Little-known Santee Cooper customer wants to buy troubled state-owned utility

Santee Cooper’s largest customer wants to put in a bid to buy the state-owned utility, which some state leaders want to sell after it sank $4 billion into a failed nuclear expansion project.

The state’s 20 electric cooperatives, who together buy about 60 percent of Santee Cooper’s power, join a handful of companies looking to submit a bid to buy some or all of the Moncks Corner-based power company.

The co-ops’ plans were disclosed publicly during a S.C. House hearing Thursday by Mike Couick, chief executive of the Electric Cooperatives of South Carolina. The buyout plan comes after the co-ops, who deliver Santee Cooper’s power to 1.5 million customers in all 46 S.C. counties, passed a resolution saying the “continuation of the status quo at Santee Cooper is unacceptable.”

“No option ought to be off the table,” said Couick, whose organization represents all 20 co-ops. “This is 20 cooperatives looking for a solution for their ratepayers, for their members.”

In a statement, Santee Cooper spokeswoman Mollie Gore said the utility values its relationship with the co-ops.

“We did not see a copy of the cooperative resolution prior to today’s hearing, but we will be looking at it,” she wrote. “As always, we are focused on keeping costs low and reliability high for all of our customers, including ... member cooperatives.”

The push to sell Santee Cooper follows the company’s announcement last July that it had abandoned a decade-long effort to build two nuclear reactors at the V.C. Summer Nuclear Station in Fairfield County. The senior partner in that project, investor-owned SCE&G, also is in dire straights as S.C. lawmakers and utility watchdogs seek to block the Cayce-based company from charging its customers any more to pay off debt from that project.

S.C. Gov. Henry McMaster has championed Santee Cooper’s possible sale, starting negotiations with Fortune 500 companies just weeks after the nuclear project’s abandonment. The Richland Republican says selling Santee Cooper is the only way to make sure its customers aren’t left footing its $4 billion bill for the unfinished nuclear reactors.

Florida-based NextEra Energy, North Carolina-based Duke Energy, Georgia-based Southern Co. and Virginia-based Dominion Energy all have shown interest in Santee Cooper. So has Greenville-based Pacolet Milliken, a family-owned investment company.

Couick, who was part of a small team involved with McMaster’s early negotiations to sell Santee Cooper, said there have been four types of offers for the state-owned utility:

▪  Offers to buy all of Santee Cooper’s assets

▪  Offers to buy its transmission lines and/or its distribution system

▪  Offers to keep Santee Cooper state owned, but pay a private company to manage it, cutting costs and sharing those savings with customers

▪  The cooperatives’ offer to buy Santee Cooper.

Each of the first three offers has been made by at least three separate companies, Couick said.

Couick would not tell a special House committee what the cooperatives’ bid would look like, nor did he offer a dollar amount for the proposal. However, he did say the co-ops offer would protect the 1,700 Santee Cooper employees whose futures now are uncertain.

Three of the 20 S.C. co-ops publicly have said they want to buy a chunk of Santee Cooper if it is sold.

Horry Electric, Berkeley Electric and Santee Electric want to buy the right to distribute power to the 177,000 customers that Santee Cooper directly serves if the utility is sold off or reorganized.

“Our position is that if Santee Cooper is sold, we think we can do a better job than anyone from out of state,” said chief executive Pat Howle of Horry Electric.

The Conway-based co-op would add Santee Cooper’s 140,000 customers in Horry County to its own 80,000.

The co-ops hold tremendous influence over Santee Cooper’s possible sale. They have a contract to buy power from Santee Cooper until 2058. But they could pull out of that deal if the utility is sold, taking 60 percent of Santee Cooper’s business with them. That ensures any company that wants to buy or re-organize Santee Cooper also must appease the co-ops.

The co-ops do not all agree that Santee Cooper should be sold, Couick told House members Thursday.

But, he added, they do agree that state lawmakers, who will make that decision, should begin evaluating offers for the 83-year-old power company.

This story was originally published February 8, 2018 at 3:54 PM with the headline "Little-known Santee Cooper customer wants to buy troubled state-owned utility."