Powerful S.C. House Speaker Jay Lucas says he is open to selling Santee Cooper, days after a consultant’s report indicated a buyer could lower electric bills for the roughly 2 million South Carolinians who rely on the state-owned utility’s electricity.
“The report shows there is a market for Santee Cooper and that there are buyers willing to provide rate relief for customers of Santee Cooper and the electric cooperatives (who buy Santee Cooper’s power),” Lucas told The State. “If that proves to be the best option for ratepayers, I will pursue a sale.”
The Darlington Republican’s stance could have far-reaching implications for the debate raging in the General Assembly about whether to offload the 84-year-old power company that racked up $4 billion in debt before abandoning the construction of a nuclear power plant in July 2017.
It comes just before a special committee of lawmakers and the governor meet Wednesday afternoon to study Santee Cooper’s fate. Those lawmakers will review a consultant’s finding that the state has received four credible offers to purchase the entire utility, including three bids that would ensure Santee Cooper’s customers must pay no more for the failed V.C. Summer Nuclear Station expansion project.
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Lucas’ office told The State the speaker is comfortable with pursuing those options, including hiring a consultant to negotiate with one or more of the bidders.
Currently, the customers that Santee Cooper serves directly are on the hook to pay $6,200 per household in higher rates for the unfinished reactors over the next for decades. Customers of the 20 electric co-ops who buy power from Santee Cooper contractually are obligated to pay about $4,200 more per household for the failed project.
Lucas is known for building consensus in the House, where he leads a near supermajority of Republicans. Last year, he orchestrated the House’s near-unanimous passage of a series of bills cutting investor-owned SCE&G’s nuclear-bloated electric rates and targeting systemic issues that enabled the V.C. Summer fiasco.
Lucas’ stance on Santee Cooper aligns him more closely with Gov. Henry McMaster, a Columbia Republican who has pleaded with the General Assembly to sell Santee Cooper to keep the utility from raising rates on its customers.
But it also sets the stage for a brewing conflict between the House and Senate over whether to sell. House members have shown a greater appetite for offloading the Moncks Corner-based utility, but the Senate is pumping the brakes, saying a sale could raise power bills and endanger the jobs of Santee Cooper’s 1,625 employees.
Virginia-based ICF’s report to the General Assembly on the offers for Santee Cooper has done little to narrow that divide.
House members — including Lucas and Santee Cooper committee co-chairman Murrell Smith, R-Sumter — have said the report encourages them that the state has options available to protect Santee Cooper’s customers from rate hikes.
“I’m pleased we now have a number of viable options at this point, but now we need to drill into the details,” Smith said.
But some senators have downplayed the report or questioned its credibility.
Senate Transportation Committee chairman Larry Grooms, for example, said ICF didn’t comb through each offer it received to verify the bidders could deliver on their promises. After reading the report, he says he still doesn’t understand how a for-profit power company — with higher taxes and an obligation to make money — could take over a not-for-profit utility with $8 billion in debt and still reduce rates.
“Until I see evidence to convince me otherwise, I will oppose the sale,” said the Berkeley Republican, whose district includes Santee Cooper’s headquarters. “And that evidence does not exist.”
Senate leaders still don’t think the State House’s upper chamber has the votes to sell Santee Cooper.
That could mean a re-run of the V.C. Summer and gas-tax debates, in which the House overwhelmingly passed a proposal and then held press conferences berating the Senate for not considering or passing them as well.