SC’s Santee Cooper looks to raise electric rates. Here’s by how much and who will pay more
Santee Cooper customers would have to adjust when during the day they use high-energy appliances in order to save money under a rate increase proposal from the state-owned utility.
Under the rate proposal, residential customers would see an 8.7% hike, but have flexibility to control their own costs. Commercial customers would see a 4.1% increase, lighting customers would have a 5% hike and industrial customers would see a 2.8% increase.
Public comments on the proposed rate increase, which would affect about 220,000 customers, are being accepted through Oct. 8.
Of those customers, 205,000 of them are residential and commercial customers in Horry, Georgetown and Berkeley counties. The rate increases would not apply to wholesale customers such as the electric cooperatives.
The new part of the proposed rate structure is a higher charge for electricity used during peak hours. For winter months of November through March, the peak usage hours would be between 6 and 9 a.m. For the summer months of April through October peak time would be between 3 and 6 p.m.
“If enough customers shift demand to off-peak periods, that lowers the peak and reduces how much generation Santee Cooper has to maintain to cover the peak,” Santee Cooper CEO Jimmy Staton said in a statement.
Through its peak demand charge, Santee Cooper wants to encourage customers not to use high-energy appliances, such as ovens, dishwashers, dryers, water heaters and heat pumps during peak hours. The utility wants to encourage customers to pre-heat and pre-cool their homes outside of the peak times and use smart thermostats to set times to shift use.
“We’re giving you these options to be able to have more control over your bill, that’s why we’ve got that three-part rate out there, because it does give the customer more control over how they use their energy and how they’re billed for that use,” said Santee Cooper spokesperson Nicole Aiello.
But AARP South Carolina has concerns about the proposed new structure, particularly for those in Horry County, which has a growing population, many of whom are retirees moving in from other states.
Folks who are on medical devices that rely on electricity 24-hours a day, can’t turn machines off during peak demand times.
“These are probably your folks who are your most vulnerable adults especially when it comes to health conditions,” said Patrick Cobb, the senior associate state director for AARP South Carolina. “They’re not going to be able to turn off any oxygen machine, or a second refrigerator that stores insulin if they have one. There’s a big concern there.”
John Ruoff, an AARP volunteer who specializes in utility issues, said the new rate structure could be problematic for consumers because most people don’t have the ability to see how much energy they’re using in real time.
“There’s no feedback on it,” Ruoff said. “You could find out the next day you just cost yourself a bunch of money, but you can’t find out that day that you’re on the verge of costing yourself a lot of money if you don’t take some steps.”
Appliances that can help track and control energy usage are “more expensive than the average person can afford at this point,” Ruoff added.
The idea of a peak demand charge isn’t new to the industry. Mid-Carolina Electric Cooperative also uses a peak demand charge in its rate structure. Dominion Energy South Carolina, Duke Energy Carolinas and Duke Energy Progress also have options for peak demand billing.
A Santee Cooper customer who uses 1,000 kilowatt hours a month, currently pays $115.69 a month.
Under the proposed rate changes, a Santee Cooper customer who uses high-demand appliances during peak hours could see their bill increase to $125.98 a month. Customers who avoid using high-demand appliances during peak hours would only see their bills increase to $119.35 a month.
“Every household is different so they could make those decisions on how they want to use energy, but we are giving them that tool to be able to shift and pivot if they want to,” Aiello said.
Same rates since 2017
Santee Cooper has had the same rates in place since 2017. The agency in 2020 agreed to a freeze rates through 2024 as part of a settlement over the failed V.C. Summer nuclear plant construction project.
During that time, both Duke Energy and Dominion have had rate increases approved by state’s Public Service Commission.
The state-owned utility still had to deal with rising costs during that period. In order to control costs during that time period, Santee Cooper has refinanced debt in July to save $100 million, held off on $70 million in capital expenses and $30 million in operations and maintenance, and reduced its employee headcount through natural attrition by not replacing employees who left for other jobs or retired.
“We’re keeping a close eye on our budgets and finding ways to save the customer as much money as we can through budget reductions and refinancing,” Aiello said.
Any base rate changes, if approved by the Santee Cooper board later this year, would go into effect in April. The Public Service Commission does not have to approve Santee Cooper’s rates as the commission does for investor owned utilities.
AARP South Carolina did not object to the overall rate increase, just the peak demand portion of the proposal.
“It’s been a while since they raised rates and you have to expect rates to go up at some level and the level of the rates going up are not outrageous,” Ruoff said.
Public hearings
This proposed rate increase also is the first time the agency has tried to hike rates since lawmakers passed a Santee Cooper reform package in 2021. Part of that reform includes holding Public Service Commission-style rate hearings before the utility’s board can vote to increase rates.
Two hearings are scheduled for Tuesday, Sept. 17:
▪ 1 p.m. at the Waccamaw Neck Library at 41 St. Paul’s Place on Pawleys Island
▪ 6 p.m. at Santee Cooper Auditorium 305A Gardner Lacy Road in Myrtle Beach.
Comments for the rate increase are due by Oct. 8, when the Santee Cooper board is expected to vote on the proposal.
