Santee Cooper Debt

Santee Cooper Class-Action Lawsuit Settled – Here’s What That Means For You

In the ongoing events that surround Santee Cooper and the V.C. Summer scandal, a $520 million settlement has been made in the case of Jessica Cook. However, the settlement amount, which was already just a slither of the debt pie Santee Cooper has racked up, came out to an even lesser amount of $300 million, to be made in two payments, by the time all legal fees were paid.

The class-action lawsuit, led by Jessica Cook, was filed in 2017 over the failed V.C. Summer project and the billions of dollars wasted and being passed onto all of the utility’s direct-serve and electric cooperative customers.

The settlement also includes a 4-year “rate freeze,” leading many to believe that efforts to sell Santee Cooper could come to a halt. However, the debt that customers are already paying for is still being paid through their power bill, essentially paying themselves for the rate freeze. Additionally, as previously stated, the settlement amount is just a small fraction of the total debt that will eventually have to be paid off.

In the larger scheme of things, the state-owned energy company is still billions of dollars in debt, due to the V.C. Summer, failed projects, and other ventures. So, while the Cook case is a win in the eyes of some, it does little to fix all of the outstanding issues surrounding Santee Cooper or give customers any answers to the rest of the debt that is owed or the debt they’re already paying for.

More news has just recently been released that the company is paying $1.1 Million to former Santee Cooper lawyer, Mike Baxley. Mr. Baxley served on the Santee Cooper general counsel and was recently laid off in efforts to cut costs. However, he was sent on his way with $495,000 and will receive an additional pension over the next 15 years. Baxley was also given additional compensation in return to agreeing not to sue the company and was added to the list of former executives who left with a golden parachute being paid by customers.

Giving large payouts is business as usual for Santee Cooper who paid gave golden parachutes to outgoing executives associated with the V.C. Summer debacle. However, what does this mean for ratepayers in the future? The company continues to shovel money into paying out their executives while the 4-year “freeze-rate” does little for Santee Cooper’s direct serve and coop customers since they continue to pay for the debt as it piles up. The only real way to protect Santee’s customers is to sell Santee Cooper to an IOU that will have proper oversight and eliminate the debt otherwise there is no question that rates will skyrocket at the end of the rate-freeze time period.

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South Carolina Lawmakers Continue To Discuss Santee Cooper

We’re going into another week of the 2020 South Carolina legislative session and while progress continues to be made on one pressing issue another has stalled yet again.

Earlier this month, the Department of Administration handed over a report to lawmakers with its three recommendations for the future of Santee Cooper.

Currently owned and operated by the state, Santee Cooper is $8 billion in debt, half of which stems from the failed V.C. Summer project which was abandoned back in 2017. Since then, lawmakers have been trying to figure out what to do with the utility. Meanwhile, the utility, which has no oversight, must raise electric rates to pay off the debt at some point despite Santee Cooper’s claim of a near-term rate freeze.

Lawmakers will continue to discuss the three proposals this week. Of the three proposals, one is a bid to purchase the utility entirely, one is a bid to manage, and one is a reform plan from Santee Cooper itself.

The report, which was released earlier this month, unveiled details of the management bid submitted by Dominion Energy, the bid to purchase submitted by NextEra Energy, and the reform plan proposed by Santee Cooper.

Virginia-based Dominion Energy purchased SCE&G last year, a move that many former SCE&G customers are still dissatisfied with. The proposal submitted by Dominion states that three or more key management positions at Santee Cooper would be filled by top Dominion employees, and it also states that the plan should happen in tandem with Santee Cooper’s reform plan but does nothing to pay off the company’s debt.

The reform plan presented by Santee Cooper includes a workforce reduction and a plan to lower customer rates over a 20-year period. However, some are skeptical of the plan given that similar claims have been made by the utility who promises a rate freeze but eventually will have to raise electric rates over the years to pay off its debt because its customers are the only source of revenue.

The last option, made by Florida-based NextEra Energy, is the most dynamic of the three. Similar to Santee Cooper’s reform plan, it includes a workforce reduction; however, the proposal states that the company would pay off Santee Cooper’s debt and relieve Santee Cooper’s two million direct serve and electric co-op customers of the responsibility. The proposal also includes the acquisition of both Lake Marion and Lake Moultrie, a four-year rate freeze, and nearly $1 billion in relief to customers.

In a quote provided to the State, Travis Miller, a utilities’ analyst for Morningstar Inc. said, “NextEra is definitely the cream of the crop and could get it done if anybody could get it done.”

Now, lawmakers have thirty days to make their recommendations.

While this is good news for the customers who have been waiting for an answer on the future of Santee Cooper, many South Carolinians are upset about the lack of movement on the education front.

The Senate debated on the “South Carolina Career Opportunity and Access For All Act” until 11:30 pm last Tuesday.

The debate will continue. According to the Senate Journal, over 100 amendments to the bill have been debated so far.

What are your thoughts on the three proposals for Santee Cooper, and do you think more focus should be put on education?

Santee Cooper

How South Carolina Residents Feel About Santee Cooper

South Carolina residents and lawmakers are gearing up for the state’s 2020 legislative session beginning in January and the many hot-button issues that are up for debate this year.

One of the issues at top of mind is that of Santee Cooper.

In January, lawmakers will review recommendations for the state-owned utility, and make a decision on the future of the debt-riddled utility company.

With billions of dollars of debt that customers could be on the hook for, many customers are expressing their concern.

Here are just a few of the responses we’ve seen recently:

“Once again our state government is sticking it to the taxpayers. They allowed this atrocity to go on for years and now they’re increasing salaries! How about the legislators taking a pay cut? Oh, wait. They may not be able to pay their “enhanced” electric bill.” – South Carolina Resident

“Santee Cooper is the largest political honeypot in the State of South Carolina. High paying jobs for connected people, like the security force that’s paid two or three times what LE officers get who actually risk their lives. Executives are overpaid with 6-figure retirements. You have to know someone to get a job there. Facts! Sell the bloody mess and let it be managed properly by a private entity!!!” – Myrtle Beach Area Resident

“I don’t believe the government should be part of the daily operation of any utility.” – South Carolina Resident

“Sell it! A state-owned entity wIll never be as responsive and responsible as a privately-owned entity because it ultimately has no economic owners, has no incentive to be efficient, and has no one to be responsible to. Voters and government officials are simply not the same as shareholders. A state-owned entity is nothing but another political institution.” – Charleston Area Resident

What are your thoughts? Fill out the submit your thoughts form and let your voice be heard.

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South Carolina Legislative Session Santee Cooper

This Issue Has South Carolina Lawmakers Concerned About The Upcoming Legislative Session

South Carolina lawmakers are getting ready for the upcoming legislative session and while there are many pressing issues to discuss, Santee Cooper, in particular, has lawmakers most concerned.

The state-owned utility has been the subject of much controversy, due in large part to their failed V.C. Summer project and increasing debt. Now, many are calling for the privatization of Santee Cooper as a way to save customers from having to pay the billions of dollars of debt through increased utility rates.

While Santee Cooper customers have long awaited the fate of the utility to be decided, lawmakers will finally make a decision in the upcoming session after reviewing recommendations in January. It’s a decision that worries some lawmakers.

Beaufort County Republican Senator Tom Davis told the Charleston City Paper that “The most significant (issue), that is the most complex, is whether or not to sell Santee Cooper, whether to have a management team come in or an alternative to that is to enact some reforms. The implications of what we do will have an effect for decades to come.”

However, a recent report from the South Carolina Club For Growth, a network of South Carolinians that works to promote economic growth, shed light on why some lawmakers would want to see a Santee Cooper sale.

As of right now, Santee Cooper customers are the only ones paying for the around $7 Billion of debt from the failed VC Summer expansion and operational debt. Depending on the outcome of the next legislative session, customers could be on the hook for this debt over the next few decades.

Orangeburg Democratic Senator Brad Hutto told the Statehouse Report that Santee Cooper is “a big deal” and that it’s “probably the thing that has the biggest potential of long-term consequences for the state.”

However, with other high-priority issues such as education, lawmakers and South Carolina residents don’t want to see Santee Cooper take up a lot of the upcoming legislative session. One Surfside Beach resident wrote to The State saying, “Frankly, however, too much time has been spent on Santee Cooper; thankfully, the Legislature has produced a process and a timeline for Santee Cooper and other interested parties to follow. It’s imperative that the timeline is followed. Any extension will only mean that even more legislative sessions will focus on Santee Cooper.”

Only time will tell how state legislators handle the situation, but whatever decision is made will certainly have implications for years to come.

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Santee Cooper’s Legal Costs For Current And Former Employees Reaches Over $1 Million

Featured Image: The State

Santee Cooper is, once again, catching heat for its reckless spending.

Recent reports obtained by the Post and Courier show that Santee Cooper has racked up $1.7 million in legal fees by covering the cost of attorney fees for eight current and former employees, executives, and board members.

This comes after recent concerns of the state-owned utility’s decision to hire a new CEO and Deputy CEO with a million dollar a year and $560,000 a year salary, respectively, while in billions of dollars of debt.

According to the Post and Courier, the legal costs can be traced back to late 2017 when the unfinished V.C. Summer plant was abandoned by the state-owned utility and continues to grow as of last month when the records were obtained.

Not included in the $1.7 million, are the funds being spent on attorneys to represent the utility itself.

While the records don’t show the exact work being performed, a spokeswoman for Santee Cooper told the Post and Courier, the costs were tied to civil lawsuits against the utility.

One of those lawsuits pits the state-owned utility against its largest customer, the electric cooperatives who purchase their power from Santee Cooper. In the lawsuit, the cooperatives claim Santee Cooper kept the problems of the V.C. Summer project hidden from them and are suing so their customers won’t be held responsible for paying off the debt. However, as of this week, South Carolina Supreme Court Chief Justice Jean Toal put the lawsuit on hold further delaying the outcome.

More recently, Dominion Energy attorneys sent a letter to the state-owned utility demanding Santee Cooper pay for a portion of Dominion’s costs for the failed V.C. Summer project. The letter referred to the agreement between SCE&G and Santee Cooper to build the abandoned reactors, a project Santee Cooper owned 45 percent of.

As Santee Cooper’s $4 billion debt continues to increase by around one million dollars a day, the utility finds itself owing even more money while continuing to spend causing the millions of direct-serve and cooperative customers throughout the state to worry about the future of utility rates.

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Lawmakers Could Focus On Other Issues If A Speedy Decision Is Made On Santee Cooper

Featured Image: AP News

People from all over the country are flocking to cities across the state of South Carolina. In fact, the Upstate expects to have a population roughly the size of Charlotte’s in just 20 years.

Organizations like the Upstate Chamber Coalition are already preparing for the huge surge in population, specifically the need for new jobs, housing, modern infrastructure and an education system that can handle the influx of families.

Jason Zacher, the executive director of the Upstate Chamber Coalition, recently stopped by an event at Lee’s Barbecue in Waterloo, South Carolina to discuss the pressing topics lawmakers need to focus on for the upcoming legislative session. With the session beginning in January, Zacher brought up issues such as pension reform, import-export bank restoration, and the state-owned utility Santee Cooper.

With more pressure than ever on lawmakers to make a decision as soon as possible on the state-owned utility, Zacher went on to say “We’ve supported the sale of Santee Cooper because of the potential statewide budget impact. If we end up having to absorb the debt that Santee Cooper has, that is debt service that cannot be used for higher teacher pay, it cannot be used for infrastructure, it cannot be used for name your program that needs to be funded.”

While much of the focus has been on Santee Cooper’s almost $7 billion of debt, there are other factors to consider. The V.C. Summer project began a decade ago and started to fail several years ago. Since then, lawmakers have spent two years talking about what to do with the state-owned utility that allowed the project to go on even with knowledge it would never be functional while accumulating billions of dollars of debt.

Meanwhile, other important issues are falling to the wayside while lawmakers continue to debate the future of Santee Cooper. With the upcoming legislative session beginning in January, recommendations from the Department of Administration to the General Assembly should come by January 15 on Santee Cooper.

However, it is up to lawmakers to make sure this is a speedy process so that they can turn their focus to other issues such as the state’s failing education system and the quality of the workplace for teachers.

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Santee Cooper’s Business Forecast for the Future

Featured Image: Post and Courier

It’s been a few weeks since state-owned Santee Cooper unveiled their “long-term plan” for the future. Since then, many Santee Cooper direct serve and electric cooperative customers have been wondering, what does it all really mean?

While the plan involves positive initiatives like a transition to more renewable, cleaner energy sources such as solar and natural gas, there are no specifics to how those goals will be achieved.

Breaking down the plan even further, Santee Cooper customers and South Carolina residents have room for concern as it appears there are many unanswered questions.

In order to pay down the debt, the state-owned utility started raising rates a few years back. Now, with the debt in the spotlight more than ever, part of Santee Cooper’s plan is to freeze rates for five years. While this is promising at first glance, many Santee Cooper customers are worried that it will only prolong the inevitable.

Other than closing its Winyah coal plant by 2027 and cutting jobs (another concern for local residents) to reduce costs, the utility doesn’t specify how it plans to pay its billions of dollars of debt and make the investments needed to reach their goals.

Which begs the question – will rates increase even more than anticipated after the five-year freeze?

Additionally, the state-owned agency finds itself in a lawsuit with its largest customer, the twenty electric cooperatives, who is suing the energy provider to stop them from raising their customer’s rates even more to pay for a generating plant that will never operate.

A question that hasn’t been answered – what will happen if the cooperatives win? Will the debt fall only onto the direct serve customers? Will a state-owned agency have to file for bankruptcy?

Many questions and very few complete answers seem to plague Santee Cooper at present.

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Santee Cooper Announces Its New Plan, Leaving Many To Wonder What It Actually Means For Their Rates

Featured Image: Energy Manager Today

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?