If House members opt to sell Santee Cooper, they want a better deal from NextEra
South Carolina House lawmakers signaled Tuesday they want to sell Santee Cooper, the state’s 86-year-old power provider, to Florida-based NextEra.
But they are asking for a better deal from the energy giant.
House members tasked with recommending whether to sell the public utility, hire a manager to run it or allow it to reform itself and remain state owned voted Tuesday to pursue a sale to NextEra, if a better deal emerges, while also pushing reforms to Santee Cooper’s governance in case a sale option ultimately falls through.
“The one thing that is unacceptable is Santee Cooper at status quo, and that is not going to happen at the end of this process,” said House Ways and Means Chairman Murrell Smith, R-Sumter.
The move to pursue the two options simultaneously comes after House Speaker Jay Lucas, R-Darlington, revealed his preference to sell Santee Cooper to NextEra.
In an op-ed published by in The (Charleston) Post and Courier on Monday, Lucas called for reforming Santee Cooper while negotiating better terms from NextEra for a sale.
While a sale is negotiated, Lucas added he wants the entire Santee Cooper board and current management replaced.
“Recognizing that it may take significant time to reach a well-negotiated final bid from any private-sector utility, the House cannot risk further, permanent harm to ratepayers,” Lucas wrote. “Santee Cooper has demonstrated a desire to conclude this process with no legislative action, thereby securing the status quo.”
Asked by The State whether the speaker’s call to remove Santee Cooper leadership includes wants the current Santee Cooper board and management removed — including the new CEO Mark Bonsall, a retired Arizona public utility executive brought in last year to reform the utility — to make negotiating with NextEra easier, Lucas’ office did not say specifically.
“The reforms the Speaker laid out for Santee Cooper (including getting rid of the board members) are unrelated to the NextEra bid,” spokeswoman Nicolette Walters said in an email. “The Speaker believes that Santee Cooper needs to be reformed no matter what, regardless of if a sale bid moved forward or not.”
NextEra willing to negotiate
NextEra’s Michele Wheeler, who would oversee Santee Cooper if a sale went through, said the utility is willing to negotiate.
But while those negotiations go on, legislative leaders want to put in their own reforms for Santee Cooper, calling the the ones proposed by the current management to be incomplete.
House members on Tuesday called for board members to have certain qualifications and representation from different types of customers — such as direct serve, wholesale and industrial — and representation from service territories.
A new board would then select a CEO and management.
Questions about other liabilities from Santee Cooper also need to be worked out, such as who could cover the costs of other pending litigation for the utility. NextEra has proposed more than $500 million to help settle a class action ratepayer lawsuit against the utility and has offered $400 million more in ratepayer relief.
“If the litigation goes south and it costs hundreds of millions of dollars, then it’s not the ratepayers of the state that are holding the bag, it is the taxpayers,” said Smith, the House budget chairman.
“If NextEra would like to assume all the assets of Santee Cooper, naturally you would want them to assume the liabilities,” Smith added.
The House panel was established to review three options for deciding the fate of Santee Cooper: sell it to NextEra, let Virginia-based Dominion manage the utility, or allow the current Santee Cooper management reform the agency.
All three of the proposals, which were recommendations the state’s Department of Administration developed with help from third-party consultants, were formally rejected on Tuesday by the House committee.
Lawmakers are considering selling the utility after it racked up $4 billion in debt tied to a failed effort to built two nuclear reactors at the V.C. Summer nuclear generation plant in Fairfield County.
Santee Cooper serves about 2 million direct and indirect customers in the state.
The Senate Finance Committee also is evaluating the proposals.
‘You can’t trust the bid is done’
The House actions on Tuesday cast doubt on whether lawmakers would abandon the plan they put in place to decide the fate of the public utility.
During a Senate Finance meeting, Senate President Harvey Peeler, R-Cherokee, said the speaker’s op-ed is a potential game changer.
“We had three options: sale, manage or reform,” Peeler said. “It don’t think is said ‘reform then sale.’ ”
“The speaker’s words have strength. If the House sends us over something with reform and sale, wipe out the board, you’re the last man standing,” Peeler said to Santee Cooper CEO Mark Bonsall, who was taking questions from senators. “How are you going to reform Santee Cooper? And then sell it?”
Bonsall said Santee Cooper had completed what it believes to be a good proposal.
The reform plan included a “440-page plan, well vetted, submitted on Jan. 3, and fully compliant, and we put our pencils down. And that’s what we understood the process to be,” Bonsall said. “I don’t understand the extension of that process that was contemplated in that op ed.”
“If I were a bidder looking from the outside at South Carolina, I wouldn’t participate in bids going forward, as you can’t trust the bid is done when the bid said it’s done,” Bonsall said.
Senate Majority Leader Shane Massey, R-Edgefield, said he doesn’t know if the op-ed helped.
“Ultimately, I mean, the House and the Senate are going to have to work together to pass something, and I think we all agree that we’re going to have to pass something before the session ends,” Massey said.
Reporter Maayan Schechter contributed to this article.
This story was originally published March 3, 2020 at 7:33 PM.
