Columbia, SC. (Feb. 11, 2020) – Palmetto Promise Institute (PPI), the most prolific publisher of independent analysis of state-owned utility Santee Cooper, issued the following statement in response to the report released this morning by the state Department of Administration (DOA):
“The facts of the DOA report are clearly in line with what our two years of research show. PPI has predicted from the start of the debate over the future of Santee Cooper that a private utility would indeed offer top dollar for the utility and resolve the cloud of debt and litigation hanging over co-op and direct serve customers of the state agency. The free market has spoken today, and with an all-in offer of up to $9.5 billion, has spoken loudly.”
Recent research by Palmetto Promise has included The Uncertain Future of Santee Cooper (2018) which accurately predicted future Santee Cooper electricity rates post-V.C. Summer, and After the Iceberg: Which Lifeboat is Safe for Santee Cooper Ratepayers and South Carolina Taxpayers? (2020), an analysis of the agency’s debt and balance sheet through the eyes of an investor-owned utility.
After the Iceberg, released just over a month ago, showed that Santee Cooper faces a mountain of debt ($7 billion) with only ratepayers to turn to for payment, a complicated federal and state legal situation with exposure to broad class-action plaintiff claims, a generation fleet whose coal-dominant base load assets produce power at costs well above market value, and a balance sheet, that if reconfigured to IOU standards, shows the utility is technically if not actually “insolvent.”
According to Palmetto Promise Institute Chairman Phil Hughes of Greenville, the choice is clear:
“With the DOA report and Palmetto Promise’s analysis in hand, the legislature can now choose among three choices for Santee Cooper: self-improvement, contracted outside management, or a sale. The offer from NextEra is very generous and resolves all debt. Accepting this offer will allow for real ratepayer relief and taxpayer protection.”
Palmetto Promise’s Senior Fellow, Dr. Oran Smith, who co-authored PPI’s reports, first began calling for the sale of Santee Cooper in the book Reclaiming the Legacy in 1995.