By Eddy Moore, special to Statehouse Report | The House last week passed something so common-sense that you would think it doesn’t need saying: A single sentence in the budget saying that state regulators should require electric utility companies to look for cost savings.
Until now, state legislators seeking utility reforms have not made this basic request and have focused only on the 18 percent portion of SCE&G customer bills that relates to charges for the abandoned nuclear project. This new common-sense budget item would broaden the search for customer savings to the other 82 percent of a customer’s bill, starting with the plans utilities make for future power plants.
Under the proviso, utilities would have to consider a range of energy sources to meet future energy needs. That could mean conventional power plants or—to the degree they save money—energy efficiency programs and renewable energy. Any resulting cost savings would pass through to customers. And because the state government itself is a big utility customer, that would help reduce the burden on taxpayers to run the government.
Strange as it may seem, this cost-savings idea was a point of contention among legislators. Without giving any reason, some members immediately voted to table the idea when it came up and then said it was out of order. But after surviving these procedural attacks, common sense prevailed and House members voted to pass it.
If you are thinking “Hey, don’t state regulators already make utilities look for cost savings?” you would be wrong.
In February, SCE&G filed its first 15-year energy plan following its decision to scrap the $9 billion V.C. Summer nuclear project. The plan says SCE&G needs to buy a gas-fired power plant now and will need another one in about five to seven years to meet customer needs. Those plants will cost hundreds of millions of dollars.
When asked whether SCE&G had assessed the possibility of doing more to help customers save energy and delay spending money on the power plants, the company admitted that “SCE&G has not performed such assessments” and that gas-fired power plants were the only option that the company analyzed in its plan.
Almost a year after abandoning the nuclear units, SCE&G has not made a credible, transparent effort to look into less-costly paths forward.
For years, state utility regulators have refused to flex their muscles to require better planning. Two years ago, conservation groups submitted a detailed plan prepared by outside experts that showed ratepayers would save over $200 million if SCE&G improved its energy efficiency programs. State officials dismissed the plan and, in the same proceeding, approved a $831 million increase in the cost estimate for the nuclear units. Conservationists tried again after the Westinghouse bankruptcy, but were ignored.
The House-passed budget language, however obvious it may seem, represents hope for a change in direction. We will see in the next few weeks if common sense survives the backroom dealing on the final budget — or whether some of the same legislators that killed solar legislation earlier this year will also block an attempt to look for customer cost savings.
Eddy Moore, a South Carolina native who served as an administrative law judge in Arkansas, is energy and climate program director with the S.C. Coastal Conservation League.
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