Santee Cooper, South Carolina's state-run utility, just completed its 85th year of operations, but it's yet to be seen whether it will be around to celebrate its 86th.
The state Legislature expects to receive several bids at some point over the next two months, which will decide the fate of the public utility.
State lawmakers will be presented with three offers that are currently being vetted by a host of financial, legal and energy consultants:
- The first will come from Santee Cooper itself, and will attempt to convince legislators to keep the utility under state control.
- The second will be from an unidentified private company that wants to be paid to manage the day-to-day operations of the utility for the state.
- The third is likely to come from one of the country's largest investor-owned electric utilities, which is hoping to take over Santee Cooper and assume control of its customer-service territory.
The public debate to this point has cast Santee Cooper in one of two ways: a valuable resource for the state or a troubled asset that lawmakers should jettison.
But that's an overly simplistic view of Santee Cooper, and the political fight that is likely to unfold in the coming months.
The state's elected leaders will need to familiarize themselves with the far more complicated details of the state-run utility, and what their votes could mean in the long term for the businesses and the more than 2 million residents who currently rely on Santee Cooper for electricity and water.
If the operation is sold, it's likely to be the biggest financial transaction the state has ever taken part in.
Santee Cooper owns and manages two lakes in South Carolina, two large water-treatment plants, more than 53 miles of water pipelines, 8,000 miles of power lines and a number of coal, gas, nuclear and hydroelectric generating stations.
No matter what the Legislature decides, it will have far-reaching consequences for the entire state.
The failed V.C. Summer nuclear project is the spark that ignited the political firestorm surrounding Santee Cooper.
The utility was the minority owner of the two reactors in Fairfield County, where more than $9 billion was spent before the project came grinding to a halt in July 2017 after years of construction delays and cost overruns.
It's that debt, which Santee Cooper shared with its project partner S.C. Electric & Gas, that has lawmakers most concerned.
That's why the Legislature ordered all of the potential bidders to spell out exactly how they would pay off the borrowed money that Santee Cooper still owes.
It's unclear how any of the interested buyers would structure a deal to manage that multibillion dollar debt at this point. But it's something lawmakers will watch closely.
State Sen. Shane Massey, R-Edgefield, said a solution for the debt is one of the most important aspects of the purchase offers.
And he said he wants to make sure the bidders aren't covering that debt by sharply cutting the purchase price they offer.
He wants potential buyers to prove they are willing to make a substantial investment with their own money in order to take over Santee Cooper's customers and the utility's valuable service territory in South Carolina.
Meanwhile, Santee Cooper's current leaders already signaled how they plan to cope with the debt load.
The Moncks Corner-based utility recently paid down a portion of the more than $8 billion it once owed in 2017, using operational savings and funds from a legal settlement it received after the nuclear project tanked.
The public utility's entire debt load now stands at $6.8 billion. About $3.6 billion of that is tied to the unfinished nuclear project.
Santee Cooper expects to pay off even more of that debt over the next two years. The question is whether a private company can do any better.
The primary concern for many lawmakers is how Santee Cooper's finances will affect what the utility charges its 185,000 direct customers and to the 20 electric cooperatives that buy and resell its power.
Roughly 6 percent of the rates that Santee Cooper's direct customers pay this year will go toward the debt for the failed nuclear project. A similar portion for the co-ops will go to the same thing.
Mark Bonsall, who joined Santee Cooper as CEO in July, has said he plans to hold those monthly electricity bills steady in the short term, promising not to raise rates for at least five years.
But the utility's executive team and its board of directors have yet to specify what the rates would look like after that point. That's also expected to be clarified in the coming weeks.
The Legislature ordered all of the bidders to lay out a forecast for electricity rates over the next 20 years, and demanded that each party detail how they plan to accomplish their financial goals.
Rep. Murrell Smith, R-Sumter, said one of his main priorities is drilling down into the 20-year rate projections. He wants to ensure that Santee Cooper and the potential buyers are not providing "artificially low" rates in the short term only to drastically increase people's power costs several years from now.
That type of teaser rate might seem appealing on its face, Smith said, but he is more concerned about long-term stability in electricity costs in South Carolina.
"There's nothing simplistic about this," said Smith, who is also the chairman of the House Ways and Means Committee. "This is probably one of the weightiest issues we've ever had, and we only have one chance to get this right. You've got to parse through the politics and parse the talking points."
Santee Cooper's supporter are quick to point out the utility doesn't need to turn a profit, unlike its investor-owned rivals.
That's true. Investor-owned utilities are allowed to tack on additional costs so that they can pay dividends to shareholders. The so-called return-on-equity portion of a monthly power bill typically ranges from 9 percent to 11 percent.
That's why the Legislature also requested a seven-year regulatory history for every for-profit utility that's offering to buy Santee Cooper.
Lawmakers want to know what those bidders' relationship might be like with South Carolina's seven utility regulators on the Public Service Commission.
It could also showcase how often the potential buyers have requested rate increases in other parts of the country in recent years.
The Legislature may be on its own schedule, but the Statehouse isn't the only arena where the future of Santee Cooper is likely to be decided this year.
Former S.C. Supreme Court Chief Justice Jean Toal is also preparing for a trial that could swing the fortunes of Santee Cooper.
Toal was appointed last year to oversee a class-action lawsuit that will effectively decide whether Santee Cooper can continue to charge its customers and the electric co-op members for the abandoned nuclear project in Fairfield County. The litigation has been hanging over the utility for more than two years now.
The attorneys who represent the customers argue the Santee Cooper can't charge the ratepayers and co-operatives for the two unfinished reactors because they are not "used and useful."
If a jury agrees, Santee Cooper's finances could be significantly damaged. It's unlikely to have another revenue source to tap to cover the debt tied to the failed V.C. Summer expansion.
A trial in the case was set for February, but it is now being delayed because Dominion Energy, which bought SCE&G last year, asked to transfer the lawsuit to federal court. The request was approved but is in dispute.
"The fact that the case has been moved has had the effect of putting a hold on discovery," said Columbia attorney Frank Ellerbe, who is representing the state's electric cooperatives in the lawsuit. "There are so many uncertainties. But it's hard to see how the case will not be slowed down."
That means the Legislature could make its decision on Santee Cooper before the risk of the litigation is resolved.
It sets up a scenario where the Legislature may choose to keep Santee Cooper, only to have the courts cut the utility's legs out from under it.
No matter who owns Santee Cooper, the future energy mix for the utility is expected to change dramatically.
For example, the coal-fired power plants it had heavily relied on over the past four decades are likely to be closed in the near future.
Santee Cooper's new executive team already announced plans to close the Cross and Winyah stations over the next decade, replacing the energy they now produce from coal with solar farms, battery storage technology and gas-fired generators.
The Legislature ordered all of the bidders to lay out exactly how the electricity for customers in South Carolina will be generated between 2020 and 2040.
That should give lawmakers and the public a more accurate picture of the location and types of power plants the utilities might seek to tap into.
Each option will be different. But with large coal and nuclear stations being phased out throughout the country, the other energy forecasts are also likely to focus on utility-scale solar projects and new gas-fired stations.
Most of the remaining questions surrounding Santee Cooper will be resolved once the bids are released to the public. Then it's up to the state's 170 lawmakers to make a vital decision that will affect millions of South Carolinians.