Santee Cooper’s revenue was down in April…WAY DOWN!
According to the public utility, demand for its energy is off 8% overall. That includes a 5% drop in industrial use and up to a 15% drop in demand from commercial customers.
According to the Charleston Post and Courier, Santee Cooper’s CEO Mark Bonsall told his Board last month:
Nobody knows what the economic implications are going to be — short term, long term, how deep, etc….But I can tell you there has been a severe contraction in the Myrtle Beach area — between schools, hotels, restaurants. It’s a tourism-based economy.
Santee Cooper had already failed to reach its revenue budget for the first quarter of this year. It was short by $48 million.
The next quarter will be even worse.
In my opinion editorial that ran in The State a month ago, I warned that Santee Cooper was going to be severely financially stressed:
The reality is that Santee Cooper’s revenue, as that for all utilities, will shrink because of lower demand from the commercial sector and because of nonpayments from the residential sector. But unlike investor-owned utilities like Dominion Energy and Duke Energy — which both have deep financial resources and can look to shareholders for cash — Santee Cooper is totally dependent on its customers to pay for its operating costs and massive debt.
Now, thanks to our current recession, it is clear that Santee Cooper’s reform plan will never be implemented. And it is also clear that selling Santee Cooper to a financially solid investor-owned utility is the only option that can deliver reduced rates and immediately remove all of the utility’s debt from the backs of the ratepayers.
Any legislators who are crossing their fingers and hoping that Santee Cooper can deliver on its promises are being naïve at best; they are not serving the best interests of ratepayers and taxpayers. And the Legislature will only make things worse if it does not make a decision on Santee Cooper.
Unfortunately, rumblings are that when the SC Legislature comes back into session next week, they will ignore all the clear warnings about Santee Cooper’s current and expected financial crisis.
Instead the legislators will put together a backroom deal to keep Santee Cooper as a state agency forever. And the ratepayers, and possibly the taxpayers, will be on the hook for paying off the utility’s $6.8 billion debt instead of offloading it to an investor-owned utility with deep pockets.
The promised Santee Cooper reform? It’s never going to happen.