Board approves rate increase for Santee Cooper customers

BERKELEY COUNTY, S.C. (WCBD) — Thousands of Santee Cooper customers will see higher energy bills next spring after the state-owned utility company’s board voted Monday to raise electric rates.

The base rate increase — the company’s first in seven years — means the average residential customer will pay an additional $11 per month, bringing their monthly bill to an estimated $126. It is set to take effect in April 2025.

Santee Cooper rates have been frozen since 2020 as part of a settlement in a class action lawsuit related to the failed expansion of the VC Summer nuclear plant.

The company asked its Board of Directors for a rate hike to supplement the cost of critical updates to its electric system needed to maintain reliable service and comply with new environmental, grid operations, and security regulations.

Officials also cited inflation as a primary driver for the changes, noting that current rate revenue will not be enough to cover the company’s expenses next year.

“The new rates will allow Santee Cooper to keep customers’ monthly bills below the state and national averages while we work to meet growing customer demand, invest in our electric system, and comply with new regulations,” Jimmy Staton, President and CEO of Santee Cooper, said in a news release.

The board also approved a new three-part rate structure as part of the plan, which officials said will give customers more control over their bills by allowing some residential users to pay only for their share of the total electricity provided during peak times.

Under the structure, expenses are broken down into three categories: an energy charge, a customer charge, and a peak-hour demand charge.

The customer charge, which represents the flat rate for residential customers, is $20 per month — a 50-cent increase. The energy charge is about 8 cents per kilowatt-hour.

Residential customers will also pay an $8-per-kilowatt surcharge during peak hours. Those are 3 p.m. to 6 p.m. April through October and 6 a.m. to 9 a.m. November through March.

The idea is that customers can stagger or shift when they use appliances that require a large amount of energy such as dryers and water heaters to reduce their bills.

While good in theory, opponents argued that is not how the demand charge would actually work because many customers would not know how to correctly manage their energy use.

“They’re making it all dependent on your single peak hour,” explained Eddy Moore, Director of Decarbonization at the Southern Alliance for Clean Energy, using the example of a 1500-watt (equivalent to 1.5 kilowatts) microwave.

“So let’s say you didn’t use any electricity for the whole month except for one hour, you [used] your microwave. Well, that would cost you 1.5 times $8, that would be $12 for that hour. If you use your microwave for an hour and then you use your [1500-watt] hairdryer for an hour, it would still be $12 because you wouldn’t have peaked,” Moore said.

“But if you use both of them at the same time, your peak would be three kilowatts and you’d pay twice as much in the so-called demand charge,” he continued.

Moore previously characterized the newly approved demand charge as an “outdated, dysfunctional, and confusing” method, suggesting that it will likely be ineffective at reducing electricity use overall during peak times and would force smaller businesses that use less electricity to subsidize heavier users.

“I think it will lead, you know for instance, to a significant share of the residential and small business class getting electric bills that are a 20 or 30% rate increase, while other people are not going to anything different than they do now, but they’re going to actually get a great decrease,” Moore said. “So the people who are getting the big increase are funding the people who got a decrease, rather than having a more even-handed rate increase.”

Santee Cooper serves more than 200,000 residential customers in Berkeley, Georgetown, and Horry counties.