Santee Cooper studying whether it needs rate hike

MONCKS CORNER, SC (WCIV) —

Santee Cooper is studying whether it needs to raise its rates.

South Carolinas state-owned electric utilitys board of directors decided Monday to tell its management to study whether current rates will support future expenses.

Those expenses include the costs of complying with environmental rules on power generation and the construction of new nuclear reactors at VC Summer Nuclear Station near Columbia.

“Santee Cooper understands the impact that a rate adjustment can have on our customers. We are working hard to minimize rate changes by controlling those costs that we can control and reducing debt cost when interest rates are favorable,” said Lonnie Carter, Santee Cooper President and CEO. “We will also continue helping our customers save money through rebates and other incentives in our energy-efficiency programs.”

Management is expected to report back to the board in June.

If the utility proposes raising rates, there would be a public comment period and a vote on new rates in the fourth quarter of 2017, with any rate adjustment taking place in 2018.

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JEA shutting down power park, laying off 200

JEA and its operating partner said Friday they will shut down a landmark electric plant near the port in January, displacing more than 200 employees.

JEA executives consider the closure of what was once the largest construction project in Jacksonville history the end of an era as well as a sign of the changing landscape for power generation.

JEA and Florida Power amp; Light Company jointly operate the St. Johns River Power Park, visible to those near the port or driving along Heckscher Drive and notable for its cooling towers that resemble those at nuclear plants.

Currently, 204 people work at the facility. JEA planned to begin meeting with those employees at 1 pm, when the company announced the closure.

In 2016, the coal-powered facility produced half as much power as it did 10 years ago.

“It’s at its economic life’s end,” CEO Paul McElroy said Friday.

JEA is producing less power than a decade ago and has more generating capacity than needed, an unnecessary cost for the city-owned utility that provides power to almost 450,000 customers.

JEA electric sales peaked in 2006 after more than a century of 3 percent annual growth and have since declined 10 percent. Sales this year are at the lowest level in 17 years despite the addition of more than 100,000 customers during the same time.

McElroy insisted this closure is not a sign of financial weakness, but instead a sign of the financial viability of the nation’s eighth-largest community-owned electric utility. He said the utility and its customers will begin to see significant savings beginning in 2020 after two years of decommissioning the plant and mitigating its environmental impact.

JEA executives are uncertain of the cost for decommissioning the plant. FPamp;L and JEA will share those costs.

The savings will be directed to reducing debt and to needed capital projects, McElroy said.

“This is a play for the future,” he said.

JEA expects the retirement to decrease JEA’s carbon footprint by 30 percent and to reduce nitrogen going into the St. Johns River.

The decision also signifies the change in the industry as natural gas prices dropped to compete with coal. The power park is currently powered 100 percent by coal from Colombia.

The final cost for the project, completed in the 1980s, was $1.45 billion. There is an outstanding debt of $281 million.

“It’s been a critically important part of our power generation for 30 years,” McElroy said. “It has performed well beyond expectations, which is a testament to the men and women” who have maintained the facility.

However, McElroy said, people are reducing their consumption and there have been changes in utility production.

The power park is no longer a cost-effective component for generating power moving forward, he said.

“This agreement is important for JEA and will allow us to right-size our power generation capabilities while offering significant environmental benefits to the community,” McElroy said. “… We regret that this move will result in job displacements for many dedicated, knowledgeable and skilled employees.”

This is the first time JEA has laid off full-time employees, although some part-time and contract workers were laid off during the Great Recession.

McElroy noted the utility is giving the employees nine months of notice.

McElroy and Chief Human Resources Officer Angelia Hiers said JEA will offer outplacement and training services for employees. She said employees will receive between 20 and 52 weeks of severance pay. They said they will assist some of those employees who are the suitable age in retiring early. Thirty-five percent of the employees will be eligible for early retirement, according to JEA.

“These are never easy,” Hiers said. She said the leadership is trying to be sensitive and to provide as many services as possible to those employees and their families.

“Some have been there since the beginning,” Hiers said.

The employees are not city employees or JEA employees. They work for the power park as a joint venture between JEA and FPamp;L. Those employees have the same medical benefits as JEA employees, but different retirement plans. Employees also will have continued health services, she said.

JEA and FPamp;L are also giving those laid-off employees priority in hiring for open positions at those utilities, he said.

The power park is on 1,600 acres of key real estate off of Heckscher Drive near the port. Much of the structure will be torn down, although some facets could continue to be utilized and would remain. JEA executives are uncertain of what would be next for the land.

FPamp;L proposed the early termination of the joint operating agreement between the two. The agreement was set to expire in four years.

While FPamp;L has been proud to partner with JEA at the park for three decades, FPamp;L CEO Eric Silagy said, “now, however, it makes financial sense for all of our customers to close this coal plant.”

“Closing the plant early results in enormous value for FPL customers – saving millions of dollars annually as well as continuing to significantly reduce greenhouse emissions for all of Florida–another major step forward in our affordable, reliable and clean energy strategy.”

Executive staff will brief the board at its Tuesday meeting, although the board will not take any action at the time. The JEA board must approve the final agreement.

Sebastian Kitchen: (904) 359-4161

Florida Times-Union

These Free Money Coaching Sessions Are Invaluable

Money is complicated and emotional. Managing your finances is often the last thing on everyone’s to-do list. It’s easier to make an appointment to get a root canal than it is to call a bank and refinance your student loans. At least with the root canal you don’t have to review a bunch of paperwork you don’t understand. And unless you have a lot of money, it’s really hard to find someone to help you manage it — there’s always a dentist willing to help you with that root canal.

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Christine Benz is Morningstars director of personal finance and author of 30-Minute Money Solutions: A Step-by-Step Guide to Managing Your Finances and the Morningstar Guide to Mutual Funds: 5-Star Strategies for Success. Follow Christine on Twitter: @christine_benz.

Don’t Settle for a Subpar Health Savings Account

Christine Benz is Morningstars director of personal finance and author of 30-Minute Money Solutions: A Step-by-Step Guide to Managing Your Finances and the Morningstar Guide to Mutual Funds: 5-Star Strategies for Success. Follow Christine on Twitter: @christine_benz.

Brevard school budget goals: No new debt, teacher raises

Swearing off debt

Brevard Public Schools is currently $446.6 millionin debt, caused by 10 certificates of participation, a form of financing,that previous administrations have taken out over the years to pay for new schools and building additions.

Definitely no new debt, no new taxeswithout very robust community engagement, said Blackburn. Instead, the district will tackle big projects with impact fees and property taxes and smaller projects with money from the operating and capital funds.

The School Board has already put this idea into action with the passage of a five-year capacity plan, which will see two new elementary schools builtin Viera and West Melbourne for $20 million each, 92 new portables added around the county for $4.4 million, the reopening of South Lake Elementary in Titusville for an initial $1 million and a classroom addition at Cocoa High for about $4 million. The district wont take on any debt to pay for the projects and will instead use impact fees to foot the bill.

At a workshop in October, Zuercher laid out a 20-year plan to pay down debt by making consistent yearly payments of about $38 million — usually covered with capital outlay millage– and refinancing when the market is doing well.

Over the past couple years, the district made some headway reducing debt, trimming $512 million to $446 million by refinancing. In total, the district has saved more than $30 million by refinancing existing debts, including a $10 million chunk that was approved in October.

Zuercher emphasized that thesearent like normal loans. For most, the district cant start paying them off for at least 10 years, cant pay them off early and must stick to a strict 10-, 20- or even 30-year payment schedule.

3 Great Options for Your Child’s First Credit Card

To facilitate that, you’ll probably want to choose an option that gives you a measure of control over the card your kid gets, and how they subsequently use it. Fortunately, such oversight is easier than it used to be. If you are a Gen Xer parent, you likely remember the days when hitting college led to receiving a slew of unsolicited credit card offers you could sign up for without mom or dad knowing you’d done so. After that solicitation created a mountain of credit-card debt, the CARD Act of 2009 put tougher restrictions on issuing credit cards to people under 21. Now your young adult’s first credit card will come with training wheels, and you’ll likely be on the hook in some way for what he or she does with it.

Here are the main options for that first card.

1. Authorized User Status

Making your child anauthorized useron your credit card is one way to guide him or her to use credit responsibly. Your son or daughter gets a credit card with his or her own name on it, and you pay off the charges each month. However, you monitor use and maintain control over the account.

With this situation, you’ll probably want to establish some firm ground rules. You might, for example, insist that your child to only use the card for specific types of purchases–gas, for example, or other necessities. In addition, you could require that your be in some way reimbursed for his or her purchases, especially of non-necessities. Your leverage over enforcing these terms is the power you’ll have to remove your child as an authorized user if he or she fails to agree to your terms.

2. Co-Sign for a Credit Card

Under the CARD Act, you can also co-sign for your adult child’s credit card. Your child then makes purchases, and is responsible for paying the card’s bill every month.

This arrangement can help build independence and a sense of responsibility, but it comes with some major downsides. If your child fails to pay his or her credit card bill, late payments will appear on your credit report. And if those recur, and the child proves to be unable to meet even the minimum monthly payments, you’ll be legally responsible, as co-signer, for paying off the debts your kid has run up.

3. A Secured Credit Card

A secured credit card allows you, or your child, to deposit a certain sum of money into an account–say $1,000–and then charge up only to that amount on the card. With this arrangement, your child can’t live beyond their means by charging above a set amount to the card, and they can’t damage their credit score by failing to make payments. (Yet having the secured card will nonetheless help your kid to build their credit score, as activity on the account will be tracked by agencies.).

With a secured credit card, though, it’s wise to guide your child through the application process. Do an internet search so they can compare fees and rates. Talk to your child so you know that he or she understands all of the card’s fees.

The article 3 Great Options for Your Child’s First Credit Card originally appeared on ValuePenguin.

Alternative Business Financing Methods Gaining in Popularity

The growing economy and the increase in purchasing power are providing perfect opportunities for new and existing businesses to grow. There are more businesses established in various industries than there were last year, signaling steady growth. Existing businesses are also expanding to new markets and boosting their production capacity.

Naturally, there are challenges associated with starting a new business or expanding an existing one. According to recent reports, finding a reliable source of financing is still considered the biggest challenge of them all. Fortunately, there are more alternative financing options on the market too and businesses are turning to these solutions more frequently.

Project-Based Financing

One of the most popular financing options available for businesses is project-based financing. Instead of taking out a long-term loan with annual interest, some businesses now prefer short-term loans. There are a number of reasons why short-term, project-based loans are more popular today.

For starters, short-term loans are more manageable. The cost of using this financing option is calculated based on the duration of the loan. This means businesses know exactly how much they have to repay even before taking out the loan.

These short-term loans are also very flexible. Businesses can now use a suitable loan for as little as 3 months, eliminating the need for long-term loans entirely in some cases. The maximum principal amount is also relatively high, up to $250,000 depending on several factors.

To make it even better, finding a suitable short-term loan is easier than ever thanks to online resource centers such as Fundera. Fundera grants access to a wide variety of loans designed for businesses. Business can simply define a specific set of search parameters and get quotes from multiple lenders – and different types of loans – in just a few seconds.

Crowdfunding and Invoice Financing

Crowdfunding is another type of financing that is commonly used by businesses today. The immense popularity of crowdfunding has made it a go-to solution for startups trying to take ideas into tangible products. It is also easier to find sources of crowdfunding and connect with stakeholders directly thanks to platforms such as Kickstarter.

Crowdfunding is a great financing option for new and exciting products. As long as the business can generate enough buzz around the product or campaign they are launching, hitting the crowdfunding target should not be a problem. For expansions, dealing with increase in demand and other purposes, however, invoice financing is the better solution.

As the name suggests, invoice financing is the type of financing that uses an upcoming invoice as collateral. The loan amount can be as high as 80% of the billed amount. In most cases, invoice financing can help small and medium businesses deal with large orders and increase their production capacity with little to no extra risk.

A Growing Market

The availability of more financing options for businesses means the current market growth is more sustainable than ever. Experts believe that we will continue to see an average growth of 5%, with some industries enjoying even faster growth that the rest.

We will also see a huge increase in the use of internet marketing and online commerce fueling this growth. Small and local businesses can now reach customers from different parts of the country – and even from other countries – and gain an even bigger increase in demand for their products.

All of these positive signs remain strong despite the recent changes and minor market uncertainties brought by the current administration. If you are thinking about expanding your business or starting a new company, there is no shortage of opportunities to grab in today’s economy. You also have the financing options to support expansions at a much lower rate.

JPMorgan Chase Agents $450MM Revolver for Select Medical Holdings

On March 6, 2017, Select Medical Corporation entered into a senior secured credit agreement that provides for $1.6 billion in senior secured credit facilities composed of a $1.15 billion, seven-year term loan and a $450 million, five-year revolving credit facility, including a $75 million sublimit for the issuance of standby letters of credit.

Borrowings under the Senior Secured Credit Facilities are guaranteed by Select Medical Holdings Corporation and substantially all of Select’s current domestic subsidiaries and will be guaranteed by Select’s future domestic subsidiaries and secured by substantially all of Select’s existing and future property and assets and by a pledge of Select’s capital stock, the capital stock of Select’s domestic subsidiaries and up to 65% of the capital stock of Select’s foreign subsidiaries held directly by Select or a domestic subsidiary.

Borrowings under the Senior Secured Credit Facilities will bear interest at a rate equal to:

  • In the case of the Term Loan, Adjusted LIBO plus 3.50%, or Alternate Base Rate plus 2.50%; and
  • In the case of the Revolving Credit Facility, Adjusted LIBO plus a percentage ranging from 3.00% to 3.25%, or Alternate Base Rate plus a percentage ranging from 2.00% to 2.25%, in each case based on Select’s leverage ratio.

Select used borrowings under the Senior Secured Credit Facilities to refinance all of its outstanding indebtedness under its existing senior secured credit facilities and to pay fees and expenses in connection with the refinancing.

JPMorgan Chase Bank, NA is the administrative agent and collateral agent for the Senior Secured Credit Facilities and JPMorgan Chase Bank, NA, Wells Fargo Securities, LLC, Deutsche Bank Securities Inc., RBC Capital Markets, Merrill Lynch, Pierce, Fenner amp; Smith Incorporated, Goldman Sachs Bank USA, PNC Capital Markets LLC and Morgan Stanley Senior Funding, Inc., are acting as joint lead arrangers and joint bookrunners for the Senior Secured Credit Facilities. Wells Fargo Securities, LLC and Deutsche Bank Securities Inc. are acting as co-syndication agents for the Senior Secured Credit Facilities and RBC Capital Markets, Merrill Lynch, Pierce, Fenner amp; Smith Incorporated, Goldman Sachs Bank USA, PNC Bank, National Association and Morgan Stanley Senior Funding, Inc. are acting as co-documentation agents for the Senior Secured Credit Facilities.