Big bills, little product from V.C. Summer consultants hired by Legislature

April 25, 2018

Investigative Reports

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By RICK BRUNDRETT

Three out-of-state consulting businesses hired by the S.C. Legislature to provide “advice” on the V.C. Summer fiasco have submitted bills totaling more than $230,000, though only one firm has produced a written report.

To put the $232,379 public tab in some perspective, it could cover the failed nuclear project portion of about 8,600 monthly bills for typical South Carolina Electric & Gas residential customers, based on 1,000 kilowatt hours used in a month.

The only written report produced so far for the Legislature was released last month by the Washington, D.C.-based Bates White Economic Consulting, which concluded that SCE&G could temporarily cut electric rates by 13 percent, or $19 monthly for typical resident customers, without being forced into bankruptcy.

The Bates White report cost a total of $152,428.75, or $2,628 per page, for according to an invoice provided Monday to The Nerve by Senate clerk Jeff Gossett under the state Freedom of Information Act. The bill listed a total of 366 hours worked by an 11-member team, with hourly rates ranging from $305 for a listed “consultant” to $580 for a “partner.”

The S.C. House this week could decide whether to agree to an amended Senate bill authorizing the temporary 13 percent reduction in SCE&G rates. The House has proposed temporarily suspending the full V.C. Summer portion of electric bills – $27, or 18 percent, for typical residential monthly bills.

The state Public Service Commission authorized nine rate SCE&G hikes over the years for the nuclear project under the Base Load Review Act, which the lawmakers quietly passed in 2007. PSC members are screened and nominated by a legislatively controlled committee called the State Regulation of Public Utilities Review Committee (PURC), which exerts considerable control over the regulation of utilities in South Carolina.

Following screening hearings this week, PURC nominated a total of nine candidates for three open seats on the seven-member PSC; an election in the Legislature is tentatively set for May 10.

Besides the Bates White firm retained by the Senate, the Senate and House also paid a total of $70,219.09 to another consulting business, ICF Resources LLC, a subsidiary of Fairfax, Va.-based ICF International Inc., though no written report was produced for lawmakers, as The Nerve reported last month.

Most of the bill was for 136.5 hours of work by a five-member team, with hourly rates ranging from $235 to $665. Gossett last month said lawmakers were advised verbally about the “value of Santee Cooper,” the state-owned utility and minority partner with SCE&G in the $9 billion failed V.C. Summer project. He didn’t respond then to questions seeking more details about ICF’s services, including who specifically was contacted in the Legislature.

Republican Gov. Henry McMaster has publicly said he wants to find a buyer for Santee Cooper, though The Nerve reported last week that a longstanding committee of top constitutional officers including the governor, which was created under state law to advise the Santee Cooper board of directors, has never met on V.C. Summer matters.

In addition to ICF, the Senate also retained the North Bethesda, Md.-based Stark Energy Consulting LLC to provide “legal advice in conjunction with the Bates White report,” Gossett said last month, though he didn’t provide specifics, and no written report has been produced.

A Stark Energy invoice provided this month by Gossett to The Nerve lists the subject matter as “V.C. Summer Abandonment/Constitutional Issues.” The total bill was $9,731.93, mainly for 28.1 hours of “professional services” at a $345 hourly rate.

Asked when Stark would produce a written report and whether the firm intended to submit any more invoices, Gossett in an email Monday replied only that he “needed to get updated.”

Gossett earlier said the Senate would pay consultants’ fees out of the chamber’s “other operating expenses account.” This fiscal year’s nearly $14.6 million adopted budget for the Senate chamber included $300,000 in “other” funds.

Both chambers are flush with tax dollars: The Senate carried over more than $7.3 million in general funds into this fiscal year, which started July 1. The House carried over $25.9 million – nearly $3.7 million more than its total adopted budget for this fiscal year, state comptroller general records show.

Brundrett is the news editor of The Nerve. Contact him at 803-254-4411 or rick@thenerve.org. Follow him on Twitter @RickBrundrett. Follow The Nerve on Facebook and Twitter @thenervesc.

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