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Santee Cooper Reverses Course

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Board Unanimously Votes to Pay For Consulting On Utility’s Future

After an initial refusal to pay, the Santee Cooper board reversed the staff’s decision and voted unanimously to pay for the required financial consultation to review options for Santee Cooper’s future. The total of $20 million will be used to hire legal, finance, energy and business consultants in order to advise lawmakers throughout the selling process, preventing a political stand-off between Santee Cooper and South Carolina’s top political leaders.

H. 4287, passed this year, provides for the Department of Administration the authority to solicit bids for sale, manage offers as well as hire the necessary consultants to assist the DOA in the process. The legislation initially granted the agency $5 million to accomplish this objective and directed Santee Cooper “to provide any and all resources necessary to assist in the process for competitive bids and management proposals, as well as the evaluation of the bids and management proposals.”

The Department of Administration came back and told the General Assembly it would need $15 million more to effectively accomplish their objective, totaling $20 million. While former interim-CEO, James Brogdon, initially expressed hesitation to paying the $15 million, the newly hired CEO, Mark Bonsall, has assured that the bid process will be “properly staffed.” Santee Cooper’s largest customers, the electric co-ops, agreed to reimburse the utility for 70 percent of the money in order to pursue the best course of action for the utility.

While the utility was initially concerned about covering the $15 million, the board voted unanimously to pay the sum nearly a month after State Senate Finance Chairman, Hugh Leatherman, requested the payment. Although the board voted unanimously, there were still concerns voiced. Certain board members made it clear that if more money is needed, the legislature would have to request the extra funds.

Earlier this year, the state of South Carolina received four legitimate expressions of interest from utility companies to buy all of Santee Cooper and pay off the state-owned utility’s $7.2 billion debt. The General Assembly is expected to vote early next year on whether to go through with the sale.

South Carolina FYI

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