Feature Image: SC Public Radio

A concerned constituent recently expressed his thoughts on the current Santee Cooper disaster in an op-ed to The Chronicle. The author expressed the need for Santee Cooper to be sold and pointed out all that could be done without the state involved in the utility business.

The resident wrote, “To me, the only real option that makes sense is to sell the utility to a company that truly understands the energy business.” The author then goes on to express the benefits of the sale outside of just the solution to the massive debt. In Santee Cooper’s current form as a state-owned entity, it cannot be taxed. If the company is sold to a privately owned company, the increase in tax revenue could be used on a slew of services to help South Carolina constituents such as education, infrastructure improvements, and drainage issues.

After a legislative session of sentiment that felt as if a Santee Cooper solution was in the near future, the South Carolina legislature once again concluded the session with the message of “explore all options for Santee Cooper”. It is now up to the Department of Administration to oversee the process of collecting and reviewing bids for the state-owned utility.

On top of the burden placed on the taxpayers for the over $7 billion in debt, Santee Cooper was recently informed that they may be responsible for up to $15 million in fees from outside consulting firms being used to advise lawmakers on purchase or management offers, legal issues, and utility manners.

State lawmakers set aside $5 million to pay these consultants, but the costs are expected to be far greater. The letter informing Santee Cooper, from State Sen. Hugh Leatherman, R-Florence, of their newly discovered responsibility claimed the entity is required to fund the resources which will allow the Department of Administration to complete their work. This was the first time any of the board members were told that Santee Cooper would be responsible to help with paying for the state’s bidding process.

Governor Henry McMaster has shown his outward support towards the sale of the state-owned energy utility. McMaster called for the formation of the special investigative committee which requested bids for the sale. Most recently, he spoke at the 42nd Annual Meeting of the Berkeley Chamber of Commerce. At this meeting, McMaster touched on Santee Cooper saying the state is working towards a “good, strong way out.” He then went on to say, “Maybe, in the end, this will be a good thing for South Carolina; maybe, in the end, we will be stronger for it.”

Featured Image: Paddle SC

While almost all South Carolinians know our state’s lakes are great for summertime, few know the energy industry’s contribution to ensuring they stay as pristine as we know them to be.

Lake Marion, the largest lake in the state, not only provides the people of South Carolina with great fishing, swimming, and boating but also, electricity! Lakes like Lake Marion and Moultrie, those which are managed by electric utilities, are guaranteed to be handled with far-reaching public oversight to ensure they are held to consistent standards across the country.

The Federal Energy Regulatory Commission (FERC) is responsible for regulating the construction, operation, and maintenance of non-federal hydropower project. The FERC’s key to this management of aquatic environments is comprehensive long-term Shoreline Management Plans (SMP) which according to the FERC, “manages the multiple resources and uses of the project’s shorelines in a manner that is consistent with license requirements and project purposes, and addresses the needs of the public.” This means if Santee Cooper is sold, the management of lakes such as Lake Marion and Moultrie will still be regulated in the same way they are today. The SMP will not change even if the owner does.

A utility cannot simply choose to switch SMPs whenever if feels the will to do so. The FERC is diligent and thorough in its responsibility in managing these non-federal hydropower sources and not all proposed changes in SMPs are approved. If the sale of Santee Cooper goes through, our prized lakes in South Carolina will not change, but stay consistent with the management they have been under in the past. The FERC ensures this throughout the nation.

Read more from Energy Consumers of the Carolinas here.

Last Thursday, May 9, marked the last day of South Carolina’s regular session with many still wondering the fate of Santee Cooper.

Just recently, South Carolina lawmakers reached a compromise on Santee Cooper and decided it was time to start seeking purchase and management bids for state-owned Santee Cooper. And earlier this week, the House amended and passed the Senate bill sending it to conference.

Key business and government leaders are pushing for the sale rather than a management agreement.

Why?

Because they know a management agreement will not relieve the millions of Santee Cooper direct-serve and cooperative customers from paying off their $7 billion debt.

As discussed in Palmetto Promise Institute’s latest post, a sale would help eliminate the massive debt and is the only solution that will rescue customers from increased utility rates.

An analysis done by PPI showed that in order for Santee Cooper to cover its debt and interest they would have to raise rates by 13.7% and keep them that high over the next four decades.

And, while many wonder how a sale would reduce rates, PPI explains that the detailed ICF report explained “…the IOU-buyer would pay off the debt for the V.C. Summer project and eliminate it from rate base. “Rate base” (in the unique financial world of the regulated utility) is the assets that utilities earn guaranteed returns on, and a lower rate base delivers lower rates to customers.”

Lawmakers agreed to come back for three days starting May 20 for a special session which will include more conversation about Santee Cooper.

To read more visit Palmetto Promise Institute, here.