Post and Courier
December 7, 2024
SC power utility is urged to pause next week’s rate hike
By John McDermott
Two groups are urging Santee Cooper to delay a vote on its first electric rate increase in seven years to address what they called “serious flaws” in the new pricing plan.
The S.C. Small Business Chamber of Commerce and the Southern Alliance for Clean Energy expressed their concerns and requested “a pause” in the process in a joint letter dated Dec. 3. They addressed it to former lawmaker Peter McCoy, chairman of the state-owned power and water utility.
The Santee Cooper board is scheduled to vote Monday on the new rate structure that calls for an average 8.7 percent increase for residential bills.
It will take effect April 1 if passed.
The two groups said Santee Cooper “may be preparing to approve” the proposed rates “without more fully addressing … concerns and suggested changes” from the Regulatory Assistance Project, an independent group the utility hired to help evaluate its pricing.
“We are concerned that there has been no public indication in the record that the board or management of Santee Cooper has given serious consideration to RAP’s suggested alternatives,” they said.
S.C. Small Business Chamber CEO Frank Knapp said the outside consultant “provided examples of newer and better designs that are fairer to these customers and allows the state utility to achieve the revenue increase it needs.”
The main point of contention is a “demand charge” designed to encourage customers to curtail their electricity usage at peak demand periods.
The chamber and the energy alliance said the proposed billing option is confusing and convoluted and “will seriously impact” households served by Santee Cooper.
“Demand charges in general have additional complexity for small consumers to understand and properly manage compared with most forms of … rates, including time-of-use rates,” they wrote.
They also pointed to a study that Santee Cooper used that found 25 percent of household accounts “could see their bills increase 20 percent or more when the proposed rates go into effect” even though “the overall residential customer class is slated for an 8.7 percent increase.”
In addition, they said, small businesses would be hurt because, unlike residential customers, they’re not being offered a “time-of-use” billing alternative.
The Moncks Corner-based power provider responded to the two groups in a written statement this week.
“Santee Cooper conducted a comprehensive and transparent rate adjustment process, including an extensive public comment period that these organizations participated in,” the utility said. “All appropriately provided comments, including theirs, are currently being reviewed by the board ahead of its meeting next week. This late letter to the board is nothing more than an attempted end run against a process that is spelled out in state law.”
Santee Cooper announced in June that it needs to raise electric bills to offset a projected $40 million revenue deficit next year, partly caused by inflation. It then conducted a series of public meetings.
Last month, Santee Cooper announced that it was revising parts of its original proposal.
Among the changes is a 20 percent reduction in the peak demand charge for “general” residential customers, who had complained the “penalty” was excessive. It would be offset with a 15 percent price increase for electricity used at any other time.
For all other residential customers, who are charged based on when they consume power, their higher-cost billing periods would be cut to three hours twice a day from four. In exchange, they would pay 7 percent to 15 percent more for power, depending on the time.
The peak-usage windows uniform for all household customers would be 6-9 a.m. from November through March and 3-6 p.m. between April and October.
The utility also has made several revisions to its commercial and industrial price sheets.
“Our team reviewed customer comments and analyzed key areas of concern, and we made changes … to help mitigate potential customer impacts,” CEO Jimmy Staton said in a Nov. 7 statement.
Santee Cooper directly serves about 215,000 residential accounts in Berkeley, Georgetown and Horry counties. It’s been operating under a rate freeze as part of a lawsuit settlement following the costly failed expansion of the V.C. Summer nuclear plant. The lockdown lifts Dec. 31.
The utility has said it needs to generate more revenue so it can invest in its electric grid to meet demand, ensure the lights stay on and comply with new environmental rules.