Santee Cooper dispute stops lawmakers from passing continuing resolution

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A one-day session of the South Carolina General Assembly devolved into a debate about the future of Santee Cooper, the state-owned water and electric utility under fire for its part in a failed twin nuclear reactor project.

The discourse prevented lawmakers from reaching agreement Wednesday on a continuing resolution in case they can't return to the capital before the June 30 end of the fiscal year because of the spreading novel coronavirus.

A dispute about Santee Cooper prevented the South Carolina General Assembly from passing a continuing resolution April 8.

In addition to the continuing resolution for fiscal 2021, it set aside $180 million for the state's response to the pandemic and $15 million for protective measures in upcoming elections.

The House, which passed its version unanimously, also included language that prohibited Santee Cooper from entering into contracts with terms over a year. It also continued the Legislature's consideration of whether to sell, reform or hire a manager for the utility until next year.

In the Senate, supporters of Santee Cooper objected to the contract prohibition. But the chamber revised the language adopted by the House saying that all decisions Santee Cooper wanted to make must be approved by the governor, Senate president, House speaker, and their respective budget chairmen.

The House had adjourned and was unable to concur with the Senate’s changes.

The disagreement over Santee Cooper was prompted by an email some lawmakers, including House Speaker Jay Lucas, R-Darlington, received from J. Michael Baxley on April 6, two days before the special legislative session was held.

Baxley, Santee Cooper's general counsel, said that Central Electric Power Cooperative Inc., agreed with terms of a recent class-action lawsuit settlement led by Jessica S. Cook that would require certain actions, including cash payments, to be done over four or more years. Those actions also include a four-year rate freeze.

The Cook suit was spurred by the nuclear reactor project that was shelved before completion, a project financed by Santee Cooper as a 45% owner and South Carolina Electric & Gas, an investor owner utility at 55% owner.

Mollie Gore, Santee Cooper's spokeswoman, said Thursday that the emails sent by Baxley to legislators were "premature and presumptive."

"The emails mistakenly indicated Central supported proposals Santee Cooper developed to enable us to pursue certain efficiencies and contractual cost savings, to ensure we could comply with the Cook settlement," Gore said.

Mark Bonsall, the utility's chief executive officer, apologized to lawmakers and plans to discuss the miscommunications with them, Gore added.

The mishap prompted Lucas to send a fiery letter to Bonsall and board chairman Dan Ray saying that he would remove Santee Cooper's board of directors and fire senior management, if he had the power to do so.

“It is evident that Santee Cooper suffers from a broken corporate culture that is deeply ingrained in your leadership,” Lucas wrote. “It is a shame that the leaders of what was once one of this state’s greatest assets suffer from such arrogance and ambivalence as to behave in the manner you have.”

The General Assembly had planned to execute the continuing resolution Wednesday, and quickly leave the capital to avoid as much contact as possible while the pandemic rages across South Carolina. Because the resolution wasn't passed, it's not clear what will happen next.

As of Wednesday, state health officials reported 2,552 positive cases of COVID-19, and 63 deaths from the virus.

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