What to Ask Your Lawmakers About the Energy Crisis

SC Senate

Earlier this week the House energy committee held a public hearing on the failed nuclear construction project and the accompanying rate hikes. However, if you were unable to attend the hearing, you did not miss your chance to make your voice heard. There is little lawmakers can do at this point, short of taking legislative action in the next session. The most effective thing you can do is to demand answers – and action – from your own House member and senator.

Below is a list of questions every lawmaker should answer, and the reason these questions are so important.

 

How many Public Service Commission (PSC) elections have you participated in? Have you voted for any of the commissioners that approved the V.C. Summer nuclear project at its various stages, and the accompanying rate hikes?

Public Service Commissioners are elected by the General Assembly. They serve four-year staggered terms, so that PSC elections occur every other year.

As the agency responsible for regulating public utilities, the PSC was responsible for all decisions to approve the nuclear construction project’s plan at every step of the way. The original project schedule including contingencies, capital cost, rate hikes, principal contractors and suppliers, etc. all had to be submitted to the PSC, along with any subsequent changes to the project plan or schedule. During that approval process, due diligence on the part of the PSC would have uncovered any mismanagement issues on the scale of the V.C. Summer disaster early on. State regulators should have noted the early red flags, asked the right questions and demanded answers before issuing approval at each stage of the project. State law gives the PSC the authority to trigger audits and investigations as needed, yet the only audit that was conducted – the Bechtel report – occurred late in the process and completely independent of state regulators who did not even know it was being conducted.

 

Did you read the Public Utility Review Committee’s (PURC) performance evaluations of the PSC members before each election?

The PURC is a special board chosen by two legislative leaders – and comprised mostly of legislators – that screens and nominates candidates to the PSC. State law also requires the PURC to conduct an annual performance review of each PSC member, as well as the PSC as a whole, and submit the reviews to the General Assembly for reelection consideration. This is the statutory process for keeping lawmakers informed as to how PSC members are performing in their roles, and whether or not they should be reelected.

 

Were you aware of any red flags in the progress of the project or the numerous rate hikes?

Any problems with the nuclear project should have surfaced early under the oversight of the PSC. Those problems should likewise have been identified by the PURC as it oversaw the PSC and forwarded to the General Assembly as required by state law.

 

Do you believe the PURC’s PSC evaluations assisted you, as required by state law, to “better judge whether [the PSC’s] actions serve[d] the best interests of the citizens of South Carolina”?

The PURC not only conducts performance evaluations of the PSC members, but it also has statutory authority to screen PSC candidates and to “undertake such additional studies or evaluations as the review committee considers necessary.” The primary responsibility of PURC is to help the General Assembly determine if the PSC members are acting in the best interest of the state.

If PURC properly executed its statutory responsibilities, it should have known about the problems facing the V.C. Summer nuclear construction project long before they were reported to the public, and should have informed the General Assembly.

 

Have you asked the House speaker/Senate judiciary chairman if he is pleased with his PURC appointees’ job performance?

The PURC is composed of six lawmakers and four members of the general public, half of whom are selected by the House speaker and half by the Senate judiciary chairman. Ultimately, all the energy industry oversight comes back to these two legislative leaders.

 

Have you asked legislative leaders why the members of the PURC have not been called to testify before the legislative energy committees regarding their oversight of state energy regulators?

In spite of the powerful oversight role that state law assigns to the PURC, they have not yet been required to give account of their oversight activities before the legislative energy investigatory committees. In fact, all six of the legislative members of the PURC are currently sitting on those energy committees.

 

Did you vote for the Base Load Review Act (BLRA) in 2007?

The BLRA guaranteed ratepayers would bear the full cost to build the nuclear plant, including a profit for SCANA’s investors – even if the project failed. While PSC was required to oversee and approve the project, the language is vague, undefined and was heavily weighted to favor utilities.

According to regulatory and industry officials, the nuclear project could never have been built without the BLRA’s provisions. In other words, the market deemed nuclear construction too risky to finance – so through the BLRA, lawmakers forced utility customers (who cannot switch utility companies) to back the project instead, using the force of law.

 

Were you aware that the Office of Regulatory Staff (ORS) is required to represent utilities and state economic development interests as well as the ratepayers?

The ORS is the government agency charged with “representing the public” in proceedings governing the utility (e.g., rate hikes) and is controlled by PURC – the same legislative board that supervises the PSC. The ORS has significant authority to audit and investigate during the BLRA process and is specifically instructed by the BLRA to “safeguard the public interest.” However, state law also instructs ORS to balance the interests of the utilities, economic development and the ratepayers – three separate interests that will often be contradictory. In other words, lawmakers tied the hands of the consumer advocate agency that should have safeguarded the public interest.

 

Do you believe Santee Cooper has fulfilled its duty as a government agency to benefit the South Carolina taxpayers and ratepayers?

Santee Cooper is a state agency functioning as a public utility and owned a 45% share in the abandoned nuclear construction project. Santee Cooper should have been the first line of accountability for the project, but all reports agree that Santee Cooper had entrusted the entire project oversight to its partner SCANA (the parent company of SCE&G). The public interest cannot be properly guarded by taking a hands-off approach. If the project was mismanaged from the beginning – as recent reports suggest – Santee Cooper should have noted red flags and exercised vigorous pushback on plan changes and rate hikes instead of merely sending angry emails.

 

Have you asked the Santee Cooper board of directors why they did not notify the General Assembly years ago that the project was in trouble?

Santee Cooper was a minority partner in the nuclear construction project and was not subject to state regulation. However, like every state agency, Santee Cooper must be operated for the benefit of the people of South Carolina. This means that at the very least, as problems piled up, Santee Cooper should have reported the situation to state regulators and the General Assembly before the situation further deteriorated.

 

What do you plan to do, as a lawmaker, to hold Santee Cooper accountable?

Who controls Santee Cooper? The utility is governed by a twelve-member board of directors who have exclusive control over policies and rates. The criteria for removing a board member are so high as to be virtually non-existent, which means decision-makers at Santee Cooper who wield unchecked power in controlling the rates their customers will pay have little incentive to listen to them or to anyone else. This can only change with legislative action by the General Assembly.

 

So far, lawmakers have been able to skirt most of their own responsibility because they have been the ones asking the questions. However, every aspect of this disaster can be traced directly back to the General Assembly. Lawmakers created and oversaw every aspect of the system that led to the current energy crisis, and they are the ones ultimately responsible for the numerous rate hikes, the massive debt citizens in all forty-six counties will have to repay, and the billions of dollars invested in a project that may never be completed. It is time for citizens to hold them accountable for it.

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