The Post and Courier ran a spot-on letter to the editor Thursday, November 5. It succinctly described the real financial picture of Santee Cooper: Underfunded by hundreds of millions of dollars through 2029. Losing $24 million just this year. Offering new debt. At the mercy of others, not self-sufficient for its financial future.
The letter to the editor is insightful for anyone who wants an unburnished look at Santee Cooper’s financial health. The president of the Palmetto Promise Institute [PPI], a nonprofit that advances citizens in varied issues, employed third party financial experts to review the Santee Cooper finances. No dog in that fight for the analysts, so it is an objective look.
Santee Cooper will be cash-strapped when increased capital-intensity for utilities is essential just to keep up, to stay average.
Case in point: Santee Cooper recently issued new bond debt to reshape old bond debt. (A variation of The Who’s line, “Meet the new boss, same as the old boss.”)
Meanwhile, NextEra has built many, and successful renewable projects, and has employed its financial flexibility: “The renewables-focused utility intends on using the $1.3 billion in cash proceeds to help finance its 15 GW development project backlog. To put that pipeline’s size into perspective, it’s bigger than its existing renewable portfolio, which is the world’s largest.” (Source, left)
In this case:
- Debt-shuffling is the focus of Santee Cooper
- Managing a growth portfolio of carbon-free energy is the focus for NextEra.
Over the next ten years an expected $10 billion will be needed to improve the US grid – two-way power flow, customer interfaces, general transmission upgrades. Oddly enough, Santee Cooper’s debt of more than $6 billion approaches the total money needed for a US grid renovation. Does that comparison bely the sad state of the company? Hard to fathom, really.
Financial figures can be outlined in black-and-white specifics, when they are shared. Santee Cooper selectively shares. “Painting a rosy picture,” as the PPI letter to the editor said. When it comes to getting projects done, they share “plans to make plans.” Other utilities get it done.
As utilities across the US build the power generation and grid of 2030, Santee Cooper manages the debt of 2017.
Flexibility makes a difference. Resources make a difference. Reputation impacts what partners want to work with a company – potential partners want reliable, open, smart partners; another possibility out the door for Santee Cooper and really, South Carolina.