South Carolina Gov. Henry McMaster has signed a Santee Cooper oversight bill into law but maintained his preference for the state to sell and privatize the government-owned utility.
“Although the resulting compromise is far from perfect, this legislation will nevertheless provide a measure of much needed and long overdue oversight, transparency and accountability,” McMaster wrote this week in his signing statement for House Bill 3194.
The new law creates four-year terms for a 12-person board of directors for Santee Cooper, along with increased oversight of any new debt taken on by the utility. There also are strict requirements that board directors must have a degree from a recognized college or university, along with a background in energy issues, consumer protection and advocacy, waste and wastewater issues, finance, economics and statistics, accounting, engineering or law.
The governor is in charge of nominating board of director replacements, with advice from the Senate. The director must be screened by the State Regulation of Public Utilities Review Committee before being approved by the Senate.
Santee Cooper is $6.8 billion in debt, and the state received several offers last year to purchase the utility, including the bid South Carolina selected from Florida’s NextEra, which had vowed to eliminate that debt before that offer was withdrawn.
This after Santee Cooper's failed $9 billion expansion of the V.C. Summer nuclear plant in July 2017.
“Unfortunately, the Santee Cooper legislation that managed to garner enough votes to pass the General Assembly addressed peripheral issues only,” said Oran Smith, a senior fellow at the Palmetto Promise Institute, which has produced several reports on Santee Cooper and its finances. “The elephant in the room, the massive nuclear debacle debt on the backs of ratepayers, remains. We are certain that like bad acid reflux, the Santee Cooper debt issue will return, and with a vengeance.”
The utility is expected to lose $525 million between 2020-29, according to analysis from Clemson Economics Associates.
“Despite Santee Cooper’s role in creating, whether actively or incompetently, one of the largest nuclear power fiascos and project failures in modern times – in turn saddling its direct and indirect customers with billions of dollars in unproductive debt – the state-owned utility’s leadership has routinely resisted oversight and accountability, repeatedly dodged or disregarded the truth, secretly subverted state law, and intentionally created a toxic political environment in an effort to preserve its existence and independence,” McMaster wrote.
After the utility took on $638 million in debt that many lawmakers felt did not follow directions Santee Cooper had been given, there was a call for new leadership at the utility.
McMaster made it clear in his signing statement that while the law did not establish a process to privatize Santee Cooper, he believed it still was a step in the right direction for the utility in terms of oversight before it is sold.
“The seemingly endless debate over how best to reform a state-owned utility only underscores that politicians have no business owning or operating one in the first place,” McMaster wrote. “South Carolina no longer has a need to provide, and never had the legal obligation to own, a state-owned utility, and the political process does not include the private-sector expertise nor the means necessary to effectively oversee Santee Cooper’s operations.”
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