For nearly two weeks, large-scale solar companies and the state’s biggest utilities squared off in a bitter regulatory fight that will ultimately determine how much customers pay in monthly power bills.
Now, both sides have finished arguing before the S.C. Public Service Commission, and it’s up to the PSC to decide the amount Duke Energy and Dominion Energy must pay solar companies for power produced from industrial-scale sun farms.
If the PSC chooses the higher rates advocated by big solar companies, sun power boosters say it will lead to an expansion of major solar farms — and that could stabilize utility costs for customers over the long term by reducing reliance on traditional forms of energy.
Traditional energy sources are subject to the rising costs of fuel, like natural gas and coal, which can drive up power bills, solar developers say. In contrast, solar energy doesn’t have those costs, say renewable energy advocates.
“If you bring solar on, you are going to insulate against rate shock from fluctuations in gas or coal prices,’’ Blan Holman, an attorney with the Southern Environmental Law Center, said after testimony wrapped up Tuesday in Columbia.
Dominion Energy wants to set a rate of $16.76 per megawatt hour for new solar power generated by sun farms, making that one of the lowest known costs, according to a recent report in PV Magazine, a trade publication, and the S.C. Office of Regulatory Staff. Solar developers favor a rate of more than $30, according to the Office of Regulatory Staff.
Utilities say paying too much for solar will ultimately hurt customers by forcing power companies to raise rates. Solar power also isn’t always available, they said.
But Bret Sowers, chairman of the Solar Business Alliance, said utilities hope to stifle solar so they can build more natural gas plants. That, he said, could saddle ratepayers with higher bills because natural gas prices are expected to rise.
Dominion, for instance, is trying to build a major natural gas pipeline from West Virginia to North Carolina near the South Carolina border. The company has said it may extend the pipeline into South Carolina. Dominion also acquired a natural gas plant in Calhoun County last year and has extended a natural gas pipeline through eastern Richland County.
Dominion and Duke don’t like ‘’direct competition for their own generation expansion plans,’’ Sowers said.
Duke and Dominion, the state’s two major investor-owned utilities, say solar developers and environmentalists are blowing smoke.
If the utilities have to pay solar companies too much for power, they’ll pass the cost to customers, spokespeople for both utilities said.
Utilities have argued that solar isn’t as reliable as natural gas, for instance, because it doesn’t provide power on dark, winter mornings when many people need energy as they prepare for work and school. Today, solar energy contributes only a fraction of the power used by utilities to supply customers.
“Because the costs Dominion Energy pays for electricity generated by qualifying solar facilities are ultimately passed through to customers, it’s important that these amounts .... be set accurately so that electric customers are not harmed,’’ Dominion spokeswoman Ashley Cunningham said in an email to The State.
Duke spokesman Ryan Mosier was more blunt.
“Customers will pay 100 percent of the cost of any contracts entered into,’’ Mosier said in an email. “Therefore customers will pay less if the rates are what Duke Energy filed compared to what the solar developers want.’’
Between them, Duke and Dominion provide power to much of South Carolina. Duke, headquartered in Charlotte, serves the Upstate and Pee Dee regions. Dominion, from Virginia, provides power to the Columbia and Charleston areas. Santee Cooper, which serves the Myrtle Beach and Moncks Corner areas as well as areas served by electric cooperatives, is not part of the proceedings because it is a state-owned utility.
The solar dispute has been simmering for several years. This past spring, the Legislature passed a law that was intended to improve the business environment for solar energy after solar developers complained that utilities, particularly Duke, were not working with them. The law encourages development of solar power and other forms of renewable energy, but in a way that is “just and reasonable to the ratepayers of the utility,’’ PSC filings show.
Part of the law’s requirement was to establish what the cost of solar energy would be, which is what led to this month’s debate before the PSC.
Solar energy is a non-polluting form of power that supporters say is better for the environment. It doesn’t produce greenhouse gases that are contributing to global warming or pollute the air with mercury or other toxins. It also doesn’t generate waste like coal and nuclear power plants do.
The Southern Environmental Law Center is representing the S.C. Coastal Conservation League and the Southern Alliance for Clean Energy in the PSC case. Southern Current is among the solar companies also challenging the utilities.
Public Service Commissioners are expected to rule in mid-November on what utilities will have to pay solar companies for energy they produce. This fall’s hearings foreshadow PSC proceedings in 2021 on how much utilities will have to compensate individual homeowners with rooftop solar panels for energy they produce. Many people with rooftop panels produce so much energy they send it back to utilities.
During the recent hearings, Public Service Commissioner Tom Ervin said solar companies and major utilities should try to work out some of the disputes that came up at the PSC. The key is phasing out coal, one of the most polluting types of energy sources, he said.
“I’m going to suggest you try to sit down and think about some common ground to meet the needs of our energy future in the Carolinas,’’ Ervin said. “It seems to me that there is going to be a need for more solar, and probably more than Duke and Dominion would like. But at the same time, there is going to be a need for natural gas to bridge that path to a fossil free environment so we can try to save the planet.’’
Energy issues have been a major source of debate in South Carolina since the failure in 2017 of the V.C. Summer nuclear construction project, which left ratepayers on the hook for billions of dollars in costs.
Since the construction project was shut down two years ago, solar energy supporters have seized on the opportunity to advocate for expanded sun power across South Carolina. They argue that solar farms, unlike nuclear plants, expose ratepayers to fewer risks because utilities are buying power, instead of generating it themselves.