South Carolina's utility regulators reversed course on Wednesday, terminating a contract with a consulting firm with deep ties to some of the country's largest power providers.
The Public Service Commission voted to drop Pegasus Global Holdings after the commissioners accused the firm of withholding information about the company's history during a screening process last month.
Pegasus was initially hired to help the utility regulators set the prices that investor-owned utilities would pay for power from independent solar companies in the future.
But over the past week, lawmakers, environmental groups and the state's solar industry called out the firm's connections to Duke Energy and Dominion Energy — the state's largest power providers.
Patricia Galloway, Pegasus's chairwoman, was previously on the board of SCANA Corp., which was purchased by Dominion Energy this year. And Duke Energy paid Pegasus more than $3 million in 2011 to defend a massive coal project in Indiana.
At the hearing, the commissioners said they were blindsided by Pegasus' earlier work for Duke Energy. And they faulted Pegasus for not making them aware of that contract — even though the Edwardsport coal gasification project is prominently listed on Pegasus's website.
"I believe Pegasus has disqualified themselves from serving as the Public Service Commission's expert because they did not disclose pertinent information when they interviewed," said Commissioner Justin Williams. "I don't think Pegasus truly appreciates the current climate that we are in. There's no room for mistakes or excuses."
Commissioner Swain Whitfield blamed the oversight on the tight deadlines the PSC is working under.
"One thing we were certainly doing was moving fast," Whitfield said. "Sometimes when you are moving expeditiously, things don't always come to light."
All but one of the commissioners voted to end the contract with Pegasus. Commissioner John "Butch" Howard abstained from voting.
Pegasus's leaders did not respond to a request for comment on the contract being rescinded. The company stood to make between $131,000 to $175,000, but had yet to get paid for any of that work.
The PSC is already prepared to open up another search for Pegasus's replacement. But this time, the commissioners plan to vet the consultants in public and with a court reporter in tow.
Commissioner Tom Ervin wanted the consulting firms to be questioned under oath in order to gauge any conflicts of interest they might have. He also advocated for the utilities and the solar companies to be allowed to submit questions to the consulting firms that are being considered for the job.
"We want to get it right and we want to be fair and impartial and transparent," Ervin said.