VC Summer Jan 31 2018 IMG_3575.jpg (copy)

An aerial shows the the V.C. Summer nuclear project. File/Provided/High Flyer

COLUMBIA — South Carolina has been stewing over its power companies since last summer, but a year into one of the biggest fiascoes the nation's utility sector has ever seen, the state’s rage is boiling over.

And no utility is safe from the intensifying wrath of South Carolina’s ratepayers and lawmakers.

A power struggle has fully engulfed the state’s government-owned utility, Santee Cooper, bringing the work of its board to a grinding halt.

The state’s utility watchdog agency is asking for financial sanctions against a once-venerable institution, South Carolina Electric & Gas, accusing it of hiding critical records and outright lies in a $9 billion nuclear plant construction debacle.

And legislators are starting to point their attention toward the state’s electric cooperatives, the sleepy utilities that power huge swaths of rural South Carolina.

Last weekend, more than 1,000 ratepayers at one Midlands co-op — Tri-County Electric — mobbed a special meeting and voted to throw out its board members after The State newspaper reported they used their jobs to enrich themselves.

Across the industry, the furor has put change on the horizon. If Santee Cooper and SCE&G parent company SCANA are sold or dip into bankruptcy, it could leave the state without any of its major power providers headquartered in South Carolina. 

The public rage surrounding it all is unlikely to simmer any time soon. Permanent fixes are months away — if they come at all.

Still searching for reform

State lawmakers are already discussing the need for additional regulatory reforms surrounding the state’s power providers — just months after finishing a legislative session dominated by the V.C. Summer debacle.

Gov. Henry McMaster and a panel of legislators are meeting throughout the fall to decide whether to sell Santee Cooper. Their next meeting takes place Wednesday.

Large investor-owned utilities, like Nextera Energy from Florida, have floated offers to buy Santee Cooper to lawmakers earlier this year. And the state's co-ops have voiced interest in possibly taking over Santee Cooper's power lines, though not its series of power plants. 

But the co-op might need some changes, said Rep. Russell Ott, D-St. Matthews.

Ott’s district includes the Tri-County Electric Cooperative, which came under fire for its part-time board members who refused to reduce their high pay and benefits. He says that episode has brought the co-ops — formed during the New Deal era of the 1930s and 1940s to electrify rural parts of the state — into the conversation as well.

Ott wants to sponsor legislation to make co-ops more transparent by requiring them to post online meeting summaries and how much their board members earn. He also wants to set better rules for the election of those board members. 

Lou Green, a spokesman for The Electric Cooperatives of South Carolina, said they appreciate the interest in giving electric customers more information about their local co-op boards. But the cooperatives are less interested in having another government agency, such as the Public Service Commission, oversee their local boards, Green said.

The Legislature’s role in the current energy crisis is still up for review, too.

For years, lawmakers in the House and Senate relied on a special committee devoted to overseeing the state’s utility industry called the Public Utilities Review Committee.

Lawmakers considered tighter ethics rules for the committee’s members this year, after The Post and Courier revealed how many of those lawmakers attended utility-funded “appreciation dinners.” That effort didn’t make it into law, but the issue isn’t likely to go away before the General Assembly reconvenes in January.

"I believe we are paying the price for our inability to stay on top of things and be proactive," Ott said.

Wall Street takes note

For the past year, the financial world has looked at South Carolina with trepidation, warning time and again that the political turmoil might burn investors.

Sign up for our new business newsletter

We're starting a weekly newsletter about the business stories that are shaping Charleston and South Carolina. Get ahead with us - it's free.

Cayce-based SCANA Corp. has been punished on Wall Street, and the power company says it's having a harder time borrowing money.

What's more, it says its vendors — like the businesses that bring natural gas to its power plants — are asking for payment upfront or demanding deposits to wade into South Carolina. Analysts say the best hope for SCANA to ease its credit issues is being bought by Virginia's Dominion Energy, but South Carolina regulators haven't ruled on whether the proposed $14.6 billion takeover should go through.

In the meantime, things have only gotten worse.

For the first time, Fitch Ratings said this month that SCE&G's situation is too precarious for its debt to be considered "investment grade." The other credit rating agencies have graded SCE&G just above the line.

Fitch said it was downgrading the utility because the Legislature forced it to temporarily cut its electricity rates by 15 percent so ratepayers could stop paying for the nuclear project for at least a few months.

And for the second time since the nuclear project ended a year ago, credit agencies are having doubts about Moncks Corner-based Santee Cooper.

The governor and the state Senate are fighting over who runs the utility’s board, which prompted the utility to cancel a board meeting last week.

The power struggle has left analysts to wonder if the swirl of uncertainty could ultimately keep Santee Cooper from raising its power rates to pay back the more than $4 billion it borrowed for the nuclear project. 

Last week, Moody’s Investor Service downgraded Santee Cooper, citing the "continued unstable governance."

On Monday, McMaster laid blame for the credit downgrade at the feet of Santee Cooper, which he's labeled as a "rogue agency." He also asked Santee Cooper to turn over documents about why Santee Cooper's CEO canceled the August board meeting. 

Santee Cooper's interim CEO James Brogdon responded in a letter Monday, saying the utility is an "untenable position" as two branches of government fight over who's in charge. Canceling the board meeting until the situation clears up, he added, was "the best course of action under the circumstances."

Reach Andrew Brown at 843-708-1830 or follow him on Twitter @andy_ed_brown.