again by increasing accountability for commissioners through shorter and staggered terms of service.” Prevents. As in, it can never happen again.
It’s true that the PSC probably never again will approve nine consecutive rate increases to fund the construction of nuclear reactors. But that’s because it’s unlikely to get the chance, not because of this bill.
It would be good to have some limits on the perks that regulators can accept from the regulated. But the Legislature will still elect those regulators, and with or without this bill, the regulators will only be “promoting fairness for South Carolina ratepayers” for as long as a majority of the Legislature wants them to.
I think the Legislature wants regulators to do that. Now. But the Legislature has not wanted them to do that in the past. Just the opposite.
That’s why the Legislature voted in 2004 to replace the state’s consumer advocate with the Office of Regulatory Staff, which is required by law to balance ratepayers’ interests with the utilities’ financial interests.
That’s why the Legislature voted in 2007 to pass the Base Load Review Act, which made it virtually impossible for the PSC to reject any of those nine rate increases.
That’s why the Legislature ignored warnings that V.C. Summer was spiraling out of control and the 2007 law was making it impossible to rein it back in. (Well, that and the fact that the warnings were coming from environmentalists, who don’t get listened to a lot at the State House, and particularly not in the House.)
I’m glad the House is taking some small steps to improve the PSC. But how well our utility regulators do protecting consumer interests will depend largely on what sort of utility laws our Legislature writes. And what sort of directions the candidates receive when they go, hat in hand, begging lawmakers to elect them to the commission.
Here are some other pieces I’ve written about this that you might find helpful:
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.