Carolina Energy 2019: In South Carolina – Time to Implement Decisions

From Scott Carlberg

Focus and timely decisions from regulators and policymakers are essential to successfully move into 2019. 

Over the next few weeks, Energy Consumers of the Carolinas will look ahead at 2019 in the energy business. We will cover a wide range of topics – technology, business trends, energy supply, workforce…

We start with the most obvious issues first: The State of South Carolina questions about nuclear debt and the ownership of Santee Cooper.

This blog is posted as the South Carolinas Public Service Commission is due to make a call on the possible merger between Scana and Dominion Energy. December 21, 2018 is the deadline. There has been a lot of debate about this in a lot of places.

The State is at a time to use that discussion and debate to decide. 2019 is a time to implement those decisions.

The chair of the SC Public Service Commission made a good observation about the issues around Scana’s possible merger and the nuclear issues that created the controversy: “I will guarantee you that we will never make everyone happy. That’s not really our job. But we will do our best for everybody here.” (Source)

The chair is succinct and right. Leadership in this kind of circumstance has its demands. He and the other commissioners are in seats that require action that is not a band aid, but the best cure they can create.

Other energy decisions in South Carolina cascade from the decision about the merger.

Debt: How is the debt from the terminated Summer project to be managed? ECC has written in the past that there is no shortcut in resolving the debt. Unresolved debt issues fester in the public’s mind. Debt adds up as interest accrues. It takes an additional toll as it can impact the financial ratings of organizations. As debt remains undecided it could lead to questions about state decision-making capabilities.

The debt is out there and owed. It has to be resolved in an understandable way. The citizens who could feel the pain of the debt need clarity.

Santee Cooper: Whether the State of South Carolina or someone else owns the Santee Cooper utility is on the table. ECC has briefly looked at this through a business lens, noting that for-profit businesses often work hard to narrow their focus to what they do best. They do work they are good at doing. Companies do not hang onto assets that are not in their expertise.

The question is whether the state should own a utility or provide regulatory oversight of the utility.

Decisions are due to be made soon. What faces South Carolina is the need to make decisions focused on debt and Santee Cooper ownership.

An ancillary issue raised recently is about deregulation of the South Carolina electric industry. There’s a catch, though. Where deregulation has been attempted, consumers (and politicians and regulators) have had some unexpected surprises on the high-side of prices. Virginia looked at deregulation, and a 27-year state senator said, “I would recommend avoiding deregulation and keeping pressure on your legislators and commissioners to keep electric rates low.” Check the October 2018 opinion piece here. *Note that the State Corporation Commission in Virginia is the equivalent of the SC Public Service Commission. 

Check this look at that electric deregulation: The Paradox of Electricity Deregulation – This is one setting where “deregulation” is a lot more complicated than regulation. Deregulation takes years to properly manage. There are more immediate answers needed for SC consumers.

2019 will be a year for some new players in the electric industry for South Carolina. Seems pretty certain. The considerable debate so far has aired many viewpoints. As noted, leadership has its demands, and there are decisions about …

  • The role of state government in the ownership of an electric utility versus the regulation of a utility
  • Managing financial obligations resulting from the Summer nuclear project
  • How the voice of consumers is heard
  • Whether policymakers stay focused

These decisions are due to be made and then efficiently enacted. 2019 needs to be a year of implementing decisions on the problems clearly in front of consumers, regulators and policymakers now.