Scoppe: Why the SC Senate doesn’t want to sell Santee Cooper to NextEra | Commentary
Despite all of Santee Cooper’s improvements – and there have been improvements – the state utility company is not a flagship of good government, accountable government, or well-run business.
As Republican Senate Chairman Shane Massey reminded his colleagues Thursday, when the upper chamber debated for more than an hour whether it could finally prepare to debate the future of the utility company, “mysteriously” is being branded into his DNA – how the length shows that the legislature had to go to last year to find out about its latest bond issue.
And Santee Cooper continues to oppose any reforms that are not adopted by him – none of which involve regulation by the Public Service Commission. “Anytime you want to talk about significant changes down there,” said Mr. Massey, “you will get the same answer: well, that will violate the Bond Covenants.” And they continue to issue the bonds with the same bond clauses. “
Combine that type of sabotage with NextEra’s promise to clean nearly $ 4 billion in debt from botched VC Summer nuclear project, and you’d think the legislation jumped on the offer made by Florida-based utility, Santee To take Cooper from our hands.
Cindi Ross Scoppe
But more than a year after NextEra made this offer, no one seriously expects lawmakers to accept it. Nobody is certain that the entire Senate will ever debate it. And not just because the Santee Cooper cheerleaders are blocking the debate.
During Thursday’s exchange, Senator Ronnie Cromer summed up the robbery the way I wish I had thought of myself: “We’d rather sell Santee Cooper. We’d rather not give Santee Cooper away. “
“NextEra prefers this, yes we sell it,” he said. “But it’s not a sale. It is a present for her. In any case, I am not in favor of giving someone something that is a state good. “
Whether they shared his opinion or not, everyone in the Senate Chamber understood what the Newberry Republican was talking about. But it has been a lifetime since our state’s highly paid experts evaluated all offers – a long time ago in a pre-COVID world – and those of us who are not constantly being promoted to a decision may have forgotten the details.
It can help given particular interests in purchasing radio and internet commercials and targeted promotions to convince us that NextEra’s charges for electricity in other states are relevant and that the utility is not getting the debt back on customers’ monthly electricity bills to recall these details.
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It’s true that NextEra has offered to take over Santee Cooper’s $ 3.6 billion debt. It also offered to pay the state about $ 600 million in cash and reimburse customers $ 541 million for VC Summer debt payments already made.
In return, NextEra would receive what Mr. Cromer called “anywhere between $ 11 billion and $ 13 billion in fortune”, along with the right to sell electricity to 2 million South Carolinians. It would also leave the state to cover around $ 600 million in pensions and other obligations. And fire up to 700 South Carolinians. They will receive a $ 2.3 billion legal pre-approval to build the new power generation facility, as well as the right to continue charging customers even if that electricity generation has never been used – essentially the same agreement on the Base Load Testing Act that sparked the VC summer debacle Has .
Additionally, our high-paid experts found that NextEra’s electricity tariffs would be higher than Santee Cooper’s from day one. And, as Dominion customers know, utility companies are not satisfied with holding prices constant long after purchasing a distressed utility.
NextEra’s offer also saw lawmakers charge a fee of approximately $ 5 million per year instead of up to $ 175 million per year in property taxes on power plants, transmission lines, office buildings and real estate that Santee Cooper currently owns, let pay. NextEra’s CEO has offered to remove the tax break from the package in exchange for increasing tax rates by the same amount.
By far the most attractive part of the proposal – and clearly at least part of the reason NextEra believed it could get away with offering an otherwise crappy deal – was the $ 541 million refunds. That’s because it would have settled a class action lawsuit that threatened to default the utility and force the state to either save it or damage South Carolina’s reputation as a good place to do business.
But somehow Santee Cooper managed to settle the lawsuit himself, removing the existential threat – and the appeal of NextEra’s offering.
Could NextEra have a better deal? Maybe like this. NextEra supporters interested in tariff payers say the utility offers smarter, nimble management that would cut utility bills much more over time than a government agency could. So it may be worth asking for a new offer, since settling the lawsuit effectively meant Santee Cooper came up with a second reform proposal.
But until we see a better deal, we can’t assume that lower prices in other states will mean lower prices here – especially since the first deal included just the opposite and NextEra in South Carolina will have a cost it doesn’t have in all of these other states have nearly $ 4 billion in debt from two unfinished nuclear reactors that will never produce a watt of electricity.
Cindi Ross Scoppe is an editor at The Post and Courier. Contact her at [email protected] or follow her on Facebook or Twitter @cindiscoppe.