Report is beginning, not end, of possible Santee Cooper sale
COLUMBIA, S.C. (AP) — A consultant’s report that South Carolina’s state-owned utility has at least three potential buyers who could wipe out its $8 billion debt and slow rate increases brought optimism that the problems with a pair of failed nuclear plants could end better than expected.
But consumer advocates and lawmakers warn there is still a long way to go to make sure any sale of Santee Cooper is the best course of action.
The first step takes place Wednesday as a special panel of lawmakers will be joined by Gov. Henry McMaster to discuss the bids to buy Santee Cooper and a report analyzing them by consultant ICF.
But the committee apparently will start with at least one hurdle cleared. It was going to be tough to sell Santee Cooper if taxpayers and ratepayers were still on the hook for debt.
“That’s good news. But the utilities offering to buy Santee Cooper want to make money for their shareholders before they want to save money for South Carolina. Lawmakers need to review all of this very carefully,” said Lynn Teague, vice president of the League of Women Voters in South Carolina who is carefully monitoring the fallout with Santee Cooper and private utility South Carolina Electric & Gas.
The two utilities had a deal to build two nuclear reactors that failed, leaving behind billions of dollars of debt. SCE&G was sold to Dominion Energy in Virginia, leaving lawmakers to decide what to do with Santee Cooper, created during the Great Depression to help bring power and therefore businesses to rural South Carolina.
The 40-page report from ICF warns everything isn’t rosy. There are questions about the pensions of Santee Cooper employees, whether rates can stay low if transmission lines need to be upgraded and what may be the biggest issue with any sale — whether a potential buyer can also keep the South Carolina Electric Cooperatives happy.
The co-ops buy 60 percent of Santee Cooper’s power and can end their contract if they don’t like the sale terms.
The report also suggests lawmakers at least consider the other bids that did not meet the criteria of eliminating debt and keeping rates at a certain level. One company proposed less of a short-term reduction of rates, but included a plan to add solar power and natural gas fired plants to more quickly eliminate coal-powered plants. The bid could save ratepayers even more money when stretched out over decades, the report said.
The details of the bids and the companies who submitted them were not released. Two of the four responses that met all the criteria are major utility companies with a significant presence in the Southeast. All are in good financial shape and have experience in the electric market, the report said.
“I think it is fantastic news,” said Rep. Peter McCoy, who has led the South Carolina House’s efforts to untangle the mess left behind when the two nuclear plants were abandoned before generating a watt of power in the summer of 2017.
“But at the same time, I’ve learned to be very careful, to be very wary to jump to any decision of this magnitude when it involves all the complexities of utility companies,” said the Republican from Charleston who is on the special committee hearing the bids.
Santee Cooper’s special relationship with the Lowcountry of South Carolina will also likely play a part in any decisions. Lawmakers from the area worry about employees losing jobs and the loss of a culture that seemed to care about a region often ignored by the rest of the state.