Opinion: SC lawmakers should not let stalling tactics prevent a sale of Santee Cooper

The State
May 10, 2020

By Frank Knapp Jr.

Scientists have confirmed that sunlight is a highly effective sanitizer to kill COVID-19.

Sunlight is also important in politics.

On Tuesday the SC General Assembly will come back into session to address next year’s state budget — and to decide what other legislative matters can be debated later this year.

One of the most critical issues that remains to be determined is the future of Santee Cooper, the troubled state public utility that Gov. Henry McMaster has called a rogue state agency.

We can only hope that politics – and the strong opinions of a handful of senators – won’t yet again hold hostage a decision our state has spent three years and $25 million trying to resolve.

Santee Cooper was a major player in a failed nuclear power project along with the now-defunct SCE&G.  The management of the two utilities deceived state regulators, investors and the public. They put a happy face on the nuclear construction project’s progress while internal information told a story of billions over budget and years behind schedule.

For years the executives of Santee Cooper and SCE&G kept promising a successful outcome while their utilities kept taking more and more of ratepayers’ money and running up a combined $9 billion debt. But in July 2017 SCE&G and Santee Cooper suddenly pulled the plug on the doomed nuclear project.

SCE&G executives have since been charged with fraud by the federal government.  As for Santee Cooper its now-retired CEO has escaped formal charges —  and the utility’s current management says that it has learned its lesson while promising that Santee Cooper can reform itself into becoming a respectable and trustworthy state agency.

Unfortunately, Santee Cooper’s leadership is still demonstrating the “broken corporate culture” described by House Speaker Jay Lucas just last month after Santee Cooper’s current CEO Mark Bonsall appeared to mislead the Legislature in an attempt to obtain favorable legislation.

Now Santee Cooper financial problem has grown into a crisis during the coronavirus pandemic.

The utility failed to reach its revenue budget for the first quarter of 2020; in fact, it was short by $48 million. And during last month Santee Cooper’s revenue was down again.

Overall demand for Santee Cooper’s energy has decreased 8%, and this includes a 5% drop in industrial use and as much as a 15% drop in demand from commercial customers.

Bonsall acknowledged last month that “nobody knows” what the economic implications are going to be over the short or long term, but he does expect Santee Coopers revenue to continue to fall by millions.

And now we have an economic recession that may lead to a depression, and an anticipated multimillion-dollar state surplus that is dwindling into red ink.

This is no time to let politics take a sale of Santee Cooper off the table.

A sale that had it already been approved this year would have given customers an immediate 18% rate cut and have the utility’s $6.8 billion debt lifted from their shoulders.

But blocking a sale — and even public deliberation on a sale — is what a small band of pro-Santee Cooper senators want to do.

They want to use the state’s growing fiscal crisis to block the sunlight from shining on Santee Cooper’s growing financial crisis.

When our legislators reconvene May 12 I urge them to stand up to Santee Cooper’s deceptive tactics for preserving their management’s ability to keep their own jobs at the expense of the ratepayers and taxpayers.

We need an open and transparent deliberation of all options for the future of Santee Cooper.

Let the sunshine in.

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


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