March 25, 2025
Re: Amendments for H.3309 and S.446 to protect ratepayers
Senate Judiciary Committee,
At your committee meeting on Tuesday, March 25th, you will take up H.3309 and S.446, both addressing energy and utilities.
The SC Small Business Chamber of Commerce is very concerned that both bills contain provisions that harm all consumers in order to benefit the utilities and big business/industrial prospects.
Both bills require amendments to protect residential and small business utility customers.
H.3309 Amendment
Delete Section 58-43-20
South Carolina is bursting at the seams with economic development and industrial growth.
In spite of this, this section would give utilities and the Department of Commerce authority to propose discounted electricity rates as incentives for big businesses and industrial customers. These rates would be lower than the rates the customer otherwise would be charged and rates up to twenty-five percent less than the utility’s costs of generating and delivering electricity to industrial prospects. These industrial incentive rates would also be given to existing industries in the state that are competitors to the prospective industry.
These incentive rates do not lower the cost of generating and delivering electricity. This provision would simply transfer an untold amount of those costs from larger businesses and industrial customers to residential and small business consumers guaranteeing them rate hikes.
Section 58-43-20 is not needed and should be deleted in its entirety.
Data Centers
The demand for electricity by anticipated new BIG Tech data centers is driving most of the need for new generation and the related costs. To protect all other consumers, data centers should be required to produce their own electricity needs with renewable energy and batteries.
S.446 Amendments
S.446, Rate stabilization Act, proposes to allow utilities to increase PSC approved rates every year to enable them to achieve ROEs that come closer to PSC approved ROEs. Utilities also argue that these annual rate increase will be better for consumers.
At the March 19th Judiciary subcommittee hearing on S.446 a representative of Dominion Energy said:
“(What the Rate Stabilization Act) does for the customer is it’s just little small bites rather than waiting a few years and then jumping up…We heard from a lot of people at our rate case hearing, ‘Hey, we understand that you gotta make money but you coming in here and putting 12% on us because you waited 3 to 4 years is more difficult for us. If you would just come in every year, because we are on 2 ½-3 ½ percent COLA adjustments, that would be better for us.”
Consumers might prefer rate hikes in “small bites”, although this is debatable, but S.446 places no caps on what the annual rate increases under this act would be. S.446 allows utilities to possibly increase rates 4%, 5% or higher annually, especially in high growth periods like we are experiencing today. Correcting any excess revenue collected at a later date only benefits the utility.
The legislature must protect all customers from Rate Stabilization Act annual rate increase that certainly wouldn’t be considered “small bites” by consumers.
We recommend the following amendment to guarantee rate hikes that are “small bites”:
the Commission shall not approve an upward adjustment in rates under the authority of this section that exceeds 2% per year for each customer class, cumulatively, of the rates set in the most recent general rate case, nor shall it approve an upward adjustment in rates under the authority of this section for a calendar year during which the National Bureau of Economic Research has declared the existence of an economic recession.
Other amendments are being proposed, which we concur with. All amendments to S.446 can be found in the attached.
Should the proposed consumer-protection amendments for H.3309 and S.446 not be approved in your committee hearing, we urge you to vote against both bills moving to the full Senate.
Thank you in advance for protecting the ratepayers, something we have been doing at PSC rate cases since 2002 for small businesses.