Flawed process? PURC members largely wing it in deciding PSC nominations

May 24, 2018

Investigative Reports

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By RICK BRUNDRETT

The legislatively controlled committee that nominates candidates for full-time, six-figure seats on the S.C. Public Service Commission, which sets rates for private utility customers, has no written criteria for making its final choices.

On paper, qualifying as a candidate for the seven-member PSC which approved nine electric rate increases and signed off on delayed production schedules for the failed V.C. Summer nuclear project – appears straightforward.

But the legal employment requirements for commissioners are broad enough to allow in candidates with relatively little or no background in the utilities field – and can, under certain circumstances, be ignored in determining who gets picked.

When it comes down to who actually gets nominated for election in the General Assembly, the six-legislator, 10-member State Regulation of Public Utilities Review Committee (PURC), which largely controls the regulation of utilities in South Carolina, mostly wings it, one committee member acknowledged.

“It’s pretty much subjective,” Rep. David Mack, D-Charleston, told The Nerve. “We all put it together in our heads and come up with who we think would serve well.”

The nomination discussions by PURC members are held behind closed doors. Since last year, lawmakers delayed candidate screening hearings – the public’s best opportunity to learn about candidate qualifications – several times, forcing the elections for three open seats to be held on May 10, the last day of regular session.

Under state law, candidates are legally qualified if they have at least a bachelor’s degree and a “background of substantial duration and expertise” – which isn’t defined – in at least one of eight broad categories: energy; telecommunications; consumer protection and advocacy; water and wastewater; finance, economics and statistics; accounting; engineering; or law.

Besides that, PURC by law also has to consider the “ability, dedication, compassion, common sense, and integrity” of candidates. In addition, according to written guidelines, PURC members also evaluate candidates on their:

  • “Temperament”;
  • “Compliance with and knowledge of legal and ethical constraints”’;
  • “Potential aptitude for meaningful leadership and/or service at the Public Service Commission”; and
  • “Substantive knowledge of commission operations.”

State law, however, allows PURC members to qualify candidates even if they don’t have experience in any of the eight listed categories, as long as three-quarters of the committee agree to do so and provide “written justification of their decision.”

Mack said the legal requirements and other factors, including a written test, aren’t weighted – allowing an individual PURC member to decide what he or she believes is most important in nominating candidates.

Mack said he didn’t see a copy of the most-recent written candidate test; a PURC staff lawyer declined The Nerve’s recent request for a copy, citing a state confidentiality law. Test scores for each candidate were included in PURC’s nomination report released in late April after screening hearings.

“I want a total composite of what this individual is like … that they’re some good people that the legislative body can pick from,” Mack said.

‘Nothing to do with the candidates’

Yet in an unprecedented move in recent years, the Legislature during its joint May 10 session, rejected – in an unrecorded voice vote – an entire slate of three nominated candidates for the congressional District 2 seat. That move effectively allows four-year incumbent Elliott Elam to retain his $107,822 position until another election is held, which might not happen until next year, as The Nerve earlier reported.

Mack, who was among a majority of lawmakers who voted on the record not to reconsider the unrecorded voice vote, said he supported the action because there was a general belief among lawmakers that none of the three nominated candidates would get a required majority of votes to win.

At least one of the rejected nominees, however, doesn’t buy that explanation.

“That was not right,” John McAllister of Columbia, who owns a real estate consulting business, told The Nerve. “My job was to get tested, screened and nominated along with the ticket. Their job (lawmakers) was to have an election. They didn’t do that.”

McAllister, who, according to his candidate questionnaire, was a federal power administrator from 1989-95, marketing and selling energy generated by U.S. Army Corps of Engineers hydroelectric projects, said he believes that lawmakers who supported Elam pushed to strike the entire slate because they feared “there was a danger Elam wouldn’t be elected.”

McAllister said he doesn’t plan to reapply for the seat, citing work commitments in his real estate business. Elam, who has received positive written performance reviews from PURC – as has been typically done for PSC members – since joining the PSC in 2014, didn’t respond to a written message from The Nerve seeking comment.

PURC, chaired by Sen. Thomas Alexander, R-Oconee, has not yet released a new screening schedule for the seat. Although PSC elections in the Legislature for the district 2, 4 and 6 seats originally were scheduled for no later than early February of this year, lawmakers pushed back the screening application deadline to late March – effectively delaying public screening hearings to late April – and set the elections for the last day of the regular session this month.

David McCraw of Greer, who, along with fellow nominee William “Kevin” Newman of Inman, lost the District 4 seat to Thomas Ervin, a former S.C. House member and circuit court judge, told The Nerve he sent emails before the election to lawmakers asking them to “look at what the Public Service Commission needs” in the wake of the V.C. Summer debacle, and also to “look at the qualifications of the candidates and pick the candidates who basically had the qualifications that would support and help the Public Service Commission.”

But no lawmaker responded about the problems facing the PSC, said McCraw, who, according to his candidate questionnaire, is a longtime financial advisor and restaurant owner. McCraw, an unsuccessful state Senate candidate in 2016, contended the lack of response showed that lawmakers weren’t really interested in candidates’ qualifications.

“It’s not based off of qualifications or what’s best for the Public Service Commission,” he said. “It’s only based on who has helped who in the past, where they are politically; and it has nothing to do with the candidates whatsoever.”

Mack said PURC members are now looking for PSC candidates who will make ratepayers’ interests more of a priority, though lawmakers in 2007 quietly passed a law that allowed the PSC to increase South Carolina Electric & Gas rates for the now-abandoned V.C. Summer project.

Legislation that would give SCE&G customers a temporary rate decrease stalled at the end of this year’s regular session. Under the PSC-approved rate increases, typical residential SCE&G customers pay about 18 percent of their monthly bills, based on 1,000 kilowatt hours used, toward the failed $9 billion nuclear project.

“I’ve said in so many of the meetings that there’s no way we are going to make ratepayers ‘whole’ from all of the past, but we need to focus on ratepayers from this day forward,” Mack said.

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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