Cindi Ross Scoppe

They cut our SCE&G rates. Now lawmakers need to fix the tough nuclear problems

WHEN THE Legislature finally responded to South Carolina’s $9 billion nuclear fiasco — 11 months after SCE&G and Santee Cooper abandoned two unfinished reactors, and during lawmakers’ second overtime session — Senate Majority Leader Shane Massey declared that the new law was “step one,” and acknowledged that “We’ve got more to do.”

Thank goodness. And: They can’t start too soon.

Lawmakers started this year’s legislative session with four types of repairs they needed to make in response to the spectacular legislative and business failure that left electricity users across much of the state on the hook for billions of dollars for a pair of nuclear reactors that will never generate a single watt of power.

Six months later, they made one repair, started work on the second repair and have nothing to show for the other two — one of which most lawmakers don’t even acknowledge is a problem.

And if I sound like a broken record, my apologies, but our fixation on our power bills has tended to make us overlook the other, equally large, problems.

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Cindi Ross Scoppe

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SC nuclear debacle, by the numbers

14 years and counting: key dates in creating, recovering from the SC nuclear debacle

$9 billion and two abandoned reactors later, who’s the victim here? SCE&G says it is

The PSC let a polluter bill customers for its legal fees. What would it give SCE&G?

Is this the best lawmakers could do to rein in SCE&G’s nuclear surcharge? Maybe

We’re bankrolling SCANA dividends with our payments for abandoned nuclear reactors

Why Santee Cooper’s customers pay a way lower nuclear surcharge than SCE&G’s

Santee Cooper is out of control. But that’s not a reason to sell it

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The one task they completed was passing a law that will shift much of the financial burden from SCE&G customers to shareholders … assuming it holds up in court, which at this point is beyond their control.

The second needed repair was to our utility regulatory system. The Legislature repealed a law that required the state’s utility watchdog to look out for the interests of the utility companies. But we still have a system that puts the monopoly utilities’ interests far ahead of the interests of ratepayers.

Regulatory bodies should have some independence from politics, but our system takes independence to the extreme extreme. Candidates for the Public Service Commission are screened by a special legislative committee and then elected by the Legislature. Commissioners can’t be removed from office before their terms expire unless they are convicted of a financial crime or a crime of moral turpitude. That’s stronger job protections than we give to people in such sensitive posts as the Ethics and Election commissions, who can be removed if they refuse to do their jobs or commit other actions that would make them subject to criminal prosecution. That has to change.

Additionally, having the Legislature screen and elect commissioners means there’s no one to complain to when the regulators do a lousy job, because when everybody is in charge, nobody is responsible. Either the Legislature should control the screening process and the governor should appoint the commissioners or vice versa. And it wouldn’t be a bad idea to tighten the qualifications for commissioners.

The third problem is Santee Cooper, the state-owned utility that is left with $4 billion in debt for its minority share of the abandoned project. Gov. Henry McMaster and a bunch of people who have always been offended by the very idea of a state-owned utility think all we need to do is sell Santee Cooper. Legislators are studying that option, and — who knows? — maybe we’ll learn that they’re right. But the decision can’t be made based just on philosophy; it has to be based on a hard-nosed calculation of what it will cost Santee Cooper customers to swallow that debt themselves vs. what it would cost them to buy their electricity from a for-profit utility that swallows the debt.

While that’s being sorted out, lawmakers need to change the insane way we don’t regulate Santee Cooper. Santee Cooper can raise rates, join in risky partnerships and embark on new construction with only the approval of its board of directors, who can’t be removed from their positions just because they make lousy decisions, as they have clearly done. Some have suggested that requiring the utility to receive approval from the Public Service Commission for construction plans and rates could cause problems with its bonds, which were sold under the law that gave the utility autonomy. Even if that turns out to be the case, legislators have to find a way to bring the utility under regulatory control — and control in general.

Finally, lawmakers need to fix the systemic problems that played a huge role in the Legislature passing the “spend more, profit more” law that incentivized SCANA to make less-than-optimum decisions.

The big problem, which extends far beyond this issue, is that legislators too often pass bills they don’t understand. Especially when there’s a complicated issue with a well-organized lobbying campaign involving generous campaign supporters and few opponents. That’s what happened when SCANA asked for a law to make it easier to get financing to build the nuclear reactors most legislators wanted. What the utility didn’t say, and legislators didn’t realize, was that the highly technical legislation was built around those perverse incentives.

There is absolutely no reason legislators should be allowed to accept employment, campaign donations or gifts from regulated utilities. On the much larger problem, we need a system — like the one already in place for tax and spending legislation — that would delay debate on certain complex bills (and certainly all bills dealing with regulated utilities) until they have been reviewed for constitutional flaws and explained, in plain English, by knowledgeable, neutral experts.

This wouldn’t guarantee that legislators make smart decisions, but it could ensure that they understand what they’re voting on. And that’s about as far as we can go toward legislating a way to improve legislators’ decisions. The rest is up to voters.

More information

Here are some other pieces I’ve written about this that you might find helpful:

Could the fate of the nuclear surcharge come down to a 3.5 x 7 piece of paper?

Ratepayers sued the state, and the attorney general’s office is helping them

Did South Carolina’s own ‘don’t ask, don’t tell’ law make the nuclear fiasco worse?

3 numbers you need to know about SCE&G, Dominion and our energy future

Legislators’ micromanagement limits fix to regulatory system behind nuclear debacle

Why legislators shouldn’t be allowed to accept donations, jobs from utilities

There are 3 ways to cut Santee Cooper customers’ bills; 2 of them are worth exploring

What else we learned from that SCE&G bankruptcy report

How awful would it really be if SCE&G went bankrupt?

4 changes the Legislature needs to make after the $9 billion nuclear debacle

Still want to run government like a business? That’s insane

How donations secured SCE&G the means to squander billions.

How much worse was the original Bechtel nuclear report?

Where to hide nuclear secrets? Behind a lawyer, of course

How ‘waste not, want not’ became ‘spend more, profit more’

SCE&G nuclear fiasco: It’s complicated. Here are some explanations.

SCE&G law could cost you more than you imagine

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

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