COLUMBIA — The S.C. House voted Tuesday to again explore selling Santee Cooper, part of a massive proposal that also calls for major changes at the embattled public power and water utility.
The legislation sailed through the Statehouse’s lower chamber 89-26 over the objections of lawmakers who said the state has already wasted enough time trying to find a suitable buyer for the 86-year-old agency.
The vote sends the ultimate debate over Santee Cooper’s fate to the S.C. Senate, which has not yet begun substantial discussions about selling the utility this year.
In recent years, senators have proven reluctant to selling Santee Cooper. But they are more likely to support parts of the House proposal that call for more state oversight of the power company, which currently answers only to its politically-appointed board.
The debate over Santee Cooper’s fate has raged off and on since the July 2017 collapse of the utility’s V.C. Summer Nuclear Station expansion project. The sudden failure of that decade-long, $9 billion project with South Carolina Electric & Gas caught customers, regulators, investors and legislators off guard.
The project left Santee Cooper saddled with $4 billion in debt, money that the utility’s customers will have to pay off on their power bills over the next several decades. It also prompted new scrutiny of Santee Cooper from legislators that has unearthed other problems at the Moncks Corner-based agency.
Some lawmakers have pursued a sale as a way to offload that V.C. Summer debt to a private company. But Santee Cooper’s defenders have insisted — citing a state analysis of previous bids — that a for-profit company would only raise electric rates for the 2 million South Carolinians who get their power from the utility.
The debate affects the future power bills for millions of South Carolinians, the jobs of 1,625 Santee Cooper employees and the state’s economic development efforts, which often depend on a prospective business' ability to purchase power cheaply. Lawmakers have pledged 2021 is the year they will decide how to address Santee Cooper’s share of the V.C. Summer fiasco.
The House bill’s architects say it would bring new oversight and accountability to a state agency that has made a series of costly business stumbles over the past decade.
Among other things, H. 3194 would:
- Require the replacement of the current Santee Cooper board
- Provide 10-year term limits for board members
- Require more diversity on the board
- Require more professional qualifications for board members
- And give the governor more power to remove board members.
For the first time, the bill would require scrutiny of Santee Cooper’s energy plans by the state’s utility regulators, the Office of Regulatory Staff and the Public Service Commission.
Those agencies currently oversee only for-profit utilities in South Carolina. Santee Cooper’s electric rates would still be decided by its board. But the utility’s ratepayers would get an opportunity to complain about proposed rate hikes before the board votes on them.
“This is a two-step process. One, we are keeping the option open for a sale,” said House budget committee chairman Murrell Smith, R-Sumter. “And number two, and most importantly, we are reforming Santee Cooper. We are letting the ratepayers and the taxpayers have a voice in Santee Cooper. … I think all of us here are for accountability and for the ratepayers and for the taxpayers.”
Much of Tuesday’s two-and-a-half-hour debate centered on the first section of the bill, which calls for legislators to continue pursuing a sale of Santee Cooper.
Opponents of selling the utility noted the General Assembly has already spent years searching for a good offer. Why keep trying when lawmakers could be tackling hardships created by the coronavirus, getting students back into school and fixing the state’s roads, they asked.
They recalled how last session, lawmakers set up a formal bidding process and the state spent $14.2 million for high-powered consultants to sort through offers for the utility, only for the General Assembly to ultimately reject the highest bid. That bid, from Florida-based NextEra Energy, would have resulted in hundreds of layoffs and ultimately led to higher electric rates than Santee Cooper could achieve itself, the consultants concluded.
“This is déjà vu all over again,” said state Rep. Sylleste Davis, a Moncks Corner Republican and former Santee Cooper employee. “We’ve been here. We’ve done this. We’ve plowed this ground. It’s time to move on. We move forward with reform.”
State Rep. Kirkman Finlay, R-Columbia, argued lawmakers could get a better deal for Santee Cooper if they could negotiate further with NextEra and other potential bidders.
“I don’t think anybody in this room, with very few exceptions, thinks Santee Cooper is functioning as a well-oiled machine,” Finlay said.