SC House Removes Consumer Protections from Costly Energy Bill

House amendments akin to creating an open bar tab for utility company spending that the public will pay for on their electric bills

COLUMBIA, S.C. – Bending to utility company requests, yesterday the South Carolina House of Representatives stripped vital consumer protections from a sweeping energy bill. It is now up to the Senate to protect families and small businesses from footing the bill for the costs utilities will incur with massive new, polluting infrastructure for potential future industries.

“These House amendments will put the cost on South Carolina families and small businesses for huge, risky energy projects needed to serve industry,” said Eddy Moore of the Southern Alliance for Clean Energy. “With these changes, this legislation is basically like an open bar tab for utility company spending that the public will pay for on their electric bills,” said Moore.

One part of the bill would create a new automatic rate increase system (mis-named “Rate Stabilization”) for electric companies in South Carolina. Each year – even during a recession – the utilities would get to raise rates if their profit falls below about 9% or 10%. “I believe that if we go into a recession, it would hurt our economy to pile an extra rate increase on the general population, just to ensure that utility profits are uninterrupted,” said Moore.

Similar automatic rate increase legislation in Arkansas led to a 45% residential rate increase over a 9-year period that included the Covid recession. Because of this history, consumer advocates tried to cap the potential annual rate increases to a few percent per year, but utilities defeated these attempts.

Utility executives claimed that more frequent rate increases are needed to finance a multi-billion-dollar new power plant on the banks of the beautiful, scenic Edisto River. The power plant will produce millions of tons of pollution every year – equal to putting about a million cars on the road.

The power plant will take almost a decade to complete because it requires the construction of a new interstate pipeline to supply it with fossil gas imported across hundreds of miles from other states. Under South Carolina law, electric customers will pay pipeline companies for the gas, no matter what it costs, because utility companies are not required to share any of the fuel cost. Federal regulations build in a profit of about 14% for the pipeline companies.

“It is a double whammy of state and federal regulations working together to make sure you pay the oil and gas industry. And there is a triple whammy waiting when they use the pipeline you paid for to export the gas to Asia and Europe,” said Moore.

While legislators were assured repeatedly by utility companies that the pipeline would run within existing rights of way, and thus not require forced condemnation of private property, earlier this week, a pipeline company (Kinder Morgan) disclosed on a quarterly earnings call that it would build a $431 million, 71-mile “greenfield” pipeline into South Carolina, which could be greatly expanded thereafter.

Moore said, “It is classic that the Wall Street investors found out first – not our own citizens or landowners or even our legislators. That is why it was so important that the Senate bill required landowners to get notice if an energy project would result in land condemnation.” But, at the request of the utility companies, the House removed the Senate requirement to let the public know when an energy project will result in federal eminent domain to take their land.

Utility companies have argued that this plant, plus others that have not yet been specifically identified, will be necessary to serve huge new computer data centers that could each use as much electricity as a small city. While the Senate bill would require the data centers to pay for the new infrastructure needed to serve them, the House stripped this requirement out. “Not only is it unfair for households to subsidize the energy costs of big industry, the danger is that tech industry growth is famously fickle and could leave us holding the bag for the infrastructure costs if they leave,” said Moore.

The bill also makes it the policy of the state to encourage new nuclear plants. “Nuclear is very profitable for the power companies, but for the consumer it is absolutely the most expensive energy on earth,” said Moore. The last nuclear plant attempted in South Carolina cost about $1,800 for every man, woman, and child in the state, and it wasn’t even finished,” said Moore. A similar plant completed in Georgia cost over three times that much.

Acknowledging the potential electric bill impacts, the Senate included a requirement for electric companies to help customers reduce their bills through rebates for weatherization, more efficient air conditioners, and other equipment. Most states have a utility energy savings requirement, but South Carolina, which has been ranked as low as 50th in energy savings in recent years, does not. Moore said, “The Senate energy savings provisions amounted to less than 1% of electric sales per year, but that was too much for the utility companies and the House. They took away even this modest assistance for consumers.”

“When you add together the automatic rate increases, the cost of highly risky infrastructure projects, the massive pollution, the lack of protection for property rights, and the attacks on energy efficiency, this is a dangerous bill for South Carolina’s economy and for its people,” said Moore.

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About the Southern Alliance for Clean Energy (SACE)
Since 1985, the Southern Alliance for Clean Energy has worked to promote responsible and equitable energy choices to ensure clean, safe, and healthy communities throughout the Southeast. Learn more at cleanenergy.org.