Blog by Frank Knapp Jr., President & CEO
November 16, 2020
Senators finally getting the message about the
“Santee Cooper Titanic”
Earlier this year the state legislature gave Santee Cooper a chance to live up to its promise to reform and put off a decision on selling the utility to an investor-owned utility.
South Carolina legislators have now seen what Santee Cooper’s Board and management have done with that opportunity. They have squandered it.
This month, House Speaker Jay Lucas wrote to Santee Cooper and identified clearly why the public utility has not and will not ever reform itself—it is accountable to no one.
In his letter Speaker Lucas took Santee Cooper’s Board and management to task for failing to notify legislators of their plans to take on $100 million in new debt, which the Speaker views as a possible violation of the legislature’s legal constraints on the utility:
This continued failure to be fully transparent demonstrates a lingering disdain for any oversight at Santee Cooper, which in my view, is the root cause of this state agency’s failures. The board’s desire to be unaccountable to lawmakers, the governor and the public continues to prevent any measure of success at Santee Cooper.
Santee Cooper’s lack of accountability is at the heart of all the costly, bad business decisions it has made over the past 15 years:
–Santee Cooper spent $250 million on engineering, construction and buying equipment for a new coal plant before abandoning the project in 2009.
–Santee Cooper signed a 60-year contract to provide Gypsum, a by-product of a coal plant, that it cannot comply with and is costing ratepayers $10 million a year.
–Santee Cooper ran up a $4 billion construction debt for a nuclear project it abandoned in 2017.
–Santee Cooper has refused Mt. Holly Aluminum’s request to buy all the energy the plant needs from the open market which will result in the plant shutting down at the end of this year, the loss of 300 very good-paying jobs and financially harming more than 350 local and statewide businesses that provide goods and services to the Mt. Holly plant.
The recent Santee Cooper controversy over lack of transparency and accountability has also resulted in Senate Finance Committee Chairman Hugh Leatherman and Senate Majority Leader Shane Massey to both call on Santee Cooper’s Board and management to be replaced.
Santee Cooper’s largest customer, Central Electric Power Cooperative which buys approximately 70% of the utility’s electricity, has also taken action that underlines a lack of confidence in the financially stressed state agency.
Central has decided to go it alone on contracting for 500 megawatts of new solar power instead of doing it jointly with Santee Cooper as originally proposed.
Central walking away from a partnership with Santee Cooper for a significant solar energy effort should be a clear signal to the legislature that the utility’s costs are too high. It also is a vote of no confidence in Santee Cooper’s management, Board and future as a state agency.
The lack of accountability, transparency, refusal to follow rules and abandonment by its largest customer should make the legislative decision to sell Santee Cooper an easy call. Unfortunately, there are still a few Senators willing to go down with the “Santee Cooper Titanic”.