* Preliminary, subject to change. South Carolina
Description: Preliminary, subject to change. South Carolina Public Service Authority Revenue Obligations consisting of 180,075,000 2024 Tax-Exempt Improvement Series A 669,925,000 2024 Tax-Exempt Refunding Series B 50,000,000 2024 Taxable
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slide1. * Preliminary, subject to change. South Carolina Public Service Authority Revenue Obligations consisting of $180,075,000* 2024 Tax-Exempt Improvement Series A $669,925,000* 2024 Tax-Exempt Refunding Series B $50,000,000* 2024 Taxable Improvement Series C Investor Presentation July 16, 2024<br>
slide2. This Investor Presentation you are about to view is provided as of July 16, 2024, for a proposed offering by the South Carolina Public Service Authority (the “Authority”) of its Revenue Obligations, 2024 Tax-Exempt Improvement Series A, 2024 Tax-Exempt Refunding Series B and 2024 Taxable Improvement Series C (collectively, the “Bonds”). This Investor Presentation is provided for information purposes only and your sole and exclusive use in connection with the proposed offering. The information contained herein is subject to completion and amendment. If you are viewing this presentation after July 16, 2024, there may have been events that occurred subsequent to such date that would have a material adverse effect on the financial information that is presented herein, and neither the Authority nor the Underwriters have undertaken any obligation to update this electronic presentation. All market prices, financial data and other information provided herein are not warranted as to completeness or accuracy and are subject to change without notice.
Any investment decisions regarding the Bonds should only be made after careful review of the complete Preliminary Official Statement. By accessing this presentation, you agree not to duplicate, copy, download, screen capture, electronically store or record this Investor Presentation, nor to produce, publish or distribute this Investor Presentation in any form whatsoever.
This Investor Presentation does not constitute a recommendation or an offer or solicitation for the purchase or sale of any security or other financial instrument, including the Bonds, or to adopt any investment strategy. Any offer or solicitation with respect to the Bonds will be made solely by means of the Preliminary Official Statement and Official Statement, which describe the actual terms of such Bonds. You will be responsible for consulting your own advisors and making your own independent investigation and appraisal of the risks, benefits, appropriateness and suitability of the proposed transaction and any other transactions contemplated by this presentation and neither the Authority nor the Underwriters are making any recommendation (personal or otherwise) or giving any investment advice and will have no liability with respect thereto.
The information contained herein has been compiled from sources believed to be reliable, however neither the Authority nor the Underwriters shall have any liability whatsoever (in negligence or otherwise) to any person for any loss arising from this Investor Presentation or any information supplied in connection therewith. In no event shall the Underwriters or the Authority be liable for any use by any party of, for any decision made or action taken by any party in reliance upon, or for any inaccuracies or errors in, or omissions from, the information contained herein and such information may not be relied upon by you in evaluating the merits of participating in any transaction mentioned herein.
Neither the Underwriters nor the Authority makes any representation or warranty as to the (i) accuracy, adequacy or completeness of any information in this Investor Presentation or (ii) legal, tax, credit or accounting treatment of any purchase of Bonds by you or any other effects such purchase may have on you and your affiliates or any other parties to such transactions and their respective affiliates. You should consult with your own advisors and make your own independent investigation and appraisal of the risks, benefits, appropriateness and suitability of the proposed offering. Nothing in these materials constitutes a commitment by the Underwriters or any of their affiliates to enter into any transaction. No assurance can be given that any transaction mentioned herein could in fact be executed.
This Investor Presentation contains “forward-looking” statements that involve risks, uncertainties and assumptions. If the risks or uncertainties ever materialize or the assumptions prove incorrect, the results may differ materially from those expressed or implied by such forward-looking statements. Accordingly, we caution you not to place undue reliance on these statements. All statements other than the statements of historical fact could be deemed forward-looking. All opinions, estimates, projections, forecasts and valuations are preliminary, indicative and are subject to change without notice.
Transactions involving the Bonds may not be suitable for all investors. You should consult with your own advisors as to the suitability of the Bonds for your particular circumstances. No assurance can be given that any transaction mentioned herein could in fact be executed. Past performance is not indicative of future returns, which will vary. Clients should contact their salesperson at, and execute transactions through, an entity of the Underwriters qualified in their home jurisdiction unless governing law permits otherwise. Disclaimer<br>
slide3. * Preliminary, subject to change.<br>
slide4. Overview of the Authority<br>
slide5. “Santee Cooper”
South Carolina’s state-owned electric and water utility, created in 1934
One of the nation’s largest public power utilities with assets of $12.1 billion and owned system summer capacity of 5,163 MW
A source of electricity for approximately 2 million people across South Carolina, and provides wholesale water to more than 210,000 people Jefferies Hydroelectric Station Rainey Generating Station<br>
slide6. Includes bank facilities, after payment to state and excludes the regulatory asset
Days of Cash on Hand = (Total Unrestricted Funds x 365 Days) / Total Operating Expense
Days of Liquidity on Hand = ((Total Unrestricted Funds + Total Unused Credit Capacity) x 365 Days) / Total Operating Expenses
As of March 31, 2024<br>
slide7. 2023 Power Supply by Fuel Source (GWh) 2023 Sales Composition (GWh) Retail and wholesale provider serving over 2 million South Carolinians
Provided 26,185 GWh in 2023 to its customers
Largest customer is Central Electric Power Cooperative, providing approximately 58% of Authority’s revenues in 2023 Business Customers An electric and water utility headquartered in Moncks Corner, South Carolina
Owned by the State of South Carolina
One of the nation's largest public power utilities:
$12.1 billion of assets (2023)1
$1.9 billion of revenues (2023) Autonomous rate making ability
Competitive wholesale and retail rates in state
Rate freeze ends at the end of 2024. Approximately 75% of the Authority’s costs are recovered through automatic pass-through adjustments which means no action is required by management or the Board of Directors
Automatic pass-through adjustments will be reinstated January 2025 when the rate freeze ends
Any remaining shortfall will be adjusted through the retail rate process underway Rates Revenue by Customer Category (2023) 1 (1) Retail includes residential, commercial, small industrial and lighting (1) Includes deferred outflows of resources<br>
slide8. Increasing State Population Unemployment Rate Strong State Credit Ratings Growing State GDP Source: U.S. Census Bureau Source: Rating Agency Websites Source: U.S. Department of Labor, Bureau of Labor Statistics (seasonally adjusted) Source: U.S. Department of Commerce, Bureau of Economic Analysis<br>
slide9. Historical Energy Sales (GWh) Wholesale Retail1 Industrial (1) Retail includes residential, commercial, small industrial and lighting<br>
slide10. 2023 Fuel Mix (GWh) 2023 Capacity (MW)1 Current Generation Sources ____________________________________________
Based on winter capacity and does not include SEPA, Buzzard’s Roost and St Stephen
2021- Reflects an outage at Cross 2
Fall 2021 – 36 days for scheduled refueling outage and 26 days of unscheduled outage due to fire Base Load Availability Coal Nuclear Gas<br>
slide11. Retail Rates<br>
slide12. Rate Setting Cost Recovery Mechanisms Retail Rate Adjustment The Authority’s Board has autonomous rate setting authority
Certain contracts and retail rate riders that are designed to adjust automatically will be reinstated January 2025. No action is required by Board or management. These adjustments include:
Central contract is cost of service where rates adjust to actual (fuel on a monthly basis and non-fuel on an annual basis).
Retail rates have fuel adjustment clauses that are based on a 3-month rolling average.
Demand sales adjustment clauses are based on a monthly true-up.
Approximately 75% of the Authority’s costs are recovered with these automatic rate adjustments.
The Board received proposed rate changes for retail customers and approved a public comment process.
The proposed rate increase will only impact Retail base rates.
The Authority hasn’t increased base Retail rates since April 1, 2017.
The base rate adjustment would be implemented in April 2025.
Cook Rate Freeze Exceptions are not included in the proposed rate adjustment.
The Authority’s Board has not determined the final amount and term of collection for the exceptions.
A collection mechanism for Retail has been proposed but not yet approved by the Board.
Central’s collection would occur through their cost of service.<br>
slide13. Santee Cooper conducted a year-long rate study for the purpose of revising residential, commercial, industrial and lighting class rates (“2024 Rate Study”) and presented the resulting proposed rates to its Board on June 10, 2024
The recommended rate adjustments (detailed below) include a single adjustment to rates effective in April of 2025
The Cook Rate Freeze Exceptions are anticipated to be collected through a proposed rider added to customers’ bills and would not be included in the base rate Average increase in total revenues for all customers in class. Not all customers in a class will experience the same level of adjustment
Does not include recovery of Cook exceptions
Does not reflect any changes in customer behavior based on new rate design
Includes Industrial Firm & Non-Firm<br>
slide14. Residential Rate
(1,000 kWh) Commercial Rate
(5,000 kWh) Industrial Rate
(9,000 kW / 5,000,000 kWh) Based on rates on file with the SCPSC for the period of June 1, 2023 through May 31, 2024. Central is the Authority’s largest customer (58% of 2023 revenues)
Central is a wholesale cooperative that provides power to approximately 20 distribution retail cooperatives throughout South Carolina
In 2013, the Authority and Central modified their existing power sale agreement; earliest termination extended to 2058
The Authority also has several power sales agreements with regional power providers for various terms (3% of 2023 revenues) The Authority directly serves approximately 200,000 residential, commercial and small industrial retail customers in its assigned retail service territory which includes parts of Berkeley, Georgetown and Horry counties (22% of 2023 revenues)
The Authority has seen customer account growth ranging from 2.2%-3.8% per year over the last 5 years
The Authority’s direct customers currently include 27 large industrial and military customers include Joint Base Charleston, Century Aluminum and Nucor (17% of 2023 revenues) Wholesale Retail<br>
slide15. Resource Planning<br>
slide16. The Authority develops integrated resource plans (“IRP”) as part of its overall planning process
The Authority is required to prepare and submit an IRP to the South Carolina Public Service Commission (“SCPSC”) every three years with annual updates
The Authority filed its IRP for 2023 with the SCPSC in May 2023, and it was unanimously approved in March 2024 (the “2023 IRP”)
The Authority will file an update to the 2023 IRP in September 2024 Key Conclusions<br>
slide17. The Authority and Central entered into purchased power agreements for their respective load ratio share of 200 MW’s of solar which is expected to be online in 2025
Since the passage of Act 90 of 2021, the Authority is required to file its Competitive Procurement of Renewable Energy (“CPRE”) program with the SCPSC for its approval
The Authority’s CPRE program was approved by the Commission in January 2024
The Authority recently issued a solar RFP, with Central’s cooperation, in accordance with the approved CPRE program
In addition, the Authority is evaluating appropriate Battery Energy Storage System (“BESS”) implementation approach for the Combined System
Through future IRPs, the Authority will evaluate impacts of:
EPA Greenhouse Gas regulation impacts on existing coal facilities and new natural gas facilities
Potential growth in large customer loads
Market conditions and trends impacting resource cost assumptions
Other considerations that may impact base planning assumptions<br>
slide18. Financial Overview<br>
slide19. Rate freeze will end in January 2025
Approximately 75% of costs will return to recovery through automatic pass-through adjustments
The remaining portion will be adjusted through the retail rate process underway
Strong projected load growth
Substantial near-term load growth from new large customers and expansion of existing large customers
The updated load forecast reflects approximately 1,100 MW by 2033 to account for additional expected load
Robust capital plan that invests in the electric system
Investment in improvements to existing power supply facilities, extensions of and improvements to the transmission and distribution systems, other general improvements and compliance with environmental requirements
Capacity expansion
Developing a natural gas combined cycle resource of approximately 1,000 MW to coincide with the retirement of Winyah
Executed purchase power agreements in 2023 to receive 250 MWs of capacity with optional energy in 2024-2028
Updating Integrated Resource Plan to reflect latest load growth projections
Reduced fuel cost
System risk mitigation by hedging volume and cost related to natural gas, coal, coal transportation surcharge, and purchased power agreements<br>
slide20. Settlement Amount. The Authority made its full contribution to the Common Benefit Fund of $200 million back to customers in three annual installments ($65m, $65m and $70m)
Rate Freeze. Rates were frozen for the majority of the Authority’s customers, including Central, beginning August 2020 through December 2024
Regulatory Asset. As of March 31, 2024, the Authority has recorded a total of approximately $637 million as a regulatory asset of Cook Deferred Expenses. Most of this cost is attributable to one exception.
These costs are expected to be collected through rates after the rate freeze
The last year of the rate freeze in which exceptions could occur will be addressed in the report filed with the Court on April 30, 2025
Resolution Status Update. The Authority, Central Electric Power Cooperative (Central) and Class Counsel have continued discussions on a path forward to resolve contested exceptions.
During 2023, the parties reached a potential resolution of Cook Exceptions which required the use of securitization. In January 2024, the Authority's Board authorized staff to work with elected officials to determine if securitization legislation was feasible.
Legislation was not introduced, and the Authority continues to work with the other parties to develop a mutually-beneficial alternative solution that builds off the progress made under the previous arrangement. The Authority has continued to fulfill its requirements under the Cook Settlement as the end of the rate freeze approaches<br>
slide21. The Authority’s debt management plan includes:
Internal funds to manage debt service
Executing a multi-faceted refunding program that is staged in tranches and targeted at mitigating risk and taking advantage of interest rate savings
The Authority maintains a bank facility program with aggregate borrowing capacity of up to $1.05 billion (as of March 31, 2024)
Increased bank facility capacity with Bank of America by $50 million in May 2024
Currently negotiating with Barclays to extend the LOCs and may increase its capacity Debt Outstanding as of 12/31/231 & Debt Service Schedule2 _____________________________________________
As of December 31, 2023. Also reflects total debt and is preliminary.
Debt service on existing debt as of December 31, 2023; includes benefit of BABs subsidy; excludes debt service on outstanding Commercial Paper Notes and loans under the Revolving Credit Agreements; shown on a cash basis.<br>
slide22. Coverage is based on the 2024 Budget system exposure which considers the economic dispatch to service our load forecast, the system is set up to fuel switch between resources based on daily pricing which incentivizes leaving some volume open to the market. Coal coverage is targeting a coal pile of 800,000 to 1,200,000 tons. Natural gas is targeting coverage for the Rainey Combined Cycle Unit, the most efficient in the fleet, 100% through 2025 and 50% 2026-2031 as well as other natural gas related exposures for other resources. Purchased Power Energy includes PURPA arrangements for renewables and SEPA as well as agreements for long term purchases through 2028.
As of March 31, 2024 The Authority has hedged a significant portion of its fuel exposure for the remainder of the rate freeze<br>
slide23. 23 Upcoming Transaction<br>
slide24. * Preliminary, subject to change. 2024A Bonds and 2024C Bonds
Financing a portion of the costs of the capital improvement program of the System
2024B Bonds
Refund all or a portion of the Authority’s outstanding 2013 Series A, 2013 Series B, 2013 Series E, 2014 Series A and 2014 Series B Bonds
An insurance policy may be obtained for a portion of the Bonds The Authority Faith Williams
Manager, Debt Management & Investor Relations (843) 761‐8000 Ext 4987
faith.williams@santeecooper.com Public Financial Management – Financial Advisor Michael Mace
Managing Director
(704) 541‐8339
macem@pfm.com J.P. Morgan – Senior Manager Kevin Plunkett
Executive Director
(212) 270-7036
kevin.plunkett@jpmorgan.com Key Contacts Structure* Financing Schedule www.santeecooper.com/about/investors<br>
slide2. This Investor Presentation you are about to view is provided as of July 16, 2024, for a proposed offering by the South Carolina Public Service Authority (the “Authority”) of its Revenue Obligations, 2024 Tax-Exempt Improvement Series A, 2024 Tax-Exempt Refunding Series B and 2024 Taxable Improvement Series C (collectively, the “Bonds”). This Investor Presentation is provided for information purposes only and your sole and exclusive use in connection with the proposed offering. The information contained herein is subject to completion and amendment. If you are viewing this presentation after July 16, 2024, there may have been events that occurred subsequent to such date that would have a material adverse effect on the financial information that is presented herein, and neither the Authority nor the Underwriters have undertaken any obligation to update this electronic presentation. All market prices, financial data and other information provided herein are not warranted as to completeness or accuracy and are subject to change without notice.
Any investment decisions regarding the Bonds should only be made after careful review of the complete Preliminary Official Statement. By accessing this presentation, you agree not to duplicate, copy, download, screen capture, electronically store or record this Investor Presentation, nor to produce, publish or distribute this Investor Presentation in any form whatsoever.
This Investor Presentation does not constitute a recommendation or an offer or solicitation for the purchase or sale of any security or other financial instrument, including the Bonds, or to adopt any investment strategy. Any offer or solicitation with respect to the Bonds will be made solely by means of the Preliminary Official Statement and Official Statement, which describe the actual terms of such Bonds. You will be responsible for consulting your own advisors and making your own independent investigation and appraisal of the risks, benefits, appropriateness and suitability of the proposed transaction and any other transactions contemplated by this presentation and neither the Authority nor the Underwriters are making any recommendation (personal or otherwise) or giving any investment advice and will have no liability with respect thereto.
The information contained herein has been compiled from sources believed to be reliable, however neither the Authority nor the Underwriters shall have any liability whatsoever (in negligence or otherwise) to any person for any loss arising from this Investor Presentation or any information supplied in connection therewith. In no event shall the Underwriters or the Authority be liable for any use by any party of, for any decision made or action taken by any party in reliance upon, or for any inaccuracies or errors in, or omissions from, the information contained herein and such information may not be relied upon by you in evaluating the merits of participating in any transaction mentioned herein.
Neither the Underwriters nor the Authority makes any representation or warranty as to the (i) accuracy, adequacy or completeness of any information in this Investor Presentation or (ii) legal, tax, credit or accounting treatment of any purchase of Bonds by you or any other effects such purchase may have on you and your affiliates or any other parties to such transactions and their respective affiliates. You should consult with your own advisors and make your own independent investigation and appraisal of the risks, benefits, appropriateness and suitability of the proposed offering. Nothing in these materials constitutes a commitment by the Underwriters or any of their affiliates to enter into any transaction. No assurance can be given that any transaction mentioned herein could in fact be executed.
This Investor Presentation contains “forward-looking” statements that involve risks, uncertainties and assumptions. If the risks or uncertainties ever materialize or the assumptions prove incorrect, the results may differ materially from those expressed or implied by such forward-looking statements. Accordingly, we caution you not to place undue reliance on these statements. All statements other than the statements of historical fact could be deemed forward-looking. All opinions, estimates, projections, forecasts and valuations are preliminary, indicative and are subject to change without notice.
Transactions involving the Bonds may not be suitable for all investors. You should consult with your own advisors as to the suitability of the Bonds for your particular circumstances. No assurance can be given that any transaction mentioned herein could in fact be executed. Past performance is not indicative of future returns, which will vary. Clients should contact their salesperson at, and execute transactions through, an entity of the Underwriters qualified in their home jurisdiction unless governing law permits otherwise. Disclaimer<br>
slide3. * Preliminary, subject to change.<br>
slide4. Overview of the Authority<br>
slide5. “Santee Cooper”
South Carolina’s state-owned electric and water utility, created in 1934
One of the nation’s largest public power utilities with assets of $12.1 billion and owned system summer capacity of 5,163 MW
A source of electricity for approximately 2 million people across South Carolina, and provides wholesale water to more than 210,000 people Jefferies Hydroelectric Station Rainey Generating Station<br>
slide6. Includes bank facilities, after payment to state and excludes the regulatory asset
Days of Cash on Hand = (Total Unrestricted Funds x 365 Days) / Total Operating Expense
Days of Liquidity on Hand = ((Total Unrestricted Funds + Total Unused Credit Capacity) x 365 Days) / Total Operating Expenses
As of March 31, 2024<br>
slide7. 2023 Power Supply by Fuel Source (GWh) 2023 Sales Composition (GWh) Retail and wholesale provider serving over 2 million South Carolinians
Provided 26,185 GWh in 2023 to its customers
Largest customer is Central Electric Power Cooperative, providing approximately 58% of Authority’s revenues in 2023 Business Customers An electric and water utility headquartered in Moncks Corner, South Carolina
Owned by the State of South Carolina
One of the nation's largest public power utilities:
$12.1 billion of assets (2023)1
$1.9 billion of revenues (2023) Autonomous rate making ability
Competitive wholesale and retail rates in state
Rate freeze ends at the end of 2024. Approximately 75% of the Authority’s costs are recovered through automatic pass-through adjustments which means no action is required by management or the Board of Directors
Automatic pass-through adjustments will be reinstated January 2025 when the rate freeze ends
Any remaining shortfall will be adjusted through the retail rate process underway Rates Revenue by Customer Category (2023) 1 (1) Retail includes residential, commercial, small industrial and lighting (1) Includes deferred outflows of resources<br>
slide8. Increasing State Population Unemployment Rate Strong State Credit Ratings Growing State GDP Source: U.S. Census Bureau Source: Rating Agency Websites Source: U.S. Department of Labor, Bureau of Labor Statistics (seasonally adjusted) Source: U.S. Department of Commerce, Bureau of Economic Analysis<br>
slide9. Historical Energy Sales (GWh) Wholesale Retail1 Industrial (1) Retail includes residential, commercial, small industrial and lighting<br>
slide10. 2023 Fuel Mix (GWh) 2023 Capacity (MW)1 Current Generation Sources ____________________________________________
Based on winter capacity and does not include SEPA, Buzzard’s Roost and St Stephen
2021- Reflects an outage at Cross 2
Fall 2021 – 36 days for scheduled refueling outage and 26 days of unscheduled outage due to fire Base Load Availability Coal Nuclear Gas<br>
slide11. Retail Rates<br>
slide12. Rate Setting Cost Recovery Mechanisms Retail Rate Adjustment The Authority’s Board has autonomous rate setting authority
Certain contracts and retail rate riders that are designed to adjust automatically will be reinstated January 2025. No action is required by Board or management. These adjustments include:
Central contract is cost of service where rates adjust to actual (fuel on a monthly basis and non-fuel on an annual basis).
Retail rates have fuel adjustment clauses that are based on a 3-month rolling average.
Demand sales adjustment clauses are based on a monthly true-up.
Approximately 75% of the Authority’s costs are recovered with these automatic rate adjustments.
The Board received proposed rate changes for retail customers and approved a public comment process.
The proposed rate increase will only impact Retail base rates.
The Authority hasn’t increased base Retail rates since April 1, 2017.
The base rate adjustment would be implemented in April 2025.
Cook Rate Freeze Exceptions are not included in the proposed rate adjustment.
The Authority’s Board has not determined the final amount and term of collection for the exceptions.
A collection mechanism for Retail has been proposed but not yet approved by the Board.
Central’s collection would occur through their cost of service.<br>
slide13. Santee Cooper conducted a year-long rate study for the purpose of revising residential, commercial, industrial and lighting class rates (“2024 Rate Study”) and presented the resulting proposed rates to its Board on June 10, 2024
The recommended rate adjustments (detailed below) include a single adjustment to rates effective in April of 2025
The Cook Rate Freeze Exceptions are anticipated to be collected through a proposed rider added to customers’ bills and would not be included in the base rate Average increase in total revenues for all customers in class. Not all customers in a class will experience the same level of adjustment
Does not include recovery of Cook exceptions
Does not reflect any changes in customer behavior based on new rate design
Includes Industrial Firm & Non-Firm<br>
slide14. Residential Rate
(1,000 kWh) Commercial Rate
(5,000 kWh) Industrial Rate
(9,000 kW / 5,000,000 kWh) Based on rates on file with the SCPSC for the period of June 1, 2023 through May 31, 2024. Central is the Authority’s largest customer (58% of 2023 revenues)
Central is a wholesale cooperative that provides power to approximately 20 distribution retail cooperatives throughout South Carolina
In 2013, the Authority and Central modified their existing power sale agreement; earliest termination extended to 2058
The Authority also has several power sales agreements with regional power providers for various terms (3% of 2023 revenues) The Authority directly serves approximately 200,000 residential, commercial and small industrial retail customers in its assigned retail service territory which includes parts of Berkeley, Georgetown and Horry counties (22% of 2023 revenues)
The Authority has seen customer account growth ranging from 2.2%-3.8% per year over the last 5 years
The Authority’s direct customers currently include 27 large industrial and military customers include Joint Base Charleston, Century Aluminum and Nucor (17% of 2023 revenues) Wholesale Retail<br>
slide15. Resource Planning<br>
slide16. The Authority develops integrated resource plans (“IRP”) as part of its overall planning process
The Authority is required to prepare and submit an IRP to the South Carolina Public Service Commission (“SCPSC”) every three years with annual updates
The Authority filed its IRP for 2023 with the SCPSC in May 2023, and it was unanimously approved in March 2024 (the “2023 IRP”)
The Authority will file an update to the 2023 IRP in September 2024 Key Conclusions<br>
slide17. The Authority and Central entered into purchased power agreements for their respective load ratio share of 200 MW’s of solar which is expected to be online in 2025
Since the passage of Act 90 of 2021, the Authority is required to file its Competitive Procurement of Renewable Energy (“CPRE”) program with the SCPSC for its approval
The Authority’s CPRE program was approved by the Commission in January 2024
The Authority recently issued a solar RFP, with Central’s cooperation, in accordance with the approved CPRE program
In addition, the Authority is evaluating appropriate Battery Energy Storage System (“BESS”) implementation approach for the Combined System
Through future IRPs, the Authority will evaluate impacts of:
EPA Greenhouse Gas regulation impacts on existing coal facilities and new natural gas facilities
Potential growth in large customer loads
Market conditions and trends impacting resource cost assumptions
Other considerations that may impact base planning assumptions<br>
slide18. Financial Overview<br>
slide19. Rate freeze will end in January 2025
Approximately 75% of costs will return to recovery through automatic pass-through adjustments
The remaining portion will be adjusted through the retail rate process underway
Strong projected load growth
Substantial near-term load growth from new large customers and expansion of existing large customers
The updated load forecast reflects approximately 1,100 MW by 2033 to account for additional expected load
Robust capital plan that invests in the electric system
Investment in improvements to existing power supply facilities, extensions of and improvements to the transmission and distribution systems, other general improvements and compliance with environmental requirements
Capacity expansion
Developing a natural gas combined cycle resource of approximately 1,000 MW to coincide with the retirement of Winyah
Executed purchase power agreements in 2023 to receive 250 MWs of capacity with optional energy in 2024-2028
Updating Integrated Resource Plan to reflect latest load growth projections
Reduced fuel cost
System risk mitigation by hedging volume and cost related to natural gas, coal, coal transportation surcharge, and purchased power agreements<br>
slide20. Settlement Amount. The Authority made its full contribution to the Common Benefit Fund of $200 million back to customers in three annual installments ($65m, $65m and $70m)
Rate Freeze. Rates were frozen for the majority of the Authority’s customers, including Central, beginning August 2020 through December 2024
Regulatory Asset. As of March 31, 2024, the Authority has recorded a total of approximately $637 million as a regulatory asset of Cook Deferred Expenses. Most of this cost is attributable to one exception.
These costs are expected to be collected through rates after the rate freeze
The last year of the rate freeze in which exceptions could occur will be addressed in the report filed with the Court on April 30, 2025
Resolution Status Update. The Authority, Central Electric Power Cooperative (Central) and Class Counsel have continued discussions on a path forward to resolve contested exceptions.
During 2023, the parties reached a potential resolution of Cook Exceptions which required the use of securitization. In January 2024, the Authority's Board authorized staff to work with elected officials to determine if securitization legislation was feasible.
Legislation was not introduced, and the Authority continues to work with the other parties to develop a mutually-beneficial alternative solution that builds off the progress made under the previous arrangement. The Authority has continued to fulfill its requirements under the Cook Settlement as the end of the rate freeze approaches<br>
slide21. The Authority’s debt management plan includes:
Internal funds to manage debt service
Executing a multi-faceted refunding program that is staged in tranches and targeted at mitigating risk and taking advantage of interest rate savings
The Authority maintains a bank facility program with aggregate borrowing capacity of up to $1.05 billion (as of March 31, 2024)
Increased bank facility capacity with Bank of America by $50 million in May 2024
Currently negotiating with Barclays to extend the LOCs and may increase its capacity Debt Outstanding as of 12/31/231 & Debt Service Schedule2 _____________________________________________
As of December 31, 2023. Also reflects total debt and is preliminary.
Debt service on existing debt as of December 31, 2023; includes benefit of BABs subsidy; excludes debt service on outstanding Commercial Paper Notes and loans under the Revolving Credit Agreements; shown on a cash basis.<br>
slide22. Coverage is based on the 2024 Budget system exposure which considers the economic dispatch to service our load forecast, the system is set up to fuel switch between resources based on daily pricing which incentivizes leaving some volume open to the market. Coal coverage is targeting a coal pile of 800,000 to 1,200,000 tons. Natural gas is targeting coverage for the Rainey Combined Cycle Unit, the most efficient in the fleet, 100% through 2025 and 50% 2026-2031 as well as other natural gas related exposures for other resources. Purchased Power Energy includes PURPA arrangements for renewables and SEPA as well as agreements for long term purchases through 2028.
As of March 31, 2024 The Authority has hedged a significant portion of its fuel exposure for the remainder of the rate freeze<br>
slide23. 23 Upcoming Transaction<br>
slide24. * Preliminary, subject to change. 2024A Bonds and 2024C Bonds
Financing a portion of the costs of the capital improvement program of the System
2024B Bonds
Refund all or a portion of the Authority’s outstanding 2013 Series A, 2013 Series B, 2013 Series E, 2014 Series A and 2014 Series B Bonds
An insurance policy may be obtained for a portion of the Bonds The Authority Faith Williams
Manager, Debt Management & Investor Relations (843) 761‐8000 Ext 4987
faith.williams@santeecooper.com Public Financial Management – Financial Advisor Michael Mace
Managing Director
(704) 541‐8339
macem@pfm.com J.P. Morgan – Senior Manager Kevin Plunkett
Executive Director
(212) 270-7036
kevin.plunkett@jpmorgan.com Key Contacts Structure* Financing Schedule www.santeecooper.com/about/investors<br>