The pressure on lawmakers is likely to increase in the wake of a new report on offers to buy or manage state-owned Santee Cooper.
Gov. Henry McMaster, a proponent of selling the utility since its failed partnership with SCANA Corp. in the abandoned nuclear project in Fairfield County, was quick to react to findings prepared for South Carolina by Virginia-based ICF.
“This is a historic moment. There is no longer any significant reason to delay action needed to solve the Santee Cooper crisis. I ask that members of the General Assembly objectively review this report and place the interest of our state’s ratepayers and taxpayers first and those of the naysayers last,” McMaster said.
The consulting company reported four offers to buy all of Santee Cooper and pay off the utility’s $8 billion in debt, with at least three including no further customer payment for Santee Cooper’s debt from the nuclear debacle. As the situation stands now, Santee Cooper customers would pay the nuclear bill over the next four decades.
ICF’s report states those offering to buy Santee Cooper would cut electric rates from 2 percent to 14 percent over 20 years.
In total the state received 15 bids from 10 parties, with seven wanting to buy all of Santee Cooper. Four — including two from utilities “with significant operations in the Southeast” — met lawmakers’ criteria to evaluate a sale, according to ICF.
There also were two offers to buy parts of Santee Cooper, four offers to take over its management and two offers to enter into a long-term agreement to supply power, a move that could allow Santee Cooper to close its coal-fired power plants.
As noted in a report by The State newspaper of Columbia, “Lawmakers, particularly in the state Senate, have been skeptical that a for-profit company can buy Santee Cooper, pay off its more than $8 billion in total debt and still charge lower electric rates than the not-for-profit state agency.”
We, too, are skeptical, agreeing with lawmakers such as Orangeburg Sen. Brad Hutto that while changes are needed at Santee Cooper, there should be no rush to sell the asset. Hutto and Calhoun County Rep. Russell Ott are members of the Public Service Authority Evaluation and Recommendation Committee assigned to plot a future course for the state regarding Santee Cooper.
The Senate members of the panel issued a statement in the wake of ICF’s findings: "While the release of the ICF market analysis is an important and transparent step in the committee's work, it is not the committee's final report. The information received today will be combined with the many of hours of testimony and the information received by the committee throughout the fall as the committee prepares recommendations to the General Assembly per its legislative charge."
Santee Cooper – which is valued by ICF at between $8 billion to $10 billion – is an important state asset. Ensuring its future is important – whether that future involves a sale, a management agreement or restructuring and reform. Santee Cooper plays key roles in assisting economic development, supplying water to underserved South Carolina rural communities and managing Lakes Marion and Moultrie.
All factors must be weighed in deciding on the utility’s future. Key lawmakers have stated a belief that no decision should be rushed, contending the Santee Cooper question is much more complex than last year’s actions regarding SCANA Corp.’s role in the nuclear failure.
The ICF report let’s South Carolina know it has a valuable asset in Santee Cooper. Selling it is an option – but not the only one.