Santee Cooper Pulls ‘Reform Plan’ Offline As One Of Its Critical Assumptions Evaporates
Where is the $425 million this “rogue agency” said it would make from auctioning off abandoned nuclear assets?
At this point, writing stories about the abject failure of South Carolina’s government-run utility Santee Cooper and its so-called “reform” plan has become almost unsporting. It isn’t even a fair fight, really.
Santee Cooper has missed the mark so badly – on so many fronts – that its assurances of being able to achieve fiscal stability in the long-run are looking every bit as bad as its current balance sheet.
No wonder legislation sponsored by its top legislative apologist is in deep trouble …
Readers will recall Santee Cooper helped plunge Palmetto State ratepayers into a $10 billion hole thanks to its involvement in NukeGate – the botched construction of a pair of since-abandoned, next generation nuclear reactors in Jenkinsville, S.C.
Santee Cooper and its crony capitalist partner – SCANA – were supposed to have completed these reactors in 2016 and 2017, respectively. Despite the massive cash outlay, though, the project was abandoned – leaving ratepayers holding the bag for what has become an ongoing fleecing.
For years, SCANA jacked rates on its customers to pay for this project – as did Santee Cooper. In fact, Santee Cooper proposed a huge rate hike just one week before pulling the plug on the project.
Executives at both utilities knew the project was doomed for years and didn’t warn the public. Instead, they kept raising rates … effectively socializing the investment risk for the reactors.
Anyway, our news outlet reported in detail last fall on one of Santee Cooper’s planned auctions of raw materials and equipment left behind at the abandoned Jenkinsville nuclear site. The utility was supposed to split the proceeds of these auctions with Westinghouse – the contractor on the NukeGate project.
How much money were the auctions supposed to generate? $425 million – every penny of which was earmarked for “the continued accelerated reduction of debt,” according to Santee Cooper’s much-ballyhooed “reform plan.”
Of course, that was before the utility agreed to split the proceeds with Westinghouse … although in typical smoke-and-mirrors fashion, Santee’s chief executive Mark Bonsall said last February that the split would not impact its revenue calculations.
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“Bonsall said he still expects Santee Cooper to get roughly the same price, even as it shares part of the proceeds with Westinghouse,” noted Andrew Brown of The (Charleston, S.C.) Post and Courier, Santee Cooper’s most reliable mainstream media mouthpiece.
Hmmmm. That sounds suspiciously like something a methamphetamine addict asking taxpayers to front his next “fix” might say …
Anyway, is Santee Cooper on track to hit its $425 million target by the end of the current year, as laid out in its reform plan?
Of course not …
In fact, it’s not even certain at this point whether the utility has cleared $20 million from these auctions. Which would be an absolutely monumental miss …
“A lot of the projections in the reform plan are longer term and harder to judge, but the equipment sale assumptions are quite specific in amount and time frames,” one observer noted. “The fact they missed so badly calls into question the credibility of the harder-to-confirm billion dollar assumption of the rest of the plan.”
Of course, we don’t think this is merely a missed projection. Because that implies an honest error. No, we think this is more of the same deliberate misinformation Santee Cooper has been feeding the public – and lawmakers – for the better part of the last decade.
Especially since NukeGate put the necks of utility executives on the proverbial chopping block …
In outlining its fiscal pathway forward last February, Santee Cooper noted that “a significant component of our debt reduction strategy is to avoid issuance of new debt while accelerating the paydown of existing debt.”
Has it done that? Again … absolutely not.
In fact, we wonder whether the failure of the utility to achieve the projected proceeds from these auctions could be a contributing factor in its inability to stop accumulating more red ink.
Either way, we would invite you to check these “reform” assumptions out for yourself by visiting Santee Cooper’s website. Except wait … the utility’s reform plan is not online anymore.
Take a look …
(Click to view)
Luckily, interested parties can still access the plan (.pdf) on the website of the S.C. Department of Administration (SCDOA) – which is the state agency that solicited bids for the purchase or management of the utility by the private sector last winter.
That reminds us … offloading this anti-competitive, debt-ridden albatross is something our founding editor Will Folks first proposed doing more than thirteen years ago.
You know, before Santee Cooper help plunge ratepayers off the NukeGate cliff …
“South Carolina lawmakers should have sold Santee Cooper before it amassed an unconscionable, unsustainable, unresolvable amount of debt,” Folks wrote earlier this year. “The longer they wait to offload this ‘rogue agency,’ the more damage it will do to ratepayers and taxpayers across the state.”
This latest failure is further proof that this needs to happen sooner rather than later …
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