South Carolina is currently not among the handful of states that allow residents to choose their energy supplier, but that could soon change. The state legislature is weighing a proposal to create a study committee to look at the benefits of residential energy choice.
The past year has seen a wave of momentum among states looking to adopt retail energy choice. The center point of this movement has been in the South, where states like Virginia, Florida, and the Carolinas have pushed grassroots efforts to increase competition in their power markets.
In late February, South Carolina took a significant step toward reorganizing its existing monopoly utility market when the state House recommended creating a study commission.
South Carolina ratepayers currently face higher costs due to the decision to invest in nuclear power plants by the incumbent utilities that turned into a $9 billion construction sinkhole. So it’s not surprising that the state would be looking at alternatives to the old monopoly system and its capacity pricing.
Shifting from the traditional monopoly market to a competitive one can reduce costs and decrease the power sector’s carbon footprint, along with other benefits.
The resolution passed by the South Carolina House, Joint Resolution H.4940, requires a state study committee to deliver a report on the impacts of full retail competition by January 2021.
If the study committee is approved by the Senate, it will look at specific electricity market reforms, including establishing a South Carolina Regional Transmission Organization (RTO), joining an existing RTO, measures to accelerate decarbonization of the state’s power supply, and more. Notable among those measures recommended for study include the following forays into electricity choice:
Enabling full consumer retail electric service choice; enabling partial consumer retail electric service choice such as nonresidential customer choice;
Authorizing community choice aggregation in South Carolina; and
Redesigning the distribution system operator role in South Carolina to accommodate a modernized distribution grid featuring high levels of distributed energy resources, including exploration of establishing an independent distribution system operator and distribution-level electricity markets.
Lawmakers want the study to, at a minimum, provide for the following:
The legal and procedural requirements associated with the adoption of any recommended electricity market reform measures, including identification of existing laws, regulations, and policies that may need to be amended in order to implement the electricity market reform measures.
The potential costs and benefits to South Carolina electric consumers and ratepayers of each electricity market reform measure studied based on factors including, but not limited to: generation production cost savings, fuel savings, transmission cost savings, battery storage, reliability, resiliency, generation resource diversity, generator availability, the promotion and integration of demand response and energy efficiency, deployment of renewable resources, deferral of capital investments, the effect on economic development and retention of industry, and impact on consumer rates and service quality in the short and long term.
The South Carolina legislature is bicameral, so after the state House of Representatives passed the measure, the Senate must take it up. The outlook in the Senate vote is positive, though, coming as it does on the heels of state senators from both South Carolina and North Carolina calling for such a study in late January.
Lawmakers are driven by the goals of increasing competition among power providers that would spur lower costs and cleaner energy. South Carolina Senator Tom Davis noted that “whenever the producer of a good or service has competition and the consumer of that good or service has choices, all things being equal, that will result in a better product at a lower cost.”
Again, it should be noted that what is being discussed and passed here is a commitment to fully study the issue, research the potential impacts to South Carolina utilities and consumers, and make an accountable and informed choice.
“If we’re going to change the way we’ve always done energy production in South Carolina, which there is the political will to do, you have to have a baseline of knowledge and education; you have to bring legislators along," said South Carolina state Senator Wes Climer in January.