Will SC Senate do its fiduciary obligation?

Will SC Senate do its fiduciary obligation?

Blog by Frank Knapp, President and CEO of the South Carolina Small Business Chamber of Commerce

April 6, 2021

The South Carolina legislature’s effort to resolve the future of Santee Cooper continues to move at a glacial pace, years after the V.C. Summer nuclear fiasco that will cost Santee Cooper and co-op customers more than $4 billion if the debt-ridden utility is not sold.

The latest action is a bill to reform the state-owned utility that was reported out of the Judiciary Committee by the slimmest of votes – 12 to 11. Unfortunately, this bill neither provides assurances of real reform nor explores the benefits a sale could bring to Santee Cooper and co-op customers as well as to the state.

Senate Judiciary Committee Chairman Luke Rankin did achieve his stated goal of moving his reform bill – Senate Bill 464 – forward and “not to take up the House bill” that includes the exploration of a sale.

However, it was a final comment during that same committee meeting by Santee Cooper’s Director of Government Relations, Mr. Geoff Penland, that framed the issue for the upcoming Senate floor debate.

Asked about the possible benefits from the sale of Santee Cooper, Mr. Penland told the committee:

“You all will have to do the analysis of whether or not you think that it is in the best interest of the ratepayer or not…If you have the ratepayer in mind as it relates to that decision, I think you need to make a thorough decision about that.”

The problem for the Senate is that there has been no analysis, thorough or otherwise, of a potential sale.

No weeks of intensive subcommittee negotiations to flesh out details.

No opportunity for a Senate committee to publicly question lobbyists in support of a sale.

No detailed explanation of how the sale of Santee Cooper could lift its nuclear debt from ratepayers.

No examination of how a sale could result in immediate Santee Cooper rate cuts (the rate freeze in the Cook lawsuit settlement does not prevent the reduction of rates, only rate hikes).

As Senator Marlon Kimpson correctly observed during that Judiciary Committee meeting, the legislature has “a fiduciary obligation to the people of South Carolina and the ratepayers to make sure that power is at low cost.”

But how is this fiduciary obligation to be achieved if the Senate votes only to make modest reforms to Santee Cooper but makes no analysis of possible ratepayer benefits from a sale?

Even the editorial page editors of the Post and Courier, clearly not part of the so-called “sell Santee Cooper crowd”,  have called for taking a new look at a sale:

“… it also probably won’t hurt …”(January 31, 2021)

“So maybe it’s worth asking for a new bid …” (March 13, 2021)

The Post and Courier has the best advice for the legislature and the analysis that is needed:

“… whether to sell Santee Cooper must depend on whether a sale means better rates and better reliability and cleaner energy, now and in the long term.” (February 27, 2021)

The Senate won’t know the answer to these questions unless it does the thorough analysis of the possible benefits of a sale.

Not after reform.  Not two or four years from now.

NOW!