The South Carolina Public Service Authority (commonly known as Santee Cooper) said Feb. 4 that it will offer a revenue bond issue of between $700m and $1.2bn, with some of the bonds sold through retail outlets.
More than half of the proceeds are planned for debt refunding, which means the final size of the deal will depend on interest rate movement. A portion of the issue will be tax exempt. Most of the bond proceeds will be split between refunding existing debt and helping fund Santee Cooper’s share of new nuclear power units under construction at the V.C. Summer Nuclear Station.
The issue drew a rating of A1 from Moody’s, which issued Santee Cooper a stable outlook and reaffirmed its long-term debt ratings. Ratings from the other agencies are expected imminently.
Santee Cooper owns 45% of the in-construction Summer Units 2 and 3, and a bond offering document said the estimated budget for that 45% share is currently $5.1bn. Out of that, $4.8bn is for the actual unit construction, with the rest needed for things like transmission upgrades to get this power on the grid and the initial nuclear fuel core. The offering document said Santee plans further bond offerings in the 2015-2018 period to help with nuclear project financing and also plans to sell a 5% share of the project to South Carolina Electric & Gas under a deal worked out in January 2014. The purchase price for that 5% share, which will be based on actual project costs, is currently estimated at $500m-$600m. The two units, taking into account various delays, are estimated to be operating in the December 2018-June 2020 period.
The state-owned utility is South Carolina’s largest power producer, the largest Green Power generator and the ultimate source of electricity for 2 million people across the state.