The S.C. House on Tuesday voted to begin exploring the possibility of selling Santee Cooper, months after the state-owned utility racked up $4 billion in debt for a failed nuclear construction project.
The 104-7-vote follows Gov. Henry McMaster’s news conference last week urging the General Assembly to get started evaluating offers to purchase and privatize the Moncks Corner-based power company.
It also follows last week’s release of hundreds of once-secret emails showing Santee Cooper’s lobbyists were working to undermine the governor’s efforts to sell the utility.
The proposal, which now heads to the Senate, offers a significant step toward selling Santee Cooper. A number of companies have privately shown interest in buying or taking over the state-owned power company, but S.C. lawmakers — whose approval is needed to privatize Santee Cooper — have yet to create a process to field and evaluate those offers.
As a result, Florida-based power giant NextEra Energy for weeks has briefed lawmakers privately on a potential bid for Santee Cooper but can not yet make an official offer.
“If there is an offer on the table, we don’t want to hear it behind closed doors,” said state Rep. Peter McCoy, a Charleston Republican who chaired the House’s special nuclear panel. “If you have a proposal, you bring it to this committee, and you testify in front of this committee.”
McMaster and other state lawmakers have said selling the utility is the only way to ensure the 2 million S.C. residents who rely on Santee Cooper for electricity are not made to pay for the failed V.C. Summer nuclear expansion.
Santee Cooper and investor-owned SCE&G abandoned that $9 billion project last July after years of cost overruns and construction delays. Santee Cooper’s customers already have paid about $530 million for the project and continue to pay about $5 a month – or 4.5 percent of their power bills – for it on their power bills, the agency says.
"Speaker Lucas and the House of Representatives have shown tremendous leadership with their efforts to protect the ratepayers of our state," McMaster said in an emailed statement. "This legislation will allow the future of Santee Cooper to be objectively determined through a transparent and accountable process that places the interests of taxpayers and ratepayers first. I applaud the House for taking this historic first step and urge the Senate to pass it without delay.”
"This decision cannot be made behind closed doors through back room deals," House Speaker Jay Lucas, R-Darlington, said in a statement. "South Carolinians deserve to have their voices heard regarding the possible sale. This legislation provides that opportunity and offers a transparent process to vet bids from potential buyers.
The House’s plan, which now heads to the Senate, would create a nine-member committee to:
▪ Evaluate whether selling Santee Cooper is best for the state and its power customers
▪ Figure out which parts of Santee Cooper should be for sale and what should be off-limits
▪ Accept bids from potential purchasers and hold public hearings on those offers
▪ Identify potential hurdles to selling Santee Cooper, such as its $8 billion in debt, and find ways to handle those problems in a potential deal.
The vote does not necessarily indicate House members are ready to privatize the 84-year-old utility.
State Rep. Russell Ott, D-Calhoun, noted that McMaster has said for months Santee Cooper must be sold.
“That might be a little premature,” Ott said, “without trying … to get to the bottom of some of these questions that have to be asked and answered.”
State Rep. Alan Clemmons, R-Horry, said he wanted to make sure the nine-member committee is sensitive to Santee Cooper’s 1,700 employees, many who live in the Lowcountry.
“It is incumbent upon us and the people of South Carolina to do right by those employees,” he declared during a debate on the House floor.
Santee Cooper spokeswoman Mollie Gore said her agency appreciates the House's efforts and its "recognition of our employees' hard work on the frontline every day."
"As this process continues, we will continue to be a resource for legislators and, if it comes to be, the committee outlined by the House today," Gore said.
The committee would include six House and Senate leaders, or their designees; the governor, or his designee; and two members appointed by the governor. The House proposal stipulates that no one on the committee can receive pay or other benefits from a power company.
The House proposal – passed ahead of a critical April 10 deadline – also would fire the current members of Santee Cooper’s board – a group lawmakers blame for failing to alert them of problems with the nuclear project.
The utility’s current board members would remain in their seats until their replacements can be screened and appointed by the governor and state lawmakers.