On the heels of our exclusive reporting this week regarding the latest extra-legal borrowing bonanza undertaken by South Carolina’s abysmally managed, debt-addled, government-run power provider Santee Cooper, leaders of the Palmetto State have stepped in and delivered a stern rebuke of this “rogue agency.”
And this time, it appears as though there will be no negotiation over their demands …
In a letter dated Thursday, October 29, 2020, the five most powerful politicians in South Carolina – governor Henry McMaster, S.C. Senate president Harvey Peeler, S.C. Senate finance chairman Hugh Leatherman, S.C. House speaker Jay Lucas and S.C. House ways and means committee chairman Murrell Smith – issued an ultimatum to the acting chairman of the embattled utility, Dan Ray.
That ultimatum? Show us your math … or else.
According to the leaders’ letter – a copy of which was provided to this news outlet – additional information about Santee Cooper’s “plans to issue new debt” was sought. Meanwhile, the five leaders raised “preliminary concerns” as to whether the new debt offering violated Act 135 of 2020, the stopgap spending bill passed by lawmakers in May in response to the onset of the coronavirus pandemic.
Part of that law was intended to maintain the status quo regarding the ongoing solicitation of bids for the agency’s possible offloading to the private sector – something this news outlet has championed for nearly a decade-and-a-half.
Per the language of that statute, lawmakers didn’t want Santee Cooper doing anything that would “impair, hinder, or otherwise undermine from an economic, operational, feasibility, or any other perspective the ability of the General Assembly to complete its consideration regarding Santee Cooper’s status.”
Which is exactly what issuing new debt would do …
Why do we support privatizing Santee Cooper?
First and foremost, we do not believe government should be in the power generation business – a point capably underscored by the recent NukeGate fiasco.
Readers will recall Santee Cooper and its crony capitalist partner SCANA were supposed to have produced a pair of next-generation pressurized water reactors at the V.C. Summer nuclear power generating station near Jenkinsville, S.C. in 2016 and 2017, respectively.
(Click to view)
(Via: SC High Flyer
Despite a massive cash outlay, this project was abandoned with the reactors only half-completed – leaving ratepayers holding the bag to the tune of $10 billion.
And as we noted earlier this year, this debacle has become an ongoing fleecing – which we believe is all the more reason Santee Cooper should be offloaded.
A government-funded war of misinformation, as it happens …
Anyway, lawmakers inserted language governing Santee Cooper’s actions into its 2020 stopgap spending bill after the “rogue agency” attempted to mislead lawmakers regarding its potential sale to the private sector.
This language barred Santee Cooper 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.
Earlier this month, we reported on how Santee Cooper was continuing these negotiations behind lawmakers’ backs …
Meanwhile, as we reported earlier this week, Santee Cooper’s debt moves appear to be in violation of a recent settlement with ratepayers that precluded the utility from taking on additional red ink to subsidize its so-called “rate freeze.”
This news outlet already believed that settlement (and the accompanying “freeze”) to be untenable … and the fact Santee Cooper is now attempting to dig its $7 billion debt hole even deeper to subsidize it would appear to validate our concerns.
The settlement was already “robbing Peter to pay Peter,” as we put it … and now there is an expanded debt burden on top of it?
In their letter, the five state leaders made it abundantly clear they share these concerns.
Accordingly, they questioned whether Santee Cooper’s latest misadventures in red ink were taking place without required oversight from the S.C. Office of Regulatory Staff (SCORS) – noting with tongues firmly implanted in cheeks that “we presume that Santee Cooper would not have willfully undertaken these transactions if (Ray) and (his) colleagues were of the opinion they did not comply with (state law).”
“We appreciate any authorized effort to reduce Santee Cooper’s significant debt portfolio and the resulting burden on its ratepayers; however, we are concerned as to whether these transactions, or certain portions thereof, are in keeping with the provisions and overarching purpose of Act 135 and the General Assembly’s intent in passing the same,” the leaders noted.
In order to allay these concerns, the leaders instructed the agency to “promptly provide to us and to (SCORS) a detailed explanation as to why, and how, you believe that Santee Cooper’s actions are in keeping with both the letter and spirit of the General Assembly’s mandates.”
“Please note that failure to comply, in whole or in part, with the foregoing demands and directives will constitute malfeasance, misfeasance or misconduct,” the letter concluded.
In other words, if Santee Cooper doesn’t cough up numbers showing that its bond moves comply with the law then the governor has grounds to remove them from office.
McMaster appoints all of Santee Cooper’s board members with the advice and consent of the Senate. Frankly, we are not sure why any of the current board members still have jobs – although it sounds like they may not have those positions much longer.
“This (letter) is a throat punch to Dan Ray and the Santee Cooper executive management team,” a source who reviewed the letter told us.
We concur …
We applaud McMaster, Peeler, Leatherman, Lucas and Smith for standing up for the citizens of South Carolina against this rogue agency. Hopefully this time they will follow through on their demands and insist that Santee Cooper follow the law – both as it relates to its bond offerings and its ongoing extra-legal negotiations with private sector utilities aimed at thwarting a possible sale.
More importantly, we would call on these leaders to do what they should have done over a dozen years ago and unload this anti-competitive albatross.
LETTER TO SANTEE COOPER
(Via: S.C. Governor)
WANNA SOUND OFF?
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