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Columbia Business Monthly

The Power Company

Nov 01, 2017 02:12PM ● Published by Emily Stevenson

By John Temple Ligon

SCANA, parent company of SCE&G, was suggested in The State recently as being possibly a bit too creative, particularly when SCANA’s nuclear power plant construction communications are concerned. The mystery continues: Did SCANA tell Santee Cooper in a timely manner or did Santee Cooper get word to SCANA? Who knew first the nuclear power plants were in serious trouble? Was that same information brought before Gov. McMaster? When?

While Gov. McMaster puts Santee Cooper up for sale, how can any firm take the sale seriously with so much confusion and misleading information? Sounds intentional, just like a poison pill.

We’ve all seen this SCANA communications breakdown business before. To paraphrase Casablanca’s police chief, I am shocked, shocked to see fraud at this establishment.

For almost a hundred years until recently, SCANA and its forerunners ran the bus systems in both Columbia and Charleston. It had to if it wanted the electric power franchise monopoly, a deal confirmed by the United States Supreme Court in the early thirties.

But under the power company’s screwy accounting system, the company made money on transit. To review the company’s annual report every year for a century, everything spent in producing and distributing electricity was carried as “electric in service,” which meant a targeted return on common equity was guaranteed by adjustment in rates every year. By law, the power company could not lose money.

Even the transit system made money, if the annual report to shareholders could be understood.

According to the 1992 SCANA annual report to its shareholders, from 1982 until 1992, the Columbia and Charleston bus systems run by SCANA lost 46 percent of their ridership – that’s beginning in 1982 at 10,720,000 revenue passengers carried and ending in 1992 at 5,837,000.

Nowhere else in the world did that happen. But it was particularly unexpected between the two concentrations of population growth in the Midlands and the Holy City. A loss of almost half the bus transit ridership in one decade had to have been by intent and design – had to have been.

Meanwhile, the federal government continued for the decade with its transit subsidies. In rough numbers, the SCANA bus systems collected about $2 million dollars in federal subsidies each year, $1 million dollars as an operations subsidy and the second million dollars for capital improvements, such as new buses.

SCANA, however, was not interested in new buses because new buses would challenge the SCANA strategy to lose ridership and drop the bus system altogether. The capital improvement money, around $1  million dollars each year, went into a slush fund until a use was found that did not include new buses or any possible gains in ridership.

Think of that: new money every year and no new buses. Put another way, obviously the federal government assumed the SCANA bus systems were growing and helping more and more citizens get to work with reliable bus transit. In fact, SCANA was buying clunkers, old buses probably even Castro’s Cuba wouldn’t buy, refurbishing the buses in prison industries on Broad River Road in a new appearance package but not replacing the engines or the transmissions.

By not working on the transmissions and the engines, SCANA was running a fleet of breakdown buses, and its passengers had to find some other way to get to work. The ridership was already the transit captives in 1982, people who had to take the bus as their only means of transportation, but by 1992 the SCANA bus system ridership was down to its desperate dregs. By all appearances, the SCANA ridership was hardly a positive marketing arm for bus transit. Who would want to ride with that crowd?

So SCANA was taking the federal subsidies and gutting the bus systems at the same time, denying the work force a reliable ride to work.

Speaking of misleading communications, SCANA let the citizens of Columbia and Charleston think that SCANA was capable of hardball, a situation where SCANA could simply follow its threats and drop the bus transit systems, leaving the people of Columbia and Charleston without any transit at all. Tough guy SCANA, as it turned out, was producing even more mixed signals.

According to the Securities and Exchange Commission, SCANA could not acquire an out-of-state company and neither could it be acquired by an out-of-state company until it got rid of its bus operations in Columbia and Charleston. The cities were holding the cards, but few people knew it.

The transfer of the bus systems from SCANA to both Columbia and Charleston should have been far more in the cities’ favor.

I personally looked into the matter when I ran for Mayor of Columbia in 1990 and won a whopping five percent for the vote. Bus transit was my #1 issue, but I couldn’t generate any interest. I put forth a few proposals to improve bus transit and maybe even raise ridership, but this was before I understood how SCANA made its money and how we dubbed the firm the Power Company: SCANA buys and sells power, and it produces and distributes electricity.

In a memo titled “SCE&G Transit Issues – fall/winter 1991,” I found myself in the middle of further SCANA fraud, caught between the mayor’s office in my hometown and SCANA’s public relations executives. The memo recorded a meeting led by a Richland County Council member. I didn’t attend the meeting and I was not supposed to see the memo, I guess, since it pointed me out for action. I took the memo to a Columbia City Council meeting, read it all, and waited for fireworks, but there was none.

To quote from the SCANA memo:

SCE&G can expect strong opposition to fare increases and schedule reductions with commensurate negative public relations for the company. The strategy should include a method to neutralize Mr. Ligon’s proposals or, at best, converting his position to one that parallels company policy. Thus, strategy objectives are:

A. Minimize anticipated negative publicity
B. Assist the mayor in developing a process for the work of his committee that maximizes opportunity for public takeover
C. Neutralize Temple Ligon
D. Develop a marketing position that will enhance public support for a takeover

(Editor’s note: John Temple Ligon’s opinions are his own and do not necessarily represent those of Columbia Business Monthly.)

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