santee cooper legislation

Santee Cooper Class-Action Lawsuit Settled – Here’s What That Means For You

In the ongoing events that surround Santee Cooper and the V.C. Summer scandal, a $520 million settlement has been made in the case of Jessica Cook. However, the settlement amount, which was already just a slither of the debt pie Santee Cooper has racked up, came out to an even lesser amount of $300 million, to be made in two payments, by the time all legal fees were paid.

The class-action lawsuit, led by Jessica Cook, was filed in 2017 over the failed V.C. Summer project and the billions of dollars wasted and being passed onto all of the utility’s direct-serve and electric cooperative customers.

The settlement also includes a 4-year “rate freeze,” leading many to believe that efforts to sell Santee Cooper could come to a halt. However, the debt that customers are already paying for is still being paid through their power bill, essentially paying themselves for the rate freeze. Additionally, as previously stated, the settlement amount is just a small fraction of the total debt that will eventually have to be paid off.

In the larger scheme of things, the state-owned energy company is still billions of dollars in debt, due to the V.C. Summer, failed projects, and other ventures. So, while the Cook case is a win in the eyes of some, it does little to fix all of the outstanding issues surrounding Santee Cooper or give customers any answers to the rest of the debt that is owed or the debt they’re already paying for.

More news has just recently been released that the company is paying $1.1 Million to former Santee Cooper lawyer, Mike Baxley. Mr. Baxley served on the Santee Cooper general counsel and was recently laid off in efforts to cut costs. However, he was sent on his way with $495,000 and will receive an additional pension over the next 15 years. Baxley was also given additional compensation in return to agreeing not to sue the company and was added to the list of former executives who left with a golden parachute being paid by customers.

Giving large payouts is business as usual for Santee Cooper who paid gave golden parachutes to outgoing executives associated with the V.C. Summer debacle. However, what does this mean for ratepayers in the future? The company continues to shovel money into paying out their executives while the 4-year “freeze-rate” does little for Santee Cooper’s direct serve and coop customers since they continue to pay for the debt as it piles up. The only real way to protect Santee’s customers is to sell Santee Cooper to an IOU that will have proper oversight and eliminate the debt otherwise there is no question that rates will skyrocket at the end of the rate-freeze time period.

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South Carolina Lawmakers Issues Santee Cooper and Education

South Carolina Lawmakers Return – Here Are Two Issues You Should Be Watching

Featured Image Source: Andrew Whitaker, Post & Courier

South Carolina lawmakers returned to the State House last week, kicking off the 2020 legislative session. All eyes are on two hot topics this year: education and Santee Cooper.

Last year, both were said to be a top priority of lawmakers but have found their way rolling into the new year with no clear future.

During the 2019 legislative session, the House passed a massive bill including a complete overhaul of our state’s education system, but the bill spent the remainder of the session being torn apart and dissected by state senators.

Meanwhile, Santee Cooper’s future has been up in the air for far too long while lawmakers go back and forth on what to do with the debt-riddled state-owned utility.

Lawmakers have once again named both issues a top priority this year, and it won’t take long to see if this holds true.

Sometime in the upcoming session, legislators will receive three bids for state-owned Santee Cooper – one a reform plan from Santee Cooper itself, one from a company that would manage the utility, and one from a privately-owned utility that would purchase Santee Cooper.

While supporters from all sides have come forward, lawmakers have a difficult decision to make. They must make sure they choose an option that will protect the millions of people who get their power and water from Santee Cooper and all South Carolina taxpayers.

Since the public was made aware of Santee Cooper’s billions of dollars of debt, many have expressed their concerns over rising electric rates, talk of a taxpayer bailout, and the responsibility of the debt falling on the shoulders of customers.

Palmetto Promise Institute, an organization dedicated to promoting a “free and flourishing South Carolina” and a strong supporter of selling Santee Cooper, stated the only way for South Carolina residents to avoid costs related to Santee Cooper’s debt is a sale.

Experts have found that a sale would allow a write-down of Santee Cooper’s $4 billion in nuclear debt. According to the report, “Over time, that $4 billion could double as interest is charged to customers.”

While lawmakers try to figure out the best way to deal with state-owned Santee Cooper’s debt, they’ll also have to keep in mind the tens of thousands of teachers who are looking for raises, resources and help, and the money it will take for education reform.

All eyes are on our lawmakers now as two major decisions need to be made, quickly.

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Local Residents Give Their Thoughts On Santee Cooper

South Carolina residents and lawmakers are gearing up for the state’s 2020 legislative session beginning in January and the many hot-button issues that are up for debate this year.

One of the issues at top of mind is that of Santee Cooper.

In January, lawmakers will review recommendations for the state-owned utility, and make a decision on the future of the debt-riddled utility company.

With billions of dollars of debt that customers could be on the hook for, many customers are expressing their concern.

Letters To The Editor

Santee Cooper Bailout? – South Strand News

“Santee Cooper is again proving it’s an unaccountable state agency operating in the shadows. For years, the state-owned utility has promised that South Carolina taxpayers won’t have to bear the burden of the nuclear debt. So much so that one of its “Facts are Facts” blog posts is titled “Taxpayers Are Not Responsible For Our Debt.” To quote the post, “FACT: Our debt will be paid off through our revenues, and not by tax dollars.” Lies. Last month Santee Cooper filed a lawsuit against the SC State Fiscal Accountability Authority and the SC Insurance Reserve Fund in an effort to recover the money it lost in the V.C. Summer nuclear fiasco. Both are state agencies. So that means Santee Cooper is seeking a bailout from the state, plain and simple. Many have suspected that this would happen. Santee Cooper kept denying it. The truth always comes out. Santee Cooper can’t fix itself and will have to depend on taxpayers to dig itself out.”

– Lee Padgett, Georgetown

Letter To The Editor: Santee Cooper – Charleston Chronicle

“Since 2012, Santee Cooper, the state-owned and largest utility, has increased rates by 15% to build the VC Summer nuclear plant that ultimately failed. The immediate impact felt by laid-off workers and the local rural community was horrendous enough but the fall-out will continue for years to come because of the lingering debt of $10 billion. Rates are expected to increase unless major changes take place.

This is a real negative impact on low-income, marginalized communities where regular, everyday folks working 2-3 jobs, lack transportation make real-life decisions about keeping the lights on. Santee Cooper is conducting a getting to “know the CEO” tour of our state with “movers and shakers” but where is the concern for those folks who can’t afford the admission fee for private receptions or closed forums.”

– Marilyn Hemingway, Charleston

Easy Choice On Santee Cooper – South Strand News

“Now is the perfect opportunity for legislators on both sides of the aisle to sell failed utility Santee Cooper and protect ratepayers from skyrocketing rates.”

– Thomas Herron, Myrtle Beach

Santee Cooper Needs To Be Honest With Ratepayers – Summerville Journal Scene

“Santee Cooper is at it again, trying to pull the wool over all of our eyes. The new executives are trying very hard to make you believe they can pay down the $7 billion-plus of debt without raising rates. A few weeks ago they said they’ve got enough money on hand to start paying down the debt. In that same announcement, they said they are also going to freeze rates for the next five years.”

– Claire Robinson, Columbia

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Legislative Action Required for Santee Cooper. Here’s Why:

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.

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Santee Cooper’s Largest Customer Urges They Were Powerless Throughout the V.C. Summer Project

Santee Cooper’s largest customer, the electrical coops that buy three-fifths of Santee Cooper’s power which gets distributed to their customers across the state of South Carolina, is suing the state-owned utility. While the coops are by far the agency’s largest customer, a 38-page claim filed in August works to show that Santee Cooper actively kept the problems of the V.C. Summer construction hidden from the coops.

The project left Santee Cooper billions of dollars in debt. To pay off this debt, the burden falls onto both the state-owned utilities’ direct serve and co-op customers. The 20 co-ops who purchase power from the utility are suing to stop Santee Cooper from charging their customers any more for the debt.

The coops attorney in the case explained, “The emails, letters, etc.described above tell the indisputable story of a project beset almost from the beginning with myriad fundamental, entrenched problems that led inexorably to major delays and cost overruns,” the co-ops’ attorney, Frank Ellerbe, wrote in the filing. “Yet, it was a story Santee Cooper kept largely to itself.”

The coops claim to be powerless throughout the construction process of the nuclear reactors and in turn, should not be held responsible for the debt Santee Cooper faces for their failures. While success for the coops will save millions of customers from having to pay off the debt, there are still a lot of questions left unanswered.

If Santee Cooper is blocked from increasing the coop rates, what will happen to the debt and how will it be paid?

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Department of Administration Announces Parties are Now Able to Submit Bids for Santee Cooper

The state Department of Administration recently selected four firms to explore options on the table for the debt-riddled, state-owned utility Santee Cooper. The firms, tasked with reviewing purchase and management offers and a reform proposal from Santee Cooper, will advise lawmakers as they work to decide the future of the utility.

On Friday, August 16, the Department of Administration took a step in the right direction and announced it is now inviting parties to submit bids for Santee Cooper. Moelis & Company, a New York-based investment firm, will advise the Department of Administration on the bids for Santee Cooper. The invitation can be viewed here.

On the same day, Santee Cooper approved a $5 million loan to Laurens Electric Cooperative through the economic development revolving loan program. This loan approval took place during an ongoing lawsuit between Santee Cooper and the co-ops over who is responsible to pay for the debt resulting from the failed V.C. Summer project continues.

The co-ops are suing to block Santee Cooper from charging its customers any more to pay off the $4+ billion of debt. The lawsuit would stop Santee Cooper from continuing to bill customers for the debt. Circuit Court Judge John Hayes ruled that the lawsuit would be allowed to continue on Friday.

In a 38-page claim, filed on Aug. 9, the co-ops presented a legal argument to show Santee Cooper actively kept information from its customers including construction setbacks and increased costs, in turn violating the contract and an attempt to make customers pay for a power plant that never produced electricity.

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Humility Urged For Santee Cooper. Here’s Why.

Feature Image: Post and Courier

An article recently published in The State reported that former interim CEO, James Brogdon, declared that Santee Cooper would not be handing over the $15 million to the state to pay for financial consultants needed for the Department of Administration to explore the potential sale, management or reform offers for Santee Cooper. However, Senate Finance Chairman Hugh Leatherman demanded the money on what he claimed to be legal grounds referring to language in H. 4287 which says, “Santee Cooper is directed to provide any and all resources necessary to assist in the process for competitive bids and management proposals, as well as the evaluation of the bids and management proposals.”

This refusal to pay for the necessary financial consultation has sparked controversy across the state and put Santee Cooper’s board at the center. This is the same board who also hired a new CEO last week, set to make more than double previous CEO Lonnie Carter’s salary. Meanwhile, the coops served by Santee Cooper support the expenditure and want to see a resolution.

A recent Post and Courier editorial discusses the need for Santee Cooper to begin acting with humility. The editorial states,

“Folks who want to maintain the status quo at Santee Cooper would probably be much better off paying that $15 million bill, so legislators don’t have to spend ‘their’ (that is, taxpayers’) money.”

If Santee Cooper refuses to pay what they are legally obligated to pay, the bill will fall onto the taxpayers.

The Post and Courier editorial closed by calling for some humility from Santee Cooper’s new leadership as well.

“Meantime, the new CEO might try dialing back his predecessor’s arrogance. That’s not something legislators appreciate in others, and frankly, it’s not particularly becoming of a state agency that just blew $4 billion, and facilitated a similar fiasco by what used to be one of the state’s most important companies.”

The people of South Carolina, especially Santee Cooper’s direct serve and electric co-op customers, are more than ready for a solution to the problem. In order for a solution to take place, hiring consultants who are able to bring in the expertise and experience in transactions of this nature is crucial. The refusal to pay the $15 million owed to the state, is just one more misstep after years of mistakes.

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South Carolina Small Business Chamber Of Commerce Supports Santee Cooper Sale

Featured Image: Santee Cooper’s Cross Plant, Post, and Courier.

Today, South Carolina Senators began to debate on legislation authorizing Governor McMaster’s administration to oversee the sale of state-owned utility Santee Cooper and begin the competitive bidding process.

Many hope the legislation will pass and relieve Santee Cooper direct-serve and coop customers from paying off the state-owned utilities’ $7.2 billion debt.

In a recent survey, 71% of participants said they favored selling Santee Cooper to a private utility who can pay off the debt and get the government out of the utility business.

Over the last few weeks, the South Carolina Small Business Chamber of Commerce has been holding town hall meetings across the state to discuss the sale. SCSBCC president and CEO Frank Knapp Jr. favors the sale of Santee Cooper and doesn’t feel the debt should be left in the hands of the customers.

After a lengthy testimony, Santee Cooper executives were unable to answer many questions about their future, including how the debt would be paid off without raising rates and rate projections. With the number of unanswered questions continuing to increase, many South Carolina taxpayers and Santee Cooper customers are becoming increasingly worried.

Knapp explained that with rates already increased by 5% due to the V.C. Summer project debt and more rate hikes to come, legislators need to make the right decision for South Carolina residents.

Also in attendance at the town hall meetings is Santee Cooper spokesperson Tracy Vreeland who stated that while rates may not remain the same, they will still remain competitive even though executives are unsure of how they plan to do this and are unsure of future rate projections.

Read more about the recent town hall meetings here.