Why should we sell Santee Cooper, especially now?

Santee Cooper

Today’s story in The State told us that lawmakers want the governor to hold up a bit and loop them in on talks about selling Santee Cooper.

What they did not address, at least to my satisfaction, is the larger question: Why sell Santee Cooper?

In the normal course of things, it seems an idea worth exploring: Why should the state operate a utility, now, in the 21st century? We’ve pretty much made it through the rural electrification phase of our development.

But in the context of the current scandal over the nuclear plant fiasco, it makes less sense. To me, anyway.

I mean, isn’t everybody kind of ticked off that Santee Cooper — and SCANA — were out of control on this thing?

Wouldn’t the natural reaction under such circumstances be to think, “Hey, we own Santee Cooper. Since we own it, we can get it under control.” If the current laws and regulations don’t allow for that kind of control — and it appears they don’t — then change the laws and regulations.

But don’t sell it off to some out-of-state conglomerate that won’t give a damn what we want the utility to do and to be.

Isn’t there something kind of irresponsible in state officials wanting to wash their hands of the utility at this particular moment? Isn’t this kind of a backwards reaction?

There’s probably a flaw in my thinking on this that is obvious to everybody but me. Please, somebody explain it to me…

5 thoughts on “Why should we sell Santee Cooper, especially now?

  1. Jeff

    If we sell it, do the buyers pay for the cost overruns on the incomplete nuclear plants? Does that keep the utility customers of South Carolina from having to pay those costs?

    Don’t utility regulations that would help control the power company apply whether the state or a private company own the power company?

    I think the answer to #1 is that the losses will be paid by the customers no matter who the owner is, and the answer to #2 is that lobbyists will write the regulations that don’t benefit the public no matter who the owner is.

    But maybe I’m just grumpy today.

    1. Lynn Teague

      Santee Cooper is exempt from regulatory oversight through the standard channels, the Office of Regulatory Staff and the Public Service Commission.

      Aside from its very independent and often secretive board (they are masters of the executive session and the prohibitively expensive FOIA response), Santee Cooper is evaluated by the Public Utilities Review Committee (PURC), a group made up of legislators and a few carefully selected citizens. PURC was given a broad mandate to oversee many aspects of ORS and the PSC, as well as some aspects of Santee Cooper. ORS and PSC perform executive branch functions, in fact especially sensitive executive branch functions, and should be insulated from political influence. PURC makes that far more difficult.

      The hearing yesterday in the Senate, featuring testimony by Santee Cooper CEO Lonnie Carter, was very interesting. I don’t personally know the Santee Cooper board members and I wouldn’t presume to guess at their personal motives. However, my impression is that if they were motivated by a desire to manage the utility in a way that would create the greatest possible number of poison pills in any effort to sell, they have done a great job. Debts are 80% of book value. Contractual arrangements produce thorny legal issues in a sale. Carter’s presentation was focused on underlining these issues.

      Carter told the senators that Santee Cooper’s problem was just inadequate communication with them. Senator Massey told Carter that he could be sure that more would change about Santee Cooper than their “communications.”

      Whether selling Santee Cooper right now is wise remains to be seen. Senator Massey is very right though. One way or another, Santee Cooper must change.

      1. Brad Warthen Post author

        Right. And what I’m saying is that the state is in a better position to change its relationship with a utility that it OWNS.

        I don’t have a strong philosophical position on whether a state should own a utility in GENERAL. But if a state is unhappy with a utility’s behavior, it seems it would have, or SHOULD have, more leverage to change that behavior with a public utility…

  2. Claus2

    Why does the state have their hands in a lot of things like power plants, school buses, etc… South Carolina is the only state I’ve lived in where the state runs the school bus system, all the other states leave that up to the school districts to deal with. Why is DSS so large in this state? I’ve lived in states with a similar population and I’m guessing their DSS agency is 1/3 to 1/2 the size this one is.

    1. Brad Warthen Post author

      It’s not terribly unusual for governments to run a public utility, from the TVA down to city water departments. You can see that across the country.

      But there IS a way that South Carolina is unusual, and you sort of put your finger on it with the question about school buses…

      Historically, in South Carolina, almost everything has been run from Columbia. This dates back to before enactment of the Home Rule Act in 1975, back when there essentially were no county governments — no councils or anything like that.

      The Legislature used to run EVERYTHING. The local senator (one per county) was the main guy on the county legislative delegation (with the House members elected countywide, at large). He was pretty much the master of the budget for local services — schools, roads, whatever — which was passed by the entire Legislature as a “supply bill.”

      After the Home Rule Act, SOME responsibilities devolved to counties, but a lot of local things stayed in lawmakers’ hands — such as the recreation district and the election commission in Richland County.

      Until recently (and maybe they still do; I haven’t kept up) the Greenville legislative delegation was still passing the budget for Greenville County schools.

      Also, at least until recently, the one and only resident legislator in Dillon County had pretty much sole say in who served on the local school board. And he was Coach Hayes, the athletic director who WORKED for that board.

      Basically, we have a lot of vestiges of the old Legislative State that are WAY weirder than the state running all the school buses… Do you realize there are something like 500 special purpose districts out there like the Richland recreation and election commissions — totally separate little governments that do things that the local county and city councils ought to be responsible for. And there’s no sign of anyone moving to get rid of them…

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