Now we’re up a creek with Santee Cooper
By HANNAH HILL
When the multi-billion V.C. Summer nuclear reactor project was scrapped this week, the question on everyone’s mind was “Who’s going to pick up the tab for this?”
SCANA, SCE&G’s parent corporation, wasted no time in asking the Public Service Commission’s permission to pass the bills along to its ratepayers in a six-decade plan.
No one but SCE&G seems thrilled with that idea. All of its customers feel the sting of potentially having to pay for a project that doesn’t exist anymore – especially after shouldering nine rate increases over the past nine years to fund it to begin with.
In a legislative press conference on Wednesday lawmakers said that all options to fix the broken system that gave rise to this situation were on the table, except for making the ratepayers absorb the loss.
That sounds a bit overly optimistic to anyone familiar with legislative politics, but the fact remains that it’s unjust to make the customers pay for the investors’ bad decisions.
When a business makes a capital investment, there’s never a guarantee that it will pay out. If it was a good investment, the investors reap the rewards. If not, they bear the loss. That’s the way the market works, and that’s the incentive for businesses to spend and invest as carefully as possible and then follow through to make sure projects stay on track.
Of course, lawmakers removed that incentive for SCANA by allowing it to pass the investment costs to the ratepayers to begin with and even make a tidy profit at the same time on an unfinished project.
That said, the principle remains: It was a bad investment, and it should be on SCANA, not us.
SCE&G is only responsible for 55 percent of that project. The other player here is Santee Cooper, the state-owned utility that covered the remaining 45 percent. Who’s going to pay for its share of the loss?
As the Post and Courier put it:
“State officials and the lawmakers conceded there is little to nothing they could do for the 176,000 direct customers of Santee Cooper and the members of the 20 electric cooperatives the state utility supplies power to because it doesn’t have investors that could be forced to cut a check.”
Those of us who are SCE&G customers at least have a chance – regardless of how slim – of not being forced to shoulder the cost of this disaster. Santee Cooper customers do not, because Santee Cooper is owned by the taxpayers. The only possible recourse is a taxpayer-funded bailout, which is also unlikely.
This is the worst part of this situation. Santee Cooper customers are up the proverbial creek without a paddle. They can’t even switch power companies.
This is what happens when the state is the market. Bad decisions aren’t simply business decisions gone wrong: They’re colossal failures that pit the taxpayer against the ratepayer. There are no winners.
We’re in this mess because we refused to let the free market work. Principles of capitalism – competition, deregulation, individual responsibility – work in the energy industry too. We just haven’t given them a chance.