The future of Santee Cooper and our electric bills
A huge issue that impacts every resident in South Carolina will be deliberated and negotiated by our state legislators this week and probably for the next several weeks. It will have immense impact on the future of our State.
The issue is what to do with Santee Cooper, the state-owned utility that crumpled almost two years ago under several billion dollars in debt after abandoning construction of two nuclear power generators, admitting mismanagement and facing a slew of class action lawsuits.
What's important to Hilton Head Island and Daufuskie residents is that Santee Cooper is the supplier of our own Palmetto Electric Cooperative, as well as 20 other electric cooperatives - meaning that an unwise decision by the legislature will have a direct impact on electric rates for residents and businesses decades into the future.
If you are new to Hilton Head or haven't kept up with this issue, here is a quick overview:
Officially known as the South Carolina Public Service Authority, Santee Cooper is enormous. It was birthed in the late 1930s during President Franklin Roosevelt's "New Deal" as a rural electrification and public works project. It created two massive lakes (Lake Marion and Lake Moultrie) and cleared more than 177,000 acres of land while building hydro-electric dams and power plants. Today, it serves nearly two million customers, including several large industries across the state both directly and through the cooperatives.
Trouble began, however, when Santee Cooper partnered with South Carolina Electric & Gas (SCE&G) to build two "next generation" nuclear power facilities in Fairfield County. After a decade of excessive budget overruns and $9 billion spent, the projects were abandoned. Mismanagement was alleged and huge class action lawsuits followed. SCE&G was sold to Dominion Energy of Richmond, Va., which services power in 18 states.
The question "What to do about Santee Cooper?" was left up to our legislature. And, that's where we are now.
Three options have been spelled out: 1. Sell everything to NextEra Energy, an investor-owned company based in Florida that owns Florida Power & Light and is the largest energy company in that state with more than 5 million customers; 2. Enter into a management agreement with Dominion, which would assume overall management of Santee Cooper's operations; 3. Agree with a new Santee Cooper management team to reorganize itself and hope they perform better as they seek to pay off $4.7 billion of the $6.8 in bond debt they owe.
Our first step is for the House Ways and Means Committee and Senate Finance Committee to review the three proposals and issue recommendations. Then both the House and Senate will take up a resolution to either approve a sale to Next Era, accept Dominion's management proposal or stand pat and insist new reforms be implemented.
As legislators, we must determine what's best for future rate payers as well as for taxpayers. There is also the side question of whether a state ought to be in the utility business at all.
It's not going to be easy.
Jeff Bradley is the representative for District 123 in the State House of Representatives.