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NextEra withdraws offer for Santee Cooper. Embattled utility likely to remain state owned.

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The SC Legislature's reluctance to sell Santee Cooper after the V.C. Summer debacle is more about dissatisfaction with NextEra's purchase bid than satisfaction with the state-owned utility, as Sens. Ronnie Cromer, upper right, and Shane Massey explained Thursday.

COLUMBIA – NextEra Energy has withdrawn its offer to purchase Santee Cooper, a move that effectively ends the years-long debate over whether to sell South Carolina’s embattled electric and water utility, The Post and Courier has learned.

NextEra, the Florida-based power giant that has lobbied lawmakers for three years for a chance to take over Santee Cooper, sent a letter to the state this week pulling its multi-billion-dollar offer and asking for its $25 million deposit back.

The company’s representatives also informed top lawmakers they have given up, a decision that came shortly after the S.C. Senate last week voted 36-8 to not continue exploring the sale of Santee Cooper. The withdrawal also came less than two weeks after NextEra CEO Jim Robo sent a letter to S.C. Senate President Harvey Peeler, R-Gaffney, offering to put in a revised bid for Santee Cooper.

"They’re no longer interested," House budget committee chairman Murrell Smith, R-Sumter, told The Post and Courier. "Basically, they said they understand the politics and that (Senate) vote was overwhelming and insurmountable, and they were no longer going to be pursuing a sale of Santee Cooper.”

A NextEra spokesman did not respond to a request for comment April 28. The state Department of Administration granted NextEra's request and returned its $25 million, according to a letter obtained by The Post and Courier.

S.C. lawmakers previously considered a sale of Santee Cooper as a way to protect its ratepayers, including customers of the 20 electric cooperatives that buy power from Santee Cooper, after the agency lost $4 billion on the failed expansion of the V.C. Summer nuclear power plant in Fairfield County. 

Lawmakers in 2019 sought formal, binding offers for the utility and paid consultants nearly $15 million to review them. A handful of companies submitted bids, and NextEra's proved the best. But a NextEra takeover would mean hundreds of layoffs of state employees and higher electric rates for the 2 million South Carolinians who rely on Santee Cooper's power, a state analysis found.

Over the past year, it became clear that lawmakers lacked the votes for a sale and would instead seek to reform Santee Cooper to make it more accountable to the General Assembly, utility watchdogs and ratepayers. Both the S.C. Senate and House have passed reform proposals this year.

Santee Cooper's supporters — including employees, retirees and friends in the Legislature — will revel in NextEra's withdrawal, having campaigned against a sale over the past few years.

Senate Judiciary Committee Chairman Luke Rankin, a Myrtle Beach Republican who fought to prevent a sale to NextEra, said the Florida company has only itself to blame for submitting a bid with clear flaws.

"Raising rates, exempting themselves from the same oversight everyone else in South Carolina is subject to, and refusing to answer basic questions from the General Assembly was not a winning strategy," Rankin said.

Senate Majority Leader Shane Massey said he wasn't surprised NextEra pulled out after the Senate's vote last week.

“The Senate last week didn’t vote to reject a sale. The Senate voted to reject even talking about a sale," the Edgefield Republican said. "It doesn’t surprise me that they withdrew because they looked at that vote and thought there’s not even a pathway.”

NextEra, which previously had no operations in South Carolina, had spent more than $205,000 lobbying the S.C. Legislature over the past three years, state ethics filings show. It employed as many as nine lobbyists at a time to patrol the Statehouse grounds and poured tens of thousands of dollars more into an advertising campaign to build goodwill in the Palmetto State.

The company was said to have let go of its South Carolina-based contract lobbyists as part of this decision.

Previously, NextEra had been bullish about its prospects of sealing the Santee Cooper deal, even as powerful state senators vowed to block any effort to privatize the utility. One of the country's largest power companies, NextEra has aggressively sought to expand by acquiring other utilities across the United States.

On an April 21 earnings call, a day before the Senate vote against further exploring a sale, Robo, NextEra's CEO, told analysts the Juno Beach, Fla.-based company remained interested in Santee Cooper.

"Fundamentally, our bid stands, and we're ready to get going and negotiating with the state on the sale," Robo said. "Ultimately, the most important thing is, it remains very clear to me that the best route for the state and its customers and the economy of the state is to demunicipalize Santee Cooper and get it in the hands of an entity like ourselves that will run it in the best-in-class way."

NextEra would pull its offer less than a week later.

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Reach Avery Wilks at 803-374-3115. Follow him on Twitter at @AveryGWilks. Send tips to averywilks93@protonmail.com.

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