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Santee Cooper sale remains in play, but that won't stop SC House from seeking reforms

The State (Columbia, SC) logo The State (Columbia, SC) 1/26/2021 Joseph Bustos, The State (Columbia, S.C.)

Jan. 26—The South Carolina House wants to take time to consider other purchase offers for all or parts of a state-owned electric utility under fire since it partnered in a failed nuclear project.

House members Tuesday voted 89 to 26 to continue to receive offers for a sale of the state-owned electric utility Santee Cooper, while also pushing forward with reforms of the agency.

Under the bill set to be sent to the state Senate, lawmakers would vet proposed suitors for the utility, a responsibility previously given to a third-party consultant working with a state agency. A six-person committee comprised of three senators and three representatives would consider offers to purchase all or parts of Santee Cooper directly from potential buyers, rather than having a preferred bidder selected by a state agency.

However, that committee would have 10 years to consider offers as they come in, under the proposal.

Santee Cooper could be sold in part or in total under the legislation. Both legislative chambers and the governor would have to sign off on any deals.

Despite reopening the door to a potential sale, proponents of the legislation said the bulk of the bill is focused on reforming the utility.

"This is a reform bill that keeps the option of sell out there," said state Rep. Murrell Smith, R-Sumter.

Opponents of the bill said the state already spent $14.2 million to evaluate offers. Last year the Department of Administration concluded a process which led to Florida-based utility giant NextEra being the preferred buyer. However, NextEra's offer was ultimately rejected by legislators.

"We rejected that offer for a number of reasons. What makes us think we do better than that process led us to?" said state Rep. Russell Ott, D-Calhoun.

State Rep. Sylleste Davis, R-Berkeley, who previously worked for Santee Cooper, backed the reform portion of the legislation, but objected to how it keeps a "sale in play."

"We have a lot going on in the state right now. We don't have the time to take on this process again," Davis said. "I believe a sale will increase costs and will create additional costs for the state. We've spent $15 million evaluating a sale already, and it's gone nowhere."

The House legislation also proposes reforms for the Santee Cooper, including shortening the terms of board members, putting in education requirements, and having increased oversight from the Public Service Commission and the Office of Regulatory Staff over the utility's operations and long term agreements.

"I do not believe a sale of Santee Cooper in part or in total is imminent, but reform is," said state Rep. Kirkman Finlay, R-Richland.

The bill also creates a rate-making process similar to privately owned or investor-owned utilities. However, the Santee Cooper board would have ultimate authority over proposed rate increases, but would make the decision independent of the utility's management.

The future of Santee Cooper has been in the balance since it partnered with the now former SCE&G on the failed $9 billion V.C. Summer nuclear plant project in Fairfield County.

The Senate would need to agree to move forward with this dual path plan.

The chamber has two committees looking into the future of the utility. Senate Finance is running the Santee Cooper Review and Policy, or SCRAP, subcommittee to consider the future of the utility. Another group of lawmakers want information about NextEra's lobbying activities.

"I believe all options are on the table at this point," said state Sen. Thomas Alexander, R-Oconee. "I believe Santee Cooper has been a tremendous asset to the state of South Carolina, but I think as part of our due diligence we've got to continue to evaluate and see where we could go forward with Santee Cooper."

Senate Majority Leader Shane Massey has said he thinks the leadership in the utility needs to be changed.

"I'm convinced it has to be a total house cleaning," Massey said. "I think a culture has been created at Santee Cooper where they hide stuff, they're not straightforward with legislators and with regulators, and I'm concerned about the people who have grown up in their careers under that culture being able to change."

Not everyone is convinced a sale should go through.

"We've got a lot of real problems in South Carolina that have to be dealt with," state Sen. Brad Hutto said earlier this month. "I think throwing in a potential sale that has zero chance of passing in the senate is a distraction."

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