Santee Cooper

Santee Cooper Class-Action Lawsuit Settled – Here’s What That Means For You

In the ongoing events that surround Santee Cooper and the V.C. Summer scandal, a $520 million settlement has been made in the case of Jessica Cook. However, the settlement amount, which was already just a slither of the debt pie Santee Cooper has racked up, came out to an even lesser amount of $300 million, to be made in two payments, by the time all legal fees were paid.

The class-action lawsuit, led by Jessica Cook, was filed in 2017 over the failed V.C. Summer project and the billions of dollars wasted and being passed onto all of the utility’s direct-serve and electric cooperative customers.

The settlement also includes a 4-year “rate freeze,” leading many to believe that efforts to sell Santee Cooper could come to a halt. However, the debt that customers are already paying for is still being paid through their power bill, essentially paying themselves for the rate freeze. Additionally, as previously stated, the settlement amount is just a small fraction of the total debt that will eventually have to be paid off.

In the larger scheme of things, the state-owned energy company is still billions of dollars in debt, due to the V.C. Summer, failed projects, and other ventures. So, while the Cook case is a win in the eyes of some, it does little to fix all of the outstanding issues surrounding Santee Cooper or give customers any answers to the rest of the debt that is owed or the debt they’re already paying for.

More news has just recently been released that the company is paying $1.1 Million to former Santee Cooper lawyer, Mike Baxley. Mr. Baxley served on the Santee Cooper general counsel and was recently laid off in efforts to cut costs. However, he was sent on his way with $495,000 and will receive an additional pension over the next 15 years. Baxley was also given additional compensation in return to agreeing not to sue the company and was added to the list of former executives who left with a golden parachute being paid by customers.

Giving large payouts is business as usual for Santee Cooper who paid gave golden parachutes to outgoing executives associated with the V.C. Summer debacle. However, what does this mean for ratepayers in the future? The company continues to shovel money into paying out their executives while the 4-year “freeze-rate” does little for Santee Cooper’s direct serve and coop customers since they continue to pay for the debt as it piles up. The only real way to protect Santee’s customers is to sell Santee Cooper to an IOU that will have proper oversight and eliminate the debt otherwise there is no question that rates will skyrocket at the end of the rate-freeze time period.

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Despite Santee Cooper's claims of improved transparency, Santee Cooper board members continue meeting behind closed doors ignoring lawmakers request to stop.

Santee Cooper Board Continues Meeting Behind Closed Doors Despite Claims Of Improved Transparency

Due to continued scrutiny towards Santee Cooper, the power supply company has pledged to be more transparent in their dealings stating that they would be improving transparency moving forward and reporting publicly.

Despite this claim, it seems that a lack of transparency still exists. While Santee Cooper’s board meetings are live-streamed for the public, there’s a portion of the meetings which are not – the executive session. During the executive session, the board stops the live-stream and resumes upon entering back into regular session, meaning the general public has no knowledge of what is being discussed during this time. Being a common practice amongst many boards, this shouldn’t necessarily raise any red flags; however, records show that Santee Cooper’s Board has spent nearly twice the time in executive session as they have in regular session since the beginning of this year.

As a result of the increase in time spent in executive session, lawmakers requested that the board no longer meet in these sessions on April 9; therefore pushing the board to oblige to their promises of transparency. Lawmakers also made this request to ensure that the intent of the board is clear, if the Santee Cooper board is spending the majority of their meetings in executive sessions then their intent to improve transparency and implement change can and will be questioned by the state.

During April’s board meeting, Santee Cooper obliged to the state’s request to not hold an executive session. However, just one month later an executive session was held in May, going against the lawmaker’s request. This inconsistency by the Board is seen as questionable by many and is not the only red flag seen in recent months.

Lawmakers’ attempt to hold Santee Cooper accountable for their promise to be more transparent has failed yet again, something that Santee Cooper direct serve and electric cooperative customers are all too familiar with. These customers deserve to know where their money is going. They deserve to know if the promise of rate freezes will be true or if this is yet another false promise. They deserve to know how the billions of dollars of debt will be paid if rates are frozen especially when they continue to pay for the failed V.C. Summer project, golf tournament sponsorships, board retreats, a million-dollar CEO salary, retirement for former CEO Lonnie Carter, and other unnecessary expenses that customers see no return on.

It seems as though Santee Cooper has relied on customers to keep paying while not questioning increases in utility rates and remaining in the dark about where exactly their money is going, as some lawmakers turn a blind eye, for too long.

They’ve grown comfortable with secrecy and mismanagement and certain lawmakers have allowed it. For the first time in years, South Carolinians are being brought to light and asking for lawmakers to do something about the state-owned and operated utility and not just let it “reform itself” again.

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Santee Cooper VC Summer Anniversary Timeline

After Three Years There’s Still No Solution For Santee Cooper Customers

The largest financial disaster in South Carolina history didn’t happen overnight. In fact, it’s been going on for 16 years, since Santee Cooper and SCE&G announced they’d be partnering on a nuclear expansion project at the VC Summer plant in 2008.

After numerous delays and the project incurring billions of dollars of debt, the project was never finished and abandoned by both SCE&G and Santee Cooper.

It later came to light that executives fought to disclose a report highlighting serious problems with the project while continuing to pour money into it.

Three years later and with billions of dollars of debt that customers will have to pay, lawmakers are looking at selling the state-owned agency to alleviate customers of Santee Cooper’s debt. And while it looked like the financial disaster might come to an end earlier this year, a few lawmakers stalled. No decision was made, leaving Santee Cooper to continue to make poor decisions, such as extending a million-dollar contract for its CEO and sponsoring a golf tournament. Santee Cooper’s behavior was so bad it drew a harshly worded rebuke from the Speaker of the South Carolina legislature, who labeled Santee Cooper a “rogue entity” for providing “false and misleading” information.

So how did we get here? Here’s a timeline of how customers were left with billions of dollars of debt and increasing utility rates.

There are several key dates before the most recent decision to explore the sale, but we’re focusing on the monumental dates that reveal SCE&G and Santee Cooper’s poor leadership, lack of transparency, and what led customers to be responsible for Santee Cooper’s $8 billion debt.

May 2008 – The start of this fiasco. SCE&G and Santee Cooper announced a nuclear expansion project at the VC Summer plant. Since the announcement of the VC Summer Project eleven years ago, several delays and massive problems were hidden by the project’s leadership.

February 2009 – The nuclear expansion plan is approved and construction is set to begin in 2012 with the first reactor to begin operating in 2016 and the second in 2019.

November 2009 – Santee Cooper approves and implements a 3.4% rate increase to help pay for the project.

December 2011 – The project gets off to a rocky start with the first delay being reported by SCE&G for production issues, manpower issues, and the need to redesign nuclear modules.

December 2012 – Santee Cooper approves and implements another 1.8% increase to rates.

June 2013 – Another delay follows pushing the first reactor operation date to late 2017-early 2018.

December 2013 – Santee Cooper approves and implements yet another rate increase. This time a whopping 5.2% to help pay for the struggling project.

May 2014 – Obvious signs of trouble appear and Santee Cooper asks to hire an outside company to oversee the project.

October 2014 – Money trouble becomes more apparent when contractors say it will cost an additional one billion dollars to complete the reactors.

October 2015 – Westinghouse is brought on board and completion dates are rescheduled yet again. The project is now pushed back to late 2019-early 2020.

December 2015 – During this time, SCE&G asked the Public Service Commission of the Office of Regulatory Staff to increase rates to help fund the project. Santee Cooper has its own board of directors and doesn’t have to get rate hikes approved by anyone except its own board, so Santee Cooper increases rates to help fund the project.

April 2016 – Another rate increase is approved and implemented by Santee Cooper. Customers see their rates go up by 5.3% this time.

June 2016 – SCE&G asks for its ninth rate increase.

March 2017 – Westinghouse files for bankruptcy. The company cites $9 billion in losses from its two nuclear construction projects, one of which is the VC Summer project.

April 2017 – Santee Cooper increases rates another 2.1%.

July 2017 – Shortly after this, Santee Cooper and SCE&G announced they were abandoning the project even though customers have already paid up to $2 billion for the reactors.

At this point, much of the general public was still unaware of the financial effects it was having on them.

August 2017 – A special South Carolina Senate committee holds their first of MANY hearings and former Santee Cooper CEO Lonnie Carter announces his retirement.

September 2017 – A month later Santee Cooper turns over the Betchel report detailing their insufficient oversight of the project.

January 2018 – SCE&G customers hear good news when Dominion Energy announces it will purchase SCANA Corp.

June 2018 – A state audit reports that the final amount for the failed project could increase by over $400 million.

August 2018 – A 15 percent rate cut and refund for April-July charges begin appearing on SCE&G bills. Meanwhile, Santee Cooper customers are still continuing to pay for the failed nuclear disaster.

March 2019 – Santee Cooper executives are unable to answer important questions about the future of Santee Cooper and rates during a Senate hearing. Following this, South Carolina Senate President Harvey Peeler introduces legislation that calls for exploring options for a possible Santee Cooper sale.

April 2019 – Santee Cooper announces rate increases totaling about 7% between 2021-2024 with no PSC oversight.

May 2019 – Lawmakers adopt this resolution and will begin exploring options to sell Santee Cooper. Read more about what this resolution means, here.

July 2019 – The two-year anniversary of the abandonment of the failed V.C. Summer project that started back in 2008, over a decade ago, yet Santee Cooper direct serve and electric co-op customers are still paying for this massive financial disaster.

Santee Cooper brings on new CEO, Mark Bonsall, guaranteeing him an annual salary of $1.1 million for 18 months.

August 2019 – The South Carolina Department of Administration announces parties are now able to submit bids for Santee Cooper hoping to alleviate customers from the increasing debt.

September 2019 – Santee Cooper’s largest customer, the electrical cooperatives which buy its power from the state-owned utility, sue Santee Cooper for keeping them in the dark about the failing VC Summer project, trying to protect their customers from being held responsible for its debt.

Santee Cooper also releases their “new plan” which fails to recognize its debt or explain what will happen to utility rates.

November 2019 – Increasing its debt even more, Santee Cooper’s legal fees for current and former executives surpasses $1 million.

February 2020 – Santee Cooper files a motion to stop any reference to future rate hikes during the cooperative lawsuit trial, hoping to keep jury members in the dark after claiming a “rate freeze” would be put in place.

The Department of Administration hands over a report to lawmakers detailing its recommendations from the bids it received from Santee Cooper including a management proposal from Dominion, a purchase proposal from NextEra, and a reform proposal from Santee Cooper itself.

March 2020 – House members vote to further negotiate with NextEra and discuss extensive reforms to Santee Cooper, rejecting Dominion’s management proposal altogether. While Senate members voted to give more time to Santee Cooper to reform disregarding the years it had to reform up until this point.

April 2020 – Pro-Santee Cooper Senators hold up emergency COVID funding until they win concessions to put off a decision on the sale of Santee Cooper.

Speaker Jay Lucas issues a letter to the Santee Cooper Board of Directors stating that “representations made by Santee Cooper Board members, leadership and staff are not reliable” and states that, had he the authority, he would “seek the immediate and unqualified removal of each member of the Santee Cooper Board and the dismissal for cause, of the entire senior management.”

July 2020 – Santee Cooper extends contracts for its million-dollar a year CEO and sponsors the Heritage Golf Tournament despite it having no fans in attendance.

July 31, 2020 – Three years since the VC Summer Project was abandoned with no relief in sight for customers or South Carolina taxpayers.

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Santee Cooper South Carolina Coronavirus Funding

Santee Cooper’s Actions Caused Certain Senators To Derail Emergency Coronavirus Funding Legislation

The South Carolina Legislature was called back earlier this week for what was supposed to be a quick one-day session to pass a piece of emergency legislation that would help prevent a government shutdown and provide emergency funding to address the coronavirus crisis. But a familiar roadblock caused that plan to crumble.

While this was expected to be a quick vote, a resolution in the legislation involving Santee Cooper prevented senators from coming to an agreement, while House members decried action taken by Santee Cooper in recent days to deceive the legislature into believing they had negotiated a deal with Central Electric cooperative.

The latest move by Santee Cooper has angered many including Electric Cooperatives of South Carolina CEO, Mike Couick and Speaker of the House Jay Lucas.

Couick was quoted as saying “I grew up watching ACC basketball and Dean Smith mastering the game of four corners. If Santee Cooper is an expert at nothing else, it is an expert at delay, and delay of reform and transformation…”

In a letter to Santee Cooper’s leadership, Speaker Lucas wrote, “If state law gave me or the House of Representatives the authority, I would seek the immediate unqualified removal of each member of the Santee Cooper Board and the dismissal, for cause, of the entire senior management. Unfortunately for the people of South Carolina, I do not have that authority. However, I do predict and will applaud your ultimate removal from your positions in the appropriate manner.”

You can read the full letter from Speaker Lucas here.

The proposed emergency legislation included plans for COVID-19 funding, education funding for teacher salaries, funding to ensure South Carolina primaries can still take place safely on June 9, and other necessary government-funded operations that would allow the state to continue to run in the case that a budget isn’t passed before the start of the next fiscal year.

It also included a provision to postpone the debate on Santee Cooper and prevent the utility from engaging in any long-term contracts of more than a year until the work on what should be done with the state-owned utility is fully explored.

As reported by the AP, Santee Cooper spokeswoman Mollie Gore apologized for their actions in an email calling the utility’s words ‘presumptive and premature’.

Moreover, Governor McMaster slammed Santee Cooper on Twitter, saying, “There appears to be no tactic or action too deceitful or reckless for the leaders of Santee Cooper to employ,” accusing the utility of exploiting the current pandemic to avoid a sale or any type of reform.

Senators, on the other hand, debated the resolution for over five hours only to come back with an amended resolution that sent it back to the House for review. Certain senators such as Senator Rankin and Senator Grooms refused to approve the emergency legislation needed to keep the state running because of their support for Santee Cooper and did not want to put any limitations on the utility despite their history of mismanagement and lack of transparency.

Currently, there are plans for either the House or Senate to return to take further action.

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A Small Win For Santee Cooper Direct-Serve And Electrical Cooperative Customers

While Santee Cooper’s millions of direct-serve and electrical cooperative customers await a decision from lawmakers on the future of the state-owned utility, a trial date has been set for the ongoing lawsuit between Santee Cooper and its customers.

Last week, former South Carolina Supreme Court Chief Justice, special Judge Jean Toal, set the trial date for April 20.

The decision was a significant blow to debt-riddled Santee Cooper, which will now give lawyers representing the millions of Santee Cooper customers time to go through tens of thousands of documents that were turned over by Santee Cooper just one day before the trial date was set.

Santee Cooper customers filed the lawsuit in August 2017 seeking refunds for the millions they had already paid and to put an end to the continual payments they were being charged for the failed V.C. Summer project.

For years, customers have paid extra fees on their monthly bills. Santee Cooper spent approximately $4.7 billion on the failed nuclear project and rely only on their customers to pay the company’s debt.

It was just last month that U.S. Judge Terry Wooten sent the lawsuit back to state court to be heard by special Judge Jean Toal.

Judge Toal’s decision also allowed the case to become a class-action lawsuit allowing for many more people to be able to seek refunds. Also in her decision, Judge Toal did not limit the potential monetary penalties and suggested that Santee Cooper should find a way to settle the case so that a trial could be avoided.

Meanwhile, Santee Cooper continues to rack up legal fees to fight back, adding even more to the billions of debt already owed and being paid by its customers.

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Discussions About Santee Cooper Continue

Featured Image: Charleston City Paper

We’re two weeks into South Carolina’s 2020 legislative session and the talk around what to do with state-owned Santee Cooper continues.

The latest to speak out on the issue is founder and CEO of the Gullah Geechee Chamber of Commerce, Marilyn Hemingway, who was reported saying “Santee Cooper has forgotten its mission of providing low-cost services”, by The Chronicle.

During her interview, Hemingway referenced both the $250 million loss in 2009 after the state-owned utility pulled the plug on the Pee-Dee coal plant before construction finished as well as the billions of dollars wasted during the 2017 abandonment of the V.C. Summer project.

Furthering her point, she alluded to the millions of dollars spent in legal fees after these projects and the newly appointed executives who are paid more than any other state agency, $2.4 million annually.

On top of the overwhelming amount of evidence that points to the wasteful spending, Governor McMaster’s office released a statement stating “Paying off Santee Cooper’s debt will cost direct-serve customers in Horry, Georgetown, and Berkeley counties about $6,200 per household. It will cost customers of the 20 electric cooperatives who distribute Santee Cooper’s power about $4,200 per household.”

The statement left many confused after hearing from Santee Cooper this summer that it would be freezing rates. However, the latest move from Santee Cooper points to this claim as ringing false. The state-owned utility recently filed a motion to stop any reference to future rate hikes during their current class-action lawsuit, hoping to keep jury members in the dark. Critics say the move is similar to Santee Cooper’s lack of transparency during the V.C. Summer fiasco, which also kept ratepayers in the dark.

As lawmakers look at the proposals put in front of them, South Carolina residents, like Hemingway, are recognizing the inevitability of rate hikes if no change is made.

The statement released by Governor McMaster’s office continues by stating the “Governor instructed each of the interested purchasers that they will not consider any proposal which saddles the ratepayers or taxpayers with any of Santee Cooper’s $4.3 billion nuclear construction debt” and that they must provide the state with the best solution possible, one which protects ratepayers while recognizing the valuable contributions of current and former employees of Santee Cooper.”

It is unclear what lawmakers will decide to do with the state-owned utility; however, it is clear that millions of South Carolinians are at risk of increased utility rates and may not even know not it.

Hemingway concluded: “From our point of view, we should start over. Now is the time for South Carolina to show some leadership.”

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South Carolina Lawmakers Issues Santee Cooper and Education

South Carolina Lawmakers Return – Here Are Two Issues You Should Be Watching

Featured Image Source: Andrew Whitaker, Post & Courier

South Carolina lawmakers returned to the State House last week, kicking off the 2020 legislative session. All eyes are on two hot topics this year: education and Santee Cooper.

Last year, both were said to be a top priority of lawmakers but have found their way rolling into the new year with no clear future.

During the 2019 legislative session, the House passed a massive bill including a complete overhaul of our state’s education system, but the bill spent the remainder of the session being torn apart and dissected by state senators.

Meanwhile, Santee Cooper’s future has been up in the air for far too long while lawmakers go back and forth on what to do with the debt-riddled state-owned utility.

Lawmakers have once again named both issues a top priority this year, and it won’t take long to see if this holds true.

Sometime in the upcoming session, legislators will receive three bids for state-owned Santee Cooper – one a reform plan from Santee Cooper itself, one from a company that would manage the utility, and one from a privately-owned utility that would purchase Santee Cooper.

While supporters from all sides have come forward, lawmakers have a difficult decision to make. They must make sure they choose an option that will protect the millions of people who get their power and water from Santee Cooper and all South Carolina taxpayers.

Since the public was made aware of Santee Cooper’s billions of dollars of debt, many have expressed their concerns over rising electric rates, talk of a taxpayer bailout, and the responsibility of the debt falling on the shoulders of customers.

Palmetto Promise Institute, an organization dedicated to promoting a “free and flourishing South Carolina” and a strong supporter of selling Santee Cooper, stated the only way for South Carolina residents to avoid costs related to Santee Cooper’s debt is a sale.

Experts have found that a sale would allow a write-down of Santee Cooper’s $4 billion in nuclear debt. According to the report, “Over time, that $4 billion could double as interest is charged to customers.”

While lawmakers try to figure out the best way to deal with state-owned Santee Cooper’s debt, they’ll also have to keep in mind the tens of thousands of teachers who are looking for raises, resources and help, and the money it will take for education reform.

All eyes are on our lawmakers now as two major decisions need to be made, quickly.

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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