A clash of titans is brewing in the South Carolina Senate as the chamber’s two most influential “Republican” leaders – both ex-Democrats, incidentally – prepare to do battle over the future of the Palmetto State’s debt-addled government-run utility, Santee Cooper.
The opening shot in this looming war? A hearing scheduled for 10:00 a.m. EST on Thursday, December 31, 2020 – New Year’s Eve.
Convening this gathering is S.C. Senate judiciary chairman Luke Rankin – who is chairing a committee that ostensibly has “oversight” of this abysmally managed utility.
What sort of “oversight” has this agency been subjected to, though?
Very little …
After plunging the state billions of dollars in debt as part of its involvement in a calamitous command economic debacle three-and-a-half years ago, Santee Cooper has repeatedly defied lawmakers who are trying to decide whether the utility should be offloaded to the private sector.
Specifically, the “rogue agency” has flaunted state law – and broken the terms of a recent settlement with ratepayers – in taking on additional debt. Santee Cooper has also been caught negotiating offline with other regional utilities – even though it vowed to refrain from doing so after previously being caught engaging in such verboten discussions.
The utility’s ongoing refusal to play by the rules has enraged powerful S.C. Senate finance chairman Hugh Leatherman – who has become a more vocal opponent of the state-owned behemoth in recent months.
Last week, Leatherman announced the formation of a new Santee Cooper Review and Policy (SCRAP) subcommittee. This move reportedly enraged Rankin, who believes his judiciary committee has exclusive oversight of the utility.
“Rankin and Leatherman fighting over what committee will control the Santee Cooper narrative,” one senator told us.
His loyalty has proven costly to South Carolina …
To recap: Santee Cooper amassed billions of dollars in debt in connection with NukeGate – the botched construction of a pair of since-abandoned nuclear reactors in Jenkinsville, S.C.
Enabled by Rankin and his allies, the government-run utility 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 in Fairfield county in 2016 and 2017, respectively.
They did not. Despite a massive cash outlay, this project was abandoned on July 31, 2017 with the reactors only half-completed – leaving ratepayers holding the bag to the tune of $10 billion.
In addition to lying to the public, Santee Cooper misled its investors related to this project – the collapse of which has caused the state-owned utility’s debt to soar to nearly $7.5 billion.
Santee Cooper leaders have argued they can address this tidal wave of red ink through a “reform” plan – however, as we have documented over the course of the past year, nearly all of the assumptions associated with this plan have crumbled.
Still, Santee Cooper advocates in the S.C. Senate argue that a sale of the utility “isn’t going to happen.”
“It’s time to start talking about reform,” one pro-Santee Cooper senator told us. “(We) can’t get to that if we keep this hope of a sale alive.”
Last time we checked, Santee Cooper’s “reform plan” had been completely shredded. Which leaves us to wonder … what exactly is there for lawmakers to “get to?”
Anyway, Rankin and Leatherman both wield considerable influence over their colleagues in the S.C. Senate – which is reportedly very close to having enough votes to approve a sale of Santee Cooper. Leatherman obviously holds tremendous sway given his control over the annual budgeting process – while Rankin will exert outsized influence this year given his committee’s management of the redistricting process (which will help set legislative boundaries for the coming decade).
“Who do you want to piss off?” one frustrated senator told us. “The guy with the money or the guy drawing your district lines. There’s no ‘win’ there.”
According to our legislative sources, Rankin is prepared to “go to the mattresses” to defend Santee Cooper – including using his leverage on the redistricting front.
Our view on all of this? It has remained unchanged for the last dozen years.
Generating electricity is not a core function of government – and Santee Cooper is an ongoing case study in the inefficacy of such a model. This is why we encouraged lawmakers to offload this albatross back in 2008 – when it could have fetched billions of dollars on the open market.
Will lawmakers finally heed our call?
We shall see …
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