Public utility Santee Cooper has hired a $150,000-a-month investment bank as part of an effort to squeeze a settlement payment out of SCANA Corp. over their failed nuclear power project.
Santee Cooper's contract with the investment bank — New York-based Centerview Partners — indicates the firm was hired in part to help "seek settlement recoveries from SCANA."
The financial advisers also agreed to "participate in negotiations" between the utilities.
The contract, released Wednesday, floats the possibility of a cash settlement or other kind of arrangement, such as discounted electricity.
The prospect of settlement talks marks one of the first public signals of a skirmish between Santee Cooper and SCANA since they called off their $9 billion expansion of the V.C. Summer nuclear plant last summer.
Santee Cooper released its contract with Centerview under pressure from Gov. Henry McMaster, who has accused the utility of trying to scuttle efforts to privatize it.
Santee Cooper spokeswoman Mollie Gore declined to comment on the state-owned power provider's plans. SCANA didn't respond to a request for comment.
The arrangement with Centerview came under fire Wednesday because of its other terms — specifically that the firm is being kept on retainer to evaluate offers from the utility's prospective buyers.
McMaster suggested it was "illegal" for Santee Cooper to hire advisers to undertake that work.
The governor's allegation is that it's against the law for Santee Cooper to be involved in its own sale. He's been engaged in a war of words with the utility over what he describes as its efforts to throw roadblocks in his efforts to pursue its transfer.
"This is a perfect example of why that is the law," McMaster said at a news conference in Columbia. "They need to stick to what they're supposed to do and get out of this part that is illegal for them to be participating in."
Centerview did agree to help with "reviewing potential purchasers" and their proposals, the contract shows. The firm was paid a $200,000 signing bonus, and it will earn at least $150,000 a month with the possibility of more money if a deal goes through or Santee Cooper asks it to do more work.
Santee Cooper says it has been asked to help assess possible offers and their pros and cons, so it needed a firm with financial acumen to help out.
"That's something we're being asked to do," Gore said, adding the utility will "react to, not solicit" offers.
The dispute over the investment banking contract fits into a fight between McMaster and Santee Cooper over its lobbying efforts in the Statehouse. Santee Cooper has said it instructed its third-party lobbyists to field lawmakers' questions without taking a position on the sale.
But in emails released Tuesday by the governor's office, the lobbyists discussed their attempts to enlist lawmakers in opposition to the sale. Santee Cooper executives occasionally affirmed their efforts.
McMaster says Santee Cooper's board quietly gave its blessing to sign the contract with Centerview behind closed doors at a Feb. 23 meeting. Minutes from that meeting make no mention of the deal, and they say no action was taken in closed session.
Gore says Santee Cooper routinely hires consultants to advise on financial matters, and those contracts don't require board approval. It's possible that board members were told about the deal behind closed doors because the contract deals with legal issues.
Days before that board meeting, Santee Cooper executives met with the governor to assure him the agency wasn't lobbying against a sale.
The law McMaster cited was passed in 2005 when another governor was fighting a different Santee Cooper board over the prospect of taking it private. To hold those efforts at bay, the Legislature mandated the agency "must not inquire into the feasibility of the sale" of its assets.