Santee Cooper finally paid off his debt … just not very well
I am (luckily) not an installment payer of Santee Cooper – South Carolina’s disastrously ill-managed, debt-ridden state utility. However, I am a taxpayer of the Palmetto State – which owns this anti-competitive albatross.
I’m also a citizen of South Carolina … which is still hampered on several fronts by the chronic ineptitude of this “rogue agency” which has a legally guaranteed monopoly on the production of polluting, inefficiently generated electricity.
Why state lawmakers didn’t take the advice I gave them thirteen years ago and move Santee Cooper to the private sector, I’ll never know … because that would have turned a billion dollar loss into a billion dollar stroke of luck.
However, instead of dumping the utility company, lawmakers decided to plunge the palmetto state headlong into crisis $ 10 billion command economic boondoggle – NukeGate. This project should produce two next-generation pressurized water reactors that can collectively generate 2,300 megawatts of energy.
Instead, it produced nothing but lies … and debt … and higher interest rates for South Carolina energy customers.
The lies and debt continue long after Santee Cooper and his former private sector partner. SCANA, has almost pulled the plug on the botched construction of these now abandoned reactors four years ago.
What has the SC General Assembly done since then? Nothing …
Unfortunately, after the debate about the latest proposal for “reform” by Santee Cooper NukeGate Fiasco has completely failed to address the utility company’s escalating debt. Similarly, there has been almost no discussion of the impact this tidal wave of red ink is (and will continue to have) on the residential, commercial, and industrial consumers of Santee.
Until this week that means …
On Tuesday, state lawmakers tasked with assessing Santee Cooper’s future finally got around to addressing the debt problem … seeking detailed answers from utility executives such as their “reform” plan on potential utility default risk would decrease.
Unsurprisingly, Santee Cooper was limited in his ability to answer such questions.
One lawmaker who grilled Santee Cooper’s leaders was a senator Josh Kimbrell of Spartanburg, SC – who pointedly inquired whether the utility company’s optimistic view of its current cash position was due to its “full confidence and credit” backing South Carolina.
“If there was some way of taking government backing off the table, making sure South Carolina taxpayers weren’t liable for the debt, would you still have a bright outlook on the long-term outlook for bonds? ”Asked Kimbrell.
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Santee Cooper didn’t have a big answer, telling Kimbrell, “That sounds like one of those bond advice questions.” His most important legislative trailblazer – the judiciary chairman of the SC Senate Luke Rankin – fired back that the state government was not on the hook to repay Santee Cooper’s debts should the agency fail.
Is that true?
SC Senator Wes Climer of Rock Hill, SC, made it clear that a failure by Santee Cooper would be catastrophic for the state below any Circumstances – it is referred to as a potential “contagious event”.
Even Rankin seemed to agree with this assessment … as far as he knew what the word “contagion” meant.
“I don’t understand, but it clearly makes sense,” he said.
My goodness …
Contagion fear aside, Santee Cooper’s installment payers will clearly be the ones to pay for the utility’s continued negligence – provided lawmakers fail to come to their senses and drop that anchor before it’s too late.
What brings us to the next round of questions …
Another lawmaker who did not hesitate to criticize Santee Cooper over his financial data was newly elected Senator Michael Johnson from Fort Mill, SC
According to Johnson, the energy prices charged by the utility of his regional power cooperative are more than ten percent higher than the prices rated by Duke of Energy. Johnson wanted to know how the current “reform” law would affect this discrepancy in the future.
The first answer he got was obscure …
First, Santee Cooper lobbyist Geoff Penland tried to fend off Johnson’s investigation by referring him to so-called “transparency” provisions in the legislature’s “reform” law.
The senator didn’t buy it …
“Your answer is that transparency will lead to lower interest rates,” Johnson fired back. “I’m not sure that transparency alone will change the pay structure in South Carolina.”
In fact, it won’t …
Penland’s second attempt at getting out of that box, however, was quite enlightening.
“Right now, Santee Cooper is in a tariff freeze related to the Cook Settlement,” he said, referring to a controversial class action lawsuit signed with his customers last year.
TIED TOGETHER | Santee Cooper’s “reform” law looks like a tactic to stall
Wait … What does this agreement have to do with the tariffs that Santee Cooper charges the state power cooperative network? Especially in connection with his debts?
“Going forward, (the cooperatives) would have the ability to influence this more,” said Penland, apparently suggesting that once the interest rate freeze was lifted, Santee Cooper would have more flexibility to close the price differential with the cooperatives.
The only way to achieve this “flexibility”? Higher rates….
Like I said … it became a very insightful exchange.
You see, I’m glad lawmaker is finally asking Santee Cooper about his debts – which simply cannot be addressed by “reform”. Still, it was disappointing to see that utility fee payers continued to have no concerns in these discussions. In fact, the only two lawmakers who seemed genuinely interested in what happened to Santee Cooper’s customers were senators Marlon Kimpson from Charleston, SC and Margie Bright Matthews from Walterboro, SC
These two lawmakers impressed me with their questions … which always tried to bring the conversation back to the real impact of the proposed policy changes on low-income payers (who already pay a disproportionate percentage of their income for energy bills).
Kimpson and Matthews deserve credit for bringing these issues to light … and I definitely hope their concerns remain at the forefront of lawmakers’ thinking as the Santee Cooper debate progresses.
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Become people is the founding editor of the news agency you are reading right now.
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