Nowhere to run

August 4, 2017

Inside Insight, Uncategorized

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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.

Nerve stories are always free to reprint and repost. We only ask that you credit The Nerve.
  • Lyn Wilson

    I disagree with the conclusion of this article. The ‘free market’ works when willing and informed consumers make a choice between competing offerors for similar goods or services. A monopoly is the antithesis of a free market. What needs to happen – with Santee Cooper and SCE&G – is a class action lawsuit. Both entities conspired to profit from the building of 2 nuclear power plants, and lobbied the state legislature to have codified the terms by which the construction of those plants were to be funded in advance by increases in the (captive) consumer’s electric bill. Both entities justified the increases by promising that when the new plants came online rates for everyone would decline or rise at a much lower rate. Both entities have now defaulted, and breeched their contract with the consumers. To allow the projects to get $10 billion down the road without corrective oversight is gross negligence on the part of both entities. And now SCANA has the temerity to state that the consumers will be funding the additional ~$5 billion needed to shut the project down? The consumers, not Santee Cooper or SCE&G, rightfully own the two nuclear sites and all of the associated resources and infrastructure. Criminal charges should be levied against the two entities, and the board of directors for each should be prosecuted. This is ‘legalized’ theft on a grand scale.

    • Evinrude 27

      Don’t disagree, but if you fine SCANA $14 Billion – where do you think that money is going to come from? Ratepayers!

  • Walter White

    Better add the SC legislature and former Gov Halley to the defendants list– they passed the law (and failed to veto it) that made all this possible. And, BTW, good luck with that– welcome to SC, have a nice day!

  • Philip Branton

    Hmm…… We wonder just how much of the state retirement pension was invested in this impending fiasco due to the 20+ billion it is in “debt” already…? What if the recent pension “tax” was in anticipation of this very bankruptcy fiasco..?
    Talk about conspiracy. You mean the legal team for Toshiba and Westinghouse and SCANA and Santee Cooper did not have business and legal lobby actions in our Statehouse campaign and legislative consulting..????
    My Backside….!!!!!

    This nuclear nest of fraud is a matter of economic NATIONAL SECURITY…!!!!!!

    I dare say that David Pascoe is sitting on information that is going to make the NSA blush…

  • Roboc Dalama

    Hello this is SCANA screw you all and payup and shutup.

  • Bill Brasky

    When will people in this state learn that blindly pulling the “R” lever time-after-time no matter what these people do while in power has consequences?

  • OldMarineFE

    WHEN-O-WHEN will SC citizens declare that they have had enough??? Do
    you REALLY think ANY republican or democrat politician has the best interests of SC citizens as their primary reason for being/staying in our state government? AND, how ’bout that lindsey graham, huh?

    This is, ALL OF IT, just another symptom of how corrupt the SC government
    has become. You will NEVER defeat the corrupt “gangs” that run roughshod
    over SC, UNLESS you organize and get a voting block together that can get the job done! In fact, just a few thousand angry and active SC citizens can and WILL make a BIG difference!

    Join the fight here, http://sccphub.net, clear & clean the swamp with the Constitution Party! IT CAN BE DONE!