Nuclear Fiasco aftermath

Taxpayer-owed Santee Cooper power company is another failed experiment in government-run enterprise.

Santee Cooper is actually governed by a small clique of powerful legislators whose ambitions to create a major regional seller of electricity led to the now well-known $9 billion nuclear plant building debacle.

This crisis provides an opportunity for several reforms to benefit the economy.

• Sell up to 40,000 acres of Santee Cooper-owned land unrelated to utility operations to pay down its $8 billion debt.

• Separate the generating assets into an independent power producer.

• An initial public offering can gain investment in a company regulated by competition, not the Public Service Commission.

• Gain equity in the new company by allowing bonds to be converted to stock.

• The high voltage transmission system should be owned by its users, creating a free market other power sellers can join.

• Consumers would be able to choose their power supplier through competition.

• Direct served customers would form another electricity distributing entity.

• Exclusive franchise territories would be eliminated and consumers enabled to choose the provider with the best price.

These reforms have precedents historically in other parts of the country.

The concepts of privatizing and eliminating state regulation are familiar, but the idea of a shared transmission system isn’t.

Right now, some states require mandatory transmission allowing consumers to choose from many suppliers who deliver power to the local power distributor.

In Georgia, the owner-users of the transmission system compete for customers in certain circumstances. These relations were developed voluntarily between them.

In the 1970s, Georgia Power was near bankruptcy due to massive cost overruns in the construction of 2 nuclear reactors.

At that time only assets that were “used and useful” could gain regulatory approval for recovery and rate of return. Desperate for money, Georgia Power sold parts of power plants to municipal and cooperative power distributors. These distributors demanded the right to use the transmission system mostly owned by Georgia Power, and agreed to compete for customers.

All these entities can compete for large customers all over the state. A small utility can bid to serve a new industrial or commercial facility anywhere in Georgia. Competition for new customers is intense.

The competing utilities go all out to accommodate potential customers with lower rates and other amenities.

Customers should be able to switch utilities for a better price within contractual agreements. Georgia developed its system with a minimum of political direction.

Jim Clarkson is president of Resource Supply Management, an energy services company.