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NextEra Makes Its Move

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Florida-based NextEra Energy – in what sources describe as an increasingly desperate acquisition mode – is floating a trial balloon to purchase South Carolina’s debt-addled government-run utility, Santee Cooper.

Palmetto State lawmakers told reporter Avery Wilks of The (Columbia, S.C.) State newspaper this week that the proposed NextEra deal was valued at $15.9 billion, although there are conflicting reports as to the structure of that agreement.

A follow-up report in The (Charleston, S.C.) Post and Courier quoted establishment “Republican” senator Larry Grooms as saying the deal was valued at slightly less than $8 billion – which is less than the beleaguered utility owes.

What’s the real number?  Good question …

“The dirty little secret is that NextEra Energy wants South Carolina taxpayers to subsidize this deal,” South Carolina political operative Justin Evans wrote on his Facebook page. “What a joke. You want Santee Cooper you get the $8 billion debt. That’s how this works. You take everything, not just the good stuff.”

According to lawmakers, NextEra only wants to purchase Santee Cooper’s electric generation and transmission assets – which serve an estimated two million customers in the Palmetto State (most of them through a network of regional electric cooperatives).

Chatter surrounding a possible NextEra deal has been rampant at the S.C. State House for weeks.  We originally reported on it here, with a follow-up report here.

We also exclusively reported weeks ago on the company engaging in offline negotiations with lawmakers.

According to our sources, legislators were expecting the company to make a bid for both Santee Cooper and crony capitalist utility SCANA.  However, we’re told NextEra couldn’t match the ratepayer relief proposed by Virginia-based Dominion Energy – which has made a $14.6 billion offer to purchase the Cayce, S.C.-based utility.

NextEra was reportedly a suitor of SCANA, but those efforts fell through two months ago.

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NextEra isn’t the only entity interested in purchasing Santee Cooper.  According to unnamed sources quoted in the Post and Courier report, Greenville, S.C.-based Pacolet Milliken is also preparing a bid for the utility – which along with SCANA is reeling from its involvement in a failed nuclear power expansion project in Fairfield County, S.C. (a.k.a. #NukeGate).

A third suitor – one which has yet to be publicly identified – is also reportedly in the mix.

Finally, there’s speculation that the state’s politically connected cooperatives might organize and make a play to take over Santee Cooper, which has been providing them with power since 1942.

Of interest?  Unlike the Dominion deal to buy SCANA – which would reimburse ratepayers $1.3 billion and provide yet-to-be-determined reductions in their power bills moving forward – there is no reimbursement contemplated for Santee Cooper ratepayers.

Also, lawmakers briefed on the proposals say rates for Santee Cooper customers would not be reduced – but rather frozen for a five-year period.

Stay tuned … this is obviously a very fluid situation.

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