The South Carolina General Assembly will soon hear buyout offers for Santee Cooper. Following a two-hour meeting, according to The State, state lawmakers contracted with a consulting firm on October 17 to study the sale of the state-owned utility as well as field prospective candidates for its purchase.
The firm, ICF International, will serve as the official intermediary through which private companies can submit bids for the purchase of Santee Cooper, and will begin evaluating offers in January 2019, when lawmakers reconvene for the next legislative session.
At least four private entities – including three Fortune 500 companies – submitted previous bids to Gov. Henry McMaster. The sale of the utility, however, must first win approval from the Statehouse.
The hiring of the Virginia-based firm marks the most significant development in the debate over the future of Santee Cooper since the state General Assembly formed a committee in August 2017 to study the utility’s future after the failed V.C. Summer nuclear venture.
In 2008, Santee Cooper and SCE&G (SCANA), a private utility, set out to construct two additional nuclear reactors at the V.C. Summer Nuclear Station in Fairfield County. The companies abandoned the project in July 2017, saddling Santee Cooper with more than $4 billion in debt. But that’s not including interest and other preexisting debt: Santee Cooper owes nearly $15 billion in combined principal and interest payments, necessitating rate hikes on customers.
Santee Cooper and its 20 electric co-ops service electricity for more than 2 million customers in South Carolina. The utility has already increased rates by more than 15 percent since 2012. A Palmetto Promise Institute analysis in May found that servicing Santee Cooper’s debt will require hiking rates by an additional 13.7 percent. By selling the utility to a private company, many have suggested that ratepayers – and taxpayers – could be relieved of some or all of that costly debt burden.
In releasing our original report and calling for the Commission to be formed, we also called for the kind of independent, expert analysis that a complex business transaction like this would require. We are pleased to see the Commission moving forward on this key recommendation.
ICF will submit its first assessment to the S.C. General Assembly in February.