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Demand for electricity in SC drops during pandemic and economic slowdown

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Electricity demand in parts of South Carolina dropped between 8 and 9 percent in April amid the coronavirus pandemic. Both Santee Cooper and Dominion Energy saw sales of electricity drop. File/Lauren Petracca/Staff

Electricity usage in South Carolina dropped significantly last month, as restaurants, retailers and manufacturers temporarily closed amid the coronavirus pandemic.

Santee Cooper and Dominion Energy, two of South Carolina's largest power providers, said the overall demand for electricity in their service territories shrank by 8 percent and 9 percent, respectively, in April. 

Duke Energy, South Carolina's other major electric utility, told investors electricity demand for commercial and industrial customers in April dropped by 10 percent and 13 percent, respectively. 

Those numbers include Duke's electric utilities in multiple states including North Carolina, Indiana, Florida and South Carolina. It's unclear how much of that decline reflects the sales to Duke's 775,000 ratepayers in the Upstate and the Pee Dee. 

But officials with Duke suggested they were witnessing the same trends as the other utilities in South Carolina.

"We’ve generally seen daily peak demands reduced due to COVID-19 impacts but also because of milder weather," said Ryan Mosier, Duke's spokesman. "The increased residential use from people working from home hasn’t made up for the loss in load usually required by the many businesses that have closed." 

All of the electric providers in South Carolina are closely watching what the economy does now that Gov. Henry McMaster has allowed businesses to start reopening. 

"Nobody knows what the economic implications are going to be — short term, long term, how deep, etc.," Mark Bonsall, Santee Cooper's CEO, said during the utility's board meeting last month. "But I can tell you there has been a severe contraction in the Myrtle Beach area — between schools, hotels, restaurants. It's a tourism-based economy." 

Santee Cooper, which is based in Moncks Corner, supplies power to roughly 183,000 customers mostly in Horry and Georgetown counties.

Mollie Gore, a spokeswoman for Santee Cooper, said electricity demand from the utility's industrial customers in April was cut by 5 percent compared to the year before. And Santee Cooper, South Carolina's state-run utility, estimates the drop among commercial customers could be as high as 15 percent, she said. 

The leaders of Virginia-based Dominion Energy, the new owner of South Carolina Electric & Gas, told investment analysts earlier this month that they were dealing with the same problems. 

Ten of the Dominion's 30 largest industrial customers in South Carolina temporarily idled their plants in April either as a result of supply chain problems or to help stop the spread of the virus in their factories. 

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Jim Chapman, Dominion's chief financial officer, said that dip in manufacturing contributed heavily to the 9.6 percent decline in electricity sales in South Carolina in April.

All of Dominion's major manufacturing customers are planning to restart operations soon, Chapman said. But he emphasized that overall electricity demand in Dominion's territory, which covers areas around Columbia, Orangeburg, Charleston and Beaufort, could take longer to bounce back. 

"The future is difficult to predict, but we currently expect that load trends will gradually rebound through the late summer," Chapman said. 

"We are not expecting an immediate snap back," he added. 

As the state began to lock down due the coronavirus, utilities throughout South Carolina implemented policies to ensure people's power wouldn't be cut off if they didn't pay their bill during the pandemic. 

But, as McMaster begins to lift the emergency orders, the utilities are going to need to figure out what to do with all of the customers who fell behind. 

Dominion, according to Chapman, has only seen "modest increases" in the number of people defaulting on their monthly electricity bills. But the utility, which has roughly 722,000 customers in South Carolina, will soon be contacting those ratepayers to try to get them to catch up with their missed payments, he said. 

"We will work carefully with our customers over the coming months to provide options and tools to maintain service and assist them in returning accounts to current," Chapman said. 

While that happens, the utilities are also looking for ways to cut expenses. Dominion, Duke and Santee Cooper all plan to implement cost-saving measures this year to deal with the loss of revenue.   

Bonsall, Santee Cooper's CEO, said the public utility expects to see its revenues drop by millions of dollars. And if demand remains low, he said, his team will need to rethink the long term energy plan for the utility. 

Dominion's executives said they were exploring cuts to business travel, office supplies and fuel expenses, as well as a potential hiring freeze. Those cuts are meant to ensure returns to the company's investors remained stable. 

Dominion's lawyers will also be filing a regulatory case in August, asking South Carolina's utility regulators to adjust the rates for its customers in the state. 

Reach Andrew Brown at 843-708-1830 or follow him on Twitter @andy_ed_brown.

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