PPI’s economic analysis of Santee Cooper is quoted in this article by Vivian Jones of Center Square.
(The Center Square) – Two Republican lawmakers are calling for new leadership at Santee Cooper in response to the state-owned utility’s recent issuance of $638 million in debt, announced late last month.
Earlier this year, the General Assembly passed legislation narrowly defining how Santee Cooper can issue new debt.
“It wasn’t what the General Assembly instructed them to do. If that’s not malfeasance … I don’t know what is,” Senate Finance Committee Chairman Hugh Leatherman, R-Florence, told The State newspaper.
Leatherman called on Santee Cooper Board Chairman Dan Ray to resign, saying it would be “the best thing that could ever happen to Santee Cooper.”
Senate Majority Leader Shane Massey agreed that the utility is due for a change in leadership.
“Dan Ray is very bright & understands the issues. He wasn’t there for the fraud,” Senate Majority Leader Shane Massey, R-Edgefield, said in a tweet. “Santee Cooper desperately needs a house cleaning. The entire board. The entire management team. All of them. Then use a MiB Neuralyzer on anyone who’s left.”
The issue of what to do with the state-owned utility will be a key one in the 2021 legislative session, continuing from discussions of whether to sell the utility last year. Several Republicans, including Gov. Henry McMaster, support selling Santee Cooper.
“This was a profoundly successful transaction that reduces customer debt obligations,” a Santee Cooper spokesperson said. “It is a sound business decision that saves customers literally hundreds of millions of dollars. Additionally, it restructures future debt service beyond the current rate freeze, keeping it flat for over a decade and paving the way for rate stability for a long time to come. Santee Cooper is pleased to have achieved these benefits for our customers, and we certainly followed all applicable rules in doing so.”
Economic analysis from the Palmetto Promise Institute found that Santee Cooper has experienced an 11 percent reduction in revenues due to the demand shock of COVID-19, and is expected to lose $24 million this year. The utility will be underfunded by $525 million through 2029.
“Selling Santee Cooper relieves the state, and the taxpayer, of the risks and responsibilities of the entity … If the state chooses to keep Santee Cooper, risk mitigation becomes more difficult,” Dr. Katie Grace writes in the Palmetto analysis. “For the next 4-7 years, without the ability to set rates, Santee Cooper is completely at the mercy of the market.”