Santee Cooper CEO Lonnie Carter explains decision to scrap nuclear-related rate hikes
Santee Cooper chief executive Lonnie Carter will leave the state-owned utility Friday, amid criticism over its role in the construction of two now-abandoned nuclear reactors in Fairfield County, according to a source close to the situation.
Santee Cooper’s board of directors told Carter earlier this week he could resign or be fired. The utility already is searching for an interim replacement, the source said.
Meanwhile, S.C. Gov. Henry McMaster’s office confirmed Thursday that the Republican governor is in ongoing talks with potential buyers for Santee Cooper, which provides power to 2 million South Carolinians.
Santee Cooper’s directors plan to meet Friday in a specially called meeting to discuss “employment matters” involving “appointment, development and retention” behind closed doors, according to a statement by the utility.
Efforts to reach a Santee Cooper spokeswoman Thursday for comment were unsuccessful. The utility’s chairman, Columbia attorney Leighton Lord, would not comment.
Carter would become the first executive to fall victim to the political firestorm surrounding the botched V.C. Summer Nuclear Station expansion.
On Wednesday, S.C. House Speaker Jay Lucas, R-Darlington, called for the resignation of the director of the state agency that oversees utilities.
However, Gov. McMaster was adamant that Office of Regulatory Staff executive director Dukes Scott will stay aboard. McMaster’s office said late Thursday that Scott had not resigned.
‘Rumors’ of departures
In late July, Santee Cooper, which owns 45 percent of the two unfinished reactors, and its majority-partner, Cayce-based SCE&G, said they would abandon plans to finish the reactors.
The two utilities already had spent more than $9 billion on the project, and S.C. electric customers have paid billions in higher electric rates for the project.
Santee Cooper chief Carter testified Tuesday before a state Senate committee investigating the decision to abandon the V.C. Summer expansion.
The utilities have blamed the project’s collapse on the bankruptcy of the project’s contractor, Westinghouse; spiraling costs; and construction delays.
However, state senators said Tuesday that utility leaders also needed to take responsibility.
During the hearing, Senate Majority Leader Shane Massey, R-Edgefield, told utility executives he was hearing “rumors” of impending management shake-ups.
If that happens, Massey warned the executives not to sign severance agreements that included confidentiality clauses that would prevent them from testifying at future legislative hearings.
Selling Santee Cooper?
Meanwhile, Gov. McMaster’s office says it is focused on somehow reviving the project, including selling Santee Cooper’s 45-percent ownership stake to another utility. McMaster also has proposed selling the utility itself.
McMaster is in ongoing talks with potential buyers, his office says. Thursday, his office confirmed some parties potentially interested in acquiring Santee Cooper have signed nondisclosure agreements, which could mean talks are becoming serious.
The agreements, McMaster’s office added, are standard practice for parties entering negotiations on large deals.
McMaster’s office would not say how many parties have signed the agreements or how far along discussions about the sale of the public utility have gone.
Carter and Santee Cooper chairman Lord are part of a small team helping McMaster sell the utility. That team also includes Mike Couick, chief executive officer of the Electrical Cooperatives of South Carolina, and Scott, director of the Office of Regulatory Staff.
However, there are obstacles to selling Santee Cooper.
Santee Cooper has about $8 billion in debt, including $4 billion related to the nuclear project, the utility’s officials told state senators Tuesday.
Lord told state senators Tuesday that utility officials were summoned by the governor to a meeting last week to discuss the sale of the state-owned utility.
There was a utility present at the meeting that was interested in buying Santee Cooper but not its stake in the Fairfield County nuclear project, Lord told legislators, adding the discussions were preliminary.
“I don’t think any investor-owned utility would want to acquire $4 billion in debt” related to a project that is not set to be completed, Lord said, adding, “It would kill their balance sheet.”
If only Santee Cooper’s assets were bought, its debt likely would stay with the state of South Carolina, Lord said.
Legislators told Lord the requirement the state assume that debt would be a deal killer.
Santee Cooper’s impact
2 million: S.C. residents who rely on Santee Cooper for power
45 percent: Santee Cooper’s ownership stake in the failed V.C. Summer nuclear expansion project
$540 million: Rate hikes that Santee Cooper has levied on its customers since 2009, including money to pay for the nuclear project
$8 billion: The utility’s debt, including about $4 billion for two unfinished nuclear reactors