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Santee Cooper’s Rate Freeze Would Still Screw Ratepayers

Government-run utility not telling the whole story …

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South Carolina’s government-run utility, Santee Cooper, is bragging that its proposed five-year “rate freeze” would lock in energy prices for consumers at a lower level than rates charged by private sector providers. You know … assuming you aren’t having to pay a middle man.

“Our new business forecast will reduce or hold customer prices stable for at least another five years,” the utility bragged in a release earlier this week.

In touting these “stable” prices, Santee Cooper posted a comparison of its rates with those of Virginia-based Dominion Energy and Charlotte, N.C.-based Duke Energy

Take a look …

(Click to view)

(Via: Santee Cooper)

Looks impressive, right? Indeed …

Once again, though, there is some serious smoke and mirrors at play here. While Santee Cooper’s 150,000 customers are indeed paying modestly lower rates than customers of Dominion and Duke, consumers who get their power from Santee Cooper via the Palmetto State’s network of regional cooperatives are not nearly as fortunate.

Consider the Berkeley Electric Cooperative, which provides power to an estimated 87,000 residents in Berkeley, Charleston and Dorchester counties (making it the largest of the individual coop providers).  According to the latest data from the U.S. Energy Information Administration (EIA), its customers are paying an average of $131.77 per month.  Meanwhile the 70,000 customers of the Horry Electric Cooperative – the second-largest cooperative – are paying even more than that, an average of $142.05 per month.  The third-largest cooperative provider – Blue Ridge Electric Cooperative – is charging even more, billing its 65,000 customers an average of $157.35 per month.

While a handful of cooperatives charge competitive rates, most do not.

Among those assessing monthly bills well above the private sector benchmarks are: Coastal Electric Cooperative ($165.90 per month for its 10,000 customers in the South Carolina Lowcountry), the Tri-County Electric Cooperative ($156.72 per month for its 17,000 customers in the lower Midlands region of the state), the Edisto Electric Cooperative ($147.38 per month for its 15,000 customers in the rural Lowcounty), the Lynches River Electric Cooperative ($147.17 per month for its 20,000 customers in the rural Pee Dee), the Broad River Electric Cooperative ($147.05 per month for its 20,000 customers in Cherokee, Newberry, Spartanburg and Union counties), the Little River Electric Cooperative ($146.12 per month for its 12,000 customers in Abbeville, Anderson, Greenwood, and McCormick counties) and the Santee Electric Cooperative ($141.10 per month for its 33,000 customers in rural Clarendon, Florence, Georgetown, and Williamsburg counties).

(Click to view)

(Via: Getty Images)

Compounding the problem? These excessively high monthly rates are being imposed on some of the Palmetto State’s poorest citizens – limiting their upward mobility and unnecessarily constraining South Carolina’s consumer economy.

But let’s return for a moment to the 150,000 consumers who get their power directly from Santee Cooper. Are they really getting a good deal?

Shortly after the government-run utility released its latest numbers, S.C. Senate majority leader Shane Massey took to social media to provide some much-needed context to the data.

“This really isn’t something to brag about,” Massey tweeted, noting that Santee Cooper “doesn’t pay taxes (the others do) and can borrow money cheaper than the others.”

“Your rates ought to be much lower,” Massey added. “And not just for the five years that you kick the can down the road and wait for people to lose interest.”

(Click to view)

(Via: Travis Bell Photography)

Woof …

Is Massey (above) correct, though? Yes … and while there will always be questions regarding his motivations for engaging in this debate, he is raising an absolutely critical point regarding Santee’s claims.

We would take Massey’s criticism one step further, though: Not only are Santee Cooper’s rates artificially high based on the many financial advantages it receives over private sector providers, the utility dishonestly raised (and attempted to raise) them even further during the NukeGate disaster.

Don’t believe us? Santee Cooper has acknowledged that debt associated with the botched construction of the abandoned V.C. Summer nuclear generating station expansion project (a.k.a. NukeGate) will remain on its books through 2056.

In other words, Santee Cooper is disingenuously attempting to lock in artificially high rates … and pretending as though it is doing its customers a favor in the process.

Massey is absolutely correct to call out the government-run utility for its duplicity … and we hope lawmakers currently deliberating over Santee Cooper’s future bear this in mind as they mull a final disposition of this asset.

-FITSNews

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