Another Look At Scana
Nov 30, 2017 10:11AM
By Emily Stevenson
By John Temple Ligon
Since SCANA, parent of SCE&G, is having a hard time finding believers in its nuclear plant construction stories, maybe another recall can put SCANA where it might insert some veracity into the conversation. The recall in this case is a reminder of just how determined SCANA was to get out of the bus business back in the early ‘90s. They said they wanted out, and they surely did.
After I failed to generate public interest in Columbia and Charleston to improve the SCE&G bus system, SCANA at least recognized my good-faith efforts and asked me to work for them full-time beginning in August 1991, developing ideas to improve the bus system to the point the City of Columbia might consider a takeover and let SCE&G off the bus transit hook reaffirmed by the U. S. Supreme Court in the early ‘30s.
The bus system was carried on the SCANA books as “electric plant in service,” which meant the magical accounting that allowed SCANA to gain its government guaranteed return on common equity also applied to the bus system. SCANA actually made money on the bus business, otherwise a losing proposition in every bus system in every city in the country.
The problem, however, was the restriction on SCANA’s desires to expand. By a 1930 law, SCANA could not be taken over by an out-of-state firm and neither could SCANA take over an out-of-state business or any part of that business until SCANA got out of the bus business.
The value of a share of SCANA stock was dependent on SCANA’s potential for growth.
In 1991, SCANA directed its advertising and PR arm, Columbia-based Chernoff/Silver, to hire me and get me out of Columbia, where I was regularly invited to speak on bus transit on the rubber chicken circuit. These lunch gigs were where the subject matter otherwise could be about as interesting as the crabgrass crisis in Kershaw County, so lining up speaking appointments for me at the Rotary Club, say, was not too hard.
I took the job offer and I relocated in the Orlando office for Chernoff/Silver. Part of my cooperation came from their pitch to me that they wanted me to gain skills and knowledge in advertising and PR and in maybe another year move to Charlotte to open an office there.
After about a year in Orlando, where I was shuttling between there and Columbia, I was alerted to a twenty-something commercial artist who wandered into Chernoff/Silver in Orlando while I was in Columbia. The artist told of an opportunity to compete for the full advertising/PR contract at the Savannah bus system, Chatham Area transit, aka CAT. On top of that, CAT wanted to develop a plan for a bond referendum. The walk-in wanted a job. He had heard of me in transit circles, and he said if Chernoff/Silver won the CAT contract, he could work with us.
I immediately called CAT and heard that the deadline to enter the competition was fast approaching. Then I called Tom Gardo at the Hilton Head office of Chernoff/Silver. I really liked Gardo, an old pro in the business. Gardo and his coworker in the Hilton Head office both said they could probably put it together, but they were sure I was the front man for the pitch. My transit knowledge would be our presentation.
It was a two-presentation pitch. The first one was when we simply introduced ourselves at the CAT headquarters, and the CAT people would tell us everything we needed to know and everything we needed to bring with us for the second presentation, the one CAT would use to determine the winner among us three competitors.
Gardo said he was putting together the Chernoff/Silver material for our second presentation. In about two weeks, we’d put it to them, as would the other two firms, and CAT was prepared to announce the winner that same afternoon.
On the morning of the second presentation, I got a call from Gardo at my Savannah hotel room. He didn’t have it all put together, and we were going to have do some serious dancing.
Fine, I said, let’s dance. I had already forwarded enough material to just go with that. My bus transit stories were well in hand at CAT.
Before lunch, we three got together in downtown Savannah and laid out our plan, replete with dancing and such and lacking Gardo’s standard Chernoff/Silver presentation. We walked into the CAT headquarters on time but a little short-handed.
We didn’t know how or why, but the CAT executives had already decided on us before the second presentation by all three competitors.
SCANA was not happy because our Savannah victory meant that what I had been telling the Columbia crowd actually had some truth to it.
I was the expert on developing and promoting bus transit, so I had to go. SCANA had Chernoff/Silver kick me out and SCANA told Chernoff/Silver to decline the Savannah opportunity.
A golden opportunity, and SCANA told Chernoff/Silver to drop it and get on with the business of reducing bus ridership in both the Columbia and the Charleston bus systems.
Even though SCANA was paid subsidies, millions from the Federal Transit Administration to run the two bus systems, SCANA ran off riders, 46 percent all told between 1982 and 1992. SCANA took the subsidies for operations but redirected the subsidies for capital improvements – ordinarily new buses, for instance – to continue its collection of run-down buses. The clunkers would break down and run off the ridership.
I didn’t know all this – any of this – when we went after the Savannah contract, but soon after, SCANA told Chernoff/Silver to run me along, the SCANA annual report to its shareholders came out, and the drastic drop in bus ridership was reported to impress the shareholders with how successful SCANA had been over the past decade in getting rid of bus ridership.
Between 1982 and 1992, SCANA had managed to lower its bus ridership from about ten million passengers a year down to five million passengers, and SCANA thought it suitable to brag about it in their annual report to shareholders. After all, nowhere else in the world did this happen.
(Editor’s note: John Temple Ligon’s opinions are his own and do not necessarily represent those of Columbia Business Monthly.)