Buy Your Own Power: A Path to Affordable Electricity in South Carolina 

South Carolina is experiencing growing demand for electricity as the population increases, developers look to build data centers, and manufacturers try to expand their operations. This push for growth creates opportunities for investment and job creation, but it also begs an important question: Who should pay for the new power generation needed to meet rising demand? 

While utilities are planning billions of dollars in new power plants, electric infrastructure, and paying off past projects, the costs of these investments are being passed on to customers through higher rates. That’s baked into the utility price model.  

While South Carolinians are already facing rising utility bills, it is crucial that policy should open a path to meeting these growing energy needs without placing unnecessary financial burdens on families and small businesses. 

A recent report from the Mackinac Center for Public Policy offers a potential solution: Buy Your Own Power (BYOP). The key finding of this report is that allowing large energy users to procure their own electricity can reduce utility generation costs and deliver substantial savings to everyday consumers. For South Carolina, this model presents an opportunity to support economic growth while protecting ratepayers. 

Michigan Offers a Model for South Carolina 

Under the traditional regulated utility model, utilities build or purchase the power needed to serve their customers. When electricity demand increases, utilities may invest in additional power plants and infrastructure, recovering those costs through their rates. 

BYOP offers eligible large commercial and industrial customers another option: purchasing electricity from competitive suppliers rather than relying exclusively on their incumbent, monopoly utility for power generation. Private investment can then finance a greater share of the generation needed to serve those customers, instead of relying solely on the utility for expansion and infrastructure that gets baked into rates. 

Importantly, BYOP does not mean abandoning the existing electric grid. In Michigan, utilities continue to own and operate the transmission and distribution systems that deliver electricity. The difference is who supplies the electricity and who finances the generation needed to produce it. 

The Mackinac Center’s analysis identifies significant benefits from Michigan’s Electric Customer Choice Program, which has operated for nearly two decades. According to the report: 

• 2,172 megawatts of electricity demand are served by competitive suppliers rather than utility-owned generation. 

• $3 billion to $4 billion in avoided generation costs have been identified for ratepayers. 

• $185 million in savings went to participating customers in 2024. 

• More than 5,100 customers are waiting to participate because Michigan caps enrollment at 10% of each utility’s retail electricity load. 

The avoided generation costs represent probable upfront power plant construction expenses, rather than the lifetime costs of operating and maintaining the facilities. Nevertheless, the findings illustrate how alternative electricity procurement arrangements can reduce the amount of investment required to build additional generation, as well as lowering the rates for consumers. 

The report also estimates that increasing Michigan’s participation cap from 10% to 30% could save ratepayers an additional $7 billion to $8 billion in generation costs. Michigan’s experience suggests that allowing more customers to procure their own power could help accommodate growing demand while reducing financial pressure on utility customers. 

Why South Carolina Should Pay Attention 

South Carolina faces many of the same challenges that make BYOP worth considering. 

Duke Energy’s recent planning filings pose up to 4,000 megawatts of new large electricity loads within five years. Meanwhile, Santee Cooper’s 2026 resource plan projects that electricity demand in 2030 will be 1,250 megawatts higher than the utility than their projections from three years ago 

At the same time, South Carolinians are already experiencing higher electric bills. Duke Energy Progress customers began paying an approximately $11.23 monthly increase in February 2026, and the utility subsequently sought additional annual revenue that was initially estimated to add another $10.20 to the average residential bill. Dominion Energy South Carolina also filed a rate case in January 2026 seeking an approximately 12.7% increase, initially estimated at nearly $20 more per month for a typical residential customer. 

These developments show crucial it is to properly finance and build new power generation. South Carolina needs reliable electricity to support economic development, but relying exclusively on utility planning and generation could expose everyone to additional costs. 

BYOP could allow private capital to help finance the generation required to meet their needs, reducing the amount of new utility-owned generation that must be funded through customer rates while giving energy-intensive businesses greater flexibility in securing power. 

South Carolina lawmakers have already considered legislation addressing this issue. Senators Michael Johnson, Wes Climer, and Brian Adams introduced S.878 to establish a third-party electricity supply option for eligible customers. The proposal would allow qualifying commercial and industrial users to obtain electricity from third-party suppliers while their incumbent utility continues providing transmission and other regulated services. 

The Mackinac Center’s findings provide a useful case study for evaluating this approach. Although BYOP would not eliminate the need for new utility owned power plants or guarantee lower electric bills, it could diversify how new generation is financed and reduce the amount of investment recovered through rates alone. 

Economic Growth and Affordability Can Go Together 

South Carolina should not have to choose between attracting new businesses and protecting families from rising electricity costs. A competitive electricity market that allows eligible large energy users to procure their own power could help the state pursue both goals. 

Michigan’s experience demonstrates the potential benefits of this approach, including substantial avoided generation costs and millions of dollars in annual savings for participating customers. The findings also suggest that demand for alternative electricity procurement arrangements can exceed the limits imposed by existing programs. 

At the Palmetto Promise Institute, we believe sound public policy should encourage economic opportunity while protecting South Carolina families and taxpayers. As the state prepares for continued growth in electricity demand, policymakers should carefully consider whether a BYOP framework could help achieve these objectives. 

The central principle is straightforward: Businesses that need additional electricity should have opportunities to help finance the power generation required to serve them, rather than placing the entire burden of new utility investment on the broader pool of ratepayers. 

By learning from Michigan and thoughtfully evaluating proposals such as S.878, South Carolina can explore ways to attract investment, support reliable electricity, and limit unnecessary pressure on household budgets. The goal should be an energy market that supports economic growth without making families pay more than necessary to power it.