South Carolina to get bids for a Santee Cooper sale

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A South Carolina legislative committee dealing with the fate of state-owned Santee Cooper is moving toward selling the utility.

The committee of four senators, four representatives and Gov. Henry McMaster voted 5-4 Wednesday to have a consultant proceed with work toward getting formal bids from four companies that have expressed interest in buying the utility, also known as the South Carolina Public Service Authority.

The companies have not been named publicly, but their preliminary nonbinding proposals included paying off Santee Cooper’s $8 billion in debt and not seeking recovery of costs for two shelved nuclear reactors — the project that led McMaster and some elected officials to call for jettisoning Santee Cooper because there will be no income-producing asset to pay the debt.

The General Assembly created the committee to recommend whether to sell the utility or implement tighter regulations over its governance. The legislature will make the final decision.

“We need an offer for this committee, at the end of the day, to be able to accomplish what the General Assembly tasked us to do,” said state Rep. Russell Ott, D-Calhoun, who made the motion to get bids. “We need the best offer that Santee Cooper can get, and we need professional help to be able to accomplish that.”

While some senators only wanted to start initial due diligence instead of pursuing bids, McMaster said the committee should get an offer on the table.

“This is an important process, and we need to get moving,” the governor said. “We’ve got to eliminate as much uncertainty as possible.”

The committee chairmen, Sen. Paul Campbell and Rep. G. Murrell Smith, were authorized to request additional funds to hire the consulting firm ICF to do the work necessary to seek bids and to hire an attorney that specializes in such transactions.

Smith said he envisioned bringing the committee “the best offer” from bidders that will then open the door for negotiations. While that work is going on, he said the panel should begin focusing on “some type of Santee Cooper reform” if there ultimately is no sale.

“The status quo can’t continue,” Smith said.

Since its first meeting in August, the committee has largely focused on selling the authority.

ICF Executive Director Judah Rose told the panel Wednesday that more due diligence will be required to project additional costs for upgrading South Carolina’s transmission grids and other facilities, before seeking requests for proposals.

Rose said an analysis of the initial nonbinding proposals showed a purchase could lower rates for Santee Cooper’s customers from 2% to 14%, although nothing was said about how the state could protect rates from rising in the future.

ICF said it could take until the end of June to produce a “best and final” firm offer from the RFP process.

Meanwhile, Senate President Harvey Peeler wants more work done examining the pros and cons of selling the authority. Peeler, R-Gaffney, announced Feb. 21 that he was creating the Select Committee on Santee Cooper. He named five Republicans and four Democrats to the new panel and set no time frame for its work to be done.

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Energy industry Revenue bonds Utilities Henry McMaster South Carolina Public Service Authority South Carolina