As the potential sale of one South Carolina power company awaits approval, the possible sale of its partner in a failed nuclear project is a cause of concern for some.
News broke last week that Virginia-based Dominion Energy offered to buy SCANA Corp., the parent company of South Carolina Electric & Gas, in a $14.6 billion-dollar dollar deal which SCANA accepted. Dominion promises to deliver more than $1 billion in refunds ($1,000 for the average residential electric customer) to SCANA customers that helped fund a failed nuclear project that both SCANA and Santee Cooper halted last July.
If the deal is approved by the SC General Assembly, electric rates for customers would also decrease by about 5 percent (or $7 per household per month). Payments would vary based on the amount of electricity used in the 12 months prior to the merger closing.
Last July, Santee Cooper and SCE&G announced they would stop construction on two unfinished reactors in Fairfield County. They cited construction delays, increased competition caused by lower-than-projected gas prices and factors which drove up costs. The two companies had spent nearly $9 billion on the project that began in 2008.
South Carolina Governor Henry McMaster, who has campaigned for the sale of Moncks Corner-based Santee Cooper, praised the SCANA deal.
“But this doesn't resolve the issue,” McMaster said. “Over seven hundred thousand electric cooperative customers face the prospect of having their power bills sky rocket for decades to pay off Santee Cooper's $4 billion in debt from this. The only way to resolve this travesty is to sell Santee Cooper. There is more work to be done, but today, we are headed in the right direction.”
Moncks Corner Mayor Michael Lockliear has concerns about the impact such a sale would have on the Berkeley County seat where the company is headquartered. Lockliear penned a Letter to the Editor of The Independent last month where he said the power company has rendered too much good to be sold. He said Santee Cooper does more than just provide electricity.
“[Santee Cooper] is more than just a power company, benefitting the state and local communities behind the scenes in so many other ways,” he said. “Educational programs, community sponsorship and fundraisers, their Green Power initiative, renewable resources, water services, serving as an engine for economic growth – Santee Cooper is more than just electricity.”
Lockliear said the sale of Santee Cooper would likely increase electricity rates for customers. Santee Cooper currently has the lowest rates around, Lockliear said. He adds that whoever purchases the company would probably move the headquarters out of Moncks Corner, resulting in a loss of jobs for many of the town’s residents.
“Eighty percent of the people in Moncks Corner are employed with Santee Cooper or (are otherwise connected through family members),” Lockliear said. “They are a driving force in the economy in Moncks Corner, Berkeley County, and state as well.”
The Post and Courier newspaper reports that several entities are interested in purchasing Santee Cooper. These include Dominion Energy of Virginia, Duke Energy of North Carolina, NextEra Energy of Florida, Southern Co. of Georgia, and, most recently, Pacolet Milliken of Greenville, South Carolina.
Gov. McMaster’s press secretary Brian Symmes said the office cannot disclose details about others interested in purchasing Santee Cooper. However, he reassures Moncks Corner residents that the potential sale would be in the town’s best interest.
“While that skepticism is understood, [Gov. McMaster] will not endorse a deal that puts South Carolinians in jeopardy,” Symmes said. “[The Governor’s] job is to broker a deal, to sell to the people of Moncks Corner and any other customer. He has to be able to sell this.”
For Lockliear, it doesn’t matter if the potential buyer of Santee Cooper can keep the headquarters in Moncks Corner.
“I wouldn’t be in favor of the sale of Santee Cooper at all,” he said.
How then, can the billion-dollar debt of the power company be resolved?
“I don’t know that it can be resolved,” Lockliear said. “[The nuclear project] was a bad business deal. It was a lesson learned.”
“That’s part of business. All of your deals are not solid.”
The governor’s office said there is no timeline for striking a deal. Any sale of Santee Cooper must go through the general assembly which convenes Jan. 9.