Bids nixed, SC Senate, House differ on state utility future
COLUMBIA, S.C. (AP) — South Carolina lawmakers have rejected all bids to buy or manage state-owned utility Santee Cooper and the state House and Senate appear to disagree on what to do next.
The budget writing committees for both chambers met simultaneously Thursday and took divergent paths.
The House Ways and Means Committee approved a bill with some ideas to reform Santee Cooper, but also to create a committee of three House members and three senators with expert help to continue to negotiate with NextEra Energy of Florida to sell the utility.
An hour later, the Senate Finance Commission rejected the initial bids by NextEra as well as a bid from Dominion Energy of Virginia to manage Santee Cooper and the utility’s own plan to reform itself. The House committee rejected them all Tuesday.
But Senate Finance Chairman Hugh Leatherman said the Senate isn’t committing to renegotiate with NextEra now. Instead, the Republican from Florence appointed a subcommittee to look at “robust reforms” of Santee Cooper.
“I believe there is enough sharp minds in this General Assembly — House and Senate — to get Santee Cooper back on track,” Leatherman said.
The state Department of Administration spent $15 million over several months gathering Santee Cooper bids under a state law passed last year requiring the agency to deliver the best offer to buy, manage and reform.
Lawmakers from both chambers praised the agency for helping sharpen their ideas of what needs to be done with Santee Cooper before heading on their own way.
The votes to reject the bids do appear to eliminate a deadline of next Thursday in the state law for the committees to report their conclusions to the full House and Senate.
If anything is done with Santee Cooper — reform or sale — the House and Senate will have to get back on the same path.
House Ways and Means Committee Chairman Murrell Smith said everyone agrees Santee Cooper can’t keep going like it is, but the House hasn’t closed the door on letting the utility stay public with the right reforms.
Santee Cooper has $4 billion in debt for its minority stake in a pair of nuclear reactors that were abandoned during construction. Its main customer — the state’s electric cooperatives which provide power to about 2 million of the state’s 5 million people — are disgusted with their treatment, The Electric Cooperatives of South Carolina CEO Michael Couick told senators before Thursday’s vote.
“They just don’t care,” Couick said.
Couick told senators Santee Cooper ignored warnings from co-ops that the nuclear deal was too risky and signed an ill-fated 60-year contract to sell gypsum, a byproduct from burning coal, to a private company. The gypsum market has turned down and the utility now pays $10 million to keep up its end of the deal.
Santee Cooper didn’t care about those mistakes because they were locked into a contract to sell power to the co-ops for the next 30 years and the utility’s board can set its own electric rates.
“This is how they make money. They charge what they spend,” Couick said.
The House Ways and Means Committee voted to have Santee Coper to now have to go before regulators like other private utilities. They also suggested installing a whole new board to appoint a new CEO who would review the further employment and salary of every senior executive at Santee Cooper.
“I think they understand the urgency of being accountable to the General Assembly now,” said Smith, a Republican from Sumter.
The House will pause on Santee Cooper issues next week as they take up the budget.
Meanwhile, the subcommittee created by Leatherman to report back its reform plans meets for the first time Tuesday,
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