Don't ignore these red flags in South Carolina's energy mega-bill

Bryce Fiedler

Written by
March 26, 2024

Don't ignore these red flags in South Carolina's energy mega-bill

Update 4/4/24: The bill passed the House and is now in the Senate Judiciary Committee. 

 

RATEPAYERS COULD BE CHARGED FOR ABANDONED UTILITY PROJECTS

A massive utility bill (H.5118) awaiting debate on the floor of the S.C. House threatens to blur the line between economic development and energy policy. To better understand the proposal, called the South Carolina Energy Security Act, we have prepared a brief summary highlighting some of its concerning provisions.  

This summary reflects the version of the bill adopted by the House Labor, Commerce and Industry Committee on Mar. 21. You can read our original summary here. 

 

Red flags in the House energy bill 

H.5118 would: 

  • Allow a utility to recover the costs of building a small modular nuclear reactor from ratepayers even if the project is abandoned, so long as the decision to abandon is “reasonable, prudent and in the public interest.” 
      
  • Encourage Dominion Energy and Santee Cooper to make preparations for the construction of a natural gas plant of up to 2,000 megawatts in Colleton County. It also directs the involved governmental agencies to give the project accelerated consideration. With the Legislature’s explicit endorsement, a fair and objective approval process becomes less likely.  
     
  • Insert economic development language into the missions of state utility regulators, undermining their independence. Under H.5118, the phrase “economic development” appears five times throughout the Public Service Commission’s list of duties.  
     
  • Offer reduced electric rates and special perks to companies meeting arbitrary job and investment criteria, among other requirements. Notably, it sets up different perk tiers, the highest being reserved for “transformational customer(s).” To reach this level, a business must be designated by the S.C. Department of Commerce, among other criteria.  
     
  • Grow government by establishing the “S.C. Energy Policy Research and Economic Development Institute” – a new advisory body for state policymakers. The institute would be governed by a six-member board of legislative appointees.  
     
  • Grow government by creating the “Energy Investment and Economic Development Fund” housed within Santee Cooper.
     
  • Shrink the Public Service Commission by more than half (from seven to three commissioners). A decision on energy matters could therefore be reached with just two commissioners.     
     
  • Put broadly defined economic development needs at the center of energy and ratemaking decisions, which could clash with consumer interests. 
     
  • Transfer the Consumer Advocate’s authority to challenge rate-hike requests to the Office of Regulatory Staff – an entity that, under H.5118, would need to consider “economic development and job attraction” when representing the public interest.