NextEra Energy Inc. has offered to eliminate $8 billion in debt and provide $200 million in customer refunds in its latest move for South Carolina utility Santee Cooper, according to a political blog and newspaper report.
Fits News in a March 1 blog post indicated that it obtained documents from two South Carolina lawmakers that revealed the terms of the proposal for the state-owned company. The blog also posted pictures of the proposal, which the lawmakers said they received from lobbyists, on its website. Fits News did not identify NextEra Energy as the Santee Cooper suitor, but The State newspaper in Columbia, S.C., reported that a South Carolina lawmaker confirmed the Florida company used the same slideshow to pitch him on the potential deal.
The documents and reports indicate NextEra will incur $1.5 billion in costs to pay off Santee Cooper's debt early. NextEra would use $6 billion of its own cash and securitize $1.75 billion of the debt, documents show. NextEra also wants to use the $831.2 million lump sum cash payment Santee Cooper received from Toshiba Corp. to pay down debt as well as about $900 million in Santee Cooper cash.
The pitch also includes a rate freeze from 2019 to 2022 with $200 million in customer refunds spread out over the four-year period. Half of the $50 million annual refund would be tied to tax breaks from the state. The proposal notes that the refund is the equivalent of what Santee Cooper customers have paid since the publication of a controversial Bechtel Corp. report that warned of "fundamental" problems prior to the abandonment of the V.C. Summer nuclear plant expansion.
Santee Cooper, known legally as South Carolina Public Service Authority, and SCANA Corp. utility South Carolina Electric & Gas Co. announced July 31, 2017, that they had decided to halt construction of the two 1,117-MW reactors in Fairfield County. The utilities placed the blame on bankrupt contractor Westinghouse Electric Co. LLC and billions of dollars of additional cost overruns, but the project audit warned of oversight problems, schedule slippage, reactor design concerns and "poor" construction productivity more than a year before the cancellation of the twin reactors.
South Carolina Gov. Henry McMaster has been publicly seeking buyers for Santee Cooper or its stake in V.C. Summer to help recoup customer costs, identifying Dominion Energy Inc., Southern Co. and Duke Energy Corp. as potential suitors. Dominion Energy on Jan. 3 announced its plan to acquire SCANA in a stock-for-stock deal valued at about $7.9 billion or $14.6 billion including the assumption of debt.
The State and The (Charleston, S.C.) Post and Courier also previously reported NextEra's active pursuit of Santee Cooper. NextEra's latest pitch reportedly includes a commitment to invest $2 billion to "build solar, storage, and natural gas generation facilities."
South Carolina Sen. Larry Grooms told The State that NextEra's plans include a 1,100-MW gas-fired plant in Anderson County.
NextEra did not immediately respond to a request for comment.
