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South Carolina’s failed government-run utility Santee Cooper is proposing a rate hike on its customers in 2025, hoping to make up a massive projected revenue shortfall.
The rate hike comes less than two years after the utility received a $450 million bailout from Palmetto State taxpayers – and just days after its leaders said they were going to ask state lawmakers for permission to borrow another $815 million.
Compounding the problem? Santee Cooper was already $7 billion in debt at last count, one of many reasons its credit outlook was lowered from stable to negative last fall.
“We need to invest in our system to ensure we continue to power a reliable and sustainable future for all of our customers,” the utility’s president and chief executive officer Jimmy Staton said in a statement. “We also need to make investments to meet new environmental regulations at generating stations. Unfortunately, inflation has increased 25 percent since we last raised rates, and new power lines and transformers cost a lot more today.”
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The rate hikes – which would go into effect in April 2025 – amount to 8.7 percent for residential customers, 4.1 percent for commercial customers, 5 percent for lighting customers and 2.8 percent for industrial customers, according to the release. The average residential ratepayer would see their bill increase by $10.29 per month based on an average of 1,000 kilowatts of energy consumption.
Additional increases are likely to be assessed by the utility to make up for “deferred costs” it incurred during a recent seven-year rate hike freeze. While Santee Cooper was not allowed to raise rates on consumers prior to January 1, 2025, it is allowed to petition the S.C. Public Service Commission (SCPSC) – and the lawmakers who control it – for retroactive relief linked to cost overruns.
Santee Cooper’s latest rate increase could actually wind up being much higher as the utility has added a new $10.03 per kilowatt “demand charge” – which it intends to assess on electricity consumption recorded during “system peak hours.”
Talk about a disaster waiting to happen …
The utility’s solution? Rearranging the lives of its ratepayers.
“If a family starts dinner at 5:00 p.m. every summer afternoon by turning on an oven that takes five kilowatts of electricity, they add $50 to their monthly demand charge,” Staton noted in the utility’s release. “But if that family waits until 6:00 p.m. to turn the oven on every day, or uses a slow-cooker that takes much less electricity, they save that $50. If they adjust when they use the dishwasher or other high-demand appliances, they save even more.”
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“If enough customers shift demand to off-peak periods, that lowers the peak and reduces how much generation Santee Cooper has to maintain to cover the peak,” Staton added. “And that’s a savings worth sharing with our customers through lower monthly bills.”
Except mark our words … that is never going to happen. And Santee Cooper knows it. This is nothing more than a massive backdoor rate hike – one that is going to spike ratepayer bills well above the projected $10.29.
What’s driving these rate hikes? Ongoing mismanagement. Santee Cooper is projected to go another $40 million in the hole in the coming year – further proving that the Palmetto State’s 90-year, failed experiment in the power generation business is never going to pay off.
“State government has absolutely no business running a power company,” I have consistently argued. “Especially South Carolina state government. This is why I have been calling on Palmetto politicians to offload Santee Cooper to the private sector since 2008.”
Lawmakers have had multiple chances to sell Santee Cooper. Instead of offloading the utility, though, they decided to plunge the Palmetto State headfirst into a $10 billion command economic boondoggle – NukeGate. This project was supposed to produce a pair of next generation, pressurized water reactors capable of generating a combined 2,300 megawatts of energy. Instead, it produced nothing but lies … and debt … and higher rates on South Carolina energy customers.
Santee Cooper will hold public meetings between August 26 and October 8, 2024 on its proposed rate hikes. Written comments will be accepted on its website anytime prior to September 9, 2024. The politically appointed board of the utility will vote on the rate hikes on December 9, 2024.
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ABOUT THE AUTHOR …
Will Folks is the founding editor of the news outlet you are currently reading. Prior to founding FITSNews, he served as press secretary to the governor of South Carolina and before that he was a bass guitarist and dive bar bouncer. He lives in the Midlands region of the state with his wife and eight children.
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4 comments
Great observation and on point. Santee Cooper will continue to set its own agenda and roll over any road blocks. Always has and always will.
Will seemingly forgets all about SCE&G and Dominion when he acts like the private sector is some sort of panacea.
How much did Nextera pay you to write this?
Hold on now, correct me if im wrong. Didnt Nikki Haley pass the law that let power companys charge for a plant that never produced one kilowatt of electricity? Now the cheating, lieing snaggle puss bitch wants a national run. Our problem in the Palmetto state seems to be short memory`s. And a complete lack of spinal fortitude. The errors in my grammer is the result of my S.C. education.