The House-passed energy bill under consideration by the S.C. Senate raises several important questions about what is best for our state, for the investor-owned utilities Duke and Dominion Energy, for Santee Cooper and for their respective customers.
Investor-owned utilities Dominion and Duke and state-owned Santee Cooper say they need to build new natural gas plants to meet increased demand for electricity over the coming decade, but it should be noted that their past projections haven’t always been accurate. And these same utilities were already proposing new gas plants even before these huge projected load increases were announced.
Moreover, new gas plants won’t solve all the problems that utilities were facing even before these latest forecasts.
During winter storm Elliott just before Christmas 2022, many of Duke’s gas plants froze up, resulting in rolling blackouts. This failure by gas plants to provide electricity during the winter storm undermines the utilities’ position that they are always reliable sources of power. During winter storm Elliott, solar performed as expected. Demand-response programs where utilities pay their customers to turn down electricity until the storm passes also performed well.
New natural gas plants will increase costs for customers because utilities are allowed under state law to make a guaranteed rate of return on all capital investments including new power plants, new power lines and new gas pipelines. This gives utilities a built-in incentive to maximize capital investments with no similar incentive to improve energy efficiency or consider less costly options such as solar and storage facilities.
Electricity from solar coupled with battery storage is much cheaper to build and requires no fuel. Under state law, the cost of natural gas also is passed on to consumers, so when natural gas prices go up like they did a few years ago, ratepayers have to pay more in their monthly bills to cover these increased costs. This means utility companies have a built-in conflict of interest when they plan new generation facilities that are not in their customers’ best interests.
Public service commissions should require these utilities to examine expanding energy efficiency, demand-side management, pump storage and solar with battery storage more thoroughly in their integrated resource plans.
The stakes are high. And there are still many unanswered questions. How much will the combined-cycle natural gas plant Dominion and Santee Cooper want to build cost? How much will new natural gas pipelines cost, and how long will it take to acquire rights of way for these new pipelines?
How will property owners be affected if their land is condemned? Will they be fairly compensated for their land?
We have seen how difficult it has been for investor-owned utilities to build the Mountain Valley Pipeline in West Virginia and Virginia. The project has experienced numerous delays and cost overruns over the past 10 years and is still not completed.
The General Assembly has a duty to ensure that any energy law it passes doesn’t repeat these same mistakes. Our state ratepayers are still having to pay for the costly mistakes that were made by passing the Base Load Review Act, which resulted in the nuclear debacle at V.C. Summer. South Carolina deserves much better solutions than the bill under consideration in the Senate. Please ask your state senator to defeat the legislation in its current form.
Tom Ervin is a Greenville attorney and former Circuit Court judge who resigned last month from the S.C. Public Service Commission.
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