COLUMBIA — If the South Carolina Legislature opts to sell Santee Cooper, lakes Moultrie and Marion could dry up unless taxpayers take over the $11 million annual cost of maintaining the 180,000-acre lake system.
Transferring operations of the lakes, located between Columbia and Charleston, to the state could also put taxpayers on the hook for building fish passages for eels and the endangered Atlantic sturgeon at an estimated cost of $180 million.
Legislators contemplating the fate of the state-owned utility asked Wednesday what could happen if a buyer decides the electricity benefits of Santee Cooper's hydroelectric plants aren't worth the costs. The Jefferies Generating Station and smaller Santee Spillway represent just 1.8 percent of the Moncks Corner utility's total power generation.
A buyer could opt to surrender the federal operating license for the power stations, which could trigger an order from regulators to remove the dams and dikes that created the lakes nearly 80 years ago, Santee Cooper senior vice president Pam Williams told a special panel looking at a possible sale.
Legislators noted the lakes hugely benefit South Carolina beyond supplying electricity, as a draw for new residents and tourists from both in and outside the state.
A potential buyer could not pick and choose what parts of Santee Cooper's lake system to maintain, Williams said. Everything written into the federal license — which includes managing forests, wildlife habitats, boat landings, campgrounds and even aquatic weeds — would have to be continued, she said.
"We didn’t just decide to do these things on a whim," Williams said. "It was part of the public input process."
Legislators said the state Department of Natural Resources, whose officers already patrol the lakes, could run the system.
"It would be possible for the state to pick up the tab if the state wanted to do that," Williams said, adding that would require federal permission to take over the license.
Gov. Henry McMaster, who appointed himself to the panel, said the state would do that, whatever the cost.
"I do not want to sell those lakes," he told reporters after the meeting. "They are well worth whatever the costs of keeping them. They are worth their weight in gold."
The lakes bring $415 million worth of tourism to the five counties surrounding the lakes, employing 3,750 people, according to the utility's presentation. Those counties are Berkeley, Calhoun, Clarendon, Orangeburg and Sumter.
"If the lakes weren’t there, nobody would have lake houses or fish camps, or nobody would even be there," said Sen. Brad Hutto, D-Orangeburg.
Santee Cooper is in the process of negotiating with the federal government on a 30-year license renewal. The utility has been operating on one-year extensions since 2006. Back-and-forth talks continue over the sturgeon. Federal regulators have designated South Carolina's rivers as a critical habitat for the fish.
The estimated price tag for constructing whatever the federal government ends up requiring for a new license, including fish lifts, is $179 million — hundreds of millions of dollars less than projected several years ago, utility officials said.
It's unclear whether those costs would transfer to the state, if it took over the lakes' maintenance.
Also unknown is whether the revenue generated by the lakes — through Santee Cooper's parks, timber sales and lot leases, plus the hydroelectric power — would cover expenses. Utility officials pledged to calculate those numbers for lawmakers.
McMaster has advocated selling at least parts of South Carolina's only government-owned utility as perhaps the only way to give its customers relief after Santee Cooper racked up $4 billion in debt on a failed nuclear power project in Fairfield County. Santee Cooper, the minority partner, and South Carolina Electric & Gas jointly abandoned the partially built reactors in July 2017.
The two reactors account for nearly half of the utility's $7.8 billion total debt.
Under state law, only the Legislature can approve selling any or all of Santee Cooper.
The study panel hopes to make recommendations for legislators to consider next year.
No utility has made an offer yet, noted Rep. Murrell Smith, R-Sumter.
"This all may be an exercise in futility," he said.