Santee Cooper seeks state OK to dive deeper in debt

August 17, 2021

Investigative Reports

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Santee Cooper

By RICK BRUNDRETT

State-owned utility Santee Cooper’s debt load is projected to grow by more than a half-billion dollars under a proposal that a legislative committee likely will rubber-stamp today.

The utility’s board of directors in a special meeting Thursday approved asking the state Joint Bond Review Committee (JBRC) to allow the utility to sell up to $350 million in revenue obligation bonds. Last week’s board meeting was held the same day The Nerve revealed that the Berkeley County-based utility in recent years had approved millions in economic development spending while being mired in debt.

The 10-member JBRC is scheduled to meet later this morning.

As of June 30, the utility owed a total of $12.5 billion in debt payments, including interest, Santee Cooper spokeswoman Mollie Gore said in a written response last Wednesday to The Nerve. Utility records provided for today’s JBRC meeting show an existing debt load of $12.38 billion.

The overall projected debt through 2056 would grow to $12.91 billion with additional proposed payments totaling $535.5 million, including $289 million in principal and an estimated $246.5 million in interest, over 30 years, records show.

Santee Cooper customers would see a “moderate (less than inflation)” rate increase beginning in 2027, according to utility records. Gore last week said rates will be frozen through 2024 under a court settlement related to the failed $9 billion V.C. Summer nuclear construction project in Fairfield County in which Santee Cooper was a partner.

Lawmakers considered selling Santee Cooper in the wake of the V.C. Summer debacle, though they ultimately decided not to and instead passed a law in June that supposedly would reform the utility.

The utility supplies electricity to about 2 million South Carolinians, generating power for the state’s 20 electric cooperatives in addition to directly serving more than 190,000 customers in Berkeley, Georgetown and Horry counties, according to its website.

The law passed in June requires the JBRC, made up of five senators and five House members, to “approve, reject, or modify” bond proposals by Santee Cooper. Longtime Senate Finance Committee chairman Hugh Leatherman, R-Florence, is the JBRC chairman; the vice chairman is Rep. Murrell Smith, R-Sumter, who is the House Ways and Means Committee chairman.

In a written response Monday to The Nerve, Gore said if the JBRC approves the utility’s bond proposal, it would “come back to us to take to market and then the Board (of directors) would vote on the actual priced transaction.”

Gore didn’t immediately respond to a question about whether the longstanding Santee Cooper Advisory Board – made up of the governor, attorney general, comptroller general, treasurer and secretary of state – approved the bond proposal. Under state law, the advisory board “must consult and advise with” the utility’s 12-member board of directors “on any and all matters” that the board of directors refers to the advisory panel.

The Nerve in 2018 revealed that the advisory board never met once to discuss the now-abandoned V.C. Summer project.

Under Santee Cooper’s bond proposal, about $192 million would be used to pay off short-term debt related to solid waste landfill, ash pond and transmission projects, JBRC records show. Another approximately $151 million would be designated for new capital expenditures in those project areas.

The capital projects include, according to utility records:

  • Adding landfill cells on the sites of two coal-fired generating stations – the Cross station in Berkeley County and the Winyah station in Georgetown County – to dispose of coal waste.
  • Continuing work to close coal ash ponds at the Winyah West generating plant and the Jefferies plant in Berkeley County.
  • Improving the utility’s “interconnected bulk transmission” system, which is tied to other utilities.

Brundrett is the news editor of The Nerve (www.thenerve.org). Contact him at 803-254-4411 or rick@thenerve.org. Follow him on Twitter @RickBrundrett. Follow The Nerve on Facebook and Twitter @thenervesc.

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