As South Carolina lawmakers ponder the possible sale of state-owned utility company Santee Cooper, their top concern must be the company’s roughly 700,000 residential and business electricity customers.
Of course, a sale is only on the table because Santee Cooper has about $4 billion in debt related to the failed construction of two nuclear reactors outside of Columbia. It also has a few billion dollars more in debt from other projects.
That’s obviously not sustainable, but the best way forward isn’t yet clear. There is reason for optimism, however.
Last week, the state Legislature and Gov. Henry McMaster got a detailed look at several potential proposals for selling all or part of Santee Cooper. Ten bidders made 15 offers, which are discussed in a report that analyzed suitors’ experience in the industry, financial strength and other characteristics.
The report doesn’t cover the names of the entities making offers or say which proposal would be best for South Carolina ratepayers, but some of the details are surprising — and encouraging.
At least three potential buyers said they wouldn’t charge customers for the nuclear-related debt, for example.
That’s a huge deal, especially considering that customers of Santee Cooper’s nuclear project partner SCANA, which was recently bought out by Dominion Energy, will likely keep paying for two useless, incomplete reactors for decades.
A few offers for Santee Cooper even pledged to keep rates lower than what would otherwise be projected based on estimates of future electricity needs and the costs of meeting that demand.
It’s worth noting, however, that the report seriously analyzed only those proposals that included a full buyout of Santee Cooper — four out of 15 offers. At this early stage in assessing the utility’s future, every option ought to be on the table.
After all, the SCANA debacle suggests that private utility ownership doesn’t necessarily ensure a better outcome or lower cost than a state-run operation, especially under lax legislative oversight and a flawed regulatory system.
It’s possible that a less typical arrangement — a partial buyout or cooperative deal — might be beneficial.
In the long term, South Carolina must consider moving electricity generation toward a more open market system that would encourage competition and embrace cost-saving measures like investing in energy efficiency and large-scale solar power.
A system that rewards smaller but still meaningful upgrades rather than big-ticket spending would probably have prevented the nuclear fiasco from happening in the first place.
But for now, it’s encouraging that Santee Cooper not only has multiple interested buyers, but several that seem willing to go above and beyond to make sure that ratepayers have access to reliable, affordable electricity well into the future.
Lawmakers and Gov. McMaster have a lot to consider.