Small-business owners are accustomed to making decisions big and small. When a crisis arises that threatens their very existence, small-business owners also know that time is of the essence in the decision-making process.
Of course, a good understanding of the problem and the possible solutions is critical for the small-business owner to make the right decision.
However, the adage “time is money” applies. If the longer it takes to make a decision means that the business goes deeper into the crisis, thus making the resolution costlier or takes solutions off the table, then the small-business owner needs to focus intently on the matter and move forward as quickly as possible.
Today the state of South Carolina is facing a business crisis, but it’s not new.
In fact, we became aware of this crisis in July of 2017 when Santee Cooper, our state-owned utility, and SCE&G abandoned the construction of two nuclear plants in Fairfield County.
Santee Cooper, which was a 45 percent partner in the failed project, was left with a $4 billion construction debt that threatens to dramatically increase electricity rates for the utility’s approximately 180,000 direct customers and the ratepayers of the 20 electric cooperatives in our state.
SCE&G’s nuclear debt was $5 billion, and the utility warned that it was facing a business crisis that could only be successfully resolved by a speedy sale to Virginia-based Dominion Energy. That business-saving deal was approved by the state’s Public Service Commission in December. SCE&G is now financially solvent, ratepayers have seen their electric rates reduced 15 percent and approximately half of the nuclear debt has been taken off the customer’s back.
So where is the resolution to the Santee Cooper $4 billion financial crisis? Some people project increases at approximately $1 million per day as a result of interest.
A joint committee of S.C. House and Senate members plus the governor have studied the problem and received four offers to buy all of Santee Cooper’s assets and 10 proposals for management services.
However, the Senate has now formed a new select committee for the purpose of better understanding the issue and options for an eventual decision.
The concern of many, including probably the private companies that have offered to buy Santee Cooper, is that the financial crisis grows daily, making it more expensive to get the best deal for ratepayers.
Unfortunately, some legislators are indicating that this deliberative Senate analysis might put the business decision off until 2020. We can’t wait that long.
The South Carolina Small Business Chamber of Commerce supports the sale of Santee Cooper if it will result in removing the $4 billion of nuclear debt and possibly another $4-plus billion of other debt of the utility. This debt represents approximately 70 percent of the total debt owed by the state of South Carolina. So, eliminating this debt would put our state government in better fiscal health as well as benefiting ratepayers.
In addition to eliminating hopefully all of Santee Cooper’s debt, the contract for sale must show how electric rates in the future will be lowered plus a quick timeline for replacing electricity produced by the utility’s coal plants with energy from solar and new-generation gas. The latter is critical for reducing carbon emissions that are contributing to flooding and sea level rise that threatens our coastal economies.
A contract to sell Santee Cooper also should address concerns about the local economy in Berkeley County that stands to be impacted. Making sure that Santee Cooper employees and the local economy will not be harmed must be a part of any negotiating process.
If the decision-making process regarding Santee Cooper’s fate drags on for too long, opportunities to reach the best deal for ratepayers, the state and employees will diminish. The offers from other utilities will be lower as the debt of Santee Cooper grows and the suitors themselves might find acquisitions in other states to pursue instead.
Taking the time for 170 members of the General Assembly to become energy experts is not necessary for the state to make a good business decision on this critical financial issue. Those experts and banking expertise can and should be hired quickly and given a deadline for recommendations in a few months, not years.
This is the way small business owners would move forward to solve the problem.