For more details on this issue, Eddy Moore and Frank Knapp will be available today at noon at this zoom link.
The Santee Cooper management refuses to make recommended changes to proposed rate design
Proposal unfair to many small businesses and will be ineffective in reducing energy consumption
Columbia, SC—Last week Santee Cooper (S-C) management made a small concession to small businesses to lessen the rate shock from its proposed new rate design to take effect April 1st of next year. S-C has approximately 25,000 small business customers in its direct-serve territory in Horry and Georgetown Counties.
S-C responded to concerns raised by the Southern Alliance for Clean Energy, the Small Business Chamber of Commerce, and others after the South Carolina Office of Regulatory Staff estimated that the original S-C proposal could result in some small businesses receiving a 34% or more increase in their rates. To reduce this expected rate shock the S-C Board reduced its proposed new “demand charge” on small business customers from about $17 per kW to about $12 per kW.
However, as the below S-C screenshot graph shows, under the modified proposal approximately 44% of small businesses served directly by S-C will still see their electric bills increase by 10%-100%, far more than the S-C claim of only a 4.6% rate hike.
Here is the impact of the S-C modified proposed new rate design:
–Approximately 44% of small businesses will see their electric bills increase from 10%-100% (raw data tables not provided by S-C).
–Approximately 22% of small businesses will see their electric bills increase from 30%-100% (raw data tables not provided by S-C).
–Small businesses that use less electricity will subsidize those that are heavier users.
–Small businesses will pay 50% more for a single hour of peak electricity use compared to residential customers.
–Energy consumption will not be significantly reduced during peak demand periods, the goal for grid reliability and reducing costly energy generation, because the demand charge is an outdated, dysfunctional and confusing method.
The South Carolina Small Business Chamber of Commerce and the Southern Alliance for Clean Energy provided recommendations to the S-C management that included S-C dropping the demand charge rate design for Time-Of-Use rates that are just and reasonable for all customer classes and would be more effective in reducing residential and small business electricity consumption during peak demand periods.
S-C has not scheduled a formal commentary period on its modified demand charge proposal. The S-C Board is expected to vote on adoption of the new rate design and schedule in December.
“Santee Cooper should not implement its plan to base a large portion of monthly bills for small business and residential customers on a single hour of usage,” said Eddy Moore, Director of Decarbonization at the Southern Alliance for Clean Energy based in Charleston. “That is the fundamental flaw in their new rate proposal, which will cause it to produce arbitrary, unfair results for thousands of small business and residential customers from an otherwise modest rate increase. There are better ways to achieve the stated goal of reducing peak usage. We believe that all customers, including small business, residential, and solar customers, should be allowed a fair rate that rewards energy conservation.”
“While Santee Cooper deserves additional revenue for past and future expenses, all of their direct serve small businesses should be treated fairly with easy to understand rules for avoiding higher electric bills,” said Frank Knapp Jr., President and CEO of the South Carolina Small Business Chamber of Commerce. “The proposed rate design is unfair and confusing. It will result in significant and unnecessary rate increases for many of Santee Cooper’s 25,000 small business customers in Horry and Georgetown Counties. The state legislature needs to step in to protect small businesses from this proposed rate disaster if the Santee Cooper Board refuses to do it.”