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Santee Cooper Adopts Solar ‘Standby Fee’

December 16, 2015 By Cheryl Kaften

Santee Cooper, South Carolina’s largest power producer – and its only state-owned electric utility, serving over 2 million customers and providing retail services in Berkeley, Georgetown, and Horry counties – raised its rates and approved a controversial solar buyback program at a board meeting on December 7.

Two-Part Rate Hike

Specifically the state utility’s residential, commercial, and industrial customers will be hit with a 3.7 percent increase over each of the next two years, effective in April 2016 and April 2017, to meet an overall budget of $2.7 billion endorsed by the board.

Residential customers also will absorb a $3 increase in their monthly fees, from $14 to $17.

The utility last raised its electric rates in 2013, and still claims to charge less than most other U.S. energy providers. “I know times continue to be challenging for many of our customers,” Chairman Leighton Lord told board members and meeting attendees, according to the local newspaper, The Post and Courier, adding that Santee Cooper’s rates remain 29 percent below the national average. “We’ve got good, competitive rates.”

The rate increase was necessary, he said, because of slower-than-expected growth in the demand for electricity and higher debt-servicing costs for two nuclear power generators the utility is building with South Carolina Electric & Gas in Jenkinsville.

Solar Fees

The board approved a package of solar charges that had been under discussion for months, noting that such fees are necessary to recoup lost revenue now that customers are generating their own renewable energy.

The board approved a “standby fee,’’ that will cost residential customers $4.40 per month per kilowatt of installed solar capacity. It also approved the use of rebates and credits to incentivize customers to install solar generation, instead of a net metering rate.

At the same time, the board set the rates for crediting generation at less than its retail rate, according to the JD Supra Business Advisor. The company charges about 11 cents per kilowatt hour (kWh) for customers to buy its power, but will pay back residential solar generators about 7 cents/kWh for any excess solar energy they produce.

Those charges are being hotly contested by environmentalist, including the Southern Environmental Law Center, which recently stated, “While South Carolina’s investor-owned utilities are making affordable solar power more accessible for families and businesses, state-owned Santee Cooper is going in the opposite direction by proposing stiff charges that would penalize customers for exercising their right to use this clean, renewable resource.

Santee Cooper staff recently proposed a fee that would make solar cost-prohibitive for its customers. The tax, not levied by any other South Carolina utility, would amount to a monthly charge of approximately $30 for an average solarized household,” the advocacy group argued.

The group noted that Santee Cooper is the only utility in South Carolina that has adopted such fees. “Like energy efficiency upgrades, solar lets customers take more control of their monthly energy bills to reduce the impact of rising rates — something to be encouraged, not punished,” the Law Center opined, adding, “Private utilities Duke Energy and South Carolina Electric & Gas offer solar programs with no punitive metering or standby charges. They also offer retail-rate net metering to their customers – meaning customers are paid the full retail rate for extra energy they send back to the grid.”

Now, advocates are predicting that the fees will have a chilling effect on solar growth in the Palmetto State. Indeed, the Southern Environmental Law Center expects, the charges will mean “Lights out for solar,” statewide.

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