sell santee cooper

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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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?

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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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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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How We Got Here: A Santee Cooper V.C. Summer Nuclear Disaster Timeline

The largest financial disaster in South Carolina history didn’t happen overnight.

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.

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.

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.

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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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Murrells Inlet Resident Urges Lawmakers To Sell Santee Cooper As South Carolina Regular Session Comes To An End

Last Thursday, May 9, marked the end of this year’s South Carolina regular legislative session and with the end came no resolution for the Santee Cooper debacle.

Just recently, South Carolina lawmakers reached a compromise on Santee Cooper and decided it was time to start seeking purchase and management bids for state-owned Santee Cooper. And shortly after, the House amended and passed the Senate bill sending it to conference.

And, many South Carolina residents and Santee Cooper customers urged lawmakers to keep them in mind when evaluating these offers. Currently, Santee Cooper customers are still paying the V.C. Summer debt, while Dominion’s, former Scana, customers bills have dropped.

With over $7 billion in debt, the state-owned utility is looking to increase rates for the next four decades to help pay back the massive debt. But as one Murrells Inlet resident wrote, there are a few purchase offers out there which would help cover the cost of this debt and take the burden off the millions of direct-serve and cooperative customers who get their power from Santee Cooper.

Preston Edwards, a South Carolina resident, is anxious about looming rate hikes after Santee Cooper’s Chief Financial Officer acknowledged that rates will go up another 15 percent to help cover the cost of the debt. And, may even increase more for years to come.

With the regular session over, lawmakers have agreed to discuss Santee Cooper further during a special three-day session starting May 20.

To read Preston Edwards’ full letter click here.

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South Carolina Small Business Chamber Of Commerce Supports Santee Cooper Sale

Featured Image: Santee Cooper’s Cross Plant, Post, and Courier.

Today, South Carolina Senators began to debate on legislation authorizing Governor McMaster’s administration to oversee the sale of state-owned utility Santee Cooper and begin the competitive bidding process.

Many hope the legislation will pass and relieve Santee Cooper direct-serve and coop customers from paying off the state-owned utilities’ $7.2 billion debt.

In a recent survey, 71% of participants said they favored selling Santee Cooper to a private utility who can pay off the debt and get the government out of the utility business.

Over the last few weeks, the South Carolina Small Business Chamber of Commerce has been holding town hall meetings across the state to discuss the sale. SCSBCC president and CEO Frank Knapp Jr. favors the sale of Santee Cooper and doesn’t feel the debt should be left in the hands of the customers.

After a lengthy testimony, Santee Cooper executives were unable to answer many questions about their future, including how the debt would be paid off without raising rates and rate projections. With the number of unanswered questions continuing to increase, many South Carolina taxpayers and Santee Cooper customers are becoming increasingly worried.

Knapp explained that with rates already increased by 5% due to the V.C. Summer project debt and more rate hikes to come, legislators need to make the right decision for South Carolina residents.

Also in attendance at the town hall meetings is Santee Cooper spokesperson Tracy Vreeland who stated that while rates may not remain the same, they will still remain competitive even though executives are unsure of how they plan to do this and are unsure of future rate projections.

Read more about the recent town hall meetings here.