Staff and board turnover at Santee Cooper, the state-owned utility that serves most of Horry and Georgetown counties, caused one of the top bond-rating firms Friday to downgrade the utility's credit outlook.

That means Santee Cooper and its customers could be forced to pay more interest on the bonds.

The downgrade by Fitch Ratings, one of the top three credit rating firms, from "stable" to "negative" echoes the worries of local legislators and business leaders about how recent leadership changes at the utility will affect what customers are charged.

Gov. Mark Sanford last week fired Graham Edwards, the utility's board chairman. Horry County's representative on the board then abruptly resigned. In the past year, the chief executive officer and top legal officer have quit.

Fitch's announcement Friday said board turnover is "not typical" for a utility with a bond rating of AA and that it could affect Santee Cooper's usually solid financial position.

The level of a company's bond rating determines the interest rate it's charged. The higher the rating, the lower the interest rate. A bond rating of AAA is the highest given by ratings firms. A rating of AA means "very high credit quality."

Will Folks, a spokesman for Sanford, said the rating is nothing to be concerned about. The same group raised the same issues about previous board changes and gave Santee Cooper its positive rating in June, he said.

Sanford has asked Santee Cooper to make a larger payment to the state budget.

Edwards said the only way the state can get more money out of Santee Cooper is to raise rates for customers or to sell it.

Sanford has declined to say whether he will demand a rate increase or order the utility sold to a private firm.

Asked if Sanford wants to raise rates, Folks said, "I think folks trust this governor to act in the best interest of South Carolina taxpayers."

Edwards said Sanford wanted the utility to send an additional $15 million to the state this year. The utility usually pays the state $10.5 million annually.

Edwards said he resisted because the additional contribution would increase the cost to ratepayers.

That was one reason he was fired, he said.

Brad Dean, president of the Myrtle Beach Area Chamber of Commerce, said people are asking what the governor is trying to accomplish.

"Santee Cooper is a critical piece of the local economy," Dean said. "It impacts thousands of businesses and millions of tourists."

Besides its 138,000 direct customers in Horry, Georgetown and Berkeley counties, Santee Cooper sells electricity to the 20 cooperatives in the state and has 625,000 customers scattered across all 46 counties.

"We are watching it closely," said Penelope Hinson, spokeswoman for Horry Electric Cooperative, which serves most of the rural area of the county. "Our purpose is to provide the area with the lowest possible rates."

State Sen. Luke Rankin, R-Myrtle Beach, has been a vocal critic of Sanford's attempts to get more money from the utility.

"What is really going on here?" Rankin asked. "This has a direct impact on the pocketbooks of the people of this area and our industry."

In making the announcement of Edwards' appointment as chairman in 2003, Sanford lauded his experience, including 23 years working at the utility, with seven as chief executive officer.

Rankin questioned why Sanford would want Edwards out now.

Sanford's spokesman said the issue is having a board whose philosophy matches the governor's.

Sanford and some board members, including Edwards, disagreed over charitable donations and sponsorships. The utility makes donations to a variety of groups and activities, including Brookgreen Gardens and Berkeley County schools. Most of those contributions "had nothing to do with its core mission," which is providing value to the state's taxpayers and the utility's ratepayers, Folks said.

"It revolves around wanting a board in place that is open to new ideas," Folks said. "This was a board where the dynamics had not come together."

The board cut its donations "substantially," said utility spokeswoman Laura Varn, but she did not have the previous year's figures readily available. The utility is still giving about $1 million, and none of its multiyear commitments were cut, she said.

Folks said customers will save money because of those cuts and assertions that bills will go up because of putting "a fiscally conservative perspective on the board is ridiculous."

Rankin and others have said they are concerned the governor wants to sell the state-owned utility to a private company.

"We've never said Santee Cooper should be sold," Folks said.

Santee Cooper's staff has signed a contract with Credit Suisse First Boston for $150,000 to study the value of the utility, Edwards and Varn said.

That is especially worrisome to Rankin.

"There's a lot of stuff brewing," he said.

Folks said Rankin is needlessly raising red flags.

"The process is supposed to be a discussion of ideas on their merit, but Senator Rankin is approaching the point where the criteria is starting to stray from merit and enter the realm of completely reckless and unfounded attack," Folks said.

Rankin said the downgrading of Santee Cooper's credit outlook shows the concern is justified.

Rep. Tracy Edge, R-North Myrtle Beach, said Rankin isn't the only one raising questions.

"I just see the action as somewhat chaotic," Edge said.

Sanford has not clearly identified a problem that was so serious the chairman needed to be removed, and "it just smells, the way it was handled," Edge said.

"I think there's something deeper going on," he said.

Edge said he generally agrees with the governor's plans to streamline government, but if it involves privatizing Santee Cooper, "then he is in for a fight."