sell santee cooper

Santee Cooper Intervenes As The City of Goose Creek Seeks To Purchase Power On the Open Market for Much Less

Featured Image: ABC News 4

Goose Creek is exploring the idea of creating a municipal electric utility to serve areas annexed into the city. A driving factor in the decision is Century Aluminum which is located right outside of Goose Creek city limits where high costs of power are threatening the company.

Century Aluminum currently purchases 75% of its power on the open market and the remaining 25% from Santee Cooper. According to a Count on News 2 report, the power the company purchases from Santee Cooper is almost double the cost compared to that purchased on the open market. Due to the high power costs, Century Aluminum had to close half of the facility’s operations in 2015.

The high costs of power and the problems they created within Goose Creek led to City Council discussions regarding the creation of their own utility which would buy power on the open market at half the cost of the power purchased from Santee Cooper. The utility would serve the nearly 5-thousand acres owned by Century Aluminum annexed into Goose Creek including the company’s smelter site and an undeveloped part of an industrial park.

On September 10, Goose Creek City Council approved a referendum to ask voters if they want to begin operating an electric utility to serve Century Aluminium and to approve the annexation of the 5,000 acres of Century property. If approved, the company would pay the city property taxes and a business license fee. City Council members believe this is a great opportunity to bring in large amounts of revenue for the city.

Santee Cooper officials responded swiftly making the claim that what is being proposed by Goose Creek is illegal, citing a similar 2004 annexation case involving South Carolina Electric & Gas vs. the Town of Awendaw.

Another issue arises with the fact that Santee Cooper owns all of the substation and transmission lines at the property. Santee Cooper’s next steps are still unknown, but it is clear the state-owned utility doesn’t want Goose Creek purchasing its power on the open market for nearly half the price.

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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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Charleston Resident Speaks Out About Santee Cooper

Once a valuable asset for the state of South Carolina, Santee Cooper is now nearing insolvency, especially if the company loses the fight with its largest customer, the electrical cooperatives.

The coops which purchase service from the state-owned agency, are suing Santee Cooper to stop the agency from continuing to charge their customers to pay for the more than $4 billion of debt due to the failed V.C. Summer project.

Santee Cooper’s questionable history has led to an outcry from South Carolina residents demanding change. One Charleston resident took to the Post and Courier to speak out on the cultural and systemic problems which have plagued Santee Cooper saying, “Paradoxically, Santee Cooper has failed to deliver more public benefits than its private sector, investor-owned companions.” While the state-owned utility frequently boasts having some of the lowest utility rates in the state, Santee Cooper actually has the second-highest utility rates, above privately-owned Duke Energy.

Unlike investor-owned Duke Energy, the Public Service Commission doesn’t have to approve rate increases for Santee Cooper since it is state-owned. Instead, it only takes a simple vote by Santee Cooper’s board of directors to raise rates on customers. And customers see the lack of concern Santee Cooper has for its customers by continuing to make decisions that aren’t beneficial for its customers. The Charleston resident put it best in their letter to the Post and Courier stating “it (Santee Cooper) has resisted almost every initiative that would provide even modest protections for the environment and public health, or that would help customers reduce power bills.”

In 2009, Santee Cooper spent a quarter-billion dollars on land, equipment, and parts before receiving federal or state permits to build a coal-fired plant in the Pee Dee. The plant then became just another one of Santee Cooper’s abandoned projects.

However, abandoning projects isn’t the only reason Santee Cooper has continued to raise rates on its customers. The state-owned utility also spent $2 million on a new CEO and deputy CEO team, granted several loans even while in debt, and as the Charleston resident pointed out in their letter, repeatedly violated the federal Clean Air Act regardless of monetary fines. “On the modest side of those miscalculations is the $2 million civil penalty Santee Cooper paid for repeatedly violating the federal Clean Air Act.”

Just last week, the Department of Administration announced it would begin inviting parties to submit bids for Santee Cooper. Direct serve and coop customers await the outcome of not only the state lawmaker’s decision on what to do with the debt-riddled agency but the court’s decision in the case between Santee Cooper and the coops.

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How We Got Here: A Santee Cooper V.C. Summer Nuclear Disaster Timeline

The largest financial disaster in South Carolina history didn’t happen overnight.

May 2008 – The start of this fiasco. SCE&G and Santee Cooper announced a nuclear expansion project at the VC Summer plant. Since the announcement of the VC Summer Project eleven years ago, several delays and massive problems were hidden by the project’s leadership.

There are several key dates before the most recent decision to explore the sale, but we’re focusing on the monumental dates that reveal SCE&G and Santee Cooper’s poor leadership, lack of transparency, and what led customers to be responsible for Santee Cooper’s $8 billion debt.

February 2009 – The nuclear expansion plan is approved and construction is set to begin in 2012 with the first reactor to begin operating in 2016 and the second in 2019.

November 2009 – Santee Cooper approves and implements a 3.4% rate increase to help pay for the project.

December 2011 – The project gets off to a rocky start with the first delay being reported by SCE&G for production issues, manpower issues, and the need to redesign nuclear modules.

December 2012 – Santee Cooper approves and implements another 1.8% increase to rates.

June 2013 – Another delay follows pushing the first reactor operation date to late 2017-early 2018.

December 2013 – Santee Cooper approves and implements yet another rate increase. This time a whopping 5.2% to help pay for the struggling project.

May 2014 – Obvious signs of trouble appear and Santee Cooper asks to hire an outside company to oversee the project.

October 2014 – Money trouble becomes more apparent when contractors say it will cost an additional one billion dollars to complete the reactors.

October 2015 – Westinghouse is brought on board and completion dates are rescheduled yet again. The project is now pushed back to late 2019-early 2020.

December 2015 – During this time, SCE&G asked the Public Service Commission of the Office of Regulatory Staff to increase rates to help fund the project. Santee Cooper has its own board of directors and doesn’t have to get rate hikes approved by anyone except its own board, so Santee Cooper increases rates to help fund the project.

April 2016 – Another rate increase is approved and implemented by Santee Cooper. Customers see their rates go up by 5.3% this time.

June 2016 – SCE&G asks for its ninth rate increase.

March 2017 – Westinghouse files for bankruptcy. The company cites $9 billion in losses from its two nuclear construction projects, one of which is the VC Summer project.

April 2017 – Santee Cooper increases rates another 2.1%.

July 2017 – Shortly after this, Santee Cooper and SCE&G announced they were abandoning the project even though customers have already paid up to $2 billion for the reactors.

At this point, much of the general public was still unaware of the financial effects it was having on them.

August 2017 – A special South Carolina Senate committee holds their first of MANY hearings and former Santee Cooper CEO Lonnie Carter announces his retirement.

September 2017 – A month later Santee Cooper turns over the Betchel report detailing their insufficient oversight of the project.

January 2018 – SCE&G customers hear good news when Dominion Energy announces it will purchase SCANA Corp.

June 2018 – A state audit reports that the final amount for the failed project could increase by over $400 million.

August 2018 – A 15 percent rate cut and refund for April-July charges begin appearing on SCE&G bills. Meanwhile, Santee Cooper customers are still continuing to pay for the failed nuclear disaster.

March 2019 – Santee Cooper executives are unable to answer important questions about the future of Santee Cooper and rates during a Senate hearing. Following this, South Carolina Senate President Harvey Peeler introduces legislation that calls for exploring options for a possible Santee Cooper sale.

April 2019 – Santee Cooper announces rate increases totaling about 7% between 2021-2024 with no PSC oversight.

May 2019 – Lawmakers adopt this resolution and will begin exploring options to sell Santee Cooper. Read more about what this resolution means, here.

July 2019 – The two-year anniversary of the abandonment of the failed V.C. Summer project that started back in 2008, over a decade ago, yet Santee Cooper direct serve and electric co-op customers are still paying for this massive financial disaster.

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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.