The tallest hurdle in Gov. Henry McMaster's effort to sell Santee Cooper could prove to be the S.C. Legislature.
Lawmakers – whose approval is required to sell the state-owned utility – are skeptical about selling Santee Cooper in the midst of the firestorm over its role in a failed, $9 billion nuclear expansion project in Fairfield County.
They worry about how an out-of-state company’s takeover of Santee Cooper could affect electricity rates for the 2 million S.C. residents who rely on the Moncks Corner-based utility for power. They also want an independent valuation of Santee Cooper’s assets – something the governor’s office says it is seeking now.
And, State House leaders complain, they have been left out of the loop as McMaster negotiates to sell Santee Cooper to one of four unidentified Fortune 500 companies. That omission, they say, could hurt the governor’s efforts to secure the Legislature’s approval.
“I don’t think it’s going to be received really well if he just negotiates this deal and drops it in the General Assembly’s lap,” said state Senate Majority Leader Shane Massey, R-Edgefield. “Communicating with the General Assembly would be a start, other than just sending a letter.”
The governor’s office says McMaster is telling top legislators as much as he can but the Richland Republican is bound by confidentiality arrangements with the unidentified companies, thought to include Charlotte-based Duke Energy, Atlanta-based Southern Co. and Richmond-based Dominion Energy.
Also, his spokesman warned Tuesday, legislators’ failure to approve a deal put before them would cost Santee Cooper customers billions of dollars.
McMaster began negotiating Santee Cooper’s sale in August, days after the utility and its V.C. Summer partner, Cayce-based SCANA, pulled the plug on a nine-year effort to build two new nuclear reactors.
Santee Cooper officials have said they are working to reduce consumer liability, but the utility’s customers could be charged more than $3.4 billion to cover the costs of the failed nuclear venture. McMaster wants one of the out-of-state utilities either to finish the reactors or buy Santee Cooper – options meant to ensure its customers are not charged for reactors that will not benefit them.
Negotiating that deal is an enormous task that has consumed the governor’s daily schedule, his office says.
But it could prove even harder to persuade state lawmakers to accept a deal that sells part or all of the state-owned power company, which serves about two of every five S.C. residents and employs 1,750.
Top lawmakers have not yet proposed any other solution to the nuclear fiasco. Some say selling Santee Cooper should be one of many options on the table. But they insist on studying all alternatives before agreeing to any deal.
“I don’t think that’s something that can be done quickly and without a great deal of study,” said Senate Minority Leader Nikki Setzler, D-Lexington. “Lots of folks have reservations about that.”
Legislative leaders also say they don’t yet understand how Santee Cooper’s sale might affect its customers or the state’s long-term economic development efforts.
“Would Boeing be here if not for Santee Cooper and its low (electricity) rates?” asked S.C. House Majority Leader Gary Simrill, R-York.
House Speaker Jay Lucas, R-Darlington, said he isn’t reluctant to sell Santee Cooper but urged caution until lawmakers see an independent valuation of the utility. The governor’s office says it is in the process of hiring an investment bank to complete that valuation.
“Members of the House have a responsibility to protect South Carolina’s economy and its citizens,” Lucas said. “I am confident a fire sale of Santee Cooper is not in our state’s best interest.”
Nearly a week after McMaster’s Oct. 5 letter promising to deliver lawmakers an offer to buy Santee Cooper, state senators plan to start asking detailed questions about the state-owned utility’s value at a hearing with its leaders Wednesday. Massey said he and other senators will ask about the utility’s assets and operations to learn more about the pros and cons of selling Santee Cooper.
“It’s got to be on the table, but I don’t think we have nearly enough information yet to make a decision about selling Santee Cooper,” said Massey.
McMaster’s effort to sell legislators on a deal could be hamstrung if he does not do more to involve them in negotiations, some legislators say.
Massey said he was surprised to read in McMaster’s Oct. 5 letter that the governor has “kept the House and Senate leadership up to date on the general patterns of our negotiations.”
Massey, Setzler and House Minority Leader Todd Rutherford, D-Richland, say they have spoken with McMaster about the negotiations only in passing, if at all.
“If he expects the Legislature to approve it, he ought to have had them in the loop earlier,” Setzler said.
Simrill says McMaster has kept him up to date with occasional phone calls.
“The governor will continue to keep the legislative leadership up to date as much as confidential negotiations will allow,” McMaster spokesman Brian Symmes wrote in a statement Tuesday. “He looks forward to working with them on a solution, and would remind them that inaction will force South Carolinians to keep paying off the $4.3 billion in Santee Cooper nuclear debt through their monthly power bill.”