Palmetto Promise Institute
July 31, 2019
By Oran P. Smith, Senior Fellow
Two years ago today, Santee Cooper and SCE&G announced that they were abandoning construction of the V.C. Summer Nuclear Station units 2 and 3. The reactors were nowhere near complete though $9 billion had been spent.
The financial hit was enormous. When Santee Cooper’s share of the debt was added to its other obligations, the state-owned utility’s customers—many of them in rural areas—would be on the hook for more than $14 billion (including interest). Payments would stretch to 2056.
All of this begs the question: Was the V.C. Summer debacle a fluke or was it part of a trend of poor (and expensive) decision making by a state agency playing utility?
To answer that question, Palmetto Promise has put all the numbers in one place. Whether it’s their new CEO salary of $1,100,000 or the army of lawyers at $9,000,000 (2018), the former CEO’s retirement package of up to $800,000/year, or $1,000,000 spent on advice from Wall Street – the list of payees is long.
But the list of payers is short. As a state-owned utility with no shareholders, all of these expenses will have to be paid by Santee Cooper’s customers.
It’s death by a thousand cuts for customers. Customers who, in Santee Cooper’s service area, live on about $27,065 a year.
This trend should not be allowed to continue, and it doesn’t have to.
Next year, lawmakers will be offered three choices on the future of Santee Cooper: outsource its management, expect Santee Cooper to fix itself, or sell Santee Cooper to private enterprise.
The only way to relieve ratepayers of this massive debt burden and stop the pattern of poor decision-making is to shift full ownership of Santee Cooper to the private sector where it belongs.