February 16, 2020
By Frank Knapp Jr.
Now that the SC Department of Administration has issued its report regarding Santee Cooper, all eyes are on the Legislature.
Will it take Option #1: allow Santee Cooper to try reforming itself and stay a state utility?
Will it take Option 2: keep Santee Cooper a state agency, but under the executive management of Dominion Energy?
Or will it take Option 3: sell Santee Cooper to a private utility — in this case to recommended purchaser NextEra Energy, a Fortune 200 energy company?
The SC Small Business Chamber of Commerce believes that the Legislature should keep these two priorities in mind in evaluating the listed options:
▪ Santee Cooper’s 2 million direct and electric cooperative customers should not have to pay any of the utility’s remaining $3.6 billion nuclear debt from the abandoned Fairfield County project.
▪ There must be a commitment to claw back the money that ratepayers have already paid for Santee Cooper’s nuclear debacle.
OPTIONS 1, 2 ARE IFFY
Option 1 — allowing Santee Cooper to reform itself — calls for a combination of operational changes and cost-cutting to accelerate paying off the nuclear debt (among other benefits).
This plan looks good on paper but the Department of Administration’s report casts doubt on whether Santee Cooper can carry it out based on its previous inability to implement reform.
Meanwhile, Option 2 — having Dominion manage Santee Cooper — does touch on a key point: better management at Santee Cooper is certainly imperative. But the Dominion proposal offers ratepayers absolutely no relief from being shouldered with Santee Cooper’s nuclear debt; in addition, it offers no hope of recovering any of the lost money that’s been spent by ratepayers.
OPTION 3 MAKES SENSE
Clearly the best option is No. 3: selling Santee Cooper to NextEra, which is described in the state report as “a large and well-respected” utility with a proven track record.
Not only does NextEra offer to absorb all of the $3.6 billion nuclear debt, the company would also relieve ratepayers from being responsible for Santee Cooper’s current $6.8 billion long- and short-term debt. In addition, NextEra will give ratepayers nearly $1 billion in refunds or rate credits to help address past nuclear rate hikes.
It is clear that selling Santee Cooper to NextEra is the only fiscally responsible option for the Legislature — and for the utility’s ratepayers.
Frank Knapp Jr. is CEO of the South Carolina Small Business Chamber of Commerce.