February 21, 2024

The Nerve Archive

Where Government Gets Exposed

You gotta serve someone

Santee Cooper CEO Lonnie Carter in happier times

In the nukes debacle, Santee Cooper seemed alone and sleepy


Chairman Russel Ott appeared frustrated sitting across from outgoing Santee Cooper CEO Lonnie Carter during Tuesday’s House Utility Ratepayer Protection committee hearing.

“So you don’t know why the board’s not here?” asked Ott.

“I didn’t know they were invited. I don’t think they knew they were invited,” replied Carter.

“I don’t think that’s correct,” said Ott.

Throughout the construction of the two V.C. Summer nuclear reactors that were abandoned July 31, Santee Cooper has loomed in the background as a junior partner to private utility SCANA. However, as Carter has noted, Santee Cooper has been integral to the project.

More importantly, Santee Cooper is a government agency that’s supposed to operate for the benefit of taxpayers.

So it’s alarming that its board didn’t show for a committee hearing that was slated solely for testimony by Santee Cooper’s leadership.

One thing seems clear: Santee Cooper’s board doesn’t feel accountable.

This is at least partly due to the fact that in 2005, legislators removed the governor’s ability to fire Santee Cooper board members unless they commit a serious infraction under the law. As a result, Santee Cooper’s decisions go unchecked, and those decisions significantly impact ratepayers.

Just consider their authority throughout the V.C. Summer project. During its construction, the board voted to increase rates to customers five times. Unlike privately owned SCANA, Santee Cooper did not need permission from the Public Service Commission, the state’s utility regulating body, to do so.

Santee Cooper’s board also has the authority to borrow money by issuing bonds. To generate capital to finance the project, Santee Cooper borrowed an estimated $4.4 billion dollars – all of which must be repaid by its customers.

Frustrated ratepayers had the opportunity to raise concerns during the utility’s rate adjustment proceedings, but ultimately the board had no obligation to listen. That’s because ratepayers don’t vote for board members. And those whom they do vote for — in this case, the governor — can no longer hold the board accountable.

There are also clear signs Santee Cooper bit off more than it could chew. Testimony by Carter reinforced that Santee Cooper wanted to sell part of its share in the project as early as 2010. The utility acknowledged the additional power would be unnecessary, saying, “We had more than we needed.”

Even worse, Santee Cooper exercised no real oversight over the project. Its resources were simply at SCANA’s disposal. The EPC (Engineering, Procurement, and Construction) agreement signed by the utilities and their contractors placed SCANA as the agent of Santee Cooper, allowing SCANA to act on behalf of Santee Cooper in project negotiations, oversight, and cost. On the project site, Santee Cooper only employed a handful of staff to monitor activities

Considering Santee Cooper’s minimal involvement in the project and the legislature’s move to strip the utility’s oversight, it’s no surprise the board doesn’t feel compelled to show up in front of the legislative committee. In fact, Santee Cooper has been disconnected from the beginning, and the board’s absence from the hearing is only the latest reminder.

Ratepayers deserved better than this.

When Santee Cooper joined the project and decided to leverage billions of its customers’ dollars, ratepayers – and taxpayers at large – had a right to expect that it would be proactive, engaged, and accountable. Instead, it sat idle. And when the house of cards showed its frailty and ultimately collapsed, Santee Cooper did little more than watch it fall.

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