The South Carolina General Assembly has yet to make a decision on the future of the state-owned Santee Cooper utility and will not do so at least until they return to Columbia in January 2020. Substantive action was taken in 2019, however, on another important issue related to utilities.
Legislation that for the first time will provide state regulation of electric cooperatives was approved.
The bill grew out of a 2018 controversy involving the former board of trustees of St. Matthews-based Tri-County Electric Cooperative – with trustees being ousted from their positions and replaced with a new board in an unprecedented action by cooperative membership.
The changes followed newspaper reports on board practices that stunned officials with other co-ops and utilities, elected officials and co-op customers.
The former Tri-County board had an appetite for expensive dinners, cash bonuses and secretive meetings.
Some board members were being paid an average of $55,000 a year for a part-time job. Some were being paid as much as $79,800 a year to attend board meetings. Over the past several years, some members were paid in excess of $100,000.
Utility board members earn $450 per meeting. But Tri-County's board held many more meetings per year than required by law, boosting compensation to three times the national average for co-op trustees.
Some Tri-County board members also were getting health insurance through the utility.
The new legislation is designed to prevent such future excesses.
Championed by Calhoun County Rep. Russell Ott, who represents many Tri-County customers, it gives the state Office of Regulatory Staff the power to conduct governance audits of co-ops. After an audit, the agency must report its findings to the co-op’s management and board and work to resolve any compliance issues that are identified. If there are disputes between regulators and a co-op, the state Public Service Commission has the power to resolve them.
Co-op boards must publicly disclose, by May 15 of each year, all compensation and benefits paid to board members. Directors cannot fill temporary board vacancies with their family members. Board members and their families are banned from having any other business relationship with the co-op — such as doing construction work.
The legislation also requires co-ops to notify their members at least 30 days before an annual meeting or any special meeting that includes an election. Polling places for the election of board members must be open before and after normal working hours to allow more consumer-members to participate. Directors and others are not permitted to campaign where members are voting.
While officials such as Mike Couick, president and CEO of the Electric Cooperatives of South Carolina, say the entire Tri-County episode ultimately proved the cooperative model of ownership by members works, he agrees the oversight legislation is a positive step.
“I think this is a step toward restoring trust,” Couick said. We agree.