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Santee Cooper paying down bond debt ahead of SC legislative debate

Santee Cooper

Lawmakers will decide whether state-run electric utility Santee Cooper should be sold. File/Staff

Santee Cooper paid down $360 million in bond debt ahead of the 2020 legislative session when South Carolina lawmakers are set to debate the future of the state-run utility. 

Paying off a portion of Santee Cooper's outstanding debt is part of the utility's broader business plan, along with increasing the amount of power it gets from solar arrays and retiring some of its coal-fired power plants in the next eight years. 

The multimillion payment to bondholders still leaves Santee Cooper with roughly $6.8 billion in debt.

About $3.6 billion of that is tied to the failed V.C. Summer nuclear project, which was canceled in 2017 after Santee Cooper and its project partner SCANA Corp. spent $9 billion. 

Santee Cooper was the minority owner in the ambitious construction effort — one of the first nuclear power projects in the country in decades.

After it was canceled, Gov. Henry McMaster and some state lawmakers began calling for Santee Cooper to be sold off to one of the country's investor-owned utilities.

The multibillion debt is one of the primary issues McMaster and others state leaders used to attack Santee Cooper. In legislative hearings, lawmakers have questioned whether that long-term debt is sustainable for Santee Cooper's electric customers, which include the state's 20 electric cooperatives. 

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That's one reason why Santee Cooper has moved to aggressively pay down its debt before lawmakers cast a vote that will decide the fate of the state-run utility.  

Since the V.C. Summer project was abandoned in July 2017, the Moncks Corner-based utility cut its debt on the unfinished nuclear reactors from roughly $4.1 billion to $3.6 billion. 

That reduction is expected to continue in the near future. Santee Cooper's new business plan calls for the utility to pay off another $575 million by 2021.

That money is expected to come from operational savings and any money gained through the sale of leftover parts at V.C. Summer station in Fairfield County. 

“Santee Cooper’s customers will benefit by our using debt reduction funds to retire part of our debt now, which produces a better result through long-term savings,” said Mark Bonsall, Santee Cooper's new CEO, who was hired this year. 

Bonsall believes his new business plan will allow Santee Cooper to freeze the electricity rates for its customers for at least five years. It's unclear what happens to customers' power bills after that. 

Bonsall and the rest of Santee Cooper's team is expected to deliver a more-thorough business plan for the utility later this year. It will be submitted to the Legislature alongside bids from other companies that are interested in buying or managing Santee Cooper. 

It will then be up to South Carolina's 170 lawmakers to decide whether Santee Cooper remains under state control. 

Reach Andrew Brown at 843-708-1830 or follow him on Twitter @andy_ed_brown.

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