Update on Lawmakers’ Energy “Solutions”

 

South Carolina energy bills

In the past couple of weeks, lawmakers have taken action on several interesting energy bills – only one of which was originally proposed by the special energy committees convened by the House and Senate. Here’s an update on what has passed, what these bills would accomplish, and what it means for ratepayers.

                    

S.954: Prohibiting the Public Service Commission (PSC) from ruling on SCANA’s abandonment application until December – PASSED THE SENATE

This joint resolution was filed at the end of January, and originally would have prevented the PSC from taking any action at all on the V.C. Summer issue until 90 days after the legislature adjourned sine die – which could have pushed a PSC decision back as far as next February. The Senate debate on this resolution took up the better part of this week (and apparently included at least one executive session and a legislative “huddle” during a Senate recess) before Senators amended and passed it.

The version that will now be debated in the House would require the PSC to wait until November to begin any official hearings on the case and instruct the commission to issue a final order by December 21, 2018.

What does this mean?

On January 12, 2018, SCANA officially asked the PSC for a ruling of prudency on the abandonment of the nuclear construction project (this petition also asked for approval of the proposed merger with Dominion Energy). Under the Base Load Review Act (BLRA), this ruling would allow the project’s debt to be added to the customers’ electric rates (assuming the costs are all found to be prudent within the parameters of the BLRA).

S.954 would put the PSC’s decision on hold, buying time for the regulators to collect information and (perhaps more importantly) buying time for lawmakers to insert themselves into the process in whatever way they choose (e.g. passing legislation to alter the BLRA retroactively).

 

S.955: Directing the Public Utilities Review Committee (PURC) to restart the screenings for PSC candidates – PASSED THE SENATE

This year, three seats on the PSC will need to be filled. Lawmakers suspended the screening and nomination process for PSC candidates last fall, ostensibly to give the special energy committees time to investigate the V.C. Summer fiasco.

S.955 is a joint resolution directing the PURC to hold another candidate filing period and resume the screening process. The Senate passed this resolution and it is currently before the House Labor, Commerce and Industry Committee.

 

H.4377: Replacing the entire PSC and adding qualifications for commissioners – PASSED THE HOUSE

Meanwhile, the House finally took up, amended and passed H.4377, which provides for the replacement of the entire seven-member PSC over the next two years (three in 2018 and four 2019).

This is not the “clean slate approach” that it might appear to be. First, the bill would not prevent lawmakers from re-electing the same members currently sitting on the commission. Second, three PSC members are up for reelection this year anyway (as noted above), and the other four are up for reelection in two years. There is little to be gained by moving the election up a year.

However, the bill does set a dangerous precedent. It is a one-time circumvention of the statutory process for replacing PSC members, for the purpose of enabling lawmakers to remove the entire membership of a non-legislative body. This move would set a dangerous precedent that could allow the legislature to take control of any board for any reason through state law.

While the amended version of the bill also tightens the standards for PSC members and contains some weak ethics language placing parameters on the nature, amounts and reporting requirements of reimbursements for PSC members’ continuing education, the power structure – the key to reform – would remain the same:  Lawmakers, who drove the nuclear construction project from the beginning, would still be in control. In fact, this bill increases lawmakers’ control (for an in-depth look at the full implications of this bill, click here).

 

What does it all mean?

The distinct theme to all of this legislation is the micromanagement of the PSC. All three of these bills exert and/or increase legislative control over the PSC and the prudency ruling the PSC will have to issue.

It bears repeating that the PSC’s function – regulation – is an executive role. Lawmakers properly set the parameters for how it should work, but they have no jurisdiction to meddle in the actual regulatory process.

Even if the Senate does not pass the House’s retroactive changes to the energy law, these bills, if passed, will make it impossible for the PSC to forget who they truly work for as they prepare to rule on the V.C. Summer issue.

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