SC senators turn spotlight on NextEra, energy giant seeking to buy Santee Cooper

A state Senate subcommittee voted unanimously Thursday morning to investigate energy giant NextEra’s efforts to acquire Santee Cooper, the state-owned electric utility that provides power to two million people across the state.

Led by Sen. Luke Rankin, R-Horry, the bipartisan subcommittee of seven senators agreed to send NextEra a letter requesting numerous details about the company’s lobbying efforts with, and campaign contributions to, state lawmakers. The committee will also ask NextEra to provide details on a reported ongoing federal criminal investigation into some of the company’s dealings in Florida.

NextEra will have 15 days to reply. That should be ample time because, senators said, the company has “an entire team of lawyers” working to acquire Santee Cooper.

If NextEra refuses to provide the information, senators will seek subpoena power from the 46-member Senate, said Sen. Dick Harpootlian, D-Richland, who along with Sen. Stephen Goldfinch, R-Georgetown, and Rankin is leading the effort to get information from NextEra.

NextEra officials could not be reached for comment.

With Thursday’s action, the seven senators made it clear that although there is considerable momentum building in the General Assembly to sell Santee Cooper to NextEra, they represent an organized, opposing force.

“I’m not committed to selling it, I’m not committed to keeping it, I’m not committed to any course of action... but I want to know what I’m voting on, and we can’t get there until these questions are answered,” said Harpootlian. “I’m not casting aspersions. I just don’t know what the facts are.”

In any case, whether to sell South Carolina’s sprawling utility, long a fixture in the state’s business and political landscape, is likely to be one of the General Assembly’s most contentious and high stakes issues in the 2021 legislative session.

Lawmakers who have declared themselves receptive to selling Santee Cooper include the powerful Sen. Hugh Leatherman, R-Florence, Senate Finance Committee chair. Earlier this month, Leatherman named his own committee — ominously called SCRAP, which stands for Santee Cooper Review and Policy — to help determine Santee Cooper’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 wrote in a memo.

Santee Cooper, a 1,634-employee state agency, is a desirable acquisition for an outside energy company like NextEra, an investor-owned utility holding company whose shares are traded on the New York Stock Exchange. Headquartered in Florida, the company has grown through acquisitions into one of the nation’s largest energy companies. It owns utilities across the country and has revenues of some $19 billion a year.

In 2019, Santee Cooper had $1.6 billion in revenues from sales to about 200,000 customers including 20 electric cooperatives and large businesses across the state. Santee Cooper also controls an estimated 160,000 acres of land on and around two of the state’s biggest lakes — Marion and Moultrie.

Santee Cooper has been widely criticized since the 2017 to build two nuclear reactors in Fairfield County. The project was a joint effort between Santee Cooper and the former SCANA power company, which was sold to Dominion Energy after the nuclear project’s collapse.

The project’s failure, widely attributed to gross mismanagement, spawned numerous lawsuits against both Santee Cooper and SCANA, both of which incurred large debts in the fallout. For years, both utilities charged their customers billions of dollars in increased rates to pay for the project. Ratepayers recouped some, but not all, of that money in settlements to lawsuits brought against the companies.

It was the state’s largest business failure ever. One former SCANA top executive has pleaded guilty to criminal fraud charges in connection to the project, and another former top SCANA top executive has agreed to plead guilty to similar charges.

Since 2017, the Santee Cooper’s top leadership has been replaced and its finances have begun to be overhauled. State lawmakers have been debating whether to sell Santee Cooper, basically a state agency, or allow it to reform itself.

State Sen. Chip Campsen, R-Charleston, one of the subcommitee senators, recently wrote an op-ed in the Post & Courier of Charleston in which he praised Santee Cooper’s efforts to reform itself. Although Santee Cooper has been criticized for restructuring its debts, Santee Cooper actually took advantage of “historic low interest rates” to save more than $330 million in debt service payments in coming years, Campsen said.

“This is a state asset that has value,” Campsen said Thursday. “Both the taxpayers and the ratepayers benefit from a more efficient Santee Cooper... To criticize them for doing that is really disabling them from being as efficient as they could be.”

Harpootlian and Goldfinch both wrote letters to the subcommittee outlining what they wanted investigated.

In his letter, Harpootlian said there was an ongoing federal investigation in Florida into NextEra’s efforts to acquire a Jacksonville utility. It is important “we learn all we can about the federal investigation,” Harpootlian wrote.

Goldfinch wrote that although NextEra is not a public entity subject to the S.C. Freedom of Information Act, it is important to find out the same kind information about NextEra as lawmakers have about Santee Cooper, which is subject to the FOI.

To that end, wrote Goldfinch, he wants NextEra to turn over all documents since July 31, 2017 — the date of the nuclear plant failure — that relate to NextEra’s employees or lobbyists and that mention the possible acquisition of Santee Cooper. Goldfinch also wants all documents that relate to NextEra’s employees’ or lobbyists’ correspondence with SC lawmakers, their legislative staffs and also the staff of Gov. Henry McMaster.

Goldfinch also said he wants NextEra to furnish a list of all lobbyists, law firms, public relations professionals and others — and their contracts — who have been involved in the effort to buy Santee Cooper. Goldfinch also said he wants a list of all campaign contributions and payments of any kind, including to lawmakers’ charities, by NextEra.

This story was originally published December 31, 2020 at 2:40 PM.