Selling Santee Cooper, advocates keep repeating as if it were a self-evident truth, is the only way to eliminate the $4 billion debt from the boondoggle that was the V.C. Summer nuclear expansion.
But it’s not a self-evident truth. It’s not even logical. The only way it makes sense is with a liberal sprinkling of pixie dust, if then.
Oh, it’s true that the state agency called Santee Cooper would no longer be saddled with the debt, since it would no longer exist. It’s even possible that the new owner wouldn’t issue new debt to cover the purchase price. But that wouldn’t make any meaningful difference to ratepayers, as the Legislature discovered when it spent $20 million to select the best bid to purchase Santee Cooper.
The winner, Florida-based NextEra, said it would happily assume the debt — and then charge ratepayers every penny and more, with rates from day one that would be higher than Santee Cooper’s.
Just like Dominion Energy is charging us every penny of SCE&G's V.C. Summer debt — and then some.
Just like any investor-owned utility would. Because, as Dominion’s CEO told me after he announced his bid for SCE&G, investor-owned utilities aren’t charities.
Fortunately, legislators aren’t buying what the pixie-dust peddlers are selling. The bill the S.C. House passed in January to authorize a sale is, in fact, primarily about reforming Santee Cooper in case a sale doesn’t go down.
So on Tuesday, the heads of the S.C. Club for Growth, Palmetto Promise Institute and the S.C. Association of Taxpayers gathered their cheerleaders at the Statehouse to trot out their new platform: “'Reforming' Santee Cooper = FAKE reform.”
Yep, seriously. An equal sign, alongside the pre-pubescent “fake,” which conjures images of 11-year-old boys huddled in their treehouse, yelling “cooties” whenever a girl comes too close. Still, the message is worth examining, because it highlights a discouraging truth about the debate over Santee Cooper.
The self-appointed spokesmen of “conservative voting constituents” make six arguments:
• "Reform is not possible.
• "Reform won’t make the debt go away.
• "Reform won’t create transparency and accountability in the state agency.
• "Reform won’t bring Santee Cooper into the 21st century.
• "Reform won’t help Santee Cooper stay afloat.
• "Reform won’t get South Carolina out of the electric utility business."
Most of the claims are conjecture, and ignore the fact that whether reform is possible, whether it drags Santee Cooper into the 21st century and whether it improves transparency and accountability depends on what the Legislature requires of Santee Cooper.
If the absence of transparency and accountability were reasons to sell government agencies, there wouldn’t be many left, because our Legislature hasn’t seen fit to pass laws that require serious transparency, and it still can’t consistently stomach the idea of making executive branch agencies report to the state’s chief executive. And just as a sale won't make the debt go away, it won't create transparency or accountability; it'll just reduce the Legislature’s ability to require transparency and accountability, by moving the utility into the private sector, where there's no such thing as a Freedom of Information Act request and where a regulated monopoly is just as insulated as a state agency from the threat of customers jumping ship.
Stay afloat? Santee Cooper averted sinking when it settled a class-action lawsuit that threatened to strip its ability to charge ratepayers for the V.C. Summer debt. It’s no coincidence that legislators’ lost interest in the NextEra bid once that suit was settled; the potential to moot the lawsuit was about the only thing attractive about its bid, which promised to raise rates, eliminate jobs and saddle the state with Santee Cooper obligations it wasn't willing to assume.
But the Santee Cooper critics are absolutely right on one point: Reform will not get South Carolina out of the electric utility business.
And including that on their list confirms my fear from the start that this debate would be driven by ideology rather than data: Santee Cooper apologists determined not to entertain a sale, or serious reforms, regardless of the facts; and the ideologues who worship at the altar of the free market determined not to accept reform, because their fight has nothing to do with rates or reliability or the environment.
To make sure no one missed the point, Palmetto Promise Institute’s Oran Smith proudly proclaimed that, “I’ve been calling for the sale of Santee Cooper since 1995” — well before it hooked up with SCE&G to build the nuclear reactors they abandoned in 2017.
“As a government-owned utility,” he said, “Santee Cooper and its management could never go above a C or C-plus. It’s just not possible as a government agency.”
Hmmm. I guess we never would have had that whole V.C. Summer debacle if Santee Cooper had been owned by a business. Like, say, SCE&G ... the majority partner ... whose mismanagement flushed $9 billion down the drain.
My point isn’t that Santee Cooper is wonderful. It absolutely is not, although as long as it's a state agency our Legislature at least has the power to reshape it into something better. My point — as SCE&G’s customers learned, and kept learning after SCE&G became Dominion, and as NextEra would be happy to teach Santee Cooper’s customers — is that an investor-owned utility is not inherently superior to a state-owned utility.
My point is that whether to sell Santee Cooper must depend on whether a sale means better rates and better reliability and cleaner energy, now and in the long term.
And as a bonus point, there’s this: Even if you're willing to stick it to Santee Cooper customers in order to score on ideology, you ought to keep that to yourself, lest would-be purchasers smell a fire sale, and make offers like … well, like the dog of a bid NextEra made.