It’s good to keep moving forward on Santee Cooper

It’s good to keep moving forward on Santee Cooper

Statehouse Report
May 24, 2019

By Frank Knapp, special to Statehouse Report

Three months ago, the South Carolina Small Business Chamber of Commerce (SCSBCC) began advocating for the sale of the state utility, Santee Cooper, if our organization’s goals to save consumers money and protect the environment could be achieved.

First, we do not want the Santee Cooper direct ratepayers or customers of the state’s 20 electric cooperatives, which purchase most of their energy from the utility, to pay for any of the $4 billion in nuclear debt Santee Cooper had racked up from the failed nuclear construction project in Fairfield County.

This was the same position SCSBCC held regarding SCE&G’s $5 billion of construction debt for the same failed project.  We didn’t want customers to pay for any of that debt either.

The SCE&G financial crisis was largely resolved when Dominion Energy of Virginia was approved by the state to buy the utility and agreed not to charge customers for about half of the nuclear debt.  This wasn’t everything we wanted, but the utility’s customers did receive a 15 percent reduction in their electric rates.

Now we believe that the state can get a better deal for the Santee Cooper customers.

Not only do we want a sale to remove the $4 billion of nuclear debt from the backs of the utility’s customers, but we also hope that ratepayers will also never have to pay another $3.2 billion of Santee Cooper’s debt it has accumulated.

Non-binding proposals from for-profit utilities have already been made to the state that indicate this financial goal can be achieved.

Our second goal is for any purchase to include quick retirement of Santee Cooper’s costly, dirty coal plants by transitioning to renewable energy and natural gas generation.  Reducing carbon pollution that is driving climate change resulting in rising seas and flooding has been a top priority for the SCSBCC.

We held six town halls across the state to engage the public on this issue.  Many Santee Cooper supporters attended, and the vigorous conversations always ended with a mutual agreement that the legislature should establish a thorough process for reviewing proposals from private companies to either purchase or manage the utility.  And to be fair, Santee Cooper should be given the opportunity to say how it would change to address critics’ concerns.

This week the S.C. General Assembly approved just such a plan.

The legislature passed a joint resolution that sets in motion a process to determine if the heavily in-debt Santee Cooper should be sold or managed by a private utility or kept as a reformed state agency.

The S.C. Department of Administration will accept offers to either purchase or manage Santee Cooper, evaluate the offers and make a recommendation to the legislature by Jan. 15, 2020, as to the best purchase and management offers.  A recommendation on Santee Cooper’s own proposal to remain a state agency will also be made.

We applaud our state legislators for establishing a merit-based, fair process to determine what is in the best interest of the State, taxpayers and Santee Cooper customers.

We continue to believe that neither a contract to manage Santee Cooper nor simply reforming the agency will accomplish our goals of $7.2 billion in financial relief for customers and dramatically reducing the utility’s carbon emissions.

These two matters will be part of the criteria the Department of Administration will use in making its recommendation to the General Assembly.  Other criteria will include projected future rates, the impact on current employees and the issue of the water systems operated by Santee Cooper.

While we would have preferred the legislature to have made a final decision on Santee Cooper before the end of this year, the General Assembly should be congratulated for taking on the arduous task of debating and evaluating this controversial issue and then setting the process for its resolution.

Knapp is the president and CEO of the South Carolina Small Business Chamber of Commerce.