The investor-owned utility that thought S.C. politicians were so desperate to unload Santee Cooper that they’d practically pay someone to take it finally got the message that a sale isn’t in the offing after the S.C. Senate voted 36-8 against even soliciting new bids.
The idea of exploring a sale was never a bad one, although NextEra’s bid was.
But for three years now, the debate over whether to sell our state-owned utility — a debate that for too many was more about political philosophy than the merits of a purchase offer — has been a distraction that allowed the Legislature to avoid doing the basic work of making the utility accountable.
NextEra’s withdrawal of its bid and its lobbying force — combined with the Senate vote that occasioned it — should end that distraction and make it clear that the Legislature has no choice but to reform Santee Cooper. This year. This month.
It should make this equally clear: Anyone who objects to a reform plan because it lacks a sale option is enabling the unacceptable status quo: a completely unregulated monopoly utility that traps customers and answers to no one.
The good news is that both the Senate and the House have passed reform measures that would make Santee Cooper much more accountable; there's no reason legislative negotiators can't agree on the details quickly.
Of course, the utility is currently run by an autonomous board, with no regulatory oversight, whose members are so protected that it’s illegal for the governor to even ask them, pretty please, to think about maybe resigning. Even when they blow $4 billion on an over-budget, over-deadline pair of now-abandoned nuclear reactors that will never generate a single watt of power.
Both the House- and the Senate-passed versions of H.3194 give independent state regulators the authority to sign off on some of the board’s decisions, require more transparency and give ratepayers a chance to complain about rate hikes. Both hang their hats on requiring Public Service Commission approval of the utility’s long-term energy plans, which determine how much and how the utility can spend money, which should be the main driver of customers' utility bills.
But neither version allows the PSC to reject Santee Cooper’s rate hikes. And neither allows the governor to remove board members simply because they make bad decisions.
Lawmakers say covenants in Santee Cooper’s outstanding bonds make it financially impossible to subject it to PSC rate review, and they’re probably right. But they could — and should — prohibit the utility from issuing any more bonds with those restrictions, so the PSC could regulate its rates once the old bonds are paid off. The House never considered such a requirement, and the Senate voted 24-17 against Sen. Wes Climer’s amendment to that effect. The House still could, and should, revisit that issue, because independent oversight is the surest way to keep rates under control.
The House and Senate both took steps toward acknowledging that if Santee Cooper board members knew the governor could fire them, they almost certainly would have told their boss when things started going south at V.C. Summer — and the governor could have blown the whistle so the PSC could stop rubber-stamping SCE&G’s rate increases until the utility either pulled the plug or else started exercising some oversight to get the out-of-control project back on track.
But they're small steps. The House allows the governor to remove board members for "poor performance," while retaining their right to sue the governor for removing them. And the Senate simply shortened board members' guaranteed terms in office from 7 to 4 years. It’s an improvement, but the fact remains that if your boss can’t fire you, he isn’t your boss.
It’s not too late to fix that problem, by returning to the pre-Mark Sanford law that allowed governors to fire board members for any reason or no reason. That law worked for decades without hurting Santee Cooper’s bond rating, or its ability to provide reliable power at a good rate to 2 million South Carolinians. It could work again.