Santee Cooper board approves 3.7% rate hike

The board of directors for Moncks Corner-based electric utility Santee Cooper approved a rate increase and a new solar power buyback program during its meeting Monday in Pinopolis.

Santee Cooper customers will see their rates increase by an average of 3.7 percent over each of the next two years as part of a $2.7 billion budget approved Monday by the state-owned electric utility’s board of directors.

The board also approved a solar energy buyback program, in which customers can receive credit for excess solar power they generate, and asked Century Aluminum employees to urge their bosses to accept its proposed power deal to save 600 jobs at the Mount Holly plant.

Santee Cooper and Century are at a stalemate on contract negotiations, and Century has said it will shut down the aluminum smelter on Dec. 31 if a new deal isn’t reached.

“Urge your management to accept the offer that Santee Cooper has put on the table,” chairman Leighton Lord said. “It is an incredibly generous offer. And it’s an offer that can be terminated with six months notice, so we’ve built in flexibility ... because we understand we’re getting hammered by China (exports), hammered by the aluminum markets. We want to keep those jobs. We want to keep them open.”

Century has said it cannot accept an extension of the current deal. About 35 Century employees attended nearly three hours of committee meetings Monday but left before Lord’s statement, which was made during the full board meeting.

The rate increases, approved unanimously, will affect all of Santee Cooper’s residential, commercial and industrial customers, and they will take effect each April in 2016 and 2017. Residential customers also will see a $3 increase in the monthly fee they pay, from the current $14 to $17. The utility last raised its electric rates in 2013.

“I know times continue to be challenging for many of our customers,” Lord said, adding that Santee Cooper’s rates remain 29 percent below the national average. “We’ve got good, competitive rates.”

The rate increase was necessary, utility officials 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.

Santee Cooper’s solar initiative, also approved unanimously, has drawn heat from conservation groups who say it doesn’t go far enough to promote use of the alternative energy source. But utility directors defended the program and Santee Cooper’s history with “green power.”

“Santee Cooper and the board have been very proactive in promoting solar for a number of years, and we feel like this is a step in that direction again,” said board member Barry Wynn.

The utility’s plan credits customers with 3.8 cents per kilowatt hour for excess solar power they generate and sell back to Santee Cooper. Mollie Gore, the utility’s spokeswoman, said that amount is what it otherwise would cost the utility to generate the electricity.

Those taking part in the program must pay a $2-per-month metering fee and a standby charge of between $4.40 and $4.70 per kilowatt per month. The standby charge covers the cost of the infrastructure needed so customers can access the grid, Gore said.

Hamilton Davis, energy program director for the Coastal Conservation League, said the utility’s buyback credit should match the 11 cents per kilowatt hour Santee Cooper charges its household customers, also known as net metering. The state’s other major utilities — Duke Power and SCE&G — have net metering programs in place. Davis called the metering and stand-by fees unnecessary and said they aren’t charged by the other utilities.

“Santee Cooper’s proposal is a significant, negative departure from the standard practice of other electric utilities, both in South Carolina and nationally,” Davis said in a letter to the board.

Lonnie Carter, Santee Cooper’s president and CEO, said the utility has “more solar than anybody else and we’ve been committed to it longer than anybody else.”

Santee Cooper will conduct a marketing study for its solar initiative by April, and if the program is not generating enough interest, “I believe the board is committed to increasing the incentives to meet their goals,” Carter said.

The $2.7 billion budget is for the upcoming calendar year. The board also approved budgets for 2017 and 2018 for planning purposes. There is no rate increase proposed for 2018.

The 2016 budget includes $1.8 billion for the electric system, $8.3 million for the water systems and about $911 million for capital expenditures. About 43 percent of the electric system budget is allocated for fuel and purchased power.

Among the planned capital expenditures are: $643.2 million for construction of new nuclear generating units at the V.C. Summer Nuclear Station in Jenkinsville; $70.7 million for renewable generation and environmental-control improvements; and $197.5 million for the utility’s transmission and distribution systems and systemwide improvements.

The rate increase and solar initiative affect Santee Cooper’s 172,000 customers in Berkeley, Georgetown and Horry counties. The utility also provides electricity to 20 electric cooperatives throughout the state that serve 760,000 customers. Those cooperatives set their own rates.

Reach David Wren at 843-937-5550 or on Twitter at @David_Wren_