South Carolinians pay the highest electric bills in the nation. But removing decades-old government restrictions could change that, according to a new report from the Palmetto Promise Institute.
The report, titled “Energizing Enterprise: How Energy Reforms in the Wake of the V.C. Summer Debacle Can Transform South Carolina’s Economy,” examines utility markets around the country and suggests reforms that would inject competition into South Carolina’s energy sector. That could mean an advantage in attracting industry and significant relief for electricity customers drowning in rate hikes.
Since 1969, when state lawmakers passed the Territorial Assignment Act, energy providers in South Carolina have enjoyed monopoly market power over the defined geographical areas in which they operate. But by eliminating those territorial monopolies, and allowing companies to compete, the report finds, customers would stand to benefit through both lower prices and improved services.
“The proposal is very simple and very workable,” said report co-author Michael T. Maloney, Ph.D., Clemson University retired professor emeritus of economics.
“We need to recognize the benefits of competition,” Maloney explained in a recent panel discussion. “It’s not just that we get lower prices, it’s that we get fairer prices. [And] it’s not [just] that we get fair prices, it’s that we get innovation.”
South Carolina’s energy sector gave customers cause for alarm in July 2017, when Santee Cooper abandoned construction of its planned V.C. Summer Nuclear Station in Fairfield County, saddling the public utility with more than $4 billion in debt. Including interest, the state-owned utility’s total debt sits at $15 billion.
Reform-minded lawmakers have argued that the failed nuclear venture provides an opportunity to learn broader lessons from those failures and advance free-market solutions to energize South Carolina’s utility market.
“There is a window of political opportunity right now for real, meaningful change,” state Sen. Tom Davis, R-Beaufort, said during the panel.
In the fallout from the V.C. Summer debacle, a needed push to privatize Santee Cooper surfaced in the Statehouse. And in October, state lawmakers announced they would begin hearing proposals when legislators return to the General Assembly in January.
Provided a private company gains ownership of the utility, Davis argued, fostering a competitive energy marketplace will be essential in maintaining fair pricing and customer satisfaction. “We simply must sell Santee Cooper. But if all we do…is swap Santee Cooper, with its monopoly territory, for a private company and give it that very same monopoly, you haven’t solved the underlying problem,” Davis explained.
“We must empower consumers, give them choices, and set up a system whereby prices are driven down and services are improved.”
Photo: Sen. Tom Davis.