As Santee Cooper was accumulating billions in debt for the failed V.C. Summer nuclear project, the state-owned utility was doling out millions that benefited major corporations, local governments and economic development groups, utility records reviewed by The Nerve show.
From August 2010 to April 2018, a total of at least $121 million in grants and no-interest and low-interest loans was approved for projects statewide, including:
- A $3 million grant in 2015 to buy land in Berkeley County for the recently opened Volvo plant, and another $1.3 million grant in 2016 for related infrastructure improvements for the Swedish car manufacturer;
- A $15 million, low-interest loan and a $5 million grant in 2017 to help develop the Dillon Inland Port, owned and operated by the state-created S.C. Ports Authority; and
- A $2.25 million grant in 2017 through the “South Carolina Power Team” – an economic development organization representing the state’s 20 electric cooperatives that receive power from Santee Cooper – to help buy property for the South Korea-based Samsung for its appliance manufacturing plant in Newberry County.
The Moncks Corner-based utility also has a grant program for local governments and economic development organizations for such things as new furniture, computer and office equipment, and advertising and marketing projects, according to records obtained under the S.C. Freedom of Information Act.
Santee Cooper has been on a public relations blitz this year – including defending its economic development activities – as the Legislature considered the sale or outside private management of the utility.
“Some are falsely claiming that our current debt should dictate that we stop financially supporting economic development activity,” Santee Cooper said in a May 13 prepared statement posted on its website.
The Nerve in February 2018 reported, citing utility records, that Santee Cooper’s overall debt load at that time was at least $15.6 billion including interest, to be paid back over 40 years starting in 2017.
The debt figures included approximately $4.3 billion in bonds sold to finance the construction of two nuclear reactors at the V.C. Summer site in Fairfield County, though the project abruptly ended in July 2017 when Santee Cooper and its partner, South Carolina Electric & Gas – now part of Virginia-based Dominion Energy – pulled out.
From 2009 through 2016, as project costs were escalating and construction deadlines were missed, Santee Cooper paid out a total of $5.6 million in bonuses to 15 executives, The Nerve previously reported.
SCE&G imposed nine electric rate hikes over the years to help cover V.C. Summer costs – as approved by the S.C. Public Service Commission under a 2007 state law quietly passed by the Legislature.
Santee Cooper supplies electricity to about 2 million people in South Carolina, generating power for the state’s 20 electric cooperatives in addition to directly serving about 180,000 customers in Berkeley, Horry and Georgetown counties, according to its website.
About $5 of a typical residential customer’s monthly bill of approximately $118 for 1,000 kilowatt hours of electricity is for the V.C. Summer project, according to the utility.
The state PSC doesn’t regulate Santee Cooper’s and the electric cooperatives’ rates charged to their customers. Given Santee Cooper’s large debt load, power bills are expected to rise in coming years – a projected 7 or 8 percent initial hike for Santee Cooper customers, according to the utility.
Critics contend that situation raises questions about whether Santee Cooper and the cooperatives should continue economic development spending at past levels.
In an email response Friday to The Nerve, Santee Cooper spokeswoman Mollie Gore said the Santee Cooper Board of Directors “approves the loan and grant program parameters and overall funding, and Santee Cooper management approves individual loans and grants according to those parameters.”
Under state law, Santee Cooper is “required to promote economic development,” Gore said, adding, “It is a key part of our mission.”
Yet the law also requires the Santee Cooper board to act in the “best interests” of the utility, including providing electricity to customers at “just and reasonable rates, regardless of the class of customer.”
The 12 members of the Santee Cooper board are appointed by the governor and confirmed by the state Senate after they are screened and qualified by the six-legislator, 10-member State Regulation of Public Utilities Review Committee (PURC), which, as The Nerve previously has reported, exerts considerable control over the regulation of utilities in South Carolina.
The Nerve last year also revealed that a little-known Santee Cooper advisory board including the governor and four other elected statewide officials never met once over the years to discuss the now-abandoned, $9 billion V.C. Summer project.
Following is a breakdown of approved economic development spending from August 2010 to April 2018, based on The Nerve’s review of Santee Cooper records:
- 23 no-interest or low-interest economic development loans totaling about $84 million to local governments and economic development organizations. A $15-million, 1.75%-interest loan was provided to the “Marlboro Development Team,” described on the Marlboro Electric Cooperative’s website as a “South Carolina based commercial real estate developer,” for the recently opened Dillon Inland Port.
- 30 “Site Readiness Fund” grants totaling $29 million to the “South Carolina Power Team” and local governments. The grants included a total of $4.3 million to Berkeley County and the Berkeley Electric Cooperative for the Volvo car plant site, and $5 million to the Marlboro Electric Cooperative for the Dillon Inland Port. Another $2.7 million was approved in 2017 for the Tri-County Electric Cooperative for the purchase of 375 acres in Orangeburg County.
- 133 “Santee Cooper Economic Development Investment Fund” grants totaling about $5.8 million for mainly unspecified “site, infrastructure or building costs related to” various projects – identified only by code names. The single-largest grant – $900,000 – was approved in 2017 for “Project Obsidian” in Aiken County.
- 55 grants totaling at least $413,000 to local governments and economic development groups for such things as marketing materials, “labor” studies, computer and office equipment, and new furniture. The single-largest grant – $27,500 – was for equipment and office furniture at the Abbeville Industrial Incubator. The city of Westminster received $10,000 for an iPad, “promotional materials” and a “site dev. study,” while the city of Greer was awarded $8,370 for a “Marketing approach at Golf Tournament.” A $10,000 grant was approved for “upfitting” a conference room at the Richland County Economic Development Office.
Gore said loan repayment terms typically are for 10 years, with the requirement that loans “must be paid immediately if a funded building is leased or sold.” Grants are “not designed to be repaid by the recipient,” she said, noting the “South Carolina Power Team” board approves individual grants in “cooperative service territory served by Santee Cooper.”
Asked if Santee Cooper’s residential ratepayers subsidize any of the utility’s economic development programs, Gore replied that “customer revenues fund Santee Cooper operations.”
That likely means ratepayers for the foreseeable future will continue footing the bill for millions in economic development spending.