Why Santee Cooper is on the chopping block
The S.C. Senate is refusing to pay any more for a Virginia-based consultant to study offers to buy Santee Cooper, a move that throws a wrench into legislative efforts to sell the state-owned utility and offload its $8 billion in debt.
In an email obtained by The State, Senate staff backed out of a weekly conference call with ICF — the consultant that spent months fielding and evaluating 15 bids for the 84-year-old utility — and said the Senate “wants to carefully consider the next steps in this process before committing to expending the large sums that may be necessary.”
The House and Senate already have paid ICF nearly $380,000.
At the prodding of Republican Gov. Henry McMaster, the GOP-controlled General Assembly is considering selling Santee Cooper after the utility racked up $4 billion in debt on the failed V.C. Summer nuclear plant expansion project.
ICF told lawmakers on Feb. 1 that three of the four credible offers that it has received to buy the utility would wipe out all of Santee Cooper’s debt. That would save the 2 million S.C. residents who get their power from Santee Cooper, directly or through an electric co-op, thousands of dollars on their power bills over the next four decades.
But the Santee Cooper sale study committee — made up of House and Senate members — said last week it wants more details on those offers before making a decision. It planned to hire ICF to provide those details.
Reached Thursday, state Sen. Paul Campbell, the Charleston Republican who co-chairs that study committee, said he was unaware the Senate had decided not to pay more to study Santee Cooper’s sale. He said he would talk with Senate President Harvey Peeler, R-Cherokee, about paying ICF to continue looking into the offers.
“It’s absolutely foolish not to go further with it,” said Campbell, who has been open to a possible sale.
However, Peeler said Thursday there is no point in paying ICF any more because there aren’t enough votes in the Senate to sell Santee Cooper. Of Campbell’s committee, Peeler said, “Their job is done.”
The House and governor disagree.
“Two weeks after Santee Cooper’s free-market value was confirmed and we learned that its sale would result in lower rates for its customers, some members of the Senate seem to have decided that none of that matters,” McMaster spokesman Brian Symmes said in a statement. “This is certainly a disappointing turn of events, but the governor is hopeful that the Senate will reconsider to continue this important process and think only of what is in the best interest of South Carolina’s taxpayers and ratepayers.”
Meanwhile, the House plans to move forward by hiring ICF or another consultant to further study Santee Cooper’s possible sale, even if the Senate won’t help pay the bills, staffers told The State.
The Senate, which can veto a sale, is skeptical of ICF’s findings.
Some senators have said they worry a buyer would gut Santee Cooper’s staff of 1,625. They also question how a for-profit utility with higher operating costs, including taxes, can buy not-for-profit Santee Cooper and provide customers with lower power bills in the long run.
ICF said those bills could drop from 2 percent to 14 percent.
Senate Majority Leader Shane Massey, R-Edgefield, said the Senate wants to know why “we should spend more money” after ICF already has studied the issue for months.
“Senate leadership is not currently ready to commit further funding for additional work by ICF,” Senate staff wrote in the email. “This is not a reflection of (Senate) leadership’s opinion of the work that ICF has done. As a matter of fact, leadership appreciates the work that has been done and believes that the report will be very helpful as we continue through the process of determining what action needs to be taken in relation to Santee Cooper.”
If lawmakers don’t sell Santee Cooper, they have other options.
Among the 15 bids that came in for Santee Cooper, seven were to buy the entire utility. However, ICF also fielded two offers to buy parts of Santee Cooper, four to take over its management and two to enter into a long-term agreement to supply power to the utility.
S.C. legislators also could continue to pursue some of those options.
Campbell told The State his committee shouldn’t be disbanded, even if it can’t hire a consultant to pursue a possible sale.
“We’ll do without it,” he said.