November 28, 2018
By Frank Knapp Jr. Guest Columnist
After 15 long days, the S.C. Public Service Commission (PSC) wrapped up its hearing on the SCE&G nuclear debacle. In the next few weeks, it will rule on how much SCE&G electric customers will have to pay for the $5 billion the utility spent on the now abandoned nuclear energy project in Fairfield County.
During the hearing, evidence was shown that SCE&G withheld important information from regulators. Had that information been made public, the nuclear project might have been shut down as early as 2015, potentially saving ratepayers billions.
On one side at this hearing were the representatives of the ratepayers who want to rollback electric rates by up to 20 percent because of the SCE&G deception. Since 2009, SCE&G customers have had their electric rates raised by 18 percent for the failed project. These parties included the Office of Regulatory Staff (ORS), which proposed the 20 percent rate rollback as both fair and financially feasible for SCE&G, and numerous other groups and individuals representing environmentalists, big and small businesses, senior citizens, solar and good government.
On the other side arguing that SCE&G did nothing wrong and therefore ratepayers should be responsible for much of the construction costs were SCE&G and Dominion Energy, the $79 billion Virginia-based company that wants to buy the S.C. utility. However, at the end of the hearing, even these parties agreed that customers should get rates rolled back by 15 percent as long as Dominion was approved for taking over SCE&G.
Should the PSC rule in favor of the last SCE&G-Dominion proposal, a typical residential customer will pay more in their monthly electric bills compared to the ORS proposal. The PSC could also decide to grant customers larger or even smaller rate rollback.
The PSC has a difficult decision to make. Unfortunately, that decision has been made even more stressful and difficult because of the speaker of the S.C. House, Jay Lucas.
Lucas made the unusual decision to formally intervene in this hearing. Lucas’ taxpayer-funded staff actively promoted Dominion’s settlement offers to other parties, and the speaker officially told the PSC during the hearing that he wanted them to rule in favor of the SCE&G-Dominion proposal.
The problem is that the speaker has enormous influence over who becomes a member of the PSC. The speaker appoints almost half of the joint legislative committee that decides which applicants for the PSC are to be considered by the entire legislature.
Unquestionably, the speaker can almost unilaterally control the future re-election of a Public Service Commissioner both through the screening process and by his ability to sway House members when it comes time to vote because of his powerful position. Clearly, having the speaker as a party to the hearing and telling the PSC how he wants them to rule is a threat to the integrity of this quasi-judicial regulatory process which should be free of undue legislative influence.
Also troubling about the speaker’s involvement in the hearing is his questionable authority to speak on behalf of all members of the House. Does the House really support the SCE&G-Dominion rate rollback over the ORS proposal? Or has the speaker gone rogue?
The PSC was elected by the Legislature and is trusted to make decisions based on the facts. If powerful legislators are to be a part of this process and instruct the commissioners how to rule, maybe we should just disband the PSC and let the Legislature make all utility rate decisions.
Mr. Knapp is a pro se intervenor in the PSC hearing and the president and CEO of the South Carolina Small Business Chamber of Commerce.