#SCStateHouse: Legislative Power Struggle Rages Over #NukeGate

Behind the scenes score-settling underway amid contentious energy debate …

Last November this news site reported exclusively on a major shakeup within the South Carolina House of Representatives.

Specifically, we reported on S.C. speaker of the House Jay Lucas’ decision to route all legislation dealing with the ongoing #NukeGate  debacle through a judiciary subcommittee chaired by former prosecutor Peter McCoy.

Lucas’ move was huge demotion for Bill Sandifer, chairman of the House labor, commerce and industry (LCI) committee.  Ordinarily, Sandifer’s committee would have had first crack at these bills.

Why was he demoted?  According to our sources, Lucas and several other legislative leaders were leery of Sandifer’s involvement with a self-serving “cover your ass” committee set up in the immediate aftermath of #NukeGate – a spectacularly failed command economic experiment in the nuclear power industry that has its origins in the S.C. General Assembly.  They were also reportedly concerned about allegations of improper offline negotiating between Sandifer and executives of one of the utilities at the heart of the scandal.

(Lots of that going on, huh?)

Anyway, we haven’t been especially impressed with McCoy’s handling of #NukeGate.  He’s certainly played well for the cameras and channeled some of the populist angst related to this ongoing debacle, but we believe he and his colleagues in the S.C. General Assembly are playing fast and loose with what could wind up being the most important issue the Palmetto State will face this decade.

Also, the legislation they have put forward strikes us as more of a tap dance than a line in the sand … an invitation for negotiation with the powerful interests eying the two utilities at the heart of this scandal.

Anyway, if they’re not careful their “solution” to this problem could wind up being even worse than the problem itself …

So … how did we get here?

To recap: With state lawmakers cheering them on, crony capitalist utility SCANA and state-owned utility Santee Cooper spent the past decade building a pair of next-generation nuclear reactors in Jenkinsville, S.C. at a cost of $9.8 billion.  The money was spent, but the reactors were never finished.  In fact they’re not even half-finished – with the cost to complete them reportedly ranging between $9-16 billion.

(Click to view)

(Via: High Flyer)

Drowning in debt, Santee Cooper pulled the plug on the reactors seven months ago – killing an estimated 5,600 jobs, squandering billions of dollars in investment and throwing the state’s energy future into chaos.

As of this writing, there are no plans to complete the project … meaning South Carolina is essentially stuck with a $10 billion hole in the ground.

Just eight days before it bailed on the project, the state-owned power company announced massive rate increases on customers tied to “costs associated with nuclear construction and other system improvements.”  The utility has also given its former leader a multimillion-dollar, taxpayer-subsidized golden parachute – even though documents released last summer showed its executives (and SCANA’s leaders) knew two years ago that the project was doomed.

Much of the investment related to this project was effectively socialized via the now-notorious Base Load Review Act (BLRA) – a case study in government mismanagement.

Advanced by liberal lawmakers and allowed to become law in 2007 by former governor Mark Sanford, the BLRA enabled SCANA and Santee Cooper to bill ratepayers for the costs of constructing the reactors.  In fact ratepayers are still being billed to the tune of $37 million a month.

That burden would be reduced – but not eliminated – under the terms of a a $14.6 billion offer for SCANA submitted by Virginia-based Dominion Energy.  In addition to lowering customers’ bills moving forward, Dominion’s deal also contains an estimated $1.3 billion in immediate ratepayer relief related to the botched project.

Meanwhile a rumored bid for Santee Cooper from Florida-based NextEra Energy – details of which were exclusively published on this news site yesterday – would rely on taxpayer subsidies to provide relief to the beleaguered government-run utility’s customers.

It’s a serious mess, people …

McCoy obviously wasn’t in the S.C. General Assembly when the BLRA was passed … meaning he and other younger House members (including Kirkman Finlay, Russell Ott and Micah Caskey) have been able to carry the water for many of the legislative leaders who voted for this abomination.

(Click to view)

(Via Travis Bell Photography)

In McCoy’s case, his lead role in the drama has sparked furious backlash from Sandifer – who remains livid over his demotion last November.

Unable to take his anger out on Lucas, Sandifer has instead targeted McCoy – albeit indirectly.

Last week, multiple sources at the State House informed us that staffers on the House LCI committee – all of whom report directly to Sandifer – were recruiting lobbyists to appear before his committee to testify against pro-solar legislation being sponsored by McCoy.

We don’t have a dog in that fight, but McCoy obviously does …

We reached out to several of our State House moles and were informed that the order to torpedo these solar bills came from Lucas – not Sandifer.

Do we buy that?  Or do we think this is another desperate ploy by Sandifer to try and cover his tracks in his battle with McCoy?

Who knows …

Sandifer survived an attempted takeover of his committee in 2014, and he has become increasingly vulnerable ever since.  One of the most unpopular members of the S.C. General Assembly, he has reportedly become even more irascible since Lucas stripped him of his authority over the #NukeGate bills.

Also, of all members of the S.C. House who voted for the BLRA in 2007 – Sandifer is arguably the most exposed.

In addition to supporting the #NukeGate rate increases, he was a member of the state’s Public Utility Review Commission (PURC), which was supposed to protect consumers by overseeing the political appointees chosen to regulate the energy industry – and specifically the V.C. Summer project.

Stay tuned … we will continue to keep our eye on the internal power struggles raging behind the scenes as these weighty energy issues are addressed.



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Banner: Travis Bell Photography

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