Santee Cooper’s 2020 Annual Report is public. I have worked for a couple big firms. I get that annual reports need to provide numbers, and they are also showpieces. A chance to strut and preen.
The peacock is on display with the Santee Cooper report.
In particular I note the letter from management, saying the company is in, “A strong, healthy position financially, operationally and organizationally.”
This one statement alone destines Santee Cooper’s Annual Report for the fiction section of the library.
Operationally in the cold snap the company couldn’t keep a couple Cross Plant units on line; ended up restarting an idled unit at Winyah and buying power from an IOU. Yes, it took an investor-owned utility to bail Santee Cooper out.
When a company cannot tap into its own plants, that is not operationally strong and healthy.
Keep in mind, too, that Santee Cooper is 36.6% coal reliant, much higher than the national average of 20.2% projected for 2020. (Source) Not keeping pace with the real world.
Long way to go, operationally. Far from what works well and the kind of operations desirable in the future. More…
Santee Cooper is also behind on renewable generation, with renewables providing a mere 2.6% of its generation. In the U.S., “New additions of solar and wind generating capacity contribute to our [US Energy Information Agency] forecast that the share of U.S. generation from renewable energy sources will rise from 20% in 2020 to 21% in 2021 and to 22% in 2022.” (Source) 2.6 versus 20.
Long way to go operationally.
Financially the company has billions in debt for expensive failures like the V.C. Summer nuclear plant. If Santee Cooper isn’t sold, that debt stays on the backs of Santee Cooper’s ratepayers including the co-op customers where it sells power.
Santee Cooper also retains its unique ability as a rogue agency to set its own rates with no oversight in a no-sale scenario. How will that roguishness impact rates and customers? (I previously pointed out the paradox that the State of South Carolina supports a public service commission that examines all electric operations except for state-owned electric operations. Accountability? Not for Santee Cooper. Two standards.)
The other paradox – if Santee Cooper loses its ability to set its own rates, what about its bond rating and ability to borrow to fund operations and pay down debt? Santee Cooper needs to keep borrowing, that was made clear earlier this year when the CEO casually mentioned the possibility of borrowing an additional $100 million before year’s end.
Long way to go financially.
Organizationally, let’s count the issues. There are efforts to get health benefits for Santee Cooper’s part-time board members. These benefits were stripped after S.C. Public Employee Benefit Authority launched an investigation that ultimately determined these board members were ineligible for a state health plan. This does not build trust in Santee Cooper.
The board has an acting chair and two empty board positions. Not the sign of a stable utility.
A new high-paid executive had to be hired to watch over the company in addition to a new COO. This does not build confidence.
A reduction in employee numbers is ongoing after people decried the fact that a buyer might need to reduce employee numbers. Make sense?
How about customer relations? “As 2020 ended, Santee Cooper was working with the Department of Commerce and Century Aluminum on a new contract by which Century would expand its Mt. Holly aluminum smelting operations and purchase all of its power from Santee Cooper.”
Century Aluminum should have never had a ruckus with Santee Cooper. No drama. The company has work to do. Making customers resort to legal means does not reflect a positive working relationship. This is evidence that the company is not tuned in to customers.
Homeowner associations have complained about Santee Cooper street light agreements. “Residents must pay what appear to be exorbitant lease payments – established by the utility which exercises total control – in perpetuity without a viable way to exit the contract,” said one resident in a local newspaper.
Rebates to customers from legal settlements or other agreements resulted in “comically low checks” say some customers. (Source)
Santee Cooper’s record cannot stand on its own. In one news report a former Santee Cooper employee said the company hired contract lobbyists to try and get the General Assembly not to sell the utility. Good use of customer money?
Long way to go organizationally.
Santee Cooper’s management letter claimed, “A strong, healthy position financially, operationally and organizationally.” A suspense or a mystery novel is the real question. Tom Sawyer would be proud of the paint job on that fence.
Santee Cooper’s annual report also said, “As we noted up front, 2020 redefined ‘challenge’ in many ways. But throughout the year, our employees worked hard to redefine Santee Cooper as a leaner, greener organization that remains focused on our customers.”
Santee Cooper has really hard-working people on the line. People who care. They deserve better. They deserve a company with smart development opportunities, financial acumen, clean energy growth, and stand with new fellow employees to progress in an innovative environment.
Customers deserve better, too. Just saying it as it is.