Why Santee Cooper is on the chopping block
S.C. lawmakers are intrigued by four offers to buy troubled Santee Cooper, but they want to investigate further to make sure the bidders really would lower power bills for 2 million South Carolinians.
A legislative committee studying whether to sell the state-owned utility asked a consultant Wednesday to continue working to dissect the non-binding offers the state has received for Santee Cooper. Three of those offers would ensure Santee Cooper’s customers pay nothing more for the failed V.C. Summer Nuclear Station construction project, that Virginia-based consultant, ICF, told legislators.
Officials of ICF were at the State House Wednesday to present the offers to the study committee. The General Assembly hired ICF last fall as legislators search for ways to protect Santee Cooper’s electric customers from rate hikes after the utility racked up $4 billion in debt on the failed V.C. Summer project.
ICF issued a report Friday summarizing the offers to buy Santee Cooper. The names of the would-be acquirers are known only to ICF, and lawmakers said Wednesday they want more details before deciding whether to sell the 84-year-old utility.
State Sen. Paul Campbell, a Charleston Republican who co-chairs the study committee, said it could be summer before lawmakers decide what to do. “We’ve still got a lot of unknowns, and this is a serious decision,” he said.
Seven offers were made to buy all of Santee Cooper, four of which were deemed credible by ICF.
ICF also fielded two offers to buy parts of Santee Cooper, four offers to take over its management and two offers to enter into a long-term agreement to supply power to the utility.
“The good news about this is there were 15 bids, and they contained a variety of options,” said state Rep. Murrell Smith, R-Sumter, the committee’s other co-chairman.
While the potential buyers have not been identified, several companies privately have shown interest in Santee Cooper, including Virginia-based Dominon Energy, Charlotte-based Duke Energy, New York-based LS Power, Florida-based NextEra Energy, Greenville-based Pacolet Milliken Enterprises, Atlanta-based Southern Co. and South Carolina’s 20 electric cooperatives, which buy three-fifths of Santee Cooper’s electricity.
Just how interested each is varies.
Dominion, which recently acquired SCANA and its SCE&G subsidiary after the V.C. Summer debacle, for example, has said it is interested in managing Santee Cooper, not buying it.
Santee Cooper’s power bills are projected to rise a total of 12 percent — about $6,200 per household over the next four decades — as the utility pays off its $4 billion nuclear debt over the next four decades.
But that could be avoided in a sale, ICF said in its report to lawmakers.
The four credible offers the state received to buy Santee Cooper could lower the utility’s power bills from 2 percent to 14 percent from current projections, saving its customers thousands of dollars, ICF reported.
Some lawmakers Wednesday questioned those figures — particularly state Sen. Larry Grooms, a Berkeley Republican and Santee Cooper defender. They questioned how a for-profit utility could pay taxes and provide lower rates than a not-for-profit state agency.
ICF officials explained three of the would-be acquirers plan to write off Santee Cooper’s V.C. Summer debt and shift away from its reliance on coal-fired power plants to save money.
Grooms, whose district includes Santee Cooper’s Moncks Corner headquarters, said he wanted more certainty that the bidders could deliver on their non-binding promises.
Gov. Henry McMaster, who has pushed the General Assembly to sell Santee Cooper since the V.C. Summer project collapsed in July 2017, countered the only certainty now is Santee Cooper’s rates will rise if lawmakers do nothing.
State Rep. Russell Ott, D-Calhoun, agreed.
“If we don’t do anything, then clearly, it’s been stated over and over that rates will go up because they have to pay for the debt,” Ott said.
The only way to evaluate the sale proposals, he said, “is to continue with this process, to go more in depth, to deal with these particular companies on a more intimate basis … to make sure what they’re telling us is factual.”