Power bills could go up more often under sweeping energy bill approved by state Senate
South Carolina residents could see their power bills go up more often if a sweeping new energy bill approved by the state Senate becomes law.
The Senate, after more than nine hours of debate Wednesday, voted 41-3 for the energy legislation that includes measures to encourage extra power production and capacity in the state. One part of the bill also includes a section that allows for “rate stabilization,’’ or making it easier for utilities to raise rates annually to pay for some of their costs.
Environmentalists and a Senate leader questioned the rate measure, saying ratepayers could suffer, even though proponents say it would help spread out costs for customers over time.
A key concern is that rate stabilization does not allow for the same level of scrutiny of a proposed rate hike as in established rate cases, which occur every few years., critics said.
“I’m not completely sold on it,’’ Senate Majority Leader Shane Massey, R-Edgefield, told reporters. “The fact that the utilities want it so badly, that’s not in the ratepayers’ best interests. They don’t have an obligation to look out for the ratepayers. They have an obligation to look after shareholders.’’
John Brooker, an energy analyst for the Conservation Voters of South Carolina, said utilities will be able to make profits off the increased flexibility to raise rates. He noted that there is some parallel to legislation years ago that allowed for what became the biggest construction fiasco in state history: the V.C. Summer nuclear plant expansion.
Under this year’s legislation, utilities could in some cases charge customers the interest costs of construction projects as the projects are being built.
The charges, while more narrowly allowed than with the Summer project, are similar in that the massive nuclear project was being paid for with upfront charges to customers.
Often, utilities get permission from the Public Service Commission to raise rates after projects are constructed and ready for use.
Few senators spoke against the measure allowing utilities to raise rates annually. Sens. Tom Davis, R-Beaufort, and Tom Young, R-Aiken, said the rate stabilization measure makes sense.
Davis said he was persuaded to support rate stabilization after hearing favorable comments about the plan from a top official at the Office of Regulatory Staff, an agency that is supposed to look out for ratepayers interests. Those supporting the measure said it would help people budget for rate increases.
“It prevents rate shock to customers,’’ Young told fellow senators. “It requires adjusting rates annually to avoid the rate shock of a large increase after years of unrecovered investments and carrying costs.’’
Young said similar rate systems are used in Mississippi, Alabama, Louisiana and Arkansas. And while the South Carolina bill would make annual rate increases more likely, Young said the Public Service Commission would have to sign off on them.
The rate stabilization portion of the energy bill is one of many detailed changes to South Carolina’s energy laws under consideration in the Legislature. The bill opens the door for a new natural gas plant and streamlines rules that some say slow down development of power plants and related facilities. The push for major changes has been driven by utilities and some politicians, who say South Carolina needs more energy to accommodate growth.
The Senate’s vote to approve the energy bill was taken just before midnight Wednesday and given a final approval Thursday. .
Bolstering energy in SC
Earlier this year, the state House of Representatives overwhelmingly approved the bill. But senators made enough changes to the measure this week that legislators will likely have to discuss their differences in a conference committee. If the House and Senate work out differences, the bill would go to Gov. Henry McMaster for his approval.
Among other things, the legislation would limit how long the state can study the potential impacts of new energy projects, while also streamlining the appeals process for projects that have been challenged in court.
Supporters have said such measures are needed to speed the process for new power plants and transmission lines.
This week’s approval most immediately affects plans to build a 2,000 megawatt natural gas plant in rural Colleton County, a joint effort involving investor-owned utility Dominion Energy and state-owned Santee Cooper.
The bill, H. 3309, provides the necessary permission for Santee to work jointly with Dominion on the plant, a major milestone in efforts to erect the facility at the site of a closed coal plant in the Canadys community. The plant, which could cost more than $1 billion, still needs approvals from the state Public Service Commission.
While proponents of the legislation say it will help South Carolina acquire the energy it needs to accommodate growth, critics contend that parts of the bill could compromise environmental protection. Environmentalists have raised alarms that putting a limit on how long the state takes to decide on energy projects could mean decisions won’t be well thought out.
The bill requires decisions to be made on new power plants in six months, although an amendment approved Wednesday attempted to ensure that applications must be complete for the six month-time frame to apply. That is supposed to prevent power companies from submitting incomplete applications, then waiting on the six-month clock to expire so they can gain necessary approvals.
The Senate’s marathon session included discussion – led by Massey – of whether the state was being too accommodating to power companies, less than a decade after the V.C. Summer nuclear energy construction project failed.
That project, by Santee Cooper and SCE&G, shut down in 2017 after some $9 billion was spent and rates were raised for customers. Many of the charges were assessed as the plant was being built.
Throughout the debate, which started Tuesday, senators said they wanted to make sure customers were not burdened by provisions in the bill.
Massey, who questioned the increasing impact of energy-demanding data centers on South Carolina’s power supplies, was among three senators voting against the bill. Others voting no were Sens. Shane Martin, R-Spartanburg, and Tom Corbin, R-Greenville.
On Thursday, Massey told reporters he voted against the bill after assessing the costs customers will bear for building the new natural gas plant in Canadys. With the Canadys construction, customers will be paying for two large energy projects, the other being the now abandoned Summer nuclear project in Fairfield County. Dominion customers are still being charged about 5% on their power bills for the failed project.
“Dominion customers are going to continue to pay for a profit .... and nobody’s getting anything from it other than shareholders,’’ he said. “Now, because V.C. Summer failed, we’re having to build Canadys.’’
Massey said he understands the need for energy from the Canadys plant, but he believes it could have been financed differently to save money, such as having Santee Cooper build it without Dominion. Santee Cooper, as a state owned utility, could borrow money for the project more cheaply, he said.
Other amendments that Senators approved calmed some concerns about the legislation favoring fossil fuels and nuclear over alternative forms of energy.
The bill, as approved, stripped out House-backed requirements that would have shortened the length of solar power contracts and required solar farms to go through extensive review under the state siting act – measures that sun power boosters said would hurt the growing alternative energy market in South Carolina.
It also abandoned provisions approved by the House that would have made it more difficult for people to challenge rate increases or power plant construction plans.
Because of concerns about data centers taking up too much energy, the Senate also put limits on the amount of incentives the state could give to bring data centers to South Carolina. Critics said data centers, which help provide power for internet searches, will come here anyway, without incentives. To alleviate concerns about unsightly solar farms in rural areas, the Senate approved a measure allowing trees and vegetation to be planted around the farms.
And at the insistence of Davis, the Senate approved a measure requiring utilities to be more energy efficient.
This story has been updated with comments from state senators and information about rate stabilization.
This story was originally published April 3, 2025 at 8:23 AM with the headline "Power bills could go up more often under sweeping energy bill approved by state Senate."
