Coastal Observer
March 19, 2020
By Frank Knapp Jr.
One big question that has been raised throughout the Santee Cooper legislative debate is what Dominion Energy would gain from managing Santee Cooper.
Remember that Dominion submitted an offer to manage Santee Cooper. But its proposal, that appears to have been written over a coffee break, offered nothing to address the $6.8 billion financial crisis facing Santee Cooper and state taxpayers or to pay back customers for past rate hikes for the abandoned nuclear construction in Fairfield County.
Dominion’s proposal simply wasn’t a serious offer and has been treated as such by the legislature.
However, I have been hearing talk that Dominion has joined forces with Santee Cooper supporters to protect the public utility from a sale. If Dominion is working to save Santee Cooper, the question is WHY?
There are couple of profit-driven reasons but the most obvious one is this.
Dominion is a major partner in trying to build the $8 billion, 600-mile Atlantic Coast Pipeline (ACP) that would bring natural gas from West Virginia to the Eastern North Carolina/South Carolina border.
Dominion has made no secret that it wants to sell ACP-gas in South Carolina. Tom Farrell, Dominion’s CEO, testified to this at the November 2018 SC Public Service Commission hearings on SCE&G’s future.
There is grave concern along the SC coast that the ACP won’t stop at the state border but would be brought through our coastal counties in order to set up an exporting port for liquified natural gas (LNG) around Georgetown. An industry would grow up around such a port bringing with it the inevitable spills and squeezing out of local tourism.
But for Dominion to make boatloads of money selling ACP-natural gas to SC and possibly LNG to Europe, it needs a utility in the state to push for it and a customer in the state to buy it.
That’s why keeping Santee Cooper a state agency is so important to Dominion.
Santee Cooper, its supposed environmentally-friendly aspirations aside, has said that it would buy natural gas from the ACP for a new gas plant it wants to build in the Pee Dee.
The November 25, 2019, Reform Plan Santee Cooper submitted to the SC Department of Administration said that the ACP was its first choice for obtaining the additional natural gas:
“We have assumed that the natural gas for the Pee Dee NGCC would be sourced from the Atlantic Coast Pipeline “
The consultant’s report that Santee Cooper included in its Reform Plan also points to the purchase of natural gas from the ACP.
“The Pee Dee site is also in close proximity to the termination of the Atlantic Cost Pipeline (ACP) that is currently under development. Santee Cooper is projected to secure natural gas commodity prices through the ACP that are lower than some other options; however, firm reservation fees on the ACP are projected to be higher than other options available to Santee Cooper. Natural gas supply from ACP may be through a new lateral pipeline interconnection or through Dominion Carolina Gas.”
Since Santee Cooper is the only utility stating that it wants to buy the ACP gas, Dominion has tremendous profit-motive in keeping the public utility a state agency, reformed or not.
The sale of Santee Cooper would be a financial disaster for Dominion’s ACP-aspirations and certainly would make trying to bring the pipeline to the South Carolina coast much more difficult or even impossible.
Fortunately, the SC House has indicated that it wants to continue to explore getting the best deal for Santee Cooper ratepayers and the state’s taxpayers through a sale. It also will consider extensive reforms to Santee Cooper just in case a deal can’t be worked out.
Selling Santee Cooper might not be good business for Dominion, but it definitely is in the best financial interest for everyone else.
Frank Knapp is the president and CEO of the South Carolina Small Business Chamber of Commerce.