House Approves Santee Cooper Compromise, Bill Moves To the Senate

On Tuesday, the House passed legislation addressing the debt-ridden Santee Cooper by a vote of 89-26. Here are the key points outlined in the bill: 

• The bidding process will reopen for interested private companies.
• A committee of three Representatives and three Senators will review and negotiate the offers, and if accepted, see through the selling process.
• While considering offers, the entire board of Santee Cooper will be replaced with qualified professionals.
• Until the committee accepts a bid (or if the utility isn’t sold), regulators will be involved in setting rates.

Now the state Senate will debate the legislation — taking it one step closer to the governor’s desk. What’s most interesting about this bill is that it doesn’t take a firm stance on selling nor reforming the utility — it simply allows the bidding process to be reopened and outlines a plan to reform the utility while it’s on the market. Although this doesn’t eliminate efforts to reform the utility, lawmakers pushing for a sale are even more convinced that reform is simply not possible: In the first board meeting of 2021, Santee Cooper executives said they will need $100 million dollars by the end of the fiscal year to stay afloat. Adding more debt on top of the nearly $7 billion debt the state-owned utility currently has. 

Lawmakers are still staunchly divided on the issue, but House Speaker Jay Lucus was pleased with the compromise, saying: 

“I have made no secret of my disdain for Santee’s current leadership and the need for their immediate replacement. I have also repeatedly called for more transparency and accountability in how Santee Cooper determines rates. Today, the House resoundingly delivered on both issues.” 

As for how this impacts Santee Cooper, the possibility of a sale is looking more certain. When offers were considered by industry experts last session, the bid from Florida-based NextEra Energy was overwhelmingly considered the best option, but the House rejected their initial offer. Proponents of a sale are hopeful NextEra will re-enter the bidding process, this time with a better offer. 

Although the case for a sale looks solid, some members of the Senate remain determined to keep the utility under state control. Despite expert opinion, Senator Dick Harpootlian is determined to keep NextEra Energy out of South Carolina, claiming he will block any bid from the company. Harpootlian did not explain why he singled out NextEra — they are not the only private company who may potentially bid on the utility — nor did he provide an alternative solution. Senator Luke Rankin, who authored the legislation to reform, not sell, has allegedly made threats to lawmakers “in connection with the ongoing debate over the utility’s disposition.” Like Harpootlian, Rankin continues to fight the option to sell without providing an alternative. 

The contentious bill now moves to the Senate, where there’s also a sharp divide between pro-sell and anti-sell Senators. Time will tell which camp comes out on top.