Written by Jessica Holdman, SC Daily Gazette.
This week will decide the fate of a massive energy package in South Carolina, after the House removed measures meant to safeguard consumers and landowners in the push to meet power needs of the state’s rapidly growing industry and population.
To produce enough energy to keep the lights on in the Palmetto State, utility executives told legislators, they needed guarantees that state regulators would review power-related permits in a timely manner and prevent years-long delays of new pipelines and power plants in the court system.
In exchange, senators told the utility sector it must ensure residential customers weren’t bearing the brunt of industry-driven power needs, particularly those of energy-intensive data centers. They also said utilities must give landowners earlier notice when construction of power plants, power lines and pipelines impact their property and that more effort was needed to help customers conserve energy and lower their power bills.
But last week, state House members quietly pulled those give-and-take protections for power customers and landowners, potentially putting passage at risk with just three days left in the legislative session.
With a vote of 88-13 last Thursday, the House stripped out everything the Senate added related to data centers. Under the House version, center developers don’t have to bear their share of costs for new power plants built to power them or disclose how much water they plan to use. And they can still earn sales tax credits for computer equipment bought for the centers.
Rep. Gil Gatch, R-Summerville, told his colleagues the amendment was the result of a compromise between House and Senate negotiators.
Little else was said beyond Rep. Robert Reese asking what the amendment did about data centers, and Gatch pledging those concerns will be addressed in separate legislation next year. Reese, of rural Hopkins, was among the 13 Democrats who rejected the changes.
Other items struck by the amendment received no mention at all on the floor: Gone are additional notice requirements for landowners impacted by eminent domain, which is the taking of private property for public use. It also scaled back energy efficiency efforts.
Gatch, joined at the podium by other members of the House committee that has shepherded the bill, told the chamber it was the committee’s understanding the negotiated changes would pass in the Senate, allowing a bill two years in the making to head to Gov. Henry McMaster’s desk this week.
But the Senate leaders who authored the provisions removed by the House told the SC Daily Gazette they were not part of negotiations. And they highly doubt the Legislature will revisit anything on data centers next year if the altered bill becomes law.
‘Under the gun’
The amended bill could come up for a vote in the Senate as soon as Tuesday. A final decision must be made by 5 p.m. Thursday — the end of the session, as per state law — or negotiations will carry over until next year. Power company executives have said passage this year is essential to future projects.
At the heart of the bill, sponsored by GOP House Speaker Murrell Smith of Sumter, is permission for Dominion Energy and state-owned utility company Santee Cooper to partner on a possible 2,000-megawatt natural gas plant on the site of a former coal-fired power plant along the Edisto River in Colleton County.
In its original form, the legislation saw significant pushback on its sweeping regulatory changes and rollback of consumer protections passed in the wake of South Carolina’s failed nuclear expansion. Both bodies ultimately left those existing protections alone.
The reason the House removed most provisions added by the Senate during its floor debate, according to Rep. Bill Herbkersman, was contract deadlines faced by Dominion and Santee Cooper. The deadlines involve an interstate natural gas pipeline needed to supply the proposed Lowcountry gas plant and other supplies related to the project.
The House felt “under the gun” to pass something, and the new restrictions were “not really part of what we were trying to do,” in the energy bill aimed at speeding up the regulatory process for utilities as they make updates to the state’s power grid, Herberksman said, adding they hadn’t been vetted by the House committee he chairs.
“You wouldn’t half bake a cake,” said the Bluffton Republican.
One change made in the Senate, however, did survive: The House kept a Senate-added section that would make it easier for utilities to raise power bills on an annual basis.
‘Utility wish list’
The changes approved by the House last Thursday renewed criticism of the bill from environmental and consumer groups who say all that’s left is a “utility wish list.”
“What is in this bill to protect customers?” asked Kate Mixson, an attorney with the Southern Environmental Law Center. “What’s left is just a list of things that make it easier for utilities and far fewer things to keep power companies from overbuilding and passing the cost on to consumers.”
“With these changes, this legislation is basically like an open bar tab for utility company spending that the public will pay for on their electric bills,” added Eddy Moore of the Southern Alliance for Clean Energy.
Herbkersman called that characterization a “misnomer,” arguing the gas plant at Canadys would allow Santee Cooper to replace parts of its coal-fired fleet with natural gas that emits fewer greenhouse gases. It would also guarantee the state has the energy it needs as it continues to grow.
Senators who don’t like the so-called compromise — and weren’t involved in closed-door negotiations — include the chamber’s GOP leader.
“The data center language was one of the few things I liked about the bill, and it was not very aggressive,” said Senate Majority Leader Shane Massey, who authored the data center provisions.
The Edgefield Republican vowed to make his displeasure known when senators take up the bill on the floor.
“South Carolinians are going to pay more for energy generation, and citizens are going to pay more than they should for data centers … which to me is completely unacceptable,” Massey said.
Frank Knapp, president of the SC Small Business Chamber of Commerce, encouraged senators to “stick to their guns” when it comes to the power-gobbling centers.
‘It will not go easy’
While the Senate passed its version overwhelmingly last month, “it will not go easy this time, even if the votes are there,” Massey said.
Everything added on the Senate floor was important to the members who voted for it, said Sen. Tom Davis. For the Beaufort Republican, it was requiring public utility companies to do more to help customers make their homes energy efficient.
As part of these programs, power companies send inspectors to people’s homes to check for gaps in windows, leaking ducts and outdated air conditioning systems that might contribute to higher energy usage. The companies offer rebates and discounts to customers who make home improvements, and in some cases, power companies cover the costs for low-income families.
The savings rate the Senate was asking for is far below levels set across much of the country, Davis said.
Duke Energy is already meeting what the Senate version would require, but Dominion Energy would have to step up its effort.
The House, however, left it up to energy regulators to decide on an appropriate savings level. What it approved Thursday also took away penalties.
Under a provision authored by Sen. Shane Martin of Spartanburg County, developers would need to contact all landowners in the path of a pipeline, power line or power plant two months before filing for any state-level permits. The companies also would have to inform landowners about their neighbors who were impacted and whether there were alternative routes considered.
It’s unclear if the measure would have applied to the pipeline feeding Canadys, which crosses state lines, so it’s federally regulated.
“The fact the House would remove this says to me they don’t want these affected landowners to know,” Mixson said. “My question is why. If these projects are really necessary — if they’re not going to be dangerous — then why not notify these communities and landowners.”
Davis said senators must now weigh the House changes against the importance of getting a bill across the finish line. Both he and Massey said taking up these provisions in standalone legislation next year will be hard to do.
“I have very little confidence that that will happen next year,” Massey said.
SC Daily Gazette is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. SC Daily Gazette maintains editorial independence. Contact Editor Seanna Adcox for questions: [email protected].