Opinion: Santee Cooper’s strategy to obstruct, delay

Opinion: Santee Cooper’s strategy to obstruct, delay

The Berkeley Independent
The Summerville Journal Scene
September 30, 2020

By Frank Knapp Jr.

Just over two years ago South Carolina Governor Henry McMaster called Santee Cooper a “rogue agency”.

The issues were accountability and transparency. Santee Cooper, a state agency, was refusing to provide information to the Governor. “This is a pattern of Santee Cooper’s, and it’s time for it to stop,” said Governor McMaster.

Well, it hasn’t stopped.

Speaker of the SC House Jay Lucas wrote earlier this year, “Santee Cooper suffers from a broken corporate culture that is deeply ingrained in (its) leadership”.

Santee Cooper was once a valuable state asset providing electricity to rural South Carolina when no investor-owned utility would. Now it has turned into an unnecessary agency arrogantly making bad business decisions and doing everything it can for its own best interests, not the best interests of its customers or the state.

The on-going court battle between the city of Goose Creek and Santee Cooper over supplying electricity to the Mount Holly aluminum plant is the latest example.

For several years Santee Cooper has been willing to risk 300 current jobs at the plant and $500 million to the local economy because it won’t allow Mount Holly to obtain less costly electricity on the open market for all its energy needs. Had Santee Cooper done so, the plant would have already doubled its workforce and its economic impact.

Not only has this court fight exposed Santee Cooper as both not providing the cheapest electricity and not supporting economic development; it has also revealed its corporate strategy to undermine efforts to challenge its bad decisions and future.

According to emails, the current CEO of Santee Cooper put one of his executives in charge of stopping Goose Creek’s electricity generation plans. The strategy this executive laid out was to obstruct, delay and eventually kill the Goose Creek plan for increasing jobs and boosting the economy.

The South Carolina Small Business Chamber of Commerce is familiar with Santee Cooper’s “obstruct and delay” strategy.

In 2007 we and others fiercely opposed Santee Cooper’s proposed $1 billion new coal plant saying it was not needed and too costly.

After two years of the utility’s denial and delay, the project was canned but not before spending $250 million of ratepayer money for engineering and equipment, equipment that Santee Cooper continued to store for over a decade, costing customers more than $104 million.

Santee Cooper’s corporate strategy of obstruction and delay contributed greatly to the eventual demise of SCE&G and added billons of debt to its ratepayers.

In 2015, Santee Cooper’s old management obstructed regulators and public officials by keeping secret an internal report warning that the nuclear construction project it had undertaken with SCE&G was facing massive construction and financial problems. The delay in publicly revealing the report allowed the construction to go on for 18 more months, forced SCE&G to be sold and greatly added to the ongoing debt to Santee Cooper customers.

In the current battle to fight off legislative efforts to sell Santee Cooper to an investor-owned utility, the “obstruct and delay” strategy continues with the present management.

Last year Santee Cooper took deliberate actions to delay the legislature from considering the sale of the utility. The SC Department of Administration (DOA) told a joint Senate and House committee on February 13th this year that Santee Cooper’s obstructionist tactics of non-cooperation delayed the DOA’s final report by two months and probably discouraged some potential bidders for buying the utility.

This year, Santee Cooper again obstructed and delayed the legislative process by first sending false and misleading emails to legislators and then, along with a couple of its Senate supporters, promoted a filibuster and refused to work with legislators. Their efforts have been successful so far in delaying any more legislative debate over the utility’s future with the hopes that the legislature will simply give up. However, a sale is still on the table for deliberation in the upcoming session.

Santee Cooper’s obstruct and delay strategy has protected the utility, but failed to protect its customers from the utility’s bad decisions on the $1 billion failed coal plant, the $9 billion-plus failed nuclear plant and many others.

Now we watch to see if the utility’s strategy will work in its current battles to stop Goose Creek and next year’s legislative efforts to sell Santee Cooper to an investor-owned utility.

The question is why does the legislature tolerate a state agency with management and Board of Directors that deliberately thwart public policy, deceive and lie to public officials, insist that their customers pay billions of debt that should never been incurred and deprive local communities of more jobs and economic growth?

For the good of the ratepayers and state government, sell this unnecessary “rogue agency” with a “broken corporate culture”.

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