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- "Carolina Business Review" is more than just a television program or online or streaming.

For 30-plus years, we've been a platform, probably is a better way to say it, for dialogue, discovery, offering in-depth analysis that goes beyond the headlines, above the headlines, to uncover underlying forces at play here in the Carolinas.

So, welcome again to the most widely watched program on Carolina business, policy, and public affairs.

In a moment, we start this week's dialogue about some of the things that do mean most to us across this region.

And later on, of course, energy and the delivery of it is the lifeblood and oxygen for our communities and for economic development.

From Charleston, Jimmy Staton, chief executive officer from Santee Cooper, will join us again.

- [Announcer] Major funding also by: BlueCross BlueShield 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.

On this edition of "Carolina Business Review," Anna Beavon Gravely of Restless Politico, James McQuilla from the Orangeburg Chamber of Commerce, and special guest Jimmy Staton, president and CEO of Santee Cooper.

(dramatic music) - Welcome again to our program.

Happy weekend in some places and other places not, but still, we're glad you joined us.

Anna Beavon, welcome.

James, good to see you.

- Thank you, good to be back.

- Thanks.

- Anna Beavon, let's take a couple minutes out for politics, and in North Carolina for you.

In 2023, the North Carolina Republican Party had their convention and a man named Michael Whatley became chair.

And now, that lasted, like, a minute, and now he is advancing into the RNC role for the country.

What is that?

- Yeah.

So he was chair during the 2020 election as well and I'm not too surprised that he's moving forward, getting called to the big leagues, if you will, because North Carolina was a shining star in 2020 there was a lot to be said for picking up super majorities.

The success in general assembly, council of state, in a lot of the positions in North Carolina's elections and then seeing that replicated again in '22 for the general assembly races.

And so he fundraised quite a bit, which is his chief job in his position with the party is to raise a lot of money.

And so he raised money and he helped propel North Carolina and the candidates that found success.

- So he got the call.

- He got the call.

It doesn't surprise me.

- All right.

James, in South Carolina, South Carolina just had the first Democratic presidential primary.

Just had recently in the last couple of weeks, of course, the Republican primary for president.

Did that have an economic impact on the state?

We know the politics of it, but does it have an economic impact that's meaningful?

- I don't think it really did.

It served its purpose and it's now done.

But for our state, we like to say... Well, we have a motto at the chamber that we have broadened across the state, and that is "success is simple when we work together."

So yes, we are a red state, right?

But we have both Republicans, Democrats, we're a very diverse state and becoming more and more diverse all the time.

It's "success is simple when we work together."

And it doesn't matter whether you are a Republican or a Democrat or an Independent or you're from the city or the country, for us to move forward, we have to work together, and we've been doing that in South Carolina.

- Okay.

Let's move beyond politics.

And let's look down the road for the balance.

Here we are, the end of first quarter, it's hard to believe, almost in 2024.

What do you think job one should be for North Carolina?

- First thing that comes to my mind is actually a political answer.

And so we are just past the primary in North Carolina, and that means our general assembly is gonna be coming back.

And so, I think number one priority across the board is come in and leave quickly.

And as soon as they adjourn and can leave and get out of Raleigh, so to speak, and get back into their districts and meet with constituents, continue their campaigning for the general election, the better it's gonna be.

- [Chris] James, what do you think?

South Carolina is?

- Economic development for us.

- [Chris] I mean, given the great year you just had?

- Right.

So, continue that, right?

There's a lot of opportunity.

We need to work together to make that happen.

Stay away from the social distractions and that's where we tend to ball down, but continue to focus on growing the economy because it's kind of like a really good team.

As long as you're winning, it doesn't matter what else is happening, everybody's happy, but you start having issues when there aren't that many wins.

Well, right now, we're winning.

Scout, we have an EV battery plant coming, we have some growth with Google and we need to continue to seek out wins.

When we have those economic wins, people are happy.

- You know, so to that point, it's hard to imagine, you know, "trees don't grow to the sky" was the old saying.

But South Carolina had a record year, North Carolina had a record year.

I mean, the numbers are almost... Well, they are astounding, and trees don't grow to the sky.

So I want you both to answer this question.

Do you see economic development announcements plateauing?

- Oh, good question.

I'm not sure if they'll plateau.

Maybe in answering my own question, I am saying that they will plateau.

So I think that we will probably not see as many announcements, but I think the weight of the announcements will be heavier.

North Carolina will definitely be going for a third year in a row with a CNBC rating at number one.

We're one of a few states that have gotten it two years a row.

- [Chris] You may have just changed it from North Carolina.

- I know.

Sorry.

We'll knock on some wood later.

(laughs) But we're definitely going for a third year.

I mean, if we've gotten two, we have already reached an elite category of states that have had it two years in a row.

And I think with that comes certainly a target on our back to have other states like South Carolina coming for us or coming for that title, and I think ultimately, the rest of the country wins when we're racing to the top.

That feels somewhat cliche to say, but ultimately, like trees may not grow to the sky, but if they're all pretty high, overall, the forest wins, right?

- Yeah.

Okay, so not to use another metaphor, James, I mean, can South Carolina, and not to be flippant about this, but can South Carolina keep pulling rabbits out of their hat when it comes to these big announcements like Scout?

- I honestly think so.

It's our time, really.

North Carolina has done some great things and we applaud them.

Georgia also, some great economic development over the last five years.

It's our time.

And as I said earlier, both houses of our legislature are working together with the Department of Commerce to go out and attract new business.

The research universities understand how important it is.

I think the technical colleges in South Carolina are also working to assist in bringing in industry.

So we have a lot of room for it, we have a lot of space, for both manufacturing facilities as well as individuals to move to South Carolina, and we want them to.

So we're not asking anyone to not come, we're asking folks, "Hey, South Carolina's a good option not to pass through on your way to Disney World, but to stay."

- You know, we only have about a minute left and I know you both talk to a lot of people, have your ear on the ground, tend to listen, tend to read a lot.

Anna Beavon, in about a minute, are you hearing anyone talk about a recession, any kind of slowdown at all?

- Not really.

There's a bracing for it, certainly.

I think with a lot of the new things that we're putting into play, like sports betting, we'll be rolling out pretty soon.

I think that also has a lot of revenue implications.

A lot of what the general assembly looked at toward the latter part of '23 was heavily focused on new ways to find revenue and bring in more money so that they can sort of build in a buffer to not have there be as much of a recession.

But our state has a very large rainy day fund and that's one of the things that helped us through COVID.

- Yeah, and I think both North and South Carolina both have surpluses in their budget for a lot of time.

Is this a cushion for South Carolina and would you expect to slow down and are you hearing anyone talk about that?

- I'm not hearing anyone talk about that recession, no.

Inflation is still an issue.

It's being discussed, but we're working around that.

So I can just see more progress, I don't see us moving backwards.

- Okay.

All right, stay with us please.

Next week, on this program, it's hard to imagine this, but Dr. Harold Martin, that name may ring a bell, but Dr. Martin is the chancellor at NC A&T.

They are the number one HBCU when it comes to size in the country.

Not just the Carolinas, but the US.

Also, they've been doing it for 10 years in a row.

Dr. Harold Martin would be our guest next week on this program.

Also coming up is the Secretary of Commerce for South Carolina, the honorable Harry Lightsey will also be joining us coming up on this program.

The Carolinas are a microcosm of the broader national experience.

That's easy to see and easy to say, but they grapple with the same issues like renewable energy.

And I pull that one out because renewable energy in 2022 had a staggering $1.2 billion investment in '22 alone in the Carolinas, and that's just one thing.

So the investments and the policy around just that one thing are multiplied, so as we unpack and explore these related complex energy topics in hope of understanding how it all feeds into the growth, we're gonna do it with the CEO of Santee Cooper.

Joining us again is the CEO of Santee Cooper, Jimmy State, and Jimmy, welcome back to the program.

- Thanks, Chris.

Good to be here.

Good to be here.

Nice to meet you all.

- Jimmy, I have to ask you this question.

You know, you hear the term "energy crisis" in the Carolinas and you think, "Wait a minute, I thought everything was good in the Carolinas."

Is there an energy crisis?

- I think there is a crisis looming in the Carolinas.

We have, Duke, Dominion, all of us have done a terrific job of being able to meet customers demand.

Obviously in December of '22, we had a challenge and that demonstrated to us that if we don't move now, then this growth that we are experiencing is gonna challenge the grid.

And so we have moved forward to address the immediate issues, acquiring additional capacity, doing those sorts of things, but the growth in the Carolinas and combined with the energy transition that we see moving forward, we have to continue to move as quickly as we possibly can to add more generation resources in the Carolinas.

We need to expand and create a more robust electric transmission grid in the Carolinas so that we can feed all of this growth and the challenge that we're facing in doing this is that it is the number of data centers that we see coming in and information is necessary.

So that's not a complaint, but when they come in, they put in one, two, or three facilities, those are 200 megawatt facilities at a time, and they can be built in a two- or three-year timeframe.

It takes us eight to 10 years to build a generation resource in order to meet that kind of load, and so, we need to streamline the regulatory processes that enable us to move forward and put generation in place in a more rapid way.

It takes us about 10 years to get a new transmission line in place.

And yet, because we're gonna be operating in a more distributed, you mentioned renewable energy, we're gonna be operating in a more distributed environment than what we're used to 'cause you're gonna have different resources at different places on the grid.

You've got to have that more robust grid.

And if it takes us 10 years to build a transmission line, it's gonna be a bit of a challenge to meet that.

So that's what I mean.

I think we're challenged, we're challenged by the growth, but we definitely are up to the challenge of ensuring that we aren't the reason we can't continue to grow.

So yeah, I think there's a looming crisis, but I think it's not just in the Carolinas, quite frankly.

I think we're seeing it around the entire country where we're closing plants prematurely.

We haven't had the time.

And if I could just final comment on that would be, I think we have an opportunity here in the Carolinas to do what I don't see happening in the rest of the country, and that is moving at a different pace through this energy transition by not prematurely closing down coal units, for instance.

We'd love to, but we're gonna keep everything that we have on the table.

We're gonna bring more natural gas into the Carolinas so that we can have the flexible resources we need to be able to adjust when it's not a particularly sunny day.

- And quickly, so back to the coal thing.

Do you think you can make the rational argument that those that oppose coal will give you and other generators some time?

- I believe we can and I think we're making some progress in doing that now.

Even some of the conservationists in South Carolina, for instance, have have an appreciation for the fact that we don't need to prematurely close coal.

And don't get me wrong, I mean, you know, over time, the federal government is gonna continue to challenge the continued operation of coal plants in the country and so we're going to have to move away from coal, but we need to do it, and this is the opportunity I see for us in the Carolinas, is we need to do it in a thoughtful, timely way.

Let's do a transition that makes sense over time and maybe not be as focused on how do we get there By 2035?

Maybe it's 2050 or 2060.

- Yeah, you mentioned a 10-year runway for infrastructure.

How do you plan to streamline that?

You mentioned streamlining and the need and that being a challenge.

What do you see as an option for that?

- It's a great question.

In large part, we need interest.

And one of the things that we've started to see is, politically, there is significant interest.

In both legislatures, I think, there's a great deal of interest and how do we speed things along so that we can continue to provide affordable, reliable, and resilient energy.

And so for instance, in South Carolina, there's a bill right now that would streamline some of the permitting requirements.

Still giving everyone a voice because we believe it should be an absolutely open and transparent process, but setting some deadlines so that we can move forward irrespective of what the answer is, right?

So if the answer is no, then we know we need to go in a different route.

If the answer is yes, then we get to move forward.

And those are the kinds of things that we're starting to see, and what I've seen is our legislators, certainly our governors have recognized that it's not just the highway system that is the infrastructure that we need to be focused on for economic development and economic growth, but it's the electric infrastructure.

The energy infrastructure, period, is incredibly important.

We need more resources.

We're working federally to accelerate that, and quite frankly, I think we've seen some acceleration at that level.

We need it at all levels of government.

And again, I think we're starting to see it.

I can tell you it's a very focused effort here in the Carolinas because we're growing so fast.

- [Chris] James.

- Yeah.

Well, I want kind of pivot just a little bit, but still be attached to that.

So energy is a STEM industry, and everyone is trying to figure: out where's my place in STEM?

However, it's also very labor intensive, and when you're talking about doing something that takes 10 years and putting up posts and building plants, you need people, you need bodies.

Where are they coming from and what are you doing to get the interest for folks who want to do that?

- It's a great question and it's a huge challenge.

There is a lot of money out there at the federal level and at my peer companies, that everyone is looking to invest and, so it's an even bigger pull.

I'm grateful to be in South Carolina 'cause what I have found is we have some of the greatest folks.

- [James] South Carolina.

- Yeah.

(laughs) I think the technical colleges in South Carolina, we work very closely with them to prepare our line techs, to give them the resources that they need.

We provide educators as part of the process, we help provide curricula.

More importantly, we have jobs for them when they come out of that.

- And you're doing it in high schools also, right?

- We drop down into high school and quite frankly, we're starting to drop down into the elementary schools.

We have some programs where we provide solar energy at different schools around the state in order to kind of spur the interest and the energy system, the energy grid across the state.

So we work at.

Right now, we're working at all levels.

And the last thing for me at Santee Cooper anyway is we attract people because we love our mission.

Our mission is to improve the lives of South Carolinians.

And I feel like my team of 1,575 dedicated people, they do it every single day and we're so involved in the community that that draws interest as well.

And so again, we train well externally, we train really well internally, we provide family-sustaining jobs at all levels.

Whether you're an engineer, a line tech, anywhere else in our organization, you're gonna be able to make a living.

And it's the most dynamic time I've ever seen in my 40 years to be in this industry.

- Does Santee Cooper, Jimmy, have... You have a unique footprint, obviously, along the coast, Grand Strand, Lowcountry, and other places down there.

Does Santee Cooper have the capacity of a balance sheet to meet the needs for growth?

- It's a great question.

We are unique, obviously.

We're not an investor-owned utility.

We are owned by the state of South Carolina, but our bonds are not issued.

When we borrow money, our bonds are not issued through the state, they're issued directly through Santee Cooper.

Our board has the right and the obligation to ensure that our rates recover all of the costs including recovery of the interest and the defeasance of debt over time.

And so we have surprisingly great access to capital and we're gonna have to tap that because we have a pretty ambitious plan over the next 10 years to make the kinds of investments that would create a more robust transmission system and a cleaner, more efficient, more effective generation.

So I think we have access to capital.

We do fund, just like any IOU would, we fund part of it from the cash flow from our operations, but the rest of it, we have access to bonds and that bonding is a mix of tax-free and taxable bonding, and it's all general obligation.

So our credit rating is attractive, and so, we have great access to capital.

- Given the cost of money increasing vis-a-vis in interest, rates between borrowing in public debt and public financing.

Do you feel confident that the public staff in South Carolina will give you what it needs when it comes to getting the growth from the rate increases?

- I think so.

I mean, rate increases are always a challenge.

Certainly, no one voluntarily pays us more for what we do, and so, anytime we ask for more.

But one of the things that has always been true of Santee, we generally have the lowest rates in the state of South Carolina.

So our structure enables us to do that.

We have not had a rate increase since 2017.

And so I think there's a path, if we do this smartly, because we're growing so fast, we can make investments over time, I think there's a way to both improve the emissions structure of Santee Cooper, improve the physical infrastructure of Santee Cooper, and to do it in an affordable and reliable way.

Does that mean we're not going to experience rate increases?

No.

That just wouldn't be fair.

But I think we can manage rate increases along the rate of inflation and I don't know what more we could do than that and be able to provide the level and types of services and the energy sources that people expect.

- We literally have a minute and a half left.

Do you have a quick question?

- Yeah.

The energy and excitement that you use to talk about the programs and how they're going lower down into kids' lives.

Will you go into quick detail about what that looks like for elementary and middle school?

- [Chris] You have a minute, Jimmy.

Can you shoehorn that in there?

- I think I can.

I think I can.

Well, we start with the teachers, quite frankly.

We bring in teachers every year into, into Monk's Corner.

We put them on the lake and we take them through what it takes to generate electricity.

And they see it all.

They see our coal plant, they see our hydro plant, they experience the lakes that we operate.

And what that enables us to do is we've only gotten positive feedback from teachers there.

They go back then, and they're all levels.

So it's elementary, it's middle school, it's high school.

They go back then and are able to teach the kids that they represent about energy.

And then in addition to that, we have people that go out all the time and talk to schools.

- I'm sorry, Jimmy, to interrupt you.

I mean, there's so much to unpack here.

And I know, I know that Monk's Corner used to be outside of Charleston, but it's all one continuous growth area.

- Yes it is.

Yes it is.

- [Chris] Please come back.

We've got a lot more to talk about.

- I'd love to.

- Okay.

Thank you.

Thank you.

- Nice to see you, sir.

- Thanks.

- James, thanks for making the trip from Orangeburg.

Always appreciate it.

- Thank you.

- Anna Beavon from Raleigh, as well, thank you.

- Thank you.

- Until next week, I'm Chris Williams.

Good night.

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Thank you.

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