SC lawmakers eyeing Santee Cooper’s future, as utility leadership defends past steps
South Carolina lawmakers are gearing up for yet another round of what will be a highly-watched fight when the Legislature returns in January over what to do with the state-owned electric utility Santee Cooper.
Adding to the match up between the Legislature and the utility next year is the growing mistrust among legislators of the utility’s leadership — including Santee Cooper CEO Mark Bonsall, who had a scheduling conflict and did not appear at a Dec. 16 House hearing — following the 2017 failed V.C. Summer nuclear project in Fairfield County that cost $9 billion.
And in the latest twist to the General Assembly’s debate on proposed legislation to sell the utility or reform it, a powerful state senator is sending a message to Santee Cooper and to lawmakers that without serious reforms the Senate could move to sell.
The Senate has been split, pitting senators willing to sell against senators whose districts includes the utility wanting reforms.
But in the House, even before the COVID-19 pandemic put a halt on the legislative session this year, members have been more unified on selling and continuing negotiations with Florida-based utility giant NextEra in an effort to improve the deal after rejecting an offer to outright sell.
Gov. Henry McMaster also has publicly pushed to sell the utility in the wake of the V.C. Summer plant project failure.
Republican and Democratic House leaders have co-sponsored legislation to continue talks with NextEra. The legislation also sponsored by House Speaker Jay Lucas, R-Darlington, also calls for board reforms that would change terms for members to five years from seven. The bill would have the House and Senate approve of board appointments, instead of just the Senate, and board members would be required to have bachelors degrees and background in areas that include energy, consumer protection, accounting, finance, engineering or law.
State Senate Majority Leader Shane Massey, R-Edgefield, meanwhile has filed legislation that would let the governor easily boot Santee Cooper board members.
But it’s the creation of a new panel by the chairman of the Senate Finance Committee that has raised eyebrows months after the committee said it wanted to reject NextEra’s purchase offer and only pursue reforms.
Powerful Senate Finance chairman Hugh Leatherman named a new six-member Santee Cooper Review and Policy, or SCRAP, subcommittee last week to help determine the utility’s future.
“Absent meaningful reform that includes a new board and increased oversight, I see no choice but to divest the state of what is increasingly not an asset but an albatross,” Leatherman, R-Florence, wrote in a memo.
Santee Cooper spokesperson Mollie Gore told The State the utility welcomes the opportunity to provide legislators information “on the progress we’ve made to benefit customers.”
“We look forward to answering questions the committee members may have as their consideration of Santee Cooper’s future continues,” Gore said.
However, Santee Cooper’s leadership is already facing ire from lawmakers ahead of next year’s session.
Santee Cooper’s relationship with lawmakers has soured over the past year, following criticism from Leatherman and others over its move to take on an additional $100 million in debt in a refinancing plan.
At a House hearing last week, Santee Cooper executives were forced to defend themselves without utility CEO Bonsall, angering subcommittee co-chair, Rep. Kirkman Finlay, R-Richland, who said Bonsall could have participated by video conference.
Bonsall, who was hired in 2019, was in Arizona visiting a new grandchild.
In Bonsall’s place was Santee Cooper acting Board chairman Dan Ray and top utility employees Pamela Williams and Shawan Gillians.
House members criticized the new debt issuance, pointing to how the utility had $85 million cash on hand.
When Santee Cooper made the bond sale, it unintentionally omitted when notifying the Office of Regulatory Staff about the transaction. Ultimately, Santee Cooper didn’t violate any laws when it omitted information, according to a review by ORS.
“The path that is being embarked on right now is one that is going to lead to unhappiness because when state agency heads don’t appear at committee meetings and their staff mislead, misrepresent and insult General Assembly staff and the governor’s staff, there’s no win there,” Finlay, told Santee Cooper leaders, alleging they’ve mislead staffers.
Ray told lawmakers leadership has worked to turn around the agency that stopped a third of the way through a failed nuclear project, while also keeping rates low for 10 years in the midst of a four-year rate freeze.
“I believe this staff, this organization acts in good faith and is trying to do the right thing,” Ray said. “It’s a complicated enterprise.”
This story was originally published December 28, 2020 at 5:00 AM.
