‘Reform’ bill would give more control to this South Carolina power broker

January 26, 2018

Investigative Reports

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Sen. Hugh Leatherman

By RICK BRUNDRETT

One of South Carolina’s most powerful lawmakers would gain even more control under a just-passed House bill purporting to reform an influential screening panel in the aftermath of the failed V.C. Summer project.

House bill 4378 would automatically put Senate President Pro Tempore Hugh Leatherman, R-Florence, or his designee on the proposed 12-member “Utility Oversight Committee,” which would replace the current 10-member State Regulation of Public Utilities Review Committee (PURC). If the bill becomes law, Leatherman, who is not a PURC member, also would appoint a non-lawmaker to the new committee.

PURC exerts considerable control over the regulation of private utilities in South Carolina, nominating and evaluating the seven-member Public Service Commission, which sets utility rates. From 2009 to 2016, the PSC, with the blessing of the state Office of Regulatory Staff, which also is largely controlled by PURC, hiked South Carolina Electric & Gas rates designated for the V.C. Summer project by more than 5,500 percent.

SCE&G customers have paid more than $1.7 billion for two never-finished reactors at the V.C. Summer plant in Fairfield County.

Under the House bill, which was approved by a 104-5 vote in a key second reading Wednesday and was sent Thursday to the Senate, is among a handful of House bills that supporters claim are regulatory reforms proposed after SCE&G and its partner, state-owned utility Santee Cooper, abandoned the nuclear project last summer.

But as written, the bill, which has 43 co-sponsors from both parties, essentially would maintain the Legislature’s control over the PSC and give even more authority to Leatherman, whose support of the bill is critical to its passage in the Senate.

Leatherman, who was first elected to the Senate in 1980, has far-reaching power in the 46-member Senate, as well as over the executive and judicial branches of state government.

The Nerve in 2015 reported that his longtime chairmanship of the budget-writing Senate Finance Committee allowed him to serve on or make appointments to at least 17 state boards, commissions or committees in recent years. As Senate president pro tempore, Leatherman can serve on or appoint members to at least 29 state panels, The Nerve’s review found then.

When he became the Senate’s elected leader in June 2014, Leatherman, who already was a member of the State Transportation Infrastructure Bank Board, which funneled several billion dollars over the years for transportation projects in select counties, including Leatherman’s home county, gained appointment power over two of the board’s seven seats.

Leatherman, who, as the Finance Committee chairman, served on the former Joint Transportation Review Committee, gained appointment power when he became the Senate president pro tempore over two more seats on the 10-member JTRC, which nominated candidates to the S.C. Department of Transportation Commission. The DOT Commission includes Leatherman’s son-in-law, John Hardee, as The Nerve reported in 2015; Hardee is currently the commission’s vice-chairman.

Leatherman, because of his position as the Finance Committee chairman, also is a member of the powerful, five-member State Fiscal Accountability Authority, which includes the governor. The SFAA authorizes the sale of state bonds for building projects, approves large purchases and sales of real property by state agencies, and manages state procurement services. Leatherman also is the chairman of a related state panel known as the Joint Bond Review Committee.

In addition, Leatherman is chairman of the Senate’s Interstate Cooperation Committee; serves on the chamber’s Ethics, Transportation, Rules and Labor, Commerce and Industry (LCI) committees; and chairs the state Agency Head Salary Commission.

On the judicial side, Leatherman, as the Senate president pro tempore, appoints two of the 10-member Judicial Merit Selection Commission, which screens and nominates judges for election in the General Assembly.

So, his inclusion on and appointment power to the proposed Utility Oversight Committee (UOC) under the House bill would only add to his already extensive power base.

Besides Leatherman or his designee, the Senate members of the UOC would include the Senate Judiciary Committee chairman – currently Luke Rankin, R-Horry – or his designee; and the Senate minority leader – currently Nikki Setzler, D-Lexington – or his designee.

On the House side, the UOC members would include the House Speaker – currently Jay Lucas, R-Darlington – or his designee; the Labor, Commerce, and Industry Committee chairman – currently Bill Sandifer, R-Oconee – or his designee; and the House minority leader –  currently Todd Rutherford, D-Richland – or his designee.

Leatherman and Lucas would have the authority to each appoint a non-lawmaker to the UOC under the House bill – effectively giving the Legislature control over eight of the 12 seats. The other four non-legislator seats would be filled by the governor.

The current six legislators on PURC include Sens. Thomas Alexander, R-Oconee and the PURC chairman; Rankin; and Brad Hutto, D-Orangeburg; and Reps. Sandifer, who is the PURC vice-chairman; Mike Forrester, R-Spartanburg; and David Mack, D-Charleston. Under state law, Lucas and Rankin control the legislative and non-legislative appointments to the 10-member PURC.

Sandifer, Forrester and Mack are co-sponsors of the House bill, along with Lucas and 39 other House members from both sides of the aisle. The proposed UOC’s authority over the Public Service Commission and Office of Regulatory Staff (nominating and evaluating the ORS executive director) would remain the same as PURC’s, under the bill.

In the wake of the collapse of the V.C. Summer project, Leatherman and Lucas appointed special committees from their respective chambers to investigate the failed project, though neither committee has yet issued a formal report or summary of its findings to the public.

As The Nerve reported earlier this month, the six PURC lawmakers also sit on the special investigatory panels, which Leatherman and Lucas reconvened this month to hear testimony on a proposed merger agreement involving Virginia-based Dominion Energy and Cayce-based SCANA Corp., SCE&G’s parent company.

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.