The outgoing CEO of Santee Cooper objected to reports South Carolina’s governor is in talks with several private power companies about selling the state-owned utility.
CEO Lonnie Carter defended the public nature in several exchanges with lawmakers Tuesday during a state House hearing on Santee Cooper’s involvement with the scuttled V.C. Summer nuclear expansion project. Santee Cooper announced July 31 it would no longer pursue construction after lead contractor Westinghouse filed for bankruptcy.
The Charleston Post & Courier reported ahead of the hearing that four out-of-state power utilities have responded with interest in Gov. Henry McMaster’s proposal to potentially sell Santee Cooper to help pay off the project’s debt or finish construction. The newspaper reports Duke Energy, Southern Co. and Dominion Energy are three of the utilities involved, while a fourth remains secret.
Carter told the House panel he thinks privatizing would be a mistake. “Santee Cooper’s done a lot of good over the years and can continue to do a lot of good for the state over the years,” he said. “And I believe any objection evaluation of Santee Cooper will find that it provides significant benefit to the state.”
He argued Santee Cooper is not beholden to investors or shareholders in the same way as a private utility, which he believes can keep costs lower.
However, some legislators pounced on the fact that Carter admitted Santee Cooper will likely need to raise its rates — whether it privatizes or remains public — simply to pay more than $2 billion in debt it holds after V.C. Summer’s failure.
“So, if we sell you, rates are going to go up?” State Rep. Todd Atwater, R-Lexington, asked. “But you just testified if we don’t sell you, rates are going to go up?
“Because costs are going up,” Carter answered. “But they would go up more, I believe, under a private or an investor-owned utility model.”
“So you’re the lesser of two evils,” Atwater answered drily.
Selling Santee Cooper would require approval from the legislature. For any deal to go through, the buyer would have to be willing to eat the utility’s nuclear debt or else it would fall on the state government to bail them out.
Carter has announced he will retire this fall, but is staying in the job until Santee Cooper’s board can find an interim CEO.