Reaching a deal with South Carolina’s debt-addled, habitually dishonest government run utility Santee Cooper is always going to be a risky proposition. After all, over the past year (the past decade, actually) Santee Cooper has demonstrated its utter and complete untrustworthiness … on every front.
NukeGate – an abandoned, government-run nuclear reactor project in Jenkinsville, S.C. that has left the Palmetto State billions of dollars in debt. Santee Cooper leaders knew this project was doomed – but they continued to raise rates on their customers and sell bonds to investors to pay for it anyway.
This chronic deception has only intensified as Santee Cooper has come under fire in the aftermath of the failed nuclear project … and it reached a boiling point last month when the utility and its legislative allies sabotaged an emergency session of the S.C. General Assembly held during the peak of the coronavirus pandemic.
The goal of the saboteurs? Blocking any discussion of a sale of the utility as the state’s revenue situation continues to deteriorate …
Santee Cooper doesn’t want lawmakers to sell it because it doesn’t want to be held accountable in the open marketplace (where it knows it cannot compete).
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(Via: Santee Cooper)
While Santee Cooper has been effective at blocking a sale (so far), lawmakers are clearly not ready to take this option off of the table.
In fact, as the S.C. General Assembly prepares to reconvene later this month (news we exclusively reported yesterday), sources familiar with the situation tell us an agreement has been brokered between legislative leaders and Santee Cooper executives to end the agency’s current obstructionism.
The deal – which we were first informed of on Friday morning – comes as leaders in the S.C. House of Representatives were preparing to launch a full-scale investigation of the truth-averse utility.
“Santee approached the House,” one legislative leader told us. “Our priority was to preserve the issue for debate in 2021 with all options on the table. This (agreement) does that.”
Details of the agreement are hazy, but sources familiar with its provisions tell us Santee Cooper will be barred from entering into any long-term agreements or partnerships with other utilities – like the ones it tried to negotiate last fall in the hopes of sabotaging a sale at that time.
Legislative leaders – most notably S.C. Senate finance chairman Hugh Leatherman – put a stop to those negotiations.
Santee Cooper would also agree not to undertake any further debt restructuring (or at least no “new bond covenants”) under the terms of its deal with lawmakers.
“Everyone always realized there were things the utility needs to do to operate – and this allows for that,” one legislative leader told us. “(We) also realize there are things which Santee could do – long-term deals and debt restructuring – that would limit the General Assembly’s decisions. This doesn’t allow for that.”
But how do legislative leaders propose to make sure Santee Cooper – which they have repeatedly (and correctly) referred to as a “rogue agency” – honors its end of the bargain?
“There will be operational controls around Santee Cooper that will be in place until May of 2021 – all with the goal of keeping them from frustrating the General Assembly’s options,” a source familiar with the agreement told us.
The source also indicated there would be a specific “oversight provision” enabling legislative leaders – and the office of governor Henry McMaster – to exercise “veto power” over any “big-ticket decisions” made by the utility and its embattled board.
In addition to submitting to this oversight, Santee Cooper reportedly agreed to use its influence to prevent a clique of state senators from gumming up the legislative works any further on its behalf.
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Specifically, the utility has agreed to work with Luke Rankin (above), Larry Grooms, Brad Hutto, Nikki Setzler and Stephen Goldfinch to make sure they do not hold the legislature hostage again when it reconvenes at 12:00 p.m. EDT on May 12, 2020.
How polite, huh?
“The House believes Santee has agreed to these terms – that should remove any objection from senators,” a source in the S.C. House told us.
We reached out to S.C. House speaker Jay Lucas in the hopes of getting his thoughts on the matter, but his spokeswoman Nicolette Walters said the speaker’s office had “no comment” on the rumored deal at this time.
Lucas has been leading the charge against Santee Cooper in the aftermath of last month’s legislative implosion – with support from influential House leaders Murrell Smith, Gary Simrill and Kirkman Finlay III, among others.
Assuming the House is on board with the agreement – can the Senate really keep its “rogue” members in line?
We shall see …
According to our sources, Rankin was a part of the negotiations that led to the latest deal – as was Senate majority leader Shane Massey.
Another interesting factor to consider? How this deal could potentially impact an agreement Santee Cooper recently reached related to a civil class action suit. That settlement was predicated on the implementation of an ambiguously defined “reform plan” – which now appears to be off the table for the foreseeable future.
In fact, lawmakers basically appear to be punting on the whole Santee Cooper question … just like they did last year.
Our view? While we are glad to see Santee Cooper limited in its potential to make mischief, lawmakers are deluding themselves if they think they can trust its leaders to keep their word … or do the right thing on behalf of Palmetto State citizens and taxpayers.
Accordingly, we would reiterate our call – first made over a dozen years ago – that Santee Cooper be offloaded to the private sector as soon as possible.
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