Corner: PMPA & The Soothsayers.

 

By Larry Franklin

 

 

PMPA, the supplier of electricity for the City of Clinton, the Laurens CPW and others, continues in a state of uncertainty and hostility.

Lawsuits have been filed, charges and countercharges have been made (none substantiated), many meetings have been held — some in public, most behind closed doors — votes have been taken and the future of the organization is in doubt.

Clinton City Council has given to Mayor Bob McLean the authority to decide if Clinton stays in PMPA. No one has said, at least publicly, what the ramifications are to city electric customers if the city leaves PMPA or if they city stays.

Various “scenarios” have been floated — the fancy way of saying we don’t have a clue what’s going to happen and the future vitality of our city and others remains in doubt.

And Clinton’s electric customers continue to pay the highest rates in the state. Even with no electric rate increase (and one rate decrease) in the last 4 or 5 years.

In the early 1980s, Clinton, Laurens, Abbeville, Easley, Gaffney, Greer, Newberry, Union, Westminster and Rock Hill, formed PMPA. In Clinton’s case, the new alliance was approved by city council.

The city said by joining PMPA, Clinton’s utility rates should, at least, stabilize. How much the city had to pay Duke Power Co. for wholesale power was always subject to Duke’s rate requests, that were approved but the state’s Public Service Commission. 

PMPA, it was believed, would give the city more control over the wholesale power rate. 

The decision to form PMPA was challenged in court and, after two years, was heard by the SC Supreme Court. The SCSC ruled in September, 1984, PMPA (and, thus, Clinton) could buy part of a new Duke Power nuclear plant in North Carolina.

The SCSC decision was 4-1 with Chief Justice Bruce Littlejohn dissenting. The ruling gave PMPA the authority to pay $1.2 billion for its share of the nuclear unit’s total cost. When the lawsuit was filed two years prior, the estimated cost was $675,000, so the legal delay caused the purchase price to double.

The PMPA plan had been approved by the PSC and that ruling was challenged in court by Palmetto Alliance, an anti-nuclear organization. First in circuit court and then, finally, the ruling was heard by the SC Supreme Court. 

Justice David Harwell, in writing the majority opinion, said, “The (Public Service) Commission clearly found the acquisition of the project to be beneficial to PMPA…Potential cost savings was the motivation for the formation of PMPA and the decision to acquire the project.”

Russell Allen, Clinton’s city manager at the time, said the cost savings to Clinton would have to be in the 5-7 percent range before he would recommend city council continue with the project.

Actual construction costs and bond rates were not yet known and it was that uncertainty that seemed to bother Justice Littlejohn.

“…No one can estimate with reasonable accuracy the total cost of the project and the price which PMPA will have to pay and pass on to the consumers. Truly, PMPA is buying a pig in a poke.”

During a special-called city council meeting in September, 1984, the late Jim Johnson warned of the uncertainty. At the time, Johnson was a Clinton attorney. He would later serve in the SC House of Representatives before being elected to the SC circuit court bench.

Johnson told council, “It may look good for the first 5-10 years, but 25-30 years down the road, it may not be so good. I’m not aware of anything city council has done that will have as far-reaching effect.”

Both Justice Littlejohn and Judge Johnson proved to be significant soothsayers. 

Thirty-six years later, there is no end in sight for the uncertainty or the pain that is felt by the people who get their electricity from Clinton.

 

(Larry Franklin is retired and lives in Clinton.)

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