SC House members want to hear from more possible buyers for Santee Cooper
An effort to sell the state owned electric utility Santee Cooper moved forward on Tuesday as a House panel approved a bill that re-opens the bid process.
The House Ways and Means Committee voted 20-3 to move the bill to the full House, which could begin debate on the legislation later this week or next week.
The Santee Cooper legislation would allow for reforms including making changes in the the utility’s board and increasing oversight of the utility by other state regulators.
But the big change is the House panel’s interest in considering new suitors for the debt-ridden public utility.
The Department of Administration already has spent $15 million to evaluate potentially selling the utility, having another company come in to manage the utility, or imposing reforms and allowing the utility to continue operating as is.
The DOA selected NextEra as the preferred purchaser and Dominion Energy as the preferred company to come in a manage Santee Cooper. The state owned utility also presented its reform plan.
Ultimately, NextEra’s purchase offer and Dominion’s management offer were rejected by both chambers. House members wanted to continue negotiating, while moving forward with reforms of the agency. Senators only wanted to move forward with reforms.
Now House members are looking to hear all the sale offers themselves, rather than having DOA make the selection.
Instead of having the DOA choose a preferred bidder, six legislators, three from the House and three from the Senate, would evaluate purchase offers that come in. The legislation also gives the option for the state to sell Santee Cooper in its entirety or in parts.
“It was pretty clearly revealed that the process, although it was thorough, and the people at DOA were competent, that it didn’t yield the best offer, even at that time, those folks were willing to make,” said Leon Stavrinakis, D-Charleston.
State Rep. Heather Crawford, R-Horry, voted against the legislation, objecting to the renewed bid process, saying it could lead to the Legislature just spinning its wheels.
“We went through that process, we asked them to give us their best and final offers and frankly we got junk offers and offers that no one could live with,” Crawford said. “So I feel like we’ve kind of been-there-done-that, bought the T-shirt ... So we’re now giving them a second bite of the apple because they did not give us what we asked them for.”
Crawford asked: ”So how much is this process going to cost, and then are we going to give them a third bite at that apple if we don’t get what we want this time?”
She, instead, said she preferred having the Legislature move forward with reforms.
“We’ve come a long way with some great suggestions on how we can reform Santee Cooper, and I believe that’s where we need to focus,” Crawford said. “I think we’ve got some great ideas on the table of how we can reform that entity.”
Under the reform portion of the legislation, board terms would change from seven years to five years. The bill would have the House and Senate approve board appointments, instead of just the Senate, and board members would be required to have bachelor’s degrees and background in areas that include energy, consumer protection, accounting, finance, engineering or law.
The Public Service Commission, a state regulator overseeing privately owned utilities in the state, would have to approve Santee Cooper’s joint energy generation plans with other utilities, fuel procurement plans and electric transmission plans.
Rate increases also would have to go through processes similar to what investor owned utilities go through at the Public Service Commission, including giving customers the ability to comment on rate changes.
The Office of Regulatory Staff also would weigh in on the proposed rate hikes. Santee Cooper’s board of directors also would have separate lawyers from the management when considering a rate increase, and it would be up to the Santee Cooper board to approve rate hikes.
“There’s a governance issue there. There’s an oversight issue there and this bill corrects those issues,” Stavrinakis said.
The future of Santee Cooper has been in flux since it partnered in a failed $9 billion nuclear expansion project at V.C. Summer, something ratepayers paid towards even though the plant was not complete and producing electricity yet.
Efforts to resolve Santee Cooper’s future did not come to fruition last year as the COVID-19 pandemic put a halt on the legislative session. Senators wanted to reject the NextEra offer to purchase the utility and move towards a reform of the agency. House members looked to continue negotiation with NextEra while also reforming the state agency at the same time.
In recent months, legislators were upset over Santee Cooper’s issuing an additional $100 million in debt in a refinancing without legislators not being aware of the plan.
However, any move would need both chambers to agree on a path forward.
Senate Finance Chairman Hugh Leatherman has started a six-member Santee Cooper Review and Policy, or SCRAP, subcommittee to help determine the utility’s future.
A Senate Judiciary subcommittee wants NextEra to provide documents of its lobbying efforts to lawmakers.
