Santee Cooper Thoughts

Santee Cooper Extends Executive Contracts And Sponsors Golf Tournament Amid Financial Disaster

Featured Image: The State

As debt continues to pile up for Santee Cooper, lawmakers still remain halted at their decision for the future of the state-owned utility company. After lawmakers were forced to take a break earlier this year due to COVID-19, the utility’s fate will linger even longer.

With the decision to sell still on the table, Santee Cooper in an attempt to continue reform plans is spending more ratepayer money on extending high-paying contracts to executives and on golf tournament sponsorships.

The company recently announced that they will be extending contracts to Mark Bonsall, the CEO, and Charles Duckworth, the deputy CEO who were both brought on last year after former CEO, Lonnie Carter retired from the company when the utility’s debt began making headlines. Carter left with an initial payout and an annual retirement salary of $800,000 for 20 years, that Santee Cooper customers are still paying for.

Last year we reported that Bonsall was guaranteed $1.1 million over the next 18 months in addition to bonuses, exceeding Carter’s previous salary of $541,000, while Duckworth made a reported $560,000 annual salary. All of which the utility’s direct serve and electric cooperative customers pay for, and it doesn’t look like it’ll be changing anytime soon. The two will remain with the company until July 2021 and will continue to oversee all political and legal challenges. Bonsall and Duckworth will even have the opportunity to earn bonuses, pending their performance.

Lawmakers have been debating the future of the company for the past three years since it undertook $4 billion in debt from the failed V.C. Summer project. Because of this, Santee Cooper has been under scrutiny with where they spend their money since the company’s debt is nearly $7 billion, has no Public Service Commission Oversight and its ratepayers are the only ones responsible for past bad financial decisions. Many, therefore, are not happy that the state-owned company decided to sponsor the Heritage Golf Tournament for yet another year. The tournament which was played 2 months later due to the coronavirus pandemic and without fans, was a large investment. This large expenditure is seen as unnecessary by many and has resulted in another level of concern with taxpayers and ratepayers.

As customers are left holding the bill for the interim and Santee Cooper fails to acknowledge the long term burden on them, they also fail to stop spending large sums of money that will only add to the already existing and growing debt. For some, a sale of the public utility “dinosaur” cannot come soon enough.

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Local Residents Give Their Thoughts On Santee Cooper

South Carolina residents and lawmakers are gearing up for the state’s 2020 legislative session beginning in January and the many hot-button issues that are up for debate this year.

One of the issues at top of mind is that of Santee Cooper.

In January, lawmakers will review recommendations for the state-owned utility, and make a decision on the future of the debt-riddled utility company.

With billions of dollars of debt that customers could be on the hook for, many customers are expressing their concern.

Letters To The Editor

Santee Cooper Bailout? – South Strand News

“Santee Cooper is again proving it’s an unaccountable state agency operating in the shadows. For years, the state-owned utility has promised that South Carolina taxpayers won’t have to bear the burden of the nuclear debt. So much so that one of its “Facts are Facts” blog posts is titled “Taxpayers Are Not Responsible For Our Debt.” To quote the post, “FACT: Our debt will be paid off through our revenues, and not by tax dollars.” Lies. Last month Santee Cooper filed a lawsuit against the SC State Fiscal Accountability Authority and the SC Insurance Reserve Fund in an effort to recover the money it lost in the V.C. Summer nuclear fiasco. Both are state agencies. So that means Santee Cooper is seeking a bailout from the state, plain and simple. Many have suspected that this would happen. Santee Cooper kept denying it. The truth always comes out. Santee Cooper can’t fix itself and will have to depend on taxpayers to dig itself out.”

– Lee Padgett, Georgetown

Letter To The Editor: Santee Cooper – Charleston Chronicle

“Since 2012, Santee Cooper, the state-owned and largest utility, has increased rates by 15% to build the VC Summer nuclear plant that ultimately failed. The immediate impact felt by laid-off workers and the local rural community was horrendous enough but the fall-out will continue for years to come because of the lingering debt of $10 billion. Rates are expected to increase unless major changes take place.

This is a real negative impact on low-income, marginalized communities where regular, everyday folks working 2-3 jobs, lack transportation make real-life decisions about keeping the lights on. Santee Cooper is conducting a getting to “know the CEO” tour of our state with “movers and shakers” but where is the concern for those folks who can’t afford the admission fee for private receptions or closed forums.”

– Marilyn Hemingway, Charleston

Easy Choice On Santee Cooper – South Strand News

“Now is the perfect opportunity for legislators on both sides of the aisle to sell failed utility Santee Cooper and protect ratepayers from skyrocketing rates.”

– Thomas Herron, Myrtle Beach

Santee Cooper Needs To Be Honest With Ratepayers – Summerville Journal Scene

“Santee Cooper is at it again, trying to pull the wool over all of our eyes. The new executives are trying very hard to make you believe they can pay down the $7 billion-plus of debt without raising rates. A few weeks ago they said they’ve got enough money on hand to start paying down the debt. In that same announcement, they said they are also going to freeze rates for the next five years.”

– Claire Robinson, Columbia

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Grand Strand Resident Speak Up On Santee Cooper

Featured Image: Post and Courier

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?

News

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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South Carolina Residents Urge For Sale Of Santee Cooper To Happen Quickly

Feature Image: Post & Courier

In late May, lawmakers finally agreed to explore the sale of state-owned utility Santee Cooper after months of debate.

The agreement concluded in the adoption of a resolution which will allow the Department of Administration to oversee the process of collecting and reviewing bids for the utility. Once reviewed, the department will submit its recommendations for the best purchase offer and the best management agreement to lawmakers. Santee Cooper will also submit a reform proposal.

Many Santee Cooper customers are hoping for a sale rather than new management since this option is the only one that won’t burden the millions of coop and direct-serve customers with the debt or leave South Carolina with a bankrupt state agency.

South Carolina resident, David Hood, wrote to South Strand News thanking House and Senate members for their action to pursue a sale and help keep rates from rising once again. “My thanks to the House and Senate members who voted overwhelming to pursue a sale of troubled state-owned utility Santee Cooper to protect ratepayers from big rate hikes needed to pay off its huge debt,” Hood wrote.

In 2015, Santee Cooper raised their rates for the first time to start paying off their V.C. Summer debt, and with no way to pay back the debt without raising rates and the lack of approval needed, Santee Cooper will raise rates again and will continue to do so for the next several decades, if not sold.

Hood also noted the “common-sense criteria for binding bids such as protections for rank and file Santee Cooper workers and their pensions and preservation of the lake system,” two points which many are worried about.

However, the specific criteria required for a sale makes it highly unlikely that South Carolina will abandon Lake Moultrie, Lake Marion or the hardworking employees and retirees of Santee Cooper.

The Department of Administration’s recommendations aren’t due until March 2020 but as Hood wrote to South Strand News, “With interest on Santee Cooper’s debt accumulating at $1 million per day, it’s important for ratepayers that the sale process move forward as quickly as possible.”

Read the full letter here.

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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.