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SC utility pushes to make customers pay for $500K move to swanky new offices

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The skyline in Greenville, the new home of Blue Granite Water Service. File/Grace Beahm Alford/Staff

COLUMBIA — A South Carolina water and sewer utility is trying to stick its customers with nearly $500,000 in costs related to moving its headquarters to swanky new offices in downtown Greenville, the state’s utility watchdog charged in recent filings.

Blue Granite Water Service also wants to charge its customers tens of thousands of dollars in rebranding costs and office expenses — such as flowers, a 65-inch flatscreen TV and chamber of commerce dues — that should instead be covered by the company itself, regulators say.

The charges are part of a controversial $11.7 million rate hike request that Blue Granite wants the S.C. Public Service Commission to approve this spring. If approved, rates would rise by as much as 56 percent for Blue Granite's 17,000 water customers and 13,000 sewer customers — most of them in South Carolina’s Midlands and Upstate regions.

“Blue Granite’s attempt to fleece the ratepayer is consistent with what we’re seeing from private (for-profit) utilities across the board,” said state Sen. Dick Harpootlian, a Columbia Democrat who says his office has fielded dozens of calls from constituents angry about the proposed rate hike. “Hopefully, the PSC will remember that they’re there to protect the ratepayers, not the stockholders.”

Blue Granite, which changed its name from Carolina Water Service last year after years of pollution violations and drinking water complaints, has said it needs the money, in part, to cover its rising operating costs, including soaring prices from smaller municipal utilities that Blue Granite partners with.

But utility regulators at the S.C. Office of Regulatory Staff have pushed back on the rate hike ahead of a series of PSC public hearings that began Monday evening in Lexington.

The state agency proposed trimming more than $3 million from the proposed rate hike, including money for a host of Blue Granite's recent expenses that regulators say aren't benefiting customers.

Among the largest of those expenses is the nearly $500,000 tab Blue Granite incurred in moving from its former offices in West Columbia to a new headquarters in downtown Greenville in 2018. In its own filings, Blue Granite testified it moved to Greenville, in part, for the area's stronger labor supply so it can "attract and retain the professionals needed to maintain and improve the Company’s ability to provide utility service at a reasonable cost.” Blue Granite also wanted to be closer to one of its major contractors and two peer utilities, Pacolet Milliken and Duke Energy, the company testified.

ORS challenged that reasoning, pointing out that Blue Granite used a 20-mile radius in studying Greenville's labor supply but only a 10-mile radius to conduct the same analysis for West Columbia.

The agency also noted that Blue Granite is moving its headquarters farther from the bulk of its customer base: Just 2.6 percent of the utility's customers reside in Greenville County, versus 43 percent in Lexington County.

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Regulators accused Blue Granite of failing to minimize costs for the move, writing that the utility chose to enter an expensive lease to occupy two floors of a historic South Main Street building that features high-end office furniture, large communal spaces and "an overall large footprint relative to the small number of employees."

“It is difficult to explain to customers that struggle to pay their water and sewer bills why the Company should be allowed to pass the expense of the office relocation and upfit to customers through higher rates,” wrote Kyle Maurer, a civil engineer and the deputy director of ORS’ Water Operations Department.

Blue Granite spokesman Dave Wilson said the move is part of a larger strategy of investing in infrastructure and creating new efficiencies for customers. He noted it is part of ORS' job to challenge aspects of rate hikes.

"This is part of the discussion that Blue Granite will have as part of its rate case with the Public Service Commission," Wilson said.

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This isn't the first time S.C. regulators have blown the whistle on utilities' expenses.

ORS fought off South Carolina Electric & Gas' effort to make ratepayers pay thousands of dollars for company jet flights, limousine rides, gift cards and alcohol purchases tied to the utility's failed V.C. Summer Nuclear Station expansion project, The State newspaper reported in 2017.

In 2018, the Public Service Commission prevented SCE&G's new owner, Dominion Energy, from charging customers for $118 million in executive bonuses, golden parachutes and consulting agreements tied to the same abandoned project.

In filings last week, ORS also dinged Blue Granite for a myriad of other smaller expenses, including:

  • $1,810 in chamber of commerce membership dues
  • $3,992 in dinners that included alcohol
  • $171 in flower arrangements
  • $7,000 in donations
  • $5,000 in scholarships
  • $5,530 in office-related expenses that came without sufficient documentation
  • And $12,800 in costs to rebrand the utility from Carolina Water Service to Blue Granite Water Service.

"It is unclear what the benefit of changing the name is to the customer," ORS spokesman Ron Aiken said.

Reach Avery Wilks at 803-374-3115. Follow him on Twitter at @AveryGWilks.

Projects reporter

Avery G. Wilks is an investigative reporter based in Columbia. He was named the 2018 S.C. Journalist of the Year by the S.C. Press Association. He grew up in Chester, S.C., and is a 2015 graduate of the University of South Carolina’s Honors College.

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