COLUMBIA - A House subcommittee approved
the Senate version of a bill changing how Santee Cooper's governing
board operates despite a letter from Standard and Poor's rating
service discouraging the move.
The bill is expected to be taken up by the full Labor, Commerce
and Industry Committee next week. Opponents of expanding the number
of electric co-op representatives vowed to carry the fight to the
full panel.
"If you start letting your customers control the board, it's a
natural tendency to let the co-ops set the rates at the expense of
the other customers," Rep. Skipper Perry, R-Aiken, said.
Rep. Bill Sandifer, R-Seneca, the subcommittee chairman, said
having four co-op representatives on the 11-member Santee Cooper
board does not give the electric cooperatives control.
The utility sells power directly to customers in parts of Horry,
Georgetown and Berkeley counties, and indirectly across the state
through the co-ops, buyers such as the city of Georgetown, and
individual large-user customers. The majority of the electricity is
sold to the co-ops.
The board currently has one designated co-op representative. The
original proposal was for it to have six, and a House bill called
for five, so four is a good compromise, Sandifer said.
Perry said four co-op members is "stacking" and that the
utility's financial ratings could suffer from it. The board has one
representative from industry, and groups such as the S.C.
Manufacturers Association and state Commerce Department oppose the
bill because they say the co-ops will have too much power to set
rates.
An analyst at Standard and Poor's downgraded the utility's
outlook from stable to negative, according to a letter released
Tuesday, because of concerns over the change in the board
makeup.
Standard and Poor's said the current configuration is "a more
independent representation from each of the states congressional
districts." The proposal could reconfigure the board to one with
interests "that may be adverse to Santee Cooper's interests -
particularly in the area of ratemaking and associated financial
performance," the report said.
The proposed board changes would complicate issues with rising
fuel costs for the utility and its need to add debt to finance a new
generating station, the report said.
Sandifer said he was not overly concerned with the downgrade in
outlook because the letter also says the rating could be reversed if
a reorganized board proved it could act in Santee Cooper's best
interest.
The three-page report was "a very noncommittal type of thing,"
Sandifer said.
What is important for the co-op representatives and other board
members is that according to the bill, they would be nominated by
the governor but screened by a utility board committee. They must
have related experience, and they may not be an employee or board
member of a co-op.
The legislation is complex, Sandifer said, and overall it is good
for Santee Cooper and the state, especially in its directive that
the utility will be an economic-development engine for the
state.
The bill also removes the governor's power to fire board members
for no reason.
