Earlier this week the Senate V.C. Summer Nuclear Project Review Committee and the House Utility Ratepayer Protection Committee met to discuss the failed nuclear reactor construction project. Both are special committees called by legislative leaders to investigate and address the energy crisis. Below are the primary takeaways from this week’s committee meetings.
There is little lawmakers can do at this point, short of taking legislative action in the next session. The committees heard testimony from SCANA and Santee Cooper executives, the Public Service Commission (PSC) and Office of Regulatory Staff (ORS), but the committees cannot unilaterally demand action from any of these entities. The primary purpose of the meetings – judging from the discussion – appears to have been political grandstanding and searching for a scapegoat.
The lawmakers who are tasked with oversight – the six legislators who sit on the Public Utilities Review Committee – are escaping all scrutiny. All six of those lawmakers are on the special committees, instead of testifying before them. This is especially remarkable in light of the fact that the House speaker is calling for the resignation of the ORS director – even though the speaker himself controls half of the committee that picks the ORS director (along with the PSC members) and conducts his annual performance evaluations.
The Base Load Review Act (BLRA) is working exactly as intended. The BLRA (adopted almost unanimously in 2007) was designed to guarantee that ratepayers would repay SCANA’s debt even if the project wasn’t finished, and ensure a profit for SCANA investors regardless of how the project ended. It was strongly weighted in favor of the utilities and specifically included protections against pushback from the PSC and ORS. Lawmakers seem to think the V.C. Summer disaster is a regulatory malfunction, but committee testimony correctly stated that the system is functioning exactly as designed.
The one thing lawmakers can do is to examine their own responsibility in this system. The entire energy regulatory structure is directly created and overseen by lawmakers. They are the ones ultimately responsible for failing to catch any negligence that occurred before it cost the ratepayers, and they are the ones who passed the laws permitting off-loading construction costs and investor profit onto the ratepayers. Lawmakers should be asking hard questions about their own culpability in this matter, and what the proper role of government in the energy structure should be going forward. Unfortunately, these are the questions both committees avoided asking.