If ever there were a question that reveals the wide array of ideological perspectives in South Carolina, it’s whether the state should sell its electric power company, the S.C. Public Service Authority. Santee Cooper is a veritable Rorschach test of economic and political beliefs.
For observers with an affinity for capitalism — those who believe that commercial activities that can be carried out in the private sector should be conducted by private companies — the fact that Santee Cooper is one of the largest government-owned electric companies in America (rivaled only by a few other behemoth government-owned utilities in states such as California and New York) is a persuasive argument in and of itself for sale. Many South Carolinians likely share this conservative point of view, based on the state electing large majorities of Republicans to the General Assembly every couple of years.
Another perspective comes from citizens who are concerned about environmental pollution, and especially the continued buildup of carbon in the atmosphere. They rightly focus on the types of fuel used for power production, and the emissions those fuels produce. Here, Santee Cooper is almost unique in America, because it uses coal to generate the majority of its electricity, despite decades of evidence that carbon-based power production is warming the planet, and despite decades of evidence that coal plants have contaminated our beautiful rivers and streams with so much mercury that the fish in them are unsafe to eat.
These observers would value the fact that the private, investor-owned utility that bid on Santee Cooper, Florida-based NextEra, derives just 2% of its power from coal, while Santee Cooper produces 60% of its electric production from this dirty, destructive fuel.
People whose main concern is electric rates might look to the record of managerial competence to evaluate how Santee Cooper stacks up against other companies: Over the past decade, the agency has embroiled itself in not one but two of the biggest financial disasters in the state’s history. The first was the foolish and ultimately abandoned attempt to construct one of the last coal-fired power plants in the United States — ironically on one of the very rivers that have been contaminated by mercury from existing Santee Cooper coal plants.
Santee Cooper abandoned this billion-dollar project after exhibiting a stunning degree of arrogance and incompetence. It purchased and had delivered to the site almost a quarter-billion dollars of parts and material before even receiving the first permit for plant construction. In the annals of financial disasters — including the infamous $2 billion municipal bond default to finance a power plant in Washington state more 40 years ago — Santee Cooper’s coal debacle stands out.
But the coal plant pales in comparison to the ill-fated collaboration with SCANA (a company that no longer exists) to build a nuclear plant near Columbia. The total cost to taxpayers and ratepayers is still unknown, but somewhere in the range of $10 billion.
Coherent arguments on behalf of maintaining Santee Cooper as a ward of the state are few and far between. Some politicians have praised Santee Cooper’s value for economic development. The logic here is that state officials can commit Santee Cooper to provide power to prospective industries at prices that a private, investor-owned utility would not be able to offer. Even if this were true, it would be more transparent to the voters and taxpayers if we simply wrote the new industry a check for the financial benefits it would have received from discounted electricity.
The S.C. Legislature is currently debating whether to “reform” Santee Cooper and continue to operate it. This strategy of rearranging the deck chairs on the Titanic is certain to fail.
State legislators will continue to debate this decision over the next few weeks. There will be the predictable obfuscation, scare tactics about higher electric rates, assurances that the General Assembly is capable of providing adequate oversight to this rogue agency and concern about the state divesting itself of such a “valuable” asset – which in reality has cost the state immeasurable financial and environmental harm.
The simple point is this: Now, more than ever, power production is too important a function to be managed by 170 state senators and representatives and a board of political insiders, regardless of their other governmental skills.
What legislators can and should do is negotiate the best sale terms possible for the taxpayers and ratepayers, transfer the valuable natural places the utility has acquired to the state for protection and sell Santee Cooper to a competent investor-owned utility — with all of the requisite state and federal oversight. South Carolina’s financial and environmental future depends on it.
Dana Beach is a conservationist and Charleston resident.