Hicks column: South Carolina has ways of making you — not us — pay, SCE&G
It’s time for the state Public Service Commission to go all Nancy Reagan on SCE&G.
That means every time South Carolina Electric & Gas asks to raise rates on its customers — which happens at least twice a year — the PSC should just say no.
No increase to cover debt, no rate hike to ensure maximum profitability. Nothing.
A decade ago, the utility got a sweetheart deal from the state that allowed them to make customers pay for a new nuclear power plant. And they screwed it up, finally pulling the plug on the whole thing last month.
But hey, why do proper due diligence on a complex construction project when it’s not your money? SCE&G is guaranteed not only a monopoly, but a profit. It’s the law.
Gotta love that kind of capitalism.
While these utility executives were collecting millions in bonuses and giving shareholders nine-figure quarterly profits, more than 700,000 households in South Carolina have watched their power bills go up by more than 20 percent.
Hard to imagine why South Carolina has some of the highest electricity rates in the nation.
And they aren’t finished. Last week, the chief executive of SCANA — SCE&G’s parent company — promised investors that South Carolina chumps will bail them out to the tune of another $2.2 billion.
Well, not if the PSC will just say no.
Talk about a base ‘load’
All this started a decade ago, when the Legislature passed something called the Base Load Review Act.
State Sen. Chip Campsen was one of a handful of lawmakers who opposed the deal from the start, but no one would listen to him. Now he fears the provisions in the act could stand, forcing customers to pay.
But it could be years before the courts figure all that out.
So what can the Legislature do?
“First of all, we need to repeal the Base Load Review Act to make sure this doesn’t happen to future ratepayers,” says Campsen, an Isle of Palms Republican.
He’s right. It was a stupid thing to do, as we’ve learned the hard way. Most SCE&G customers have been paying upwards of $300 a year for a pile of concrete.
But can they make us pay more? The answer is: maybe not.
Even the Base Load Review Act doesn’t give the utility authority to raise rates for a project that is mishandled. Now, SCE&G maintains that the state Office of Regulatory Staff — which reviews rate increases before the PSC votes — has to prove the utility acted imprudently.
Shouldn’t be too hard.
This week, a couple of legislative committees are going to dive into this problem, including the House Utility Ratepayer Protection Committee, chaired by Charleston Republican Rep. Peter McCoy.
He understands how we feel about this.
“I strongly believe that people across the state are right and just in being furious right now,” McCoy says. “They deserve answers to why this crisis happened. Ratepayers, taxpayers, and all South Carolinians who put their trust in a system that has failed, deserve answers.”
McCoy says lawmakers won’t drop this until SCE&G customers and taxpayers are not on the hook for this boondoggle.
Which is exactly what needs to happen.
It’s true, the Legislature of 10 years ago let this genie out of the bottle.
Before the Base Load Review Act, utilities paid for plants after they were built — not as they went, and with other people’s money. This is what happens when you let industry, or lobbyists, write its own legislation.
Right now, the current Legislature is the only thing that stands between 700,000 South Carolina households and a $2.2 billion bill. And they would much rather draw the ire of a utility than all those voters.
House Speaker Jay Lucas fired one of the first salvos, a letter urging Public Service Commissioners to deny SCE&G rate increases to pay for this fiasco. Turns out, he was being diplomatic.
Privately, lawmakers already have decided that one possible solution here is to just deny SCE&G the right to raise rates. Sure, that is the PSC’s job — but lawmakers appoint the commissioners.
You see where this is going, right? Yes, some lawmakers say if the current PSC members won’t play hardball with the utility, they will appoint new people who will.
So, if Public Service Commissioners want to hold their posts, they probably need to get comfortable with just saying no.
Meanwhile, SCE&G officials can butter up stockholders all they want. But if they try to bill us for their mistakes, they may be in for a shock from the real power brokers in South Carolina.