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- So we are now well into the new year in finding our stride about all of those things that happen and what is to come.

I am Chris William, and welcome again to the most widely watched and the longest running program on "Carolina Business Policy" in public affairs.

We will unpack those things that are directly ahead of us in both business policy and public affairs.

And later on, he is the new CEO.

It's Santee Cooper out of the low country.

We'll talk to Jimmy Staton.

And we start right now.

- [Announcer] Major funding also by Blue Cross Blue Shield of South Carolina.

An independent licensee of the Blue Cross and Blue Shield Association.

And Martin Marietta, a leading provider of natural resource-based building materials.

Providing the foundation on which our communities improve and grow.

(dramatic music) On this edition of Carolina Business Review, Terik Tidwell from NC Idea's Black Entrepreneurship Council.

Carl Blackstone of the Greater Columbia Chamber of Commerce.

And special guest, Jimmy Staton.

president and CEO of Santee Cooper.

(dramatic music) - Hello and welcome again to our program, gentlemen.

Thank you for being here.

Glad to be here.

- Thank you.

Glad to be back.

- Yes, glad to be back.

Thanks, Terik.

So we start with jobs.

That seems to be a theme that's gonna rise up here in 2023.

We've heard more about that last week.

We had a jobs report that showed growth in jobs but a slowing in wage growth.

Terik, are we gonna have a jobs recession or are we gonna slide through this whatever this recession looks like without having a slowdown in jobs?

- Well, I mean, Chris, we're seeing this like one, last week, we had these different kinds of job reports.

We have layoffs, we also, we've seen job growth but we're seeing wages going low.

So the question is what indicators do we trust to understand the recession?

And then what indicators do we use to measure getting out of the recession?

I think we may see a little bit of a different kind of recession.

I don't think it's gonna be a deep one as it relates to jobs overall.

And it may be also seen in terms of what kind of new jobs were being created.

Because we talk about this level of dynamic capitalism, dynamic economic development.

What kind of new jobs will be created in 2023 that weren't there in 2022?

Yeah.

- I totally agree.

I mean, I think we're going to be waiting to see.

Now we've seen this first jobs report for the new year.

Now we're, all right, what's the second one gonna look like?

And I think we're gonna have, Fed will continue to raise some rates, maybe not as dramatic as they have been in 2022.

But I do think for at least the first quarter, they're gonna continue to raise rates with their hope of slowing it down even more.

- Either one of you gentlemen, why do you think there is such a big question mark around jobs?

And I don't mean the typical what you all would sit over there and say, well we don't have enough talent for all the jobs that are available.

While that's an important dynamic, I get the sense now everyone can't figure out why jobs continue to be so strong and why they're so uncertain about jobs.

Why are we so uncertain about jobs?

- I think there part of it is the amount of money that was in the system after the pandemic.

- So you think the liquidity pumped in because of COVID is still distorted whatever dynamics as you said.

What do we look at now?

- Yeah.

- I do.

- Yeah, I'm looking in terms of like, we've seen so much money being pumped in into the economy in 2021, 2022. and then we started seeing a little bit of a level setting.

Now we're going through this market correction and say well we're trying to see exactly what is the new market for 2023 as it relates to jobs and employment.

But also during the same time, we also seen new business starts.

So we may see a different kind of new jobs.

- That's right.

- Which is, we're seeing at such a high propensity of businesses starting in 2022.

We've been seen in 2019 and particularly, with minority entrepreneurial businesses being developed during the same period.

- Are you saying you're actually seeing that starting to unfold in 2023?

- Oh yes.

- Greater than 2022?

- Oh yeah.

I think there's so much during the pandemic, folks starting pivoting, I would say to an extent.

- [Carl] Yeah, there's a word that we haven't- - To look at and say, well listen, this is an opportunity to really seize a little bit of a market equilibrium opportunity.

So there's folks creating new companies, creating new jobs to really make some kind of stability there.

- Yeah, we're seeing that a lot.

And so what's interesting is the type of job losses mainly in the tech sector but we're seeing them pop up other places, job creation in other places.

I think it's just gonna be an interesting reset year of trying to figure out what the new norm looks like.

- How much do you think public policy's gonna drive whatever goes on here?

And I don't mean central bank or fed raising or whatever they're gonna do with interest rates.

So the South Carolina General Assembly is now back in session.

North Carolina's not far away.

How much of that is going to drive policy?

- I think that what's driving the economy now are the policies out of DC and funding some new markets and really trying to, we're seeing the growth in the EV marketplace in South Carolina.

Unbelievable growth.

A lot of that is because the US is investing in alternative fuels.

And so the local policies will probably not have a huge impact on future job growth in South Carolina, I don't believe.

- And just a double down on that, which is out of DC, we see the bipartisan infrastructure bill which is now we're starting to see that sort of play out into different areas.

- You mean play out as if being deployed in actual dollars?

- Dollars are being deployed, workforce development programs are being deployed, are being linked to new infrastructure projects.

And then on top of that right now, which is the Inflation Reduction Act.

We're starting to see that become the fessor up to support more clean energy carbon emissions.

So as these things start to kind of unravel.

that's gonna create a whole new kind of market opportunity.

- I agree.

And especially on the tech side and the community college side of things where we've got this infrastructure money and we don't have the labor to really deploy all the money and so we're going to retrain folks.

So the money, so I will say this.

Money coming policies from the state and dollars that are funded by the state for training and retraining will be very impactful.

- So it's gonna be manifesting the technical college and the community college system, is that what you're saying?

- [Carl] I do think so.

- And it's gonna show up, actually deployed into the system and go out from there.

- I think with the challenges, the workforce challenges we're seeing right now across both of our states, especially let's talk about road construction.

There are not enough workers to be able to complete the work.

So we've gotta retrain, train young workers to take those jobs.

So I do think that we're going to have to really put an emphasis on training retraining in order to accomplish what those goals are meant to happen.

- And just to double down on that which is, we talk about broadband infrastructure.

- [Carl] Yeah, exactly.

- We're talking about fiber optics, we're talking about these are new jobs that need to be created or being developed for workforce to be able to embed that broadband infrastructure into different kind of communities, particularly rural communities.

So there's a little bit of, we're investing in long term.

So I think some of this is like a leap frog into 2027.

We'll be seeing these things were catalyst.

We're seeing so much economic boom in North and South Carolina.

- Let me, 'cause you just said, Terik.

You said you were concerned and this is my paraphrasing.

And I apologize if I'm not right about this.

You were concerned, it sounded like you were concerned about the liquidity that's still in the system.

That's still, my term was distorting the system.

This infrastructure bill, the Inflation Protection Act.

These are still monies, this is institutional funds.

This creates more of the same, doesn't it?

- It does.

But talk about short term versus long term.

That's why I'm a little bit short-term pessimistic, long-term optimistic.

And I think there's a little bit which is, there is gonna be some dynamic situations that happened in 2023 that may be a little bit more pessimistic.

But the long-term view is gonna be we're seeing the ability to connect communities, to connect new economies, to improve our infrastructure for transportation.

We're one of the biggest regions for exporting.

So I mean, we need to enhance the fabric for our region as a whole.

We talk about enhancing minority and Black entrepreneurship in both states.

I mean, North Carolina has one of the highest density of black entrepreneurs in Fayetteville area.

- So in about a minute, Carl, is education gonna be a priority in South Carolina this year?

- I think so.

We've seen tremendous amount of teachers leaving the business and so they've gotta address teacher pay, some other things dealing with administration of education in South Carolina.

We have a new superintendent of education statewide, Elle Weaver.

So I think she'll have to work with the general assembly and figure out some priorities for her.

But I do think there'll be a top priority.

- Is there gonna be a honeymoon between Superintendent Weaver and the general assembly?

They knew Molly Spearman for sure.

- Oh, Molly had been a member of the general assembly so everybody knew her really, really well.

There will be a little bit of a honeymoon period for Ellen.

At some point though, the house will go along with a lot of what she wants because of the super majority there.

The Senate will be a deciding factor.

- Okay, all right.

Thank you, guys.

Stay with us.

Joining us now from his office at the headquarters of Santee Cooper is the president and chief executive officer of Santee Cooper.

We welcome to the program and to the dialogue, Jimmy Staton.

And Mr. President, nice to see you and thank you for joining us.

- Thanks, Chris.

- An easy question, maybe not internally in the utility industry these days, but an easy question would be the rolling blackouts that happened in many places, sir, on and around Christmas Eve.

From an insider's view, was that a perfect storm?

How did that unfold and why did that happen?

- Well, we've seen a confluence of events and some of the things you all have been talking about already today is what I think is an incredible amount of economic growth in the Carolinas.

From myself, I moved here because we wanted to be here because of the opportunities that we've seen.

And so you've seen a lot of growth in the Carolinas and throughout the southeast.

On top of that, what we experienced were sustained cold with wind, which creates greater issues.

We've also seen a little bit of a tightening of electric capacity markets over the last probably seven or eight years.

And so the confluence of those events put us in a very tight market and electricity, at least currently, is not stored, if you will.

And so people are having to make, our folks are having to make decisions on a minute by minute basis to ensure that the supplies on one side and the load on the other side are met.

And when that doesn't happen, when there's not enough supply for the load, then, difficult choices are made to reduce load.

And that's what happened during this event.

It's the sustained cold throughout the broader region I think created issues that somewhat overwhelmed the overall system.

- And just very quickly, 'cause we have so many issues what one lesson would, in this case, Santee Cooper or any of the utilities learn from this?

What one thing would you take forward and apply?

- I think ensuring that we have adequate capacity and enough in the way of reserves to be able to meet extraordinary loads like what we have experienced.

Again, we have seen the Carolinas get a little bit colder over the last decade or so.

And I think the learning here is we've gotta make sure that we stay up capacity wise with the needs that we are experiencing.

- Terik, question?

- Yeah, I would love to just piggyback onto some of the things of learning, which is it's great that we are understanding some of these dynamics.

I'm curious as to see like what should the injury sector be doing in terms of thinking about for research and development to actually to move forward some of the areas because we're seeing like, it's getting colder in the southern states.

Now we have to start thinking about what does the new levels of investment need to be making, whether it's in clean energy and how do we do that?

- I think, well, it's a great cor great question, Terik.

And I think as a group, we need to continue to work together diversifying the fuel mix across the broader region.

Certainly here at Santee Cooper, we are very focused on how do we diversify the fuel mix that we have so that we are not just reliant on coal and natural gas.

And by the way, natural gas supplies were a little bit constrained during this timeframe.

So we need to move to more renewable energies.

I think we need to make some investments in the transmission systems so that we can more easily communicate between various areas so that we can bring more energy in from sources other than those located directly in our backyard.

So I think that's gonna be important for us to get the capacity that we need to diversify our fuel mix and then to increase the capabilities of our transmission systems.

- Hey, good to see you.

We're glad to have you in South Carolina.

From your experience in other states in all South Carolina obviously has not got the perfect infrastructure in place across the state but it's not as bad as some other states that we hear about all the time, Texas, etc.

How do you rank our network?

What would you like the general assembly to see?

How would you like them to invest in the infrastructure in South Carolina?

- Again, that's a great question, Carl.

I appreciate it.

I would rank South Carolina very high.

I think after the Texas event that happened, I know that the office of regulatory staff looked at all of the utilities in the state to see how prepared we were.

And I think across the line chair of South Carolina and into North Carolina, we fared fairly well.

But again, from an infrastructure perspective, I think we need to be focused on coordinating amongst the utilities.

I think that's gonna be increasingly important.

We need to be encouraged and to make the appropriate investments in transmission infrastructure and in generation infrastructure and to do it collaboratively as we can.

The last thing I would say is the cooperative network here in South Carolina in particular is instrumental in ensuring that we can meet all of the needs throughout the state.

And so continuing to press for greater collaboration with all of the stakeholders, I think will help us be able to plan better jointly for our future.

- President Staton, it was just a handful, short handful of years ago that the long-term viability of what Santee Cooper might be going forward not just for the low country but as an asset for the state of South Carolina, was in question.

The governor clearly wanted to sell it.

They talked about it within the general assembly.

But it seems to be and I don't wanna put words in your mouth but there seems to be a sense now that there is a long-term vision squarely in place for this to continue as Santee Cooper as an energy provider.

Is that an accurate term and what is the long term for you?

- I think it is an accurate term.

I think in large part, the angst around Santee Cooper has waned.

I think the legislature and the governor have recognized that Santee Cooper is a valuable asset for the state.

The legislature did impose some new regulatory requirements on Santee Cooper to continue to increase the level of transparency.

And again, I think the team now at Santee Cooper is very, very transparent.

But for instance, you will see Santee Cooper be much more transparent and open in our processes.

For instance, we're undertaking an integrated resource plan right now and that is a public process where we are soliciting input from all stakeholders.

That's not something that was required of Santee Cooper in the past, but it is now.

And for me, I think that's a great move for the state and for Santee Cooper.

Increasing that transparency.

This is what I'm used to.

I've mainly been with publicly owned companies and so I think this is a good positive move for us at Santee Cooper.

But as I mentioned earlier, our focus is on diversifying our fuel mix.

I do think expanding that transmission system and creating what I think of as energy liquidity in the state will help us drive down overall electric prices.

We are building for growth because there is tremendous growth throughout the Carolinas.

You mentioned, Terik, earlier, we are leveraging the infrastructure that we have here at Santee Cooper because we do have resources in essentially every county in the state.

We are leveraging those to create middle mile opportunities for broadband so that we can help provide the broadband necessary to help our rural communities continue to thrive.

Santee Cooper is not just an energy provider.

We're also a water provider to 200,000 South Carolinians.

So we are gonna continue to focus on ensuring we're making the right investments there to provide clean water and we are continuing to work with our partners throughout the state on economic development.

We've had some great opportunities on the economic development front.

And you mentioned, well, one of the things I would like to mention is redwood materials in Berkeley County.

We were able to work with the secretary of Commerce, Secretary Lightsey, along with the leadership at Berkeley County and Mike Fuller and his team at Berkeley Electric co-op to help bring redwood materials here to South Carolina.

And that's the single largest investment the state has ever seen.

So we're very excited about the opportunities that Santee Cooper can bring to help create economic development, keep our rates affordable and be one of the most resilient electric providers in the state.

- Yes, thank you so much for adding to that.

And really, we just talk about economic development we talk about attracting more trade to the Carolinas.

What are some other things in the utilities industry should be thinking about with enhancing infrastructure to become more attractive for starting supporting businesses coming into the Carolinas?

- Well, first of all, what businesses are generally looking for when they come into the Carolinas is they want affordable electric pricing.

They want reliable electricity and they need access to water.

And so Santee Cooper, what we can do in that environment is to ensure that we are providing those at the types of prices and reliability that customers expect.

But I think we also are going to have to continue to demonstrate that we are bringing more renewables to the table.

The new businesses that are coming in have expectations that we will have a greater renewable mix as we move forward.

And so for folks like us at Santee Cooper, we are very focused.

Earlier, I guess, late last year or last year, we went out to seek about 425 megawatts of solar.

And we are in the process at various times of bringing that onto the system.

We are also working collaborative with our cooperative partners to go out for another 1,000 megawatts of renewable resources that we can attach to our system.

So I think being flexible, continuing to be reliable, providing affordable energy and bringing a diverse mix of assets to the table, I think will continue to help us attract business throughout the state.

- And Carl, we have about two minutes left.

- Just following up on that, I mean, the amount of growth we've seen is just unbelievable and I don't think anybody three years ago would've projected this type of economic development growth enhancement across the state.

Long term, I know y'all have got another gas plant on the horizon and looking at building that out.

Is there a panic button?

Have you and your board talked about if the growth continues at this clip?

Do you have to start fast forwarding your plans for the gas?

- [Chris] And we have about a minute and a half, sir.

- We do need to move more quickly.

we've talked as an industry about the fact not so much on the state basis, but beyond that.

Accelerating the permitting process would be important too so that we could move more quickly to permit and put plants in place.

Look, we are working particularly in partnership with another utility in the state on a new natural gas plant.

That natural gas plant is gonna give us a great deal of flexibility to incorporate renewables but also to meet some of the growth needs that we are anticipating here in the states.

But right now, I think we are doing jointly throughout the states we're working together to ensure that we have the capacity to meet the growth needs of the state.

I feel like we have a good plan in place to the extent we can accelerate any of the opportunities to permit, construct.

All of those will be beneficial to us.

- President Staton, thank you for taking time to be on the program.

We'd like to invite you back 'cause we didn't get a chance to unpack the economic development equation and how not just key Santee Cooper has been in that but how you keep up.

Proverbial, you're the dog that caught the car and we all are now and we have to undo that.

But sir, thank you and please come back.

We hope we can get you back.

- Would love to do it.

Enjoyed this today.

- Thank you, Jimmy.

Nice to see you.

Carl, always nice to see you.

Thanks for making trip.

- Thank you for having us.

- And Terik, I know you're close to the studio but we still like having you.

- Thanks for having me.

- Happy New Year.

I don't think it's too late to say that.

Thank you, all for joining us.

Before we leave, the name Tyler Glenn that may mean not a lot to you, but within the production crew here, he means something to us.

He was a guy that passed away within the last two weeks and a bit unexpectedly.

He had been suffering with a chronic illness that eventually took his life.

But Tyler was one of the guys that you never think about being warm and fuzzy or particularly a hugger but he was an exceptional production executive and a good friend and a good friend to this program and a very good TV guy.

And we were honored to work with him.

So we'd liked to tell his family that we certainly miss him and we were glad to have him as part of this crew.

And we'd like to thank everyone that supported us on the program along with Tyler.

So thank you for watching this program.

We hope you have a healthy and prosperous New Year.

And next week, we got another program, so we'd like you to come back and be part of that dialogue as well.

Until then, I'm Chris William.

And we hope your weekend and your new year are good.

Goodnight.

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