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After making a surprise announcement that they would be unveiling elements of their reform plan to the public, state-owned Santee Cooper revealed the details this past Monday.
The plan, centered around the utilities’ move from coal to solar power and gas-fired plants, also lays out a business forecast for the debt-ridden utility. In July, Santee Cooper brought on its highly-paid CEO, Mark Bonsall, who led the transition from coal to solar at an Arizona utility company before heading to South Carolina. And news last month previously stated Santee Cooper would be phasing out coal generation and shutting half of its coal plants down. Leaving open the question – what will happen to all the employees that work at these plants?
According to the plan, the percentage of energy generated by coal will decrease to around 30 percent from the current level of 52 percent by 2033. To accomplish this, Santee Cooper will phase out its Winyah Generating Station, add utility-scale solar power while also buying smaller natural gas-fired turbines, all of which will take considerable time and resources to accomplish.
The initial plan involved a cost-sharing agreement to fund this shift with Georgia based, Southern Co., but after major backlash from lawmakers, the Governor’s office and South Carolina residents, this part of the plan was abandoned.
The board was intending to vote on the agreement with the investor-owned utility Monday, but the deal was shut down after state Department of Administration Director Marcia Adams, sent a letter on August 29 nixing the agreement and even threatening a restraining order to shut down the deal if necessary. Adams explained that entering into an agreement “with one more investor-owned utilities that include terms and arrangements that would potentially subvert the process set fort in the joint resolution.”
On September 2nd, S.C. Senate Finance Committee Chairman Hugh Leatherman, widely considered the most powerful legislator in the state, strongly opposed any such agreement and sent a letter requesting Santee Cooper not enter into any agreement that would limit the General Assembly’s options. Senator Leatherman ended the letter with, “in my opinion, such actions would be grounds for board removal if the governor so chooses.” Legislators, state officials and even the co-ops argued that the arrangement would have undermined and hindered the state’s process for assessing the bids for Santee Cooper.
While a plan roll-out from the state-owned utility was expected in the context of a reform deal to be submitted to the Department of Administration and evaluated alongside the management and sale bids, this announcement leaves many South Carolina residents and Santee Cooper customers wondering, what does it even mean?
The transition to renewable and cleaner energy is the future of the energy business without a doubt but Santee Cooper outlined no way to pay for this transition or how it will alleviate customers from rate increases to pay off the $4 billion of debt from the failed V.C. Summer project.
Bonsall pointed out that Santee Cooper plans to pay off $500 million of the debt by next year without explaining how they plan to do so, and still leaving billions unpaid, left to fall onto over 2 million South Carolinians who purchase power from the state-owned utility directly or from one of the 20 Electric Co-ops.
According to The State, Bonsall said Santee Cooper is still interested in partnering with other utilities in order to pay for these transitions even though legislators, government officials and the coops believe this will undermine the plan for the General Assembly to assess bids for the state-owned utility.
So, the question still remains, what will happen to Santee Cooper and its billions of dollars of debt?