South Carolina Public Service Authority - JP Morgan Public Finance Transportation and Utility Investor Forum Presentation March 2022
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South Carolina Public Service
Authority
JP Morgan Public Finance
Transportation and Utility Investor Forum
Presentation
March 2022
Introduction
®
Since the cancellation of the nuclear units, Santee Cooper has made great progress
✓ Enactment of Act 90 of 2021 establishes reasonable protocols for Santee Cooper operations,
oversight, and regulations
✓ Resolved outstanding major litigation
✓ Redesigned and launched a new, leaner and greener power resource direction
✓ Expanded focus on system resilience and risk management
✓ Implementing plan to maintain system costs to keep rates stable over the next several years
✓ Gas hedging post 2025
✓ Bond refinancings
2
Santee Cooper Overview
®
Our Business Our Customers Power Supply (MWh’s)
➢ An electric and water utility ➢ Retail and wholesale provider serving Nuclear
Hyrdro & 9%
headquartered in Moncks Corner, over 2 million South Carolinians Renewables
South Carolina 3%
➢ Provided over 24,601 GWh in 2021
➢ Owned by the State of South to its customers
Purchases
Carolina 27%
➢ Largest customer is Central Electric
Coal
➢ One of the nation's largest public Power Cooperative; providing
41%
power utilities: approximately 58% of Authority’s
Natural Gas & Oil
$11.7 billion of assets (2021) revenues 20%
$1.7 billion of revenues (2021)
2021 Customer Composition
Our Rates 2021 Sales Composition (MWh’s)
(% of Revenue)
➢ Autonomous rate making ability
Retail Retail 16%
➢ Competitive wholesale and retail 23%
rates in state
➢ 2021-2024 rates are frozen in Large
accordance with the Cook Settlement Large
Wholesale Industrial
61% 21%
Agreement Industrial Wholesale
16% 63%
➢ Subsequent to 2024, ~ 75% of
revenues are derived from automatic
rate adjustments* which mean no
action is required by management or
the Board of Directors *Automatic rate adjustments will not occur
during the rate freeze period 3
®
Power Supply
Santee Cooper maintains a diverse, low cost, and reliable power supply portfolio
Current Generation Sources
2021 Capacity (MW)1 2021 Fuel Mix (GWh)
Hydro & Renewables
3% Hydro & Renewable 3%
Natural Gas & Oil
Natural Gas &
25%
Oil
20%
Coal
Coal 41%
66% Nuclear
Nuclear 9%
6%
Purchases 27%
5,338 MW 25,284 GWh
Base Load Availability
Coal Nuclear Gas
(%) (%) 100.0 (%)
93.3 93.4 95.9 94.8 93.1
100 86.2 100 86.1
91.1 100 92.7 90.7 87.9
83.2 82.2 81.3 82.5 85.4
77.1
80 80 80
60 60 60
40 40 40
20 20 20
0 0 3 0
2 2 3 3
2016 2017 2018 2 2019 2020 2021
____________________________________________ 2016 2017 2018 2019 2020 2021 4
2016 2017 2018 2019 2020 2021
1. Based on winter capacity and does not include SEPA, Buzzard’s Roost and St Stephen
2. 2017- Cross Unit 2 was in an inactive state during this time; 2018- Reflects an outage at Cross to install new equipment related to upcoming environmental regulations, as well as, two
forced outages at Cross 4 and Winyah 1 that were anomalies; 2021- Reflects an outage at Cross 2
3. Spring 2017 – 54 days for scheduled refueling outage; Fall 2018 – 50 days for scheduled refueling outage; Fall 2021 – 36 days for scheduled refueling outage and 26 days of unscheduled
outage due to fire
4. 2018- Rainey units experienced turbine/generator outages 4
®
Legal and Legislative Update
5
Nuclear Issues Resolved
®
➢ The 2017 cancellation of the VC Summer 2 & 3 Nuclear Project
resulted in numerous legal and legislative actions that lasted for
several years
➢ Two big outcomes:
➢ Cook Settlement – class action suit against Santee Cooper by its
customers
➢ Act 90 of 2021 – the Santee Cooper Reform Bill
➢ The settlement of all nuclear-related lawsuits, along with the
oversight and certainty provided by the SC Legislature through Act 90
of 2021, have placed Santee Cooper in a strong position moving
forward.
6
Status of Nuclear-Related ®
Class Actions
Cook Settled Settlement agreements
executed
Glibowski Settled Final orders of approval
entered by court
Settled
All matters dismissed
Turka
7
The Cook Settlement ®
& Rate Freeze
➢ The 2020 Cook Settlement resolved the nuclear situation, allowing Santee
Cooper to move forward
➢ Settlement Amount. Santee Cooper must contribute $200 million back to
customers in three annual installments ($65m, $65m, $70m)
• Santee Cooper has paid $130 Million to date, with the final payment due in the third
quarter of 2022.
➢ Rate Freeze. Rates were frozen/fixed for the majority of Santee Cooper’s
customers, including Central, beginning August 2020 and through December 2024
• These rates are consistent with rates projected by Santee Cooper in our 2019
Reform Plan
• Certain exceptions that occur during the Rate Freeze Period can be collected in
rates after 2024
• Santee Cooper will need to manage cost and liquidity during the rate freeze period
and until any exceptions can be collected in future rates
8
®
Santee Cooper Reform
Act 90 of 2021
• Legislative and Executive Action
– SC House vote of 111-0
– SC Senate vote of 43-0
– Signed by Governor McMaster on June 15
• Reform Areas Include
– Governance changes
– Debt and real estate oversight
– Resource oversight
– Rate-making process
• Final legislation did not include
a sale provision
9
Act 90 of 2021 – ®
Governance Changes
Board Related Changes
• Board transition
– Board member terms expire 3 per year beginning January 1, 2022 through January 1, 2025
– May not be reappointed if serving prior to January 1, 2018
• 2 non-voting ex-officio Central representatives
• Voting board member changes include
– 4-year terms, 3 term limit
– New education and experience qualifications for appointments
– Diversity standards for appointments
– New best interest test
– Board committee requirements
10Act 90 of 2021 – ®
Debt and Real Estate Oversight
Joint Bond Review Committee
• Existing 10-member legislative committee
• Jurisdiction and Schedule
– Approves certain state financing, including colleges and
universities
– Approves certain state agency real estate transactions
• Santee Cooper – JBRC Approval
– Prior to issuance - bonds, notes or other indebtedness
must be approved
• Does not apply to short-term or revolving credit debt
or refinancings for savings
• Approved debt may be issued across multiple series
and over a three-year term
– Certain Santee Cooper real estate transactions must be
approved
11Act 90 of 2021 – ®
Resource Oversight
South Carolina Public Service Commission
• 7-member commission elected by the General Assembly
• Santee Cooper – PSC Approval
– Integrated Resource Plan – Every 3 years
– Generation facilities greater than 75MW
– Transmission facilities 125kV or greater
• Certain transmission projects grandfathered
– Non-renewable energy Purchase Power Agreements greater than 10 years
– Competitive procurement process for renewable generation
12Act 90 of 2021 – ®
Rate-making Process
Board of Directors retain sole rate making authority
Rate Process in Enabling Law
• New statutory process mirrors Santee Cooper’s existing
practice
• Establishes an exclusive process for challenging rate
adjustments approved by the Board
• Office of Regulatory Staff
– Must inspect, audit and examine the proposed rate adjustment
– Is a party in interest entitled to appeal
– Must comment on an annual pricing report submitted by Santee
Cooper
13®
Debt Plan
14®
Existing Debt Inventory
Debt Outstanding as of 2/28/221 ➢ Santee Cooper’s debt management plan has consisted of the
($ millions) following:
Revenue Obligation Bonds:
▪ Ensure funds are available for capital projects
Fixed $ 6,494,843
Variable 143,200 ▪ Paydown debt as internal funds become available
Total Revenue Obligation
Bonds $ 6,638,043 ▪ Execute a multi-faceted refunding program that is staged
Bank Facilities: in tranches and targeted at mitigating risk and taking
Commercial Paper $ 119,876 advantage of historically low interest rates
Revolving Credit Agreements 22,211
Total Bank Facilities $ 142,087
Total Debt Outstanding $ 6,780,130
Debt Service Schedule2
$ millions
800 Principal
• In 2021, Santee Cooper’s Board approved setting aside $85 million to use
Millions
towards its 2023 debt service payment Interest
600
400
200
-
2022 2026
_____________________________________________
2030 2034 2038 2042 2046 2050 2054
1. As of February 28, 2022. Also reflects total debt.
2. Debt service on existing debt as of February 28, 2022; includes benefit of BABs subsidy; shown on a cash basis; includes 2016D $174,980,000 bullet maturity in 2023 and we have set aside $85 million in the Debt
Reduction Fund which will be used to defease a portion of this maturity
15®
Debt
Total Debt Outstanding 2010-2022 at Year-End
Billions
$9.0 $8.2 $7.9
$8.0
$7.7
$6.9 $7.3
$7.0 $6.8 $6.9 $6.8 $6.8 $6.8
$5.9
$6.0 $5.3 $5.5
$5.0
$4.0
Debt peaks
$3.0 Debt level
before Santee
$2.0 Cooper began
$1.0 nuclear
borrowing
$0.0
1
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
➢ Since January 1, 2017: Reduced the amount, cost and risk of debt
▪ Total Debt Reduction = $1.4 billion
▪ This reduction in debt also includes having issued $450 million in new money proceeds
▪ Refunded approximately $2.2 billion in debt, which resulted in approximately $765 million in gross savings
▪ Board approved setting aside $85 million for a portion of the 2023 debt service
(1) As of February 28,2022 16®
Historical Financial Metrics
Debt Service Coverage1 Cash Reserves and Days of Liquidity
(days)
1.80
1.60 1.42x 800
1.40x 1.40x 685
1.40 1.32x 1.30x
1.21
1.20 600 531 548
228
1.00 .87x
386
0.80 400 245 343 353
371
0.60 137
457 186 195
0.40 200
249 286
0.20 157 158 177
0.00 0
3
2016 2017 2018 2019 2 2019 2020 2021 2016 2017 2018 2019 2020 2021
Days Cash on Hand Days Liquidity on Hand
Debt to Capitalization
90%
84%
85%
80% 80% 80%
79% 79%
80% 78%
77% 77% 77% 77%
76% 76% 76% 76% 76%
75% 75%
74% 74% 74%
75% 73%
72%
73%
72%
71% 71% 71%
70%
69%
70%
65%
60%
1985 1990 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
____________________________________________
1. Includes CP, Revolving Credit Agreements and Payment to the State.
2. Includes CP, Revolving Credit Agreements and Payments to the State but excludes the special item related to Cook case settlement.
3. Includes CP, Revolving Credit Agreements, Payments to the State and Special Item related to Cook case settlement 17®
Finance Plan
Santee Cooper is in the midst of executing a multi-faceted refunding program
that is staged in tranches
2021 Callable Bonds Bonds Callable After 2023
Up to $1-1.5 billion of remaining $4 billion
Targeted Amount
$175
($mm) Product A Product B Product C
Interest rate hedge (swap);
Fixed rate current Forward bond (current
Strategy Tender offer current refunding at call
refunding refunding)
date
Priced and executed after Priced and executed after
Subject to refunding Subject to receptivity and
Condition tender offer; subject to tender offer; subject to
economics tender economics
refunding economics refunding economics
Variable rate (swapped to
Mode Fixed rate bond Fixed rate Fixed rate fixed with interest rate
swap)
These transactions have been completed, for a total of approximately $434
Million Gross Savings and almost $299 Million in Net Present Value Savings
18Refunding Summary
®
➢ ~60% of Santee Cooper’s outstanding bonds, or $4.0 billion, were callable through 2026
➢ As mentioned previously, Santee Cooper planned to reduce its debt by refunding for savings
through a tiered approach stage in tranches
▪ In 2021, Santee Cooper completed the first tier with a current refunding
▪ In February 2022, Santee Cooper completed the second tier with a very successful tender
& exchange transaction and we plan to share the details with you today
➢ Currently evaluating next steps to achieve savings on the remaining callable bonds
19Tender/Exchange Bonds
®
Refunding Year of Bonds Offered in Accepted in Tender
Candidates 1st Call Tender/Exchange Exchange
2013 A, B, E 2023 $1,048,150,000 $440,335,000
2014 A, B, C 2024 947,635,000 642,755,000
2015 A, E 2025 701,310,000 $365,190,000
2016 A, B, C 2026 0
Total $2,697,095,000 $1,287,710,000
47.74%
Participation Rate
202022AB Tax-Exempt ®
Refunding Transaction Highlights
Refunding Par Refunded Par
2022A (Tender) $930,990,000 $943,185,000
2022B (Exchange) 352,201,000 344,525,000
2022AB Total $1,283,191,000 $1,287,710,000
Gross Savings ~$378 million
NPV Savings ~$249 million
NPV Savings as a % of
Refunded Bonds 19.4%
Maturity Dates 2023-2055
All-In TIC 3.31%
21®
Investor Relations
Visit our website at
www.santeecooper.com/investor-relations
or email us at
scbonds@santeecooper.com
1-877-246-3338
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