Dominion Energy says it’s willing to take control of running parts of the state-owned power company Santee Cooper but it’s still not interested in buying the utility outright.
The proposal from Dominion throws yet another curveball into an already tangled battle over the future of South Carolina’s energy sector which has been in turmoil since a pair of utilities called off a $9 billion nuclear project last year.
Dominion, a Virginia-based energy giant, is already trying to buy the parent company of South Carolina Electric & Gas, one of the power companies that had tried to build a pair of reactors north of Columbia.
Details of its proposal are scant. They’re limited to a letter its chief executive sent to Santee Cooper proposing to handle some of its core work, like buying fuel for power plants and taking over office support tasks like human resources and accounting.
That letter also threw cold water on the state’s bid to sell off Santee Cooper, the other utility responsible for the project.
Dominion CEO Thomas Farrell II wrote that no private-sector company would be able to buy Santee Cooper without increasing its electricity rates. As a state-owned utility, Santee Cooper doesn’t have to pay taxes and it can borrow money cheaper than private businesses can.
Securing lower rates is one of the key goals of a legislative panel studying the idea of selling Santee Cooper, which racked up some $4 billion in debt to pay for its share of the nuclear project at V.C. Summer station. Farrell’s letter was forwarded to the state’s top politicians: Gov. Henry McMaster, House Speaker Jay Lucas and Senate President Pro Tem Hugh Leatherman.
“We believe that significant cost savings could be reached,” Farrell wrote.
Farrell wrote that letting Dominion run parts of the utility could save “hundreds of millions of dollars” by folding them into a larger organization, but his letter doesn’t specify how it would reach those savings or exactly how much would be saved.
Dominion declined to comment on the letter, saying it had "no further details" on the proposal.
Santee Cooper spokeswoman Mollie Gore said the suggestion of an outside manager for the utility wasn't unexpected since lawmakers are studying its future. More like it could follow, she said.
The state's top political leaders, meantime, didn't immediately embrace the idea. McMaster and House Majority Leader Gary Simrill indicated they thought Dominion's plans should be routed through the committee considering a sale.
"If Dominion has an interest in Santee Cooper, they should follow that process and submit a bid or a partnership proposal through the committee that’s been tasked with determining the utility’s future," McMaster spokesman Brian Symmes said.
If Dominion managed Santee Cooper and owned SCE&G it would have a hand in running close to two-thirds of South Carolina's electric grid. That includes the state's electric cooperatives which buy most of Santee Cooper's electricity.
Dominion’s letter comes just days before regulators on the state’s Public Service Commission will begin considering its bid to buy SCE&G and its Cayce-based parent company, SCANA Corp. And it comes days after Santee Cooper took a more aggressive position in their review.
Santee Cooper asked regulators last week to make Dominion give it $351 million to defray some of its costs from the nuclear project. Dominion has offered to refund some $1.3 billion to SCE&G’s customers, and Santee Cooper argued that its customers should get a similar benefit.
Dominion flatly rejected that idea Tuesday, calling it an “attempt at regulatory extortion” that would be illegal. But in a filing with regulators, it floated the idea of running parts of Santee Cooper as a “practical and constructive” alternative to a payout.
Andy Shain contributed to this report.