Post and Courier
April 3, 2019
COLUMBIA — Legislators maintain control of any potential sale of South Carolina’s only state-owned utility and would decide one way or another by year’s end under a bill the House approved Wednesday.
“The problem we have now is Santee Cooper is paralyzed” due to uncertainty over the utility’s future, said House Ways and Means Chairman Murrell Smith, R-Sumter. “They’re unable to operate. Employees are losing confidence. They’re concerned about their jobs. Time is not a friend of ours. We have to do something.”
Options are selling all or parts of the utility headquartered in Berkeley County, contracting with a company to manage operations or reforming the agency.
“At a minimum, we must reform Santee Cooper,” Smith said. “The status quo is not working.”
Gov. Henry McMaster has advocated selling Santee Cooper since soon after the public utility and partner South Carolina Electric & Gas bailed on completing two reactors at V.C. Sumner Nuclear Station in July 2017 after jointly spending $9 billion.
The governor has said selling the utility could be the only way to provide relief to its customers. The partially completed reactors account for half of the utility’s $8 billion debt.
“I think the sale of Santee Cooper is inevitable,” McMaster said Wednesday.
Under current state law, only the Legislature can approve whether to sell the New Deal-era utility, which provides electricity to a region with 2 million people throughout the state, mostly through 20 electric co-operatives.
The resolution approved 101-6 on Wednesday keeps the issue before a joint House and Senate committee that has been studying what to do with Santee Cooper since last summer.
The House’s Republican and Democratic leaders filed the measure March 21, a day after Senate President Harvey Peeler, R-Gaffney, stunned his colleagues by introducing legislation directing McMaster to sell the public utility and giving his administration full control of the process.
But even Peeler’s fellow senators didn’t like that idea.
The amended version advanced to the Senate floor still directs the Cabinet-level Department of Administration to handle the bidding process but leaves the decision on whether to accept an offer to legislators. Two senators are blocking debate on that proposal.
Under the House plan, the joint committee — which McMaster sits on — would continue its “due diligence” in evaluating the bids it received in February and negotiate a “best and final written contractual offer” with a buyer.
The measure specifies that any potential buyer must maintain lakes Moultrie and Marion and all of the utility’s other recreational assets; agree to partner with the state on economic development deals; and take over all of Santee Cooper’s debt, while also providing “meaningful rate relief” to customers and protecting the utility’s employees and retirees.
The committee would forward a final offer to the Legislature for final approval.
Fifteen bids submitted as part of the committee’s review came from 10 separate investment firms and power companies. The bids, announced in February, included offers for all or parts of the public utility or to manage its power plants and utility lines.
The committee’s consultants estimate a full review will take four months, which would be August if they start immediately. The legislative session is scheduled to end May 9.
The House resolution instructs McMaster to call legislators back in session after a final offer is in but give them at least a month to consider the details before they return to Columbia to vote.
Rep. Sylleste Davis, who retired from Santee Cooper in 2014 after 31 years at the utility, was among those voting against the resolution. She tried unsuccessfully to add another level of review to the final offer, giving the Office of Regulatory Staff a month to go over the details and report to legislators.
She urged her colleagues to “proceed with caution,” for the sake of the utility’s 1,700 employees, its retirees, customers and everyone benefiting from the utility’s 180,000-acre lake system.
But Smith countered the regulatory office, which has been criticized for not catching problems with the nuclear project earlier, is not equipped to handle such a review.
And no one benefits from a never-ending delay to a decision, he said.
If legislators do nothing, the courts could decide the utility’s fate, as separate lawsuits filed by ratepayers and the electric cooperatives could force Santee Cooper into bankruptcy if judges rule in either of their favor, he said.
“We need to do something and quit delaying the process,” he said. “We need to get this vote by the end of the year or a catastrophe happens.”