Taxpayers Are Not Responsible For Our Debt
Facts ARE Facts
Santee Cooper has been an important part of South Carolina for over 85 years. More recently, there has been some confusion and understandable concern regarding Santee Cooper and the impact of the V.C. Summer project. Decisions related to the failed project have led stakeholders to question our role and tested their confidence. Some of that confusion is related to debt, and who is responsible to pay it. It’s a legitimate question, and we want to set the record straight.
Some Santee Cooper critics are promoting a notion that the State of South Carolina, and therefore the taxpayers of South Carolina, are obligated to handle our debt. That is categorially untrue. Taxpayers are not responsible for Santee Cooper. Yes, Santee Cooper is state owned and was established and built with federal grants and loans, but it is not true, then or now, that Santee Cooper is funded by the South Carolina taxpayer. We operate as a business, and our expenses are paid by customer revenues. In fact, state law [S.C. Code 58-31-30(21)] clearly says that the state is not financially responsible for Santee Cooper’s debt.
In fact, Santee Cooper annually provides a net benefit to the state and taxpayers. In addition to our extensive efforts supporting economic development and job creation, we make an annual payment of 1 percent of our budgeted revenue into the state’s general fund. Last year Santee Cooper directly paid $17.4 million into the state’s coffers and since 1990 has paid $373.6 million to the state.
Here are five essential facts to remember:
- Ultimately, customer revenues from the sale of electricity and water fund Santee Cooper.
- Santee Cooper is prohibited by statute from obligating the State’s credit or its taxing power. (58-31-130)
- The General Assembly is prohibited from appropriating any funds to Santee Cooper (58-31-140); in fact, Santee Cooper makes an annual payment to the state and has in recent years contributed approximately $20 million annually to the General Fund.
- The General Assembly and local governments are prohibited from levying any tax to fund Santee Cooper. (58-31-140)
- The General Assembly enacted a covenant (58-31-360) to the bondholders of Santee Cooper to never alter the power of Santee Cooper to establish rates sufficient for the operations and debt payment of Santee Cooper, thus further protecting the State and the taxpayers from financial liability.
Santee Cooper has the assets, resources, and projected revenue to address the nuclear debt in due time, and we have paid off nearly $1 billion in long-term debt since 2016. We will continue to pay off or offset the cost of that debt by selling remaining nuclear equipment and making operations more efficient. Because our operations impact rates, Santee Cooper is committed to controlling costs and maintaining competitive rates to all customer groups. Our typical residential customer already pays the lowest monthly bill among large electric utility customers in the state, and we project that will continue even as we address this debt.
FACT: Our debt will be paid off through our revenues, and not by tax dollars.