NextEra May Want to Take Over a S.C. Utility, But at What Price?

(Bloomberg) -- It’s been making the rounds at the South Carolina State House for days: Florida power giant NextEra Energy Inc. is interested in buying the troubled state-owned utility Santee Cooper.

The problem is, state senators who’ve been privy to conversations with NextEra can’t seem to figure out exactly how much it’s willing to pay. Depending on who you talk to, the company has thrown out figures ranging from $6 billion to $15.9 billion, state Senator Luke Rankin said in an interview. A second senator, Shane Massey, said he knew only of NextEra expressing interest in the utility and didn’t recall it ever giving firm numbers.

“I would characterize this as preliminary and vague, and somewhat squishy,” Rankin said. “We hear one thing, and we see another.”

NextEra declined to comment, and Santee Cooper said it hasn’t been discussing terms of a proposed deal with the company.

The disparity between the numbers underscores the uncertain fate of Santee Cooper, which racked up billions of dollars in debt after starting a massive nuclear power project with Scana Corp. that was ultimately canceled after years of delays. Since the project was shelved, both Santee Cooper and Scana have lost their chiefs and have been the subject of probes.

For more on Scana’s own proposed takeover, read this story.

Wide Range

In an interview Friday, Rankin said NextEra had suggested in a discussion last week that the company may be willing to pay $15.9 billion for Santee Cooper. But Rankin said another senator had seen a document indicating an offer may come in as low as $6 billion. 

The wide range makes it clear that South Carolina legislators, who must approve any sale, need to establish a formal bidding process sooner rather than later, said Mike Couick, the chief executive officer of Electric Cooperatives of South Carolina who represents Santee Cooper’s largest customers.

“An offer process shouldn’t be just people showing up and talking,” Couick said. “It needs to be formalized with a beginning, a middle and an end. It needs to be serious and fair. It needs to have rules of the road.”

To be sure, NextEra has the cash for a takeover. It’s been hunting for a regulated utility for years to balance out its portfolio and attract investors. Its previous bids to buy Oncor Electric Delivery Co. in Texas and Hawaiian Electric Industries Inc. failed.

Even in South Carolina, it’ll face competition. Investment company Pacolet Milliken Enterprises Inc. is also interested in Santee Cooper, spokeswoman Brandy Humphries said Friday. She said that the firm hasn’t made an offer, either.

Local media outlets including The Charleston Post and Courier and The State newspaper of Columbia have previously reported on interest from NextEra and other utilities in Santee Cooper.

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