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Gov. Henry McMaster slams 'rogue agency' Santee Cooper for opposing sale efforts


Gov. Henry McMaster on Wednesday slammed Santee Cooper for disobeying his orders not to oppose a sale of the state-owned utility. Jamie Lovegrove/Staff

COLUMBIA — The war of words between South Carolina Gov. Henry McMaster and Santee Cooper escalated Wednesday, as McMaster excoriated the utility's lobbyists for disobeying his orders not to oppose his efforts to sell the state-owned entity.

"We have a rogue agency," McMaster said in a news conference at the Statehouse. "We have a bureaucracy that is operating on its own contrary to instruction, contrary to law, and contrary to the instructions given by me to the board of directors."

The fiery statement came a day after the governor's office released thousands of emails from Santee Cooper in which the utility's lobbyists appeared to discuss attempts to enlist lawmakers in opposition to the sale.

After a conversation with state Sen. Brad Hutto, D-Orangeburg, lobbyist Dwight Drake told colleagues that he had successfully convinced Hutto to come out publicly against a purchase offer from Florida-based power utility NextEra Energy, no matter how good it sounded.

In another instance, interim Santee Cooper president James Brogdon asked lobbyists and other executives if Santee Cooper should get some ratepayers involved in talking to lawmakers about NextEra.

In a letter to McMaster, Santee Cooper's acting chairman William Finn said the lobbyists had defied the utility's instructions and he promised to fire the lobbyists if they took any similar actions in the future.

But McMaster dismissed that response as unsatisfactory, calling on Santee Cooper to fire the lobbyists immediately. 

"This must end," McMaster said. "This is not in the best interests of the people of South Carolina. It is not in the best interests of the ratepayers, and it is an egregious situation, which I call for a stop to right now, at this moment."

McMaster has declined to entertain holding onto any of Santee Cooper's $8 billion debt as part of a sale offer. But he said that he still believes the utility is an attractive opportunity for potential buyers.

"Our state is on the move economically," McMaster said. "We have new prosperity coming."

Santee Cooper was the minority partner in a multi-billion failed nuclear project that was cancelled last year, working with Cayce-based SCANA Corp. to build two new reactors in Fairfield County.

The governor also took issue with Santee Cooper’s decision to hire an investment bank to help sort through offers from prospective buyers. McMaster said flatly that it is “illegal” for the utility to meddle in its own sale because of a 2005 law spurred by a faceoff it had with another governor.

Santee Cooper is paying $150,000 a month to New York-based Centerview Partners, though the firm could be paid more if additional work comes up. It’s also supposed to get a cut of deals it advises on.

Santee Cooper spokeswoman Mollie Gore said the utility routinely hires advisers to help with financial questions, and she says it has been requested to help advise on offers.

And what’s more, the contract with Centerview suggests another motivation for hiring help: The firm was hired to help negotiate a settlement with SCANA. Santee Cooper declined to comment on that possibility.

As the State Senate prepared to take up a measure that could slash rates for ratepayers of South Carolina Electric and Gas, a subsidiary of SCANA, McMaster reiterated his position that he will veto any bill that does not remove all nuclear charges entirely.

The ratepayers "are being charged for something they didn't ask for, that they had no choice about," McMaster said. "They did not create this mess. They did not create this disaster, this spectacle, and this spectacle is getting worse and worse."

Thad Moore contributed to this report.

Follow Jamie Lovegrove on Twitter @jslovegrove.

Jamie Lovegrove is a political reporter covering the South Carolina Statehouse, congressional delegation and campaigns. He previously covered Texas politics in Washington for The Dallas Morning News and in Austin for the Texas Tribune.

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