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SC legislation gives governor authority to sell Santee Cooper

South Carolina Gov. Henry McMaster, who has publicly pursued the sale of Santee Cooper for nearly two years, would be given the authority to sell the state-owned utility under new legislation introduced in the General Assembly.

South Carolina Senate President Harvey Peeler Jr. on March 20 introduced a joint resolution, Senate Bill 678, which allows the governor to utilize the state's Department of Administration to conduct a competitive bidding process for Santee Cooper. The Department of Administration, the central administrative agency for South Carolina state government, would evaluate bids for Santee Cooper before submitting its recommendation to the governor.

"The evaluation must take into account at least the financial capability of each bidder, the bidder's treatment of Santee Cooper's outstanding debt, the bidder's projected rates for each class of Santee Cooper's customers, and the bidder's management plan for Santee Cooper's lakes and related natural resources," the joint resolution states.

McMaster is already part of a special committee in the South Carolina General Assembly that was formed in July 2018 to evaluate the sale of Santee Cooper, known legally as South Carolina Public Service Authority. The Public Service Authority Evaluation and Recommendation Committee in October 2018 agreed to hire a global consulting firm as part of the potential sale process.

S.B. 678 requires the evaluation committee to hand over its findings to the Department of Administration, essentially taking the decision on selling Santee Cooper out of the Legislature's hands.

"The time has come to sell Santee Cooper," Peeler told the Charleston (S.C.) Post and Courier. "They are crippled by debt. ... We have to do this, and this nonpolitical process is the right way to get it done."

Fairfax, Va.-headquartered ICF International Inc. said in a Feb. 1 report that it received "robust" interest in acquiring or managing South Carolina's government-owned electric and water utility from a variety of private and public entities. The firm further evaluated four companies, including at least two investor-owned utilities, which submitted bids ranging from $7.9 billion to $9.2 billion to acquire Santee Cooper and help alleviate its debt obligations.

Charlotte, N.C.-headquartered Duke Energy Corp. on Jan. 15 confirmed it submitted a bid for the utility, while Juno Beach, Fla.-based NextEra Energy Inc. also has made it official.

McMaster has pursued the sale and privatization of Santee Cooper since the July 2017 abandonment of the V.C. Summer nuclear expansion project. Santee Cooper said in its 2017 annual report that most of its 45% share of the more than $9 billion spent on the scrapped reactors was "financed with borrowed funds."

Richmond, Va.-headquartered Dominion Energy Inc. has declined to comment on whether it submitted a bid for Santee Cooper, but the company has offered to operate and manage the utility. At the beginning of the year, Dominion closed on its purchase of SCANA Corp. and its utility South Carolina Electric & Gas Co., which co-owns the V.C. Summer project.