The Buzz

Contract shows Santee Cooper is weighing lawsuit against SCANA over failed project

Santee Cooper is weighing a lawsuit against Cayce-based SCANA over the utilities' failed V.C. Summer nuclear expansion project, a once-secret contract shows.

That potential lawsuit, and its possible impact on the power bills of Santee Cooper's customers, is one of several reasons the state-owned utility sought the advice of Centerview Partners, a New York-based investment bank, according to the contract.

The contract, released Wednesday by state-owned Santee Cooper, also shows Centerview Partners was hired to help Santee Cooper respond to complex offers from potential buyers — such as Florida-based NextEra Energy. State lawmakers are considering a possible sale after Santee Cooper took on $4 billion in debt before abandoning the nuclear project last July.

Santee Cooper hired Centerview on Feb. 23, paying the firm a $200,000 signing bonus and agreeing to pay a minimum monthly fee of $150,000, according to the contract.

That payout could increase to $200,000 a month if Centerview is asked to review an offer for Santee Cooper. The investment bank could be paid $250,000 a month if it is asked to evaluate multiple offers at once.

The contract shows Centerview was hired to evaluate Santee Cooper's finances and prepare the utility with information and answers for S.C. lawmakers. But it also was hired to help Santee Cooper craft a strategy if the utility pursued a lawsuit against SCANA over the failed V.C. Summer project — a consideration not publicly known before Wednesday.

According to the contract, Centerview would be paid 0.5 percent of any settlement amount that SCANA pays to Santee Cooper as a result of that lawsuit.

SCANA subsidiary SCE&G owned 55 percent of the Summer project. Santee Cooper, the junior partner, owned 45 percent.

Santee Cooper spokeswoman Mollie Gore said Centerview was hired as an "expert resource" to help the utility advise the S.C. Legislature.

"They’ve certainly been asking for information and questions about our operations over these past several months," Gore said Wednesday. "We need to be prepared to answer questions they may have should there be any sale offers.”

Gore noted the state's 20 electric cooperatives have said Santee Cooper should be able to counter any offer from another company. "We wouldn’t even know how to start without this expert resource,” Gore said.

But Gov. Henry McMaster blasted the contract Wednesday, telling reporters Santee Cooper was "deliberately and openly defying the law."

The Richland Republican said Santee Cooper should have never hired an investment bank to determine whether it should be sold.

Instead, that job should be left up to the S.C. Legislature and only it should hire an investment banker, McMaster said.

Avery G. Wilks: 803-771-8362, @AveryGWilks; Maayan Schechter: 803-771-8657, @MaayanSchechter