Santee Cooper surprised Governor McMaster’s office and lawmakers when they announced their new business forecast early last month. The forecast involves phasing out coal plants, transitioning towards solar and natural gas power and a five-year rate freeze for customers. While parts of the forecast are positive, such as a transition to solar and natural gas, it leaves many questions unanswered, with concern over the company’s $7 billion debt still looming for the millions of customers that receive power from the utility.
An editorial recently published in the Post and Courier breaks down the realities of the forecast and explains that legislative action is required for Santee Cooper to actually reform. The editorial states, “If Santee Cooper is serious about turning over a new leaf, then the reform proposal it submits needs to include more than Mr. Bonsall’s business plan. It needs to include an actual reform plan, one with proposed legislation to make all of those changes he supports.”
In Santee Cooper’s current structure, the governor cannot remove individual directors unless they break the law or commit one of the listed offenses, meaning board members cannot be removed for poor decisions or hiding information from cooperatives and state regulators. The board can also raise rates with no approval or oversight from the South Carolina Public Oversight Service Commission, unlike other privately owned utilities in the state.
The editorial concludes by emphasizing that nothing laid out in the proposed business forecast would stop Santee Cooper from reverting back to its systematic and cultural problems that led the utility to the billions of debt it currently faces and the other bad decisions in its past.
“In fact, in assessing the proposals, legislators should consider the possibility that if the utility manages to stop a potential sale, it could go back to its old ways.”
Without legislative action, these initiatives could easily be reversed if lawmakers decide not to sell the state-owned utility. For example, Santee Cooper’s new CEO, Mark Bonsall, told the Post and Courier’s editorial staff that he opposes letting the PSC set rates, but would support a law requiring customer input before raising rates.
The General Assembly is expected to be presented bids for the potential sale of Santee Cooper as early as January 15. It is essential that all proposals are assessed thoroughly and expeditiously to ensure the millions of customers are given the best option for the future of the utility and the future of their rates.