Times and Democrat
February 7, 2021
By FRANK KNAPP JR.
A recent Times and Democrat editorial expressed several concerns about the South Carolina General Assembly’s upcoming decision on the future of Santee Cooper.
Let me address those concerns by answering these questions.
Would the sale of Santee Cooper to an investor-owned utility guarantee higher rates to consumers?
Would the proper management and growth of Lakes Marion and Moultrie assets continue?
Would a new owner have interest in the continued economic development of the region?
While we do not know which investor-owned utility (IOU) the legislature would negotiate with for a sale of the state-owned utility, the assumption is that it would be NextEra Energy.
With that assumption, here are the short answers to the above three questions in order.
No. Yes. Yes.
In its original offer to purchase Santee Cooper, NextEra agreed to reduce rates immediately by 18% for the first four years. That was a legally binding commitment to the State of South Carolina.
Santee Cooper’s reform proposal only called for an 8% rate cut for four years. But unlike NextEra, which would need the Public Service Commission’s approval for future rate increases, the unregulated Santee Cooper has no public oversight and could raise rates as it wants after the first four years.
Regarding lake management, when regulated lakes like Marion and Moultrie change hands, the new lake licensee must follow the same Federal Energy Regulatory Commission rules.
So, NextEra would comply with the same federal regulations that Santee Cooper follows. NextEra’s track record shows that it does not just comply, it excels at lake management for the benefit of its customers.
If NextEra should be selected to purchase Santee Cooper, the public should have confidence that the utility has a long history of performing federally required lake responsibilities including maintaining public access, shoreline management, vector management and park maintenance.
NextEra also goes beyond simply following federal regulations. It has provided public access to whitewater rafting and trails, optimized river flows to promote angler fishing, and donated lands to place them in conservation easements keeping them available for public enjoyment.
With regard to economic development of the region, NextEra’s success would be tied to responsible utilization of all its assets, including water management, to grow its revenue by encouraging commercial and industrial development. All IOUs understand that investing their financial resources in the communities they serve is in the utility’s own interest.
On this issue, NextEra’s Florida Power & Light has been named one of the “Top U.S. Utilities in Economic Development.” Bringing a proven national leader to South Carolina to partner with our state economic development agencies would be a shot in the arm for our economy, not to mention significant community investment and access to capital to improve our state’s energy infrastructure for enhanced efficiency and resiliency.
The bottom line is a sale of Santee Cooper would be in the legislature’s hands. It would be your elected officials doing the negotiations and making decisions. Real leaders aren’t afraid of negotiating for better deals than the status quo.
All the legitimate concerns that have been raised about a potential sale of Santee Cooper must be satisfactorily addressed or there will be no sale.
Legislators who refuse to even “kick the tires” of a potential sale only deprive consumers of making the best decision for our state and deny South Carolinians the benefits of investment by a world-class utility.
If we want our state to run more like a business, we need to make the best decision about Santee Cooper’s $3.6 billion nuclear construction debt.
Do we find an investor-owned utility that will contractually remove that debt from the ratepayers while also addressing all the concerns that have been raised?
Or do we just tell Santee Cooper customers to pay much higher rates for this debt for many years to come because our legislature refused to even look at other options.
Let’s start making a good business decision about Santee Cooper’s future by “kicking the tires.”
Frank Knapp is president and CEO of the South Carolina Small Business Chamber of Commerce.