A utility that provides electricity for about 75,000 homes and businesses throughout the Lowcountry will start charging hefty fees to newcomers next year so that its current members don't have to pay to plug new buildings into its grid.
Berkeley Electric Cooperative Inc., a nonprofit utility based in Moncks Corner, will charge builders between $1,100 and $1,800 starting Jan. 1 for each home or commercial project that needs to tap into its transmission lines.
The fee will cover what it costs the utility to buy and install equipment such as wiring and transformers, Vice President Eddie McKnight said. A study conducted for the utility earlier this year estimated that it costs more than $25 million a year to hook up new buildings to its power system.
The extra cost will keep gas and electricity rates down for existing customers who, as a result, won't have to pay for the Charleston area's sprawling growth, McKnight said.
But the fee is an unwelcome charge for developers, who say it will push up the price of homes.
"I can understand the need to make business-plan adjustments, but it's unfortunate because it (creates) a higher entry cost for their new customers," said Donald Jones, project manager for Associated Developers Inc.
The charges, which will fluctuate based on the size of the home and the lot, will
be levied on several residential projects his development firm is working on, Jones added.
"The core issues with these (impact fees) is that they get passed on to the cost of the home," said Mary Graham, the Charleston Metro Chamber of Commerce's senior vice president of public policy. "It just adds to the housing affordability issue."
The median price of a Charleston-area home last month was $200,000, according to the Charleston Trident Association of Realtors.
McKnight noted that more utilities across the Southeast are billing developers to cover the cost of new construction.
For example, Horry Electric Cooperative Inc., which provides power to Conway and Myrtle Beach, is considering charging an impact fee for the same reasons.
"There's a lot of development out there, and should those costs be paid by existing members or by the people who are incurring those costs?" said Penelope Hinson of Horry Electric, adding that most utilities tend to favor billing newcomers.
Santee Cooper, the state-owned utility based in Moncks Corner, decides on a case-by-case basis whether to levy an impact fee on new developments. It generally waives the charge if the proposed buildings will use a certain amount of electricity, according to spokeswoman Laura Varn. The utility collected impact fees from about 15 percent of the buildings that plugged into its grid in the past year.
Scana Corp., the Columbia-based utility that owns South Carolina Electric & Gas, does not charge impact fees. The cost of adding new buildings to its grid is factored into its rates and spread among its 633,000 customers.