Santee Cooper faces a new financial blow in its $9 billion nuclear failure with SC Electric & Gas.

Its ability to borrow money for operations will become more expensive.

This may damage a rescue effort and make Santee Cooper customers such as those at Mid-Carolina Electric Cooperative here more vulnerable to higher rates.

Standard & Poor’s Global Ratings cut the taxpayer-owned utility’s rating to A from A-plus on $7 billion in senior-lien debt and retained a negative outlook, according to Shelly Sigo of BondBuyer.com.

It was S&P’s 2nd downgrade in almost 2 years.

The ratings downgrade came before Santee Cooper announced it hired Arizona utility veteran Mark Bonsall to run the company and bail it out of $8 billion in nuclear and other debt.

S&P said Santee Cooper’s management has been vulnerable since it decided 2 years ago this month to abandon 2 nuclear reactors it was building with SCE&G.

SCE&G and its parent, Lexingon County-based holding company SCANA, one of the last locally-owned area corporations, are now owned by Dominion Energy of Richmond, VA.

“Abandoning the VC Summer nuclear project exposes Santee Cooper to multiple operational, political, and litigation challenges,” wrote S&P analyst David Bodek.

“These exposures place significant demands on management. They have the potential to divert attention from strategic planning.”

A $1 million secret Bechtel Corp. analysis estimated completing the project would cost 75% more than originally planned.

Since then, lawmakers may pass bills to place it under the Public Service Commission or sell it.

The utility’s 2018 annual report revealed it faced 5 class-action lawsuits from investors and ratepayers. 3 have been dismissed, and a multi-billion settlement has been reached on other suits.

An investor filed a class-action suit in May alleging unrated debt was sold at artificially-deflated interest rates when it and SCE&G were hiding their failures.

Despite no revenue from the abandoned reactors to repay $4.5 billion in debt, Santee Cooper’s financial profile is strong due to good debt service coverage and a 76% debt-to-capitalization ratio, S&P said.