Santee Cooper Sell

Grand Strand Resident Speak Up On Santee Cooper

Last summer, the state Department of Administration began the process of accepting bids to buy or manage some or all of Santee Cooper. State lawmakers will be deciding on what to do with the debt-riddled, state-owned utility as soon as January 15. In response, Santee Cooper released its business forecast and newest set of initiatives in what the utility claims to be an effort to pay down the debt without increasing customer’s rates.

Before this forecast was publically released, it was leaked that Santee Cooper was in talks with Georgia based Southern Company in a cost-sharing agreement. Lawmakers and the governer’s office quickly shot down any chance of this plan happening, even threatening to remove board members that voted in favor of the plan.

Santee Cooper quickly abandoned the plan and announced the most recent business forecast including a five-year rate freeze after saying for months rates would increase by at least 7 percent to pay back the more than $7 billion of debt the utility faces, $4 billion of it from the failed V.C. Summer project.

Wayne Mershan, a Murrells Inlet resident, wrote to the South Strand News regarding the forecast’s plan to move to solar and natural gas energy sources. While Mershon acknowledges the need for a transition to solar and natural gas he asks, “How will it be possible to make these necessary improvements when it has over $7 billion in debt? How are they going to accomplish their sustainability goals and get out of debt at the same time without raising rates again?”

It is clear residents are suspicious of how valid Santee Cooper’s most recent forecast actually is. A forecast that includes a five-year rate freeze and a transition to more sustainable energy sources, all while being able to pay down the debt.

This set of initiatives is leaving customers and South Carolina residents wondering, what will happen to rates after five years? Who will pay for these transitions to solar and natural gas considering the infrastructure is not currently in place? And, what will happen to the debt while all of these transitions are taking place?

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Santee Cooper’s Largest Customer Urges They Were Powerless Throughout the V.C. Summer Project

Santee Cooper’s largest customer, the electrical coops that buy three-fifths of Santee Cooper’s power which gets distributed to their customers across the state of South Carolina, is suing the state-owned utility. While the coops are by far the agency’s largest customer, a 38-page claim filed in August works to show that Santee Cooper actively kept the problems of the V.C. Summer construction hidden from the coops.

The project left Santee Cooper billions of dollars in debt. To pay off this debt, the burden falls onto both the state-owned utilities’ direct serve and co-op customers. The 20 co-ops who purchase power from the utility are suing to stop Santee Cooper from charging their customers any more for the debt.

The coops attorney in the case explained, “The emails, letters, etc.described above tell the indisputable story of a project beset almost from the beginning with myriad fundamental, entrenched problems that led inexorably to major delays and cost overruns,” the co-ops’ attorney, Frank Ellerbe, wrote in the filing. “Yet, it was a story Santee Cooper kept largely to itself.”

The coops claim to be powerless throughout the construction process of the nuclear reactors and in turn, should not be held responsible for the debt Santee Cooper faces for their failures. While success for the coops will save millions of customers from having to pay off the debt, there are still a lot of questions left unanswered.

If Santee Cooper is blocked from increasing the coop rates, what will happen to the debt and how will it be paid?

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Grand Strand Residents Are Ready for a Solution to Santee Cooper’s Debt Problem

Just last month, the state Department of Administration announced that it would now be accepting bids to buy or manage some or all of Santee Cooper.

Once the bids are received, the four consulting firms chosen by the state administration will review and pass on their recommendation to the General Assembly. From there, the assembly will make a decision on the future of the state-owned utility.

As this process continues, Santee Cooper’s direct serve and cooperative customers will continue to pay for the utility’s massive debt stemming from the failed V.C. summer project. In the meantime, Grand Strand residents are continuing to express their hope for legislators to sell Santee Cooper, get the state out of the utility business, and get rid of the debt.

Johnnie Bellamy, a Myrtle Beach resident, wrote to The State expressing his thoughts on the issue stating, “Investor-owned utilities have offered to buy Santee Cooper and provide lower long-term rates. Selling Santee Cooper just makes good sense to protect customers from sky-high electric bills.”

However, Santee Cooper has publically advertised to its customers that they have some of the lowest rates in the state, which Bellamy argues, “The electric cooperatives have complained that Santee Cooper has the highest wholesale rates not only in the state but in the region, ranging from 25% to nearly 50% higher than investor-owned utilities.”

Validating his concerns, another South Carolina resident of Murrells Inlet, Dick Richards, wrote to the South Strand News saying, “If a qualified buyer can pay off the debt and offer low rates, it just makes good sense that our legislators vote to sell Santee Cooper to protect ratepayers and get the state out of its failed utility business.”

It is clear residents up and down the Grand Strand would like to see the state move forward with selling Santee Cooper.

Meanwhile, the electric cooperatives that purchase their power from Santee Cooper are in a battle against Santee Cooper to stop them from charging their customers any more for the V.C. Summer debt.

However, while this may help the cooperative customers, there are many questions left to answer if the cooperatives win their lawsuit against the state-owned utility. Will Santee Cooper, a state agency, have to file for bankruptcy?

Or will all the debt be left in the hands of the direct serve customers if the utility isn’t sold?

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Local Residents Voice Concern Over Santee Cooper’s Spending Problem

Featured Image: The Post and Courier

In July, the Department of Administration announced they’d selected four firms, costing $20 million, to advise lawmakers on the Santee Cooper bidding process. Just weeks before this announcement, Santee Cooper dropped the bombshell they’d hired a new CEO with a $1.1 million per year contract, almost doubling previous CEO, Lonnie Carter’s salary, and a new deputy CEO with a $560,000 contract. The pair is set to make over $2 million when including their hefty bonuses.

Both announcements have South Carolina residents and Santee Cooper customers even more worried about the future of their utility rates.

One resident wrote to the Post and Courier discussing the systematic problems Santee Cooper has had throughout recent years stating, “While Santee Cooper is state-owned, it’s highly unlikely there will ever be a direct bailout courtesy of state taxpayers. The debt will continue to be paid by its customers on monthly bills that keep climbing higher when the average person in its service area lives on just $27,065 a year.”

Because while privately-owned utility companies’ rates are monitored by South Carolina’s Public Service Commission, Santee Cooper’s are not. As a state-owned agency, one vote between the utility’s board of directors can simply raise rates. And as Santee Cooper’s debt continues to increase, so will customer’s rates.

A second resident addressed his concerns with the positive sentiment some have shown for the utility’s new CEO stating, “Where else in the world would it make sense for a public utility to lost billions of dollars and have state invite offers for a sale, but then allow its board to hire administrators for hundreds of thousands of dollars to convince those same elected officials not to sell” in a letter to the Post and Courier.

It is clear South Carolina residents are fed up with the missteps Santee Cooper continues to make, costing Santee Cooper direct serve and co-op customers money. With the average customer making just over $27,000 per year, higher rates are not a cost which they should have to worry about. Customers deserve a solution to the debt where those who are responsible pay, not hard-working customers.

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Local Resident Shares Thoughts On Santee Cooper, Calling The Sale “Common Sense”

Featured Image Source: WSPA News

A Murrells Inlet resident recently expressed his feelings about the ongoing Santee Cooper issue and the billions of dollars in debt it owes.

As legislators review potential bids and weigh the options, many of Santee Cooper’s direct serve and co-op customers have shared their opinions on what the future should hold for the state-owned utility company.

This particular local wrote to South Strand News revealing his appreciation for the bids and his hope that legislators will stand up for Santee Cooper’s millions of customers and sell.

Read his full letter here.