Santee Cooper backers at Orangeburg meeting challenge sale of utility

Orangeburg Times and Democrat
April 21, 2019

By GENE ZALESKI T&D Staff Writer

About 15 individuals opposed to selling the state-owned Santee Cooper utility questioned the wisdom of advocating sale to a for-profit, investor-owned provider when there are more questions than answers.

Nine of the 15 came from Berkeley County, where the utility is headquartered, to a South Carolina Small Business Chamber of Commerce town hall meeting April 15 at the Orangeburg County Library.

The push to sell Santee Cooper has grown since it and private partner S.C. Electric & Gas halted work on the $9 billion expansion of the V.C. Summer Nuclear Station. The General Assembly is presently considering the utility’s future.

“I have heard you say earlier that you trust the process and that we should go through the process and look at all things,” Jennifer Wadford, a Santee Cooper supporter, asked SCSBCC President and CEO Frank Knapp regarding his reasons for wanting to see the utility sold. “So if that is what you believe, don’t you think it is premature to be having town halls saying you have already come up with a solution? The town halls are on ‘let me tell you why Santee Cooper needs to be sold.'”

Knapp challenged her assessment, noting SCSBCC is all for discussions on the pros and cons of the utility being sold.

“All we are saying is that in the end of the process that it has achieved our goals and our objectives … then we think it should be sold so we can have lower rates,” Knapp said.

Knapp outlined some of SCSBCC’s goals — which the organization believes Santee Cooper has not and would not be able to fulfill into the future — two of which are reducing rates and eliminating its coal footprint with natural gas and solar.

“I understand Santee Cooper can continue going on the way they are,” Knapp said, expressing SCSBCC’s concerns that Santee Cooper has made it clear it wants to raise rates again by 7% starting in 2021. He said the 7% would be on top of the 5% that rates have been raised to pay for the nuclear debt.

Knapp said SCSBCC does not want residential and business customers to pay any of the $4 billion nuclear debt, nor any of the utility’s other $7.2 billion debt.

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

“Any entity that wants to offer Santee Cooper has to be willing to show how they are going to do that and what they are going to do and put it in writing,” Knapp said. “This is not just a wink and a nod. If they can’t do that, there will be no deal.”

However, Wadford and other supporters, some of whom donned green Save Santee Cooper shirts at the town hall meeting, say Santee Cooper is doing just fine handling its own debt and does not need to be sold because of it.

Supporters say the utility has paid off $160 million of the principal from the nuclear debt and is using cash to pay down the remainder.

For those who are concerned about Santee Cooper’s rates rising 7 percent, the supporters say rate increases over a three-year period will account for all the nuclear debt outstanding.

Even after the 7 percent increase, supporters say the Santee Cooper rates will still be lower than those of utilities such as Duke Carolinas and Duke Progress.

In addition to selling power, Santee Cooper is involved in a broad range of projects including treating water at plants on Lake Marion and Lake Moultrie.

The Lake Marion Regional Water Agency buys its water from Santee Cooper’s treatment plant, which pulls water from Lake Marion. The agency serves Orangeburg County and the towns of Santee, Bowman and Vance. It also includes Calhoun, Berkeley and Dorchester counties.

The prospect of a sale comes as Orangeburg County officials seek to expand the Lake Marion Regional Water Agency to tie in the towns of Elloree and Holly Hill. The town of Eutawville is also on the list to eventually receive water from the agency.

Orangeburg County leaders such as County Council Chairman Johnnie Wright and local lawmakers such as Sen. John Matthews and Rep. Russell Ott are on record against selling the utility. Ott serves on a nine-member committee looking a possible sale. The lawmakers were not in attendance at the town hall meeting.

The meeting was one of six planned across the state.

The town halls are sponsored by the South Carolina Small Business Chamber of Commerce as well as The Palmetto Promise Institute. Other co-sponsors are the S.C. Coastal Conservation League, The Horry Independent and Lexington County Chronicle.

Beyond power generation, the utility is also responsible for maintaining both lakes Marion and Moultrie, including navigation, property and campground management and development, as well as the development of waterfront recreation sites.

It is responsible for environmental stewardship including sea turtle protection, mosquito control, wildlife habitat management, and forest and undeveloped land management.

Knapp said while he is “not well versed in all the water issues,” the concerns about the status of all these entities are legitimate.

“That is not one of our conditions for sale … but they should be on the table,” Knapp said. “All of that is crucial that that be maintained or if a private entity does not want to maintain it who would be responsible for it?”

SCSBCC’s desire for a private entity to eliminate or reduce Santee Cooper’s coal footprint also was challenged.

Santee Cooper Communications Manager Mollie Gore said the utility has done natural gas studies but has questioned its feasibility.

Retired Santee Cooper employee Glenn Stephens said South Carolina is “starved for natural gas,” noting if any private company wants to come in to build a natural gas plant it would be costly with the expense most likely falling on utility customers.

“We would have to pay for the transmission,” he said.

The existing Carolina Gas Transmission Pipeline is at capacity and there is no way to get gas to Cross and the Winyah stations, according to state energy officials.

Atlantic Pipeline construction will only go as far as Lumberton, N.C., and that project is halted by a federal judge and Virginia regulators.

Santee Cooper supporter Jill Drake wondered about the state retirement system if Santee Cooper employees are let go and no longer paying into the system. She also questioned how local contractors who have worked with Santee Cooper will be impacted by a sale.

“I think you will put a big hurting on a lot of mom-and-pop shops that hire a lot of local people in the state,” Drake said.

Knapp agreed.

“We have to establish what the process is before we get to that point,” Knapp said.

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