In an ideal world, South Carolina wouldn’t be in the utilities business.
That isn’t the job, mission or purpose of state government — as a number of lawmakers have pointed out in the past year.
It’s a good point, even if some of them conveniently only reached that conclusion after Santee Cooper racked up $4 billion in debt during the V.C. Summer nuclear plant meltdown.
Sure, the utility deserves some blame for that disaster — mainly for not ratting out SCE&G earlier — but, let’s be honest, they were more like the kid bullied by his big brother into sneaking a cigarette.
And perhaps inadvertently ripping off ratepayers.
So now state officials are awaiting a report to outline the pros and cons of their three options for dealing with Santee Cooper. As The Post and Courier’s Andrew Brown has reported, this boils down to some distinct choices:
• Sell Santee Cooper to a for-profit, private or publicly traded company like Dominion.
• Hire a private firm to run it.
• Or keep Santee Cooper under state control.
Gov. Henry McMaster and many lawmakers lean toward that first option, partly on principle but mainly just to wash their hands of this mess. That is completely understandable, even justified.
Unfortunately, principle aside, selling Santee Cooper to some corporation would be a mistake.
As Dominion Energy — like SC&G before it — continues to prove, publicly traded companies these days worry more about maximizing profits for shareholders than, you know, actually providing the service they got into business to provide.
Which, by the way, is why newspapers owned by chains or investment firms are having trouble. The investors want to make more money, so they cut staff to increase profits.
Less staff equals less news equals fewer readers … which equals less profit. So they cut more staff. Great plan, like a snake eating its own tail.
Of course, utilities can't cut production. They can only charge higher rates. And customers have no recourse. A utility is a monopoly, a license to print money, a sure thing. Which is why Dominion came in courting South Carolina lawmakers and the public with claims of $1,000 rebates for all those illicit SCE&G nuclear charges.
The bait and switch came at the end, when Dominion promised instead to use that rebate money to keep rates low. Spoiler alert: Dominion is planning to ask state regulators for a rate increase this spring.
And, by the way, it continues to charge customers for the debt SCE&G incurred while not building two Fairfield County nuke plants.
There's no reason to think any other publicly traded company would do any differently. It's just their nature these days.
Santee Cooper is only around today because 85 years ago the big for-profit companies didn’t see enough — any? — profit in running power to small towns and rural communities. The Legislature created the state agency to provide electricity to rural South Carolina.
Now, Santee Cooper and the state's nonprofit cooperatives offer 2 million retail and wholesale customers cheaper rates than Dominion or the national average. If the state sells Santee Cooper, that will change. Maybe not overnight, but eventually.
Lawmakers have promised that, if they sell Santee Cooper, they’ll cut a deal to keep rates static for a while. Which sounds a lot like a $1,000 rebate. The operative phrase is a while.
Any shareholder-owned company that comes in will insist on laying off that nuclear debt on customers and will, as soon as legally possible, hit up the Public Service Commission for a rate increase.
You know how that works? Utility asks for an 8 percent rate increase. Public Service commissioners bluster and make speeches about prudent oversight and grant a 4 percent rate increase.
Which is what the company really wanted in the first place.
Bottom line, it’s not ideal for a state to own a utility … but keeping it or hiring a private management company to run it are the only options to keep one hand on the wheel of electric rates for rural South Carolina. Which needs every advantage it can get.
But if lawmakers are determined to sell because, you know, principle, here’s an idea:
Take the money the state clears from the sale and buy every customer of Santee Cooper and the cooperatives stock in whatever vulture utility company buys it.
The dividends might just cover the coming rate increases.