CO-OP DEFENDERS will see Tuesday’s vote to remove the self-serving board of the Tri-County Electric Cooperatives as evidence that we don’t need to change the way co-ops operate in South Carolina.
Although I’m delighted that Midlands residents served by the state’s second-most expensive co-op took their utility back from the board, the fact is that board members had been taking advantage of their neighbors for years before anyone noticed.
The fact is that many residents say they never would have known enough to revolt if not for the outstanding reporting from The State’s Avery Wilks.
Set aside the fact that most people are too busy or disinterested to pay attention to their state or local government — much less their co-op. The fact is that the law under which electric cooperatives operate in South Carolina makes it too difficult for members to realize when the people they entrust to provide their electricity at the lowest possible price are more interested in milking them for perks and pay above what they’d deserve even if they were full-time employees.
The inflated compensation for Tri-County directors wasn’t enough to make a significant difference in the co-op’s inflated electricity rates, which are higher than SCE&G’s were even before the Legislature forced the Columbia utility to cut its rates. They’re also higher than every other utility in the state except Coastal Co-op.
But board members who cared about serving the co-op’s customers instead of just enriching themselves might have found some internal efficiencies. Or they might have seen that it would make sense to merge with another co-op to cash in on some efficiencies of scale. Or even to disband and turn their territory over to a for-profit utility.
All of South Carolina’s electric utilities need some sort of regulation, because consumers have no choice where they purchase their power, unless they’re willing to move.
South Carolina has four different kinds of electricity providers, all monopolies, all regulated in different ways — none of which is anywhere near perfect.
For-profit utilities — SCE&G and Duke — aren’t subject to government openness rules, but they must get approval from the state Public Service Commission to raise rates. There’s reason to believe that the PSC doesn’t provide the level of oversight that’s needed, but I’m sure rates would be even higher without the commission.
Government-run utilities are subject to government-openness rules, but they don’t have to get PSC approval to raise rates. The idea is that people who are unhappy with their government-provided power can hold the government accountable, kicking out city council members who allow rates to go too high or service to diminish too much. Of course, this idea breaks down for people who live outside the municipality that sells them power (or water). And it completely falls apart when it comes to Santee Cooper, which answers to no one but its own board, whose members can’t be removed unless they do something that could get them arrested.
We’ve learned in the past year what a huge mistake it was to allow Santee Cooper to regulate itself — how it drove up costs not only for its own customers but also, by its silence, for SCE&G customers. And while I have always generally supported the idea of letting elected city councils regulate their utilities, an argument certainly can be made that they should be subject to PSC regulation as well.
Which brings us to the fourth kind of electricity providers: the cooperatives, which are non-profits charged with providing low-cost power to their members.
Cooperatives also can raise rates without approval from the PSC. They are run by a board of directors elected by the customers, who can remove the directors, as happened Saturday. But unlike government, they aren’t subject to public records laws.
Indeed, very little of the information Mr. Wilks has been reporting about the Tri-County board’s excessive compensation was voluntarily handed over by the utility. It came from discovery in a lawsuit against the board; it came from people who leaked it to him. Now, the state’s other 19 cooperatives did give him a lot of information for his larger look at co-ops generally. But that’s because they voluntarily made the decision to give it to him, calculating that it was in their best interest to do so. Next time someone asks, they might just as easily say no.
At the very, very, very least, the cooperatives should be subject to the state’s Freedom of Information law, which requires most meetings to be held in public and most records to be made available to anyone who asks for them. Calhoun County Rep. Russell Ott, who represents three of the six counties served by Tri-County, filed a bill at the end of this year’s legislative session to require cooperatives to meet more publicly and provide access to more records.
It’s a good start, but it doesn’t go nearly far enough. The burden of proof should be on the cooperatives to demonstrate why they should be exempt from any parts of the state’s open meetings and open records law — which frankly offer too many exemptions as it is.
We also ought to give serious consideration to requiring some level of regulation from the Public Service Commission. Of course, that agency itself needs some reform, or at least some members who care more about protecting the public than the utilities. But that’s another story, which you likely know all too well by now.
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.