The State
July 14, 2020
By Frank Knapp Jr.
Sometime this month a judge is expected to give final approval to the settlement in the Cook lawsuit. It is a lawsuit by Santee Cooper ratepayers against the utility, and it seeks to recover past payments for the abandoned nuclear construction project in Fairfield County.
Under this settlement ratepayers will recover these past payments in two parts:
▪ 75% this September.
▪ The remaining amount during the fourth quarter of 2022.
Santee Cooper has also agreed to roll back rates by about 8% in keeping with the arbitrary rates proposed in its plan to reform itself. The rollback will take effect next month, and the utility is supposed to freeze rates until the end of 2024. But while all of this sounds good, here’s what Santee Cooper customers could have had already:
▪ This year Santee Cooper rates could have been reduced by about 18% — not 8% — and kept there until 2025.
▪ This year Santee Cooper ratepayers could have recovered 100% of the money they have paid for the nuclear project debacle — not just 75%.
▪ This year Santee Cooper ratepayers could have had all the utility’s $6.8 billion debt eliminated — a debt that customers will eventually have to pay if Santee Cooper remains a state-owned entity. The Cook lawsuit settlement, however, does not relieve Santee Cooper ratepayers of this debt.
So why aren’t Santee Cooper customers receiving these far better benefits?
A false claim
It’s because the South Carolina Legislature failed to accept a good offer by an investor-owned utility to purchase the state agency. Instead the state Legislature put off making a decision on Santee Cooper’s future after a small number of senators tried to block any future consideration of a sale.
Those who support keeping South Carolina in the electricity-production business — instead of selling to deliver considerably more benefits to ratepayers — continue to say that the Legislature has decided not to consider a sale. But this claim of victory by Santee Cooper’s supporters is factually incorrect.
In May the Legislature passed Act 135 which says that “the South Carolina Public Service Authority (Santee Cooper) may not take any action which would impair, hinder, or otherwise undermine from an economic, operational, feasibility, or any other perspective the ability of the General Assembly to complete its consideration regarding Santee Cooper’s status.”
The day the legislation passed in the Senate, state Sen. Chip Campsen of Charleston made it clear what the legislation actually did. Speaking on the Senate floor, Campsen said the legislation’s language would “not produce undue friction for a sale if the General Assembly were to conclude later this year that the sale should occur” — a statement that clearly signaled that all options remained open.
But by making their false claim of victory, Santee Cooper’s supporters hope to convince the public, the media and even legislators that the Legislature has given up on the debate about the utility’s future.
Fortunately, the investor-owned utility that had made the proposal to buy Santee Cooper — and provide customers with faster payback and larger rate cuts while also eliminating the state agency’s massive debt — is thought to be formulating a revised offer in light of the Cook lawsuit settlement.
We can expect this revised purchase offer to build on the Cook lawsuit settlement, and to present even better benefits with lower rates while entirely removing the debt burden off the shoulders of Santee Cooper’s customers.
While we wait for this proposal, we should appreciate the Cook lawsuit settlement for the consumer benefits that it does provide. But our next move should be to sell Santee Cooper: doing so would produce even greater benefits for our consumers and our state.
Frank Knapp Jr. is CEO of the South Carolina Small Business Chamber of Commerce.
Read more here: https://www.thestate.com/opinion/article244215772.html#storylink=cpy