Blog by Frank Knapp, President/CEO South Carolina Small Business Chamber of Commerce
April 19, 2021
Logic might yet prevail in the SC Senate regarding the future of Santee Cooper, the state-owned utility that provides electricity to about 2 million South Carolinians either directly or through electric cooperatives.
Santee Cooper ran up a $4 billion construction debt in the failed effort to build two nuclear reactors with the now-defunct SCE&G. Santee Cooper ratepayers are on the hook for paying every penny of the massive debt.
The position of the SC Small Business Chamber of Commerce has remained the same since the plug was pulled on the nuclear project in July 2017. That position continues to be that no ratepayers should have to pay the $4 billion in nuclear debt and that previous rate increases to pay for the debt be reversed given the gross mismanagement and deceitfulness that led to the massive red ink. We would also want a faster schedule for the closure of Santee Cooper’s costly and dirty coal plants.
SCE&G’s $5 billion nuclear debt was addressed in a business deal along the lines of our criteria. The Public Service Commission allowed another investor-owned utility to buy SCE&G under the condition that it would permanently remove almost half of the debt from the responsibility of the ratepayers and immediately reduce rates by 15%, almost all of the previous rate hikes attributable to the nuclear project.
Governor McMaster, the SC House and many state Senators would like to see a similar business deal with Santee Cooper. Selling the state-run utility to an investor-owned utility would put rate decisions under the independent Public Service Commission, not the Santee Cooper Board of Directors, and remove at a minimum all the nuclear debt from the responsibility of the ratepayers.
The SC House passed legislation (H.R. 3194) in January of this year to set up a process that would allow for a thorough analysis of the benefits to Santee Cooper customers and the state from a sale.
But Santee Cooper’s Senate supporters have stymied this logical business process of examining the sale option for the utility’s future.
Recently, after the Senate Judiciary pushed out a bill only focusing on minimal reform of Santee Cooper, the Majority Leader of the Senate called on prospective buyers of the public utility to step forward with an offer.
Senator Shane Massey:
“If there are prospective buyers who would like to make an updated offer, based on how the world has changed, I would encourage them to do that.”
NextEra Energy, which was selected by the South Carolina Department of Administration last year as the best offer to purchase Santee Cooper, told the press that it intended to respond to Senator Massey’s request.
So far so good.
Just one problem.
If Senators want to see what offers bidders will put on the table, they need to create a process to receive, share and negotiate those offers.
The Senate’s leading advocate for preserving Santee Cooper as a state agency, Senator Luke Rankin, called on entities wanting to make an offer to buy the utility to “please knock on the front door and share it.”
I am sure that NextEra or others would be more than happy to make an offer then go to the negotiating table to ensure that the utility’s owners’—the state of South Carolina – priorities are front and center.
But first, if Senators, including Mr. Rankin, want an offer, they must create the “front door” of a business process to make that happen.. Or they can just pass H.R. 3194 that does exactly that.