Opinion: What are the true facts about Santee Cooper?

Opinion: What are the true facts about Santee Cooper?

Lexington County Chronicle
April 11, 2019

By Frank Knapp, Jr., Special to the Chronicle

Santee Cooper and its supporters are trying to stop the sale of the utility, which is about $8 billion in debt.

The South Carolina Small Business Chamber of Commerce’s recent town hall in Charleston on the possible sale of Santee Cooper attracted the utility’s current and retired employees and other supporters.

They are to be congratulated for their enthusiastic defense even if some comments contradict information presented by the Santee Cooper CFO to a Senate Committee.

Here are some of the inaccurate comments Santee Cooper supporters made.

Untrue: The state of South Carolina is not liable for paying Santee Cooper’s debt.

True: The reality is that no elected official would consider allowing Santee Cooper, a state agency, to default on its debt and destroy the credit integrity of the state.

Santee Cooper’s CFO told senators that the utility might be forced into bankruptcy from rulings in state courts on two separate lawsuits brought by the electric cooperatives and their ratepayers.  The result, under state law, could be the taxpayers are responsible for Santee Cooper’s debt.

Untrue: Santee Cooper’s electric rates are lower than other in-state utilities.

True: Last month the Santee Cooper CFO told senators, “I believe in the last year we were slightly higher than Duke.”  The state’s electric cooperatives have stated that Santee Cooper’s rates are not competitive, and the utility should be sold.

Untrue: The $4 billion Santee Cooper nuclear debt is being paid down.

True: Santee Cooper’s CFO told senators, “I believe the first principal payment is in this year.”  The utility had planned to start making the principal payments in 2019 because one of the abandoned nuclear plants was to go online this year.  The CFO stated that ratepayers would see their rates go up another 7% in 2021 to cover these principal payments.  Santee Cooper’s interim CEO added that Santee Cooper’s rates are already 5% higher due to the debt.

To their credit, Santee Cooper supporters never denied the utility intends to raise rate on customers to pay all its debt. Customers could end up paying as much as $15 billion over the next 38 years to retire the debt, equivalent to about $7,400 per ratepayer.

The position of the Small Business Chamber is that we don’t want residential and business customers to pay any of the $4 billion nuclear debt nor any other debt.

We believe that only the sale of Santee Cooper can achieve this goal.  Offers to buy the utility indicate that this can happen.

Thus, our advocacy for selling Santee Cooper is a business decision.  We believe it is in the best interest of all the utility’s ratepayers and state taxpayers.

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