Despite all the improvements at Santee Cooper – and there have been improvements – the state concessionaire is not a symbol of good government, or responsible government, or well-managed business.
As Senate Republican leader Shane Massey reminded his colleagues on Thursday, when the upper house spent more than an hour debating whether it could finally be preparing to debate the future of public service, “secrecy” is embedded in its DNA. – as evidenced by the lengths that the Legislature had to resort to last year to find out about its last issue of bonds.
And Santee Cooper remains resistant to any reforms beyond what it decides to do – none of which involves regulation by the Public Service Commission. “Whenever you want to talk about significant changes there,” said Mr. Massey, “you will receive the same answer: Well, this is going to violate the title covenants. And they continue to issue bonds with the same bond agreements. “
Combine this type of sabotage with NextEra’s promise to eliminate nearly $ 4 billion in debt from the failed VC Summer nuclear construction project, and you would think the Legislature would have accepted the Florida-based dealer’s offer to take Santee Cooper out of our hands.
Cindi Ross Scoppe
However, more than a year after NextEra submitted that offer, no one seriously expects the Legislature to accept it. No one is sure that the entire Senate will discuss this. And it’s not just that Santee Cooper’s cheerleaders are blocking the debate.
During Thursday’s exchange, Senator Ronnie Cromer summed up the delay in a way that I would have liked to think: “We prefer sell Santee Cooper. We do not prefer to give Santee Cooper. “
“NextEra prefers that we do,” he said. “But it is not a sale. It is a gift for them … I, at least, should not give anything that is a good of the State to anyone ”.
Whether they shared their opinion or not, everyone in the Senate House understood what the Newberry Republican meant. But a lifetime has passed since our state’s well-paid experts evaluated all bids – in a pre-COVID world – and those of us who are not constantly being pressured by a decision may have forgotten the details.
Therefore, with special interests in purchasing radio and internet advertising and promotions aimed at convincing us that what NextEra charges for electricity in other states is relevant and that the concessionaire will not recover the debt on customers’ monthly energy bills, it can it will be useful to remember those details.
It is true that NextEra has offered to take on Santee Cooper’s $ 3.6 billion debt. He also offered to pay the state about $ 600 million in cash and reimburse customers $ 541 million for payments on VC Summer’s debt they had already made.
In return, NextEra would receive what Cromer called “somewhere between $ 11 (billion) and $ 13 billion in assets”, along with the right to sell energy to 2 million people in South Carolina. It would also leave the state with coverage of about $ 600 million in pensions and other obligations. And dispense up to 700 South Carolinaians. And receive legislative pre-approval for $ 2.3 billion in new power generation constructions, along with the right to continue charging customers, even if they have never used that power generation – essentially the same arrangement as the Revision Act Base Cargo that fueled the VC’s summer disaster.
In addition to all of this, our well-paid experts determined, NextEra’s electricity rates would be higher than those of Santee Cooper – from day one. And, as Dominion’s customers know, dealerships are not content to keep rates steady for long after buying a distressed dealership.
NextEra’s offer also required the legislature to allow it to pay a fee of about $ 5 million a year, instead of $ 175 million a year in property taxes on power plants, transmission lines, office buildings and properties that Santee Cooper currently owns. NextEra’s CEO offered to take the tax exemption out of the package – in exchange for raising fees by an equal amount.
By far, the most attractive part of the proposal – and clearly at least part of the reason why NextEra thought it could do well by offering what otherwise would be such a bad deal – was the $ 541 million refund. That’s because it would have ended a class action lawsuit that threatened to put the concessionaire in default and force the state to bail it out or risk jeopardizing South Carolina’s reputation as a good place to do business.
But somehow, Santee Cooper managed to resolve the process on his own, which eliminated his existential threat – and the attractiveness of NextEra’s offer.
Could NextEra make a better offer? Maybe yes. NextEra supporters who care about taxpayers say the dealership brings smarter and more agile management, which would reduce electricity bills over time much more than a state agency would. Therefore, it may be worthwhile to ask for a new bid, as the deal agreement meant that Santee Cooper submitted a second reform proposal.
But, unless and until we see a better offer, we can’t assume that lower rates in other states will mean lower rates here – especially since your first offer included just the opposite and since NextEra will have an expense in South Carolina that doesn’t there is not in all these other states: a debt of almost $ 4 billion from a pair of unfinished nuclear reactors that will never generate a watt of energy.
Cindi Ross Scoppe is a writer for The Post and Courier. Contact her at [email protected] or follow her on Facebook or Twitter @cindiscoppe.