Yesterday, I published a column arguing that South Carolina’s elected officials needed to step up and formulate a plan for moving forward with the privatization of Santee Cooper – the Palmetto State’s habitually mismanaged, debt-laden power provider.
Specifically, I called on governor Henry McMaster, House speaker Jay Lucas, Senate president Harvey Peeler, Senate majority leader Shane Massey, House majority leader Gary Simrill, Senate finance chairman Hugh Leatherman and House ways and means chairman Murrell Smith to begin “actively negotiating a deal” for the privatization of this utility in light of how efforts to ostensibly “reform” it have failed.
You can read my column on the subject by clicking here …
This gist was this, though: As much as Palmetto politicians are inclined to follow the path of least resistance, doing nothing is not an option. Certainly not with this much red ink on the state’s balance sheet.
“There is simply too much debt,” I noted. “Too much dysfunction. And too much distrust.”
Also … it has been too damn long.
In fact, it has been nearly four years since this anti-competitive albatross (which operates under the auspices of a government-guaranteed monopoly) conspired with its private sector partner to plunge the Palmetto State into a $10 billion hole. The impetus of this ongoing fleecing? NukeGate: The botched construction of a pair of since-abandoned nuclear reactors in Jenkinsville, S.C. Thanks to this command economic debacle- an artifice envisioned by some of the very lawmakers now clamoring for “reform” – Santee Cooper has taken on an unsustainable level of debt.
Debt which is rising, incidentally …
There is simply no way to address this debt other than to sell the utility … or to dramatically raise rates on Santee Cooper’s residential, commercial and industrial customers. It’s as simple as that.
Moreover, it has been nearly two years since bids were elicited for the purchase (or management) of this “rogue agency,” which has made defying the will of the governor and the legislature its modus operandi in the intervening years. As I noted yesterday, “so much has changed over the past two years it begs the question whether the original offers for the debt-addled utility remain applicable.”
What has changed? Where to begin …
For starters, Santee Cooper has reached a settlement providing a small measure of ratepayer relief related to the NukeGate debacle. While this settlement was an absolute joke (and while the utility was so cash-strapped it couldn’t make the full payment up front), the fact remains a sizable amount of cash was taken off of the ledger.
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Other developments have not been as kind to Santee Cooper’s balance sheet, though. As I noted in a recent piece, the utility has failed miserably in its efforts to pawn off the detritus from its botched reactor project – and as a result is likely to fall well short of the $425 million it was hoping to bring in from these auctions by the end of the current year.
No wonder its current cash flow situation is … strained.
Looking at the bigger picture, the utility’s claim to be able to achieve billions of dollars in efficiencies by retiring its coal-fired plants in favor of renewables has also literally gone up in smoke – on multiple fronts. So has its plan to use natural gas as a bridge fuel.
These failures will also have a lingering financial impact on the utility, which will be forced to purchase more of its power from the grid – basically turning it into a middleman (which, ironically, sells power to other middle men).
Bottom line? The circumstances that were in effect when private sector bidders originally submitted their proposals for Santee Cooper in the summer of 2019 have completely been turned upside down … meaning these offers must be revisited as soon as possible (especially seeing as “reform” has proven to be nothing but a stalking horse/ stalling tactic by Senate judiciary committee chairman Luke Rankin and his cronies on the Santee Cooper board, who also happen to include his political donors).
Whether they like it or not, the failure of “reform” means lawmakers have only two remaining options for addressing the ongoing disaster that is Santee Cooper: They can reopen negotiations to privatize it … or they can do nothing.
And once again, in the face of a $10 billion loss doing nothing is simply not an option.
It is time for lawmakers to resume negotiations to sell Santee Cooper.
ABOUT THE AUTHOR …
Will Folks is the founding editor of the news outlet you are currently reading.
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