Selling Santee Cooper town hall in Myrtle Beach

Selling Santee Cooper town hall in Myrtle Beach

MyHorryNews.com
April 10, 2019

By Janet Morgan

Julia Brinkley is worried.

“I’m a senior citizen. I have a social security check and I pinch my pennies,” she said during a town hall meeting to discuss the possibility of the state-owned utility Santee Cooper being sold to a private company. “I don’t even have the air on unless I’m practically dead with heat. I don’t have the heat on unless I’m practically freezing to death. I turn out the lights all the time.”
She’s worried now with an average power bill of $70 a month.

As Frank Knapp Jr. unveiled a chart showing a Santee Cooper rate hike of 12 % by 2021, Brinkley looked around the room at the 50-plus people gathered for the town hall.

“He makes it sound terrible,” she said noticing the meeting was loaded with Santee Cooper supporters and small business chamber supporters. “I’m just a regular person. I’m not afraid to bring up my issues, but I don’t know necessarily that they’re going to be paid attention to. I feel that I am the least important person, you know. Nobody cares for you, I’d say, after 60. You just don’t count.”

Knapp is the president and chief executive officer of the South Carolina Small Business Chamber of Commerce (SCSBCC). He led a discussion on why the chamber supports selling Santee Cooper to a private utility company.

The SCSBCC advocates selling Santee Cooper to eliminate the nearly $8 billion in debt and to close the two coal plants making way for renewable energy projects.

Knapp said the sale should include not passing on the debt to customers such as Brinkley and the more than 10,000 people in small businesses that rely on Santee Cooper.

Although years in the making, the discussion to sell the public utility are in the beginning stages with a lot of vague spots that need to be figured out when contracts are negotiated.

First, the state legislators have to agree to sell the utility, which began in 1924 to serve rural parts of the state and now serves two million customers either directly through Santee Cooper or indirectly through electric cooperatives.
Knapp said his group wants the contract to include not passing on the billions of debt dollars to customers through rate hikes and other charges. He said the purchasing company should agree to those terms based on the projected growth in the state – more customers mean more money spread out to pay investors.

It all began in 2009, Knapp outlined for the crowd at Myrtle Beach’s Chapin Library.

Then, he said, Santee Cooper and South Carolina Electric & Gas (SCE&G) partnered to build a nuclear power project with two reactors in Fairfield County known as the V.C. Summer project. Santee Cooper agreed to shoulder 45% of the construction debt. The project was supposed to be complete by 2018 with a $10 billion construction cost.

By 2015, the small business chamber and AARP had grown concerned with a 15% rate hike passed on to customers of SCE&G and numerous delays at the Summer project.

In 2017, SCE&G abandoned the project. SCE&G was sold to Dominion Energy later and the South Carolina Public Service Commission rolled back the rate hike for Dominion customers.

The state utility Santee Cooper is exempt from rate regulation by the South Carolina Public Service Commission, unlike private companies such as Dominion. Knapp said without the sale to a private company, there is nothing to stop Santee Cooper from passing on its debt load to customers — $4 billion in construction debt from the Summer project and about $4 billion in other debt from bonds.

“We believe that Santee Cooper’s management was also responsible for the mismanagement of the nuclear project leading to its collapse and that Santee Cooper’s management could have stopped the project a lot earlier had it revealed important information to the public about the project,” he said. “We don’t want any of the Santee Cooper’s nuclear debt to be paid by the ratepayers, either the direct serve ratepayers or the 20 electric cooperatives’ ratepayers. In total there are over two million ratepayers, residential and business, that will never receive any power from that project. These ratepayers deserve to be protected from paying any of this debt. They certainly don’t deserve to have their rates increased at least another 7% over the 5% rates have already been increased for the nuclear debt.

“If we don’t change Santee Cooper’s plans to increase rates to pay for the nuclear debt, ratepayers will pay an additional $9 billion over the next 30 or so years,” Knapp said. “Add to that paying off the other $4 billion of debt and that comes to a total of $15 billion over the next 30 years, about $7,400 per customer.”

But Santee Cooper’s public relations specialist Tracy Vreeland reminded the crowd Santee Cooper’s rates are the lowest in the state.

“We have the lowest rates in the state and even after the 7% increase, in small increments, they’re still going to be the lowest in the state,” she said. “If not the lowest in the state, they will be competitive.”

She added Santee Cooper does not have plans to shutter the two remaining coal plants in the state although they are bringing solar farms online. The solar farm at the Myrtle Beach International Airport is due to be online soon.
But Ed Phillips is skeptical.

He listened to the points made by Knapp and several people from Santee Cooper in the crowd as he boiled the issue down to debt being washed away when other companies have to pay off debt.

“If you can make it cheaper, why would you have to raise my rate unless you have stockholders and investors,” he said. “But the bottom line is Santee Cooper has been good to this state. Like a lot of people, I don’t want to pay any more money than I have to.”

Brinkley hadn’t made up her mind which side she is on by the end of the meeting.

“How does a regular person that doesn’t have billions of dollars end up surviving?” she asked. “How do they end up surviving when bills are like 70-plus a month? People wear coats in my house when they come to see me.”
The town hall at Chapin Library was sponsored by the SCSBCC and myhorrynews.com.

Other town halls from the SCSBCC are scheduled in Orangeburg, Rock Hill and Sumter throughout April.

https://www.myhorrynews.com/news/selling-santee-cooper-town-hall-in-myrtle-beach/article_c815661c-5bd6-11e9-8ab1-837cf8a1c279.html