Offers are due Monday to buy Santee Cooper, the state-owned power utility that racked up $4 billion in debt on an unfinished nuclear power plant.
But even the highest bidder might not win the state’s approval to take over the 85-year-old utility.
A proposed sale, which needs the S.C. General Assembly’s approval, seems likely to die in the state Senate, where senators are skeptical that selling Santee Cooper is the best solution to the agency’s nuclear woes.
Senators also say they don’t want a long and complicated debate over Santee Cooper to drown out the General Assembly’s No. 1 priority for 2019: public education reform.
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Instead, the Senate could decide to let another firm manage Santee Cooper, enact structural reforms to keep Santee Cooper from repeating its mistakes or do nothing at all.
“I don’t believe the votes are there to sell Santee Cooper,” Senate Minority Leader Nikki Setzler, D-Lexington, told reporters on Jan. 3.
Senate Majority Leader Shane Massey agrees.
“It’s a big political lift,” the Edgefield Republican said. “You’re going to have some folks that are going to defend Santee Cooper, no matter what they do. You’re going to have other people who are going to want to sell Santee Cooper, no matter how they perform.”
Republican Gov. Henry McMaster has led the push to sell Santee Cooper, saying is the only way to pay off the utility’s nuclear debt without charging its customers higher rates.
The 177,000 customers that Santee Cooper directly serves now are paying about $5.35 a month, on average, for the failed nuclear project. Barring a sale or another major change, that eventually will rise to $13.33 a month. The typical Santee Cooper customer will pay $6,200 for the project over the next four decades.
The million South Carolinians who buy Santee Cooper’s power through one of the state’s 20 electric co-ops will pay an estimated $4,200 for the project. However, the co-ops are suing Santee Cooper in an effort to get out of paying for the utility’s share of the failed V.C. Summer Nuclear Station expansion project.
‘Virtually nobody ... is interested in selling’
A legislative committee began studying the idea of selling Santee Cooper last fall. Legislators hired a Virginia-based consulting firm to field and evaluate offers from a handful of potential bidders, including Florida-based NextEra Energy, Charlotte-based Duke Energy, Virginia-based Dominion Energy, Greenville-based Pacolet Milliken Enterprises, New York-based LS Power and the S.C. electric co-ops.
ICF International is set to advise lawmakers on its findings next month. But lawmakers won’t necessarily sell Santee Cooper, even if ICF recommends it.
There appears to be a growing appetite in the S.C. House to sell or restructure Santee Cooper.
But that might not matter because a handful of senators — more than enough to block the sale — have told The State recently they are wary of offloading the state agency.
They cite the utility’s relatively low electric rates even after the nuclear debacle, its role in the state’s economic development efforts, and its longtime management of lakes Marion and Moultrie.
“I’ve tried to be open-minded about it, but I come from an area that’s very much affected by the lakes,” said state Sen. Brad Hutto, D-Orangeburg. “There is virtually nobody here who is interested in selling it.”
Some senators don’t see how a for-profit utility could pay off Santee Cooper’s $8 billion in total debt — plus $1 billion in early repayment fees — and keep electric rates low in the long run. Some also worry many of Santee Cooper’s 1,625 employees could lose their jobs in a takeover.
More than a year ago, state Sen. Larry Grooms, the Berkeley Republican whose district includes the agency’s headquarters, told Statehouse Report he would “be waiting in the Senate to kill such a foolhardy proposal should one ever make it that far.”
Efforts to reach Grooms Friday were unsuccessful.
However, state Sen. Chip Campsen, R-Charleston, told The State Friday an effort to sell Santee Cooper state agency could spark a coordinated filibuster in the Senate.
“There’s enough opposition that could stop it,” Campsen said. “I have a sense that there would be some senators who would be willing to do that. That’s their position up front.”
‘We’re tired of energy’
Absent a sale, some senators say they could support structural changes at Santee Cooper.
That could mean letting an outside company manage the state agency. Virginia-based Dominion Energy, which bought Cayce-based SCANA earlier this month, made such an offer in October, adding it has no interest in buying Santee Cooper outright.
A restructuring also could mean targeting expensive retirement plans for Santee Cooper executives or letting the S.C. Public Service Commission — which sets utility rates for investor-owned utilities — oversee Santee Cooper’s rates, currently set by the agency’s board alone.
“It makes sense to have someone looking over their shoulder,” Massey said. “So far, the board has not done that sufficiently.”
Regardless, senators say they don’t want discussions — or a lengthy filibuster — over Santee Cooper to get in the way of passing education-reform proposals.
“I don’t believe that Santee Cooper is going to suck the air out of the room because it’s too complicated,” said state Sen. Katrina Shealy, R-Lexington. “And after SCANA and Dominion, I think we’re tired of energy.”