Lexington County Chronicle
March 14, 2019
By Jerry Bellune
State lawmakers must act swiftly on Santee Cooper’s $8 billion debt before it grows any larger.
That must be done now, says SC Small Business Chamber CEO Frank Knapp.
The problem became apparent in July of 2017 when taxpayer-owned Santee Cooper and SC Electric & Gas abandoned 2 nuclear plants.
As a 45% partner in the failed project, Santee Cooper was left with a $4 billion construction debt plus another $4 billion in other debt. That threatens to dramatically increase electricity rates for Mid-Carolina Electric and members of 19 other cooperatives in the state.
“SCE&G’s nuclear debt was $5 billion,” Knapp said, “and the utility warned that it was facing a business crisis that could only be successfully resolved by a speedy sale to Virginia-based Dominion Energy.
“That business-saving deal was approved by the state’s Public Service Commission in December. SCE&G is now financially solvent, ratepayers have seen their electric rates reduced 15% and half of the nuclear debt has been taken off customers’ backs.
“So where is the resolution to the Santee Cooper $4 billion financial crisis?”
Some say they expect increases of about $1 million a day in interest charges.
The state has received 4 offers to buy Santee Cooper’s assets and 10 proposals to manage it.
A Senate committee now is assessing their options.
“The concern of many, including probably the private companies that have offered to buy Santee Cooper, is that the financial crisis grows daily, making it more expensive to get the best deal for ratepayers,” Knapp said.
“Unfortunately, some legislators are indicating that this deliberative Senate analysis might put the business decision off until 2020. We can’t wait that long.”
Knapp said the Small Business Chamber supports sale of Santee Cooper if it will remove the $8 billion debt.
“This debt represents 70% of the total debt owed by the state of South Carolina.
“Eliminating this debt would put our state in better fiscal health as well as benefiting ratepayers.”
He said the sale must:
- Lower electric rates and replace coal plants with energy from solar and new-generation gas to reduce carbon emissions.
- Ensure Santee Cooper employees and the economy will not be harmed.
If a decision on Santee Cooper’s fate drags on too long, opportunities to reach the best deal may be lost.
Offers will be lower as the debt grows and buyers may find other acquisitions.
Taking time for 170 lawmakers to become energy experts is not necessary for a good business decision.
Experts should be hired quickly and given a deadline for recommendations in a few months, Knapp said.