Ed. note: Jim Clarkson, an energy consultant and principled libertarian, is a veteran of gas and electric politics in South Carolina and other southeastern states. Clarkson has been a thorn in the side of cronyism between the utilities and their regulators for several decades. His previous posts can be found here, including “The Ratepayer’s Prayer“.
Six years ago, I sought advice about the prospects of my getting on the South Carolina Public Service Commission. It didn’t sound promising; nonetheless, considering myself familiar with state utility regulation, and having different ideas how it should be conducted, I gave it a shot. Here’s my story, beginning with some background.
In South Carolina there are seven U.S. congressional seats, and the General Assembly appoints a commissioner from each district for five-year staggered terms. In this state, the Governor is weak with the General Assembly making or approving appointments to various state offices.
The process begins with the office-seeker making an application, which requires a great deal of personal information that does not seem relevant for the job. This is followed by a mostly-essay type test. Then there is the interview with a Judicial Committee composed of state senators and representatives. The Committee is dominated by a small clique of powerful legislators who strongly influence the whole SC government. This Committee nominates candidates for the PSC positions, and the candidates then lobby the members of the legislature for votes.
The seat I was seeking drew eight applicants. I had no allies. There was no use seeking support from the Governor because the General Assembly loves to veto his proposed appointees for anything. My past dealings with the utilities in the state were, shall we say, mixed.
At the time there were big energy issues in the state. The investor-owned utility, SCANA, had partnered with the state-owned utility called Santee Cooper and cancelled a nuclear plant after spending $10 billion. There were big troubles on the state’s energy horizon, which could be solved by applying market conditions. However, the General Assembly – the real culprit for the mess – was blaming the PSC. So, maybe a new person had an advantage over those involved. I pointed out I had no vested interest to protect in the huge nuclear mess.
Accordingly, in my opening statement to the selection committee, I called for no state action and allowing the enterprises to work out their financial problems like a non-regulated company would have to do. This brought a reaction from a senior member of the committee who explained, in harsh terms, that decisions like that would be made by the General Assembly and the job of PSC members was to carry out orders. If I was not already doomed in my venture, the end was now clear. Also clear is that the PSC is just a branch of the legislature.
The committee then asked a lot of personal questions, focusing on my resolve-it-yourself position on lawsuits. These were mostly workman liens for unpaid engineering work. Finally, they laughed at some of the flowery comments in my letters of reference.
In the committee’s final report, I was deemed qualified but not nominated. There were three vacancies to fill at the time, and the committee nominated three candidates for each seat. I reviewed them; they were mostly those with a political background or connections, not real business types.
The fellow that won the seat I sought had been a page in the legislature when a law student. He’s a nice guy, by the way, and is currently chairman of the PSC, which has a complete turnover since receiving the blame for nuclear debacle.
The SCANA scandal was resolved by the company being purchased by another utility and by a terrible decision by the PSC that protected stockholders and lenders at the expense of ratepayers. Meanwhile, the Santee Cooper mess remains unresolved.
I admit to having a bad attitude about utility regulation and government in general. The experience reinforced and validated my beliefs.