COLUMBIA – A South Carolina Senate panel began work Thursday to make good on a pledge to address the future of energy in the rapidly growing Palmetto State.
The Special Committee on South Carolina’s Energy Future came about after the Senate shut the lights off on an 80-page piece of legislation that would have paved the way for a new power plant in South Carolina while also overhauling the state’s utility regulations.
Earlier this year, state-owned utility Santee Cooper sought legislative permission to partner with Virginia-based utility company Dominion Energy on a 2,000-megawatt natural gas-fired power plant, which the companies wanted to build on the site of a former coal-fired power plant along the Edisto River in Colleton County. Santee Cooper CEO Jimmy Staton estimated that plant could cost up to $2.5 billion to build.
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At the same time, legislation to allow the partnership introduced sweeping regulatory changes criticized by environmental and consumer groups.
The bill sailed through the House in March and advanced in the Senate committee level without testimony from consumer advocates. But it ran into a wall of opposition on the Senate floor over concerns the process was being rushed.
Refusing to ram a complicated bill through in the legislative session’s closing days, senators voted instead to turn the legislation into a promise to deal with the issue this fall.
To start Thursday, the special committee heard from executives of the state’s three major utilities. Over the next couple months, customers, environmentalists, and economic development officials are expected to testify. The goal is to have a bill ready by the time the new legislative session starts in January 2025.
Among those who wanted to see the issue vetted further was chairman of the special committee, Senate Majority Leader Shane Massey, who said he still felt the burn of the last partnership between Santee Cooper and Dominion’s predecessor South Carolina Electric & Gas.
In 2007, the companies asked state lawmakers to pass the now-notorious Base Load Review Act. The law blessed plans for what was to be two first-of-their-kind nuclear reactors alongside a unit in Fairfield County and allowed power companies to bill customers for the project upfront.
But the project was riddled with delays, cost overruns and fraud that led to the mothballing of the expansion in 2017 — but not before the companies spent $9 billion. The failed project left SCE&G’s customers on the hook for more than $2 billion for a reactor that never generated power.
Santee Cooper’s share of the debt was $3.6 billion. About 5% of its customers’ power bills goes toward paying that off, according to estimates reported in 2020 when rates were frozen as part of a legal settlement.
Dominion Energy stepped in, buying out SCE&G’s parent company, SCANA, as it spiraled into bankruptcy.
Some of those feelings were still raw Thursday.
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“Everybody thinks if we go to build anything that we’re going to absolutely repeat what we did with V.C. Summer” said Keller Kissam, president of Dominion Energy South Carolina. “Well, I promise you, that ain’t gonna happen. OK? I’ll pack up and leave. I can assure you.”
But Massey told Kissam the company still needs to earn South Carolinians’ trust.
“The problem is, is there are too many people right now who don’t trust,” the Edgefield Republican said.
Massey said it’s hard to hear pleas that power customers in the state put that failure in the past and move forward.
“I can’t put that behind,” he said.
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But South Carolina, like much of the country, is wrestling with a need for more electricity, both to maintain its track record of economic development success and to serve a ballooning population. Also fueling the need for more power are the electric vehicle industry, driven by federal incentives, and technology advancements that require massive amounts of energy.
“Growth is here and more, much more, is coming,” said Duke Energy’s president in South Carolina, Mike Callahan, who told senators that the utility expects electricity usage over the next decade to be eight times greater than predictions it made just two years ago.
“We need clear and effective energy policy to plan for that growth,” Callahan added.
That includes guidance on what kind of power — natural gas, solar, nuclear — the state wants to see.
One major talking point over the next couple months will likely circle around data centers and the large amount of electricity they devour to power advancing technology, from 5G streaming of videos on mobile devices to high-speed financial trades.
Staton estimated 70% or more of his utility’s increased demand is from data centers.
Kissam said his company has 1,300 megawatts worth of data centers in its expected business pipeline in the state. Industrial and manufacturing, by comparison, accounts for 700 megawatts worth of future business.
“We clearly need them. I don’t want to go back in time,” Massey said. “What I’m trying to get at is a better understanding, a better handle on how much of the projected growth is based on data centers.”
But Staton said, even if the data center demand were to go away, Santee Cooper would still have use for any power generated by a new natural gas plant as it faces pressure from federal environmental regulators to retire coal plants in the state.
Approximately two-thirds of Santee Cooper’s more than 5,700 megawatt hours of capacity comes from coal. By 2030, the utility plans to shut down 1,150 megawatts of that with the anticipated closure of its Winyah Generating Station.
