The list of electric energy decisions in South Carolina is reduced by one. On January 2, 2019, the merger between SCANA and Dominion is done. Southeast Energy Group is the new name for the company that was South Carolina Electric and Gas.
Next, the possible sale of Santee Cooper and how the wallets of customers and South Carolina citizens are impacted by its nuclear debt. That debt is some $8 billion dollars; thousands of dollars per Santee Cooper customer just by basic math. And counting. It’s going to be decision-making time soon.
To start 2019, let’s level-set the facts as a reporter might, but just briefly. This gets the basics in one place for our readers.
- Santee Cooper is a water and electric utility, owned by the State of South Carolina. The utility serves a cumulative 2 million South Carolinians. About 180,000 residential and commercial customers. Central Electric Power Cooperatives and its 20 member coops; cities of Bamberg and Georgetown. Three wholesale customers.
- Governing Board: Santee Cooper has its own board of directors.
- Panel: A joint (House-Senate) Public Service Authority Evaluation and Recommendation Committee was named to oversee the potential sale of Santee Cooper.
- Consultant: This panel hired the consulting firm ICF International (Fairfax, VA) to manage the process to consider a sale of Santee Cooper.
- Possible buyers: Various utility organizations have been speculated as possibilities. Private investor(s) could be considered. A buyer doesn’t have to be in business in South Carolina now.
- Governor Henry McMaster: Has been said in the press to support a sale of Santee Cooper.
- A buyer would be purchasing electric generation facilities, the transmission/distribution network, and water operations. A proposal could be for all or a portion of the utility.
- Proposals are due to ICF Jan. 14.
- The sale requires legislative action. ICF will report to the House-Senate panel. The panel has to present a bill to the General Assembly recommending a sale of Santee Cooper.
- The General Assembly has a few months in its regular session to act on a bill. A special session could be called to make a decision, too.
- This map shows Santee Cooper territory.
- Paying debt: As is, “State-owned Santee Cooper, which owes $4.3 billion on the V.C. Summer project, remains poised to pass on its debt to its customers,” said the SC Budget for 2018-19 (page 28) Adding that the Governor wants to “make ratepayers whole and keep the burden of Santee Cooper’s debt off the citizens of South Carolina.”
- Bid consideration criteria for Santee Cooper is: A) A minimum amount of electric utility experience. B) Be investment grade. C) Maintain the Federal Energy Regulatory Commission (FERC) license and lakes. D) Full defeasance and/or assumption of debt. E) Use no state funds. F) Acknowledge Central Electric under the Coordination Agreement. (Source: South Carolina Public Service Authority Investor Presentation, Nov. 27, 1028)
- One State Senator said that there will be no exact weighting on each criteria, but they will be viewed as a whole to determine what is best for citizens. He said that 20+ firms have expressed some sort of interest though no bids are in yet.
- One idea that was floated said the State may consider having someone else run the utility, though the State would still own it. Perhaps that is a half-way decision. It would not address the $8 billion in debt. Address the appropriate ownership of the utility and the debt.
- Santee Cooper owes more than $4 billion in nuclear debt and some $4 billion in operating debt. The State of South Carolina owns the utility. Customers typically pay costs that a utility incurs to build and operate its system. That large chunk of money has to be managed and paid. If the debt is not eliminated, Santee Cooper customers will pay higher bills over the next 38 years.
As we start 2019…
The clock is ticking now that the SCANA-Dominion merger is out of the headlines. Consumers have a lot at stake in the decision of lawmakers over the next few months. A positive outcome about Santee Cooper has to handle ownership and the debt in a decisive way. Almost time to make some more significant decisions.