With the battle over South Carolina’s government-run utility Santee Cooper fast approaching a point of critical mass, every move made by the players rumored to be competing for ownership of this toxic asset is being watched very closely.
On Monday, NextEra Energy Partners announced its intention to purchase Meade Pipeline Company for $1.37 billion. Meade has a forty percent stake in the Central Penn Line – a 185-mile natural gas pipeline originating in Susquehanna county, Pennsylvania. The pipeline connects the massive Marcellus Shale basin – the nation’s single largest source of natural gas – to the American mid-Atlantic and Southeastern markets.
NextEra’s announcement turned some heads as it was perceived as running counter to the trend of renewable energy investment across the country – not to mention the company’s status as a leader on this front.
“It is slightly surprising that (NextEra Energy Partners) doubled-down on gas exposure,” one analyst told Bloomberg.
“I view gas pipelines as clean energy,” NextEra chief executive officer Jim Robo said on a conference call with financial analysts earlier this week. “Gas is an important bridge to a low- or zero-carbon future.”
Sound familiar? It certainly should to our readers. This spring, we posted a column detailing the extent to which natural gas was the “real hero” of the American energy revolution of the last decade – not to mention the “real reason there are fewer coal-burning plants” in America.
In other words, Robo (below) is right …
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Natural gas, not renewable energy, has been the lead driver in reducing carbon dioxide levels in this country – providing a bridge between coal and fledgling renewable sources.
“Natural gas is driving America’s new era of energy independence – and will continue to do so for the foreseeable future,” we wrote back in May. “And states that shut the door on this industry are shutting the door on investment, good-paying jobs and tax revenue.”
“Although natural gas use for generating electricity in South Carolina has tripled in the past decade, we lack the pipelines and infrastructure needed to better take advantage of this resource,” Pitts wrote in a letter to the editor of The (Charleston, S.C.) Post and Courier. “As our state continues to grow and we work to attract investment, expand our economy and create new jobs, this will become a bigger and bigger impediment.”
This is not another column about the efficacy of natural gas as an energy bridge, though.
Instead, this post is an assessment of NextEra’s play as it relates to the company’s interest in purchasing Santee Cooper – which is on the block in the aftermath of its involvement in a spectacularly failed crony capitalist experiment in the nuclear power business (i.e. NukeGate).
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(Via: Getty Images)
NextEra has been among the parties interested in purchasing Santee Cooper – along with Charlotte, North Carolina-based Duke Energy, Greenville, S.C.-based Pacolet Milliken and New York-based LS Power.
Of course, NextEra is also rumored to be eyeing the Jacksonville Electric Authority (JEA) – a community-owned utility that serves an estimated 466,000 electric, 348,000 water and 271,000 sewer customers in northeastern Florida. As we noted in a post two months ago, NextEra dominates the service areas surrounding Jacksonville via its Florida Power and Light subsidiary.
It has been speculated that NextEra – which is flush with cash – may lack the “management bandwidth” necessary to pursue the purchase of both JEA and Santee Cooper. It has also been speculated that the company could face regulatory resistance in its home state in the event it were to pursue both deals.
This news outlet has been unable to confirm either of those narratives, however.
So far, we have seen nothing to suggest that NextEra – which has been one of the more aggressive players in the Palmetto energy war from the beginning – is backing away one iota from its desire to acquire Santee Cooper.
South Carolina governor Henry McMaster’s administration is currently in the process of soliciting and reviewing bids to purchase or manage the embattled utility. This secretive process will ultimately result in one preferred purchase proposal and one preferred management agreement proposal, both of which are due to state lawmakers no later than March 15, 2020.
Meanwhile, a third proposal to “reform” the utility – and keep it under government control – will be submitted to the legislature by Santee Cooper.
Lawmakers will be required to vote either “aye” or “nay” on these three proposals no later than April 15, 2020. They can only pick one plan … or they can do nothing and the status quo will hold.
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