Energy in the 2025 Legislative Session

The 2025 legislative session is underway, and a few bills have emerged as focal points: House Bill 3309 (H3309), Senate Bill 12 (S12), and House Bill 3928 (H3928).  

H3309:  

This bill seeks to rollback important regulatory oversight of electric utilities and authorize a joint venture between Santee Cooper and Dominion Energy for the construction of a major new gas plant, among other provisions.  

S12:  

This bill specifically addresses Santee Cooper’s participation in this joint venture. 

H3928:  

Instead of periodic reviews by regulators, H3928 would implement an annual electric rate adjustment based on a formula. It would also allow utilities to borrow on power plant costs before construction is completed.  

We oppose these bills and are committed to ensuring responsible energy policies for our state. We’re collaborating with environmental and conservation groups to push for amendments to these bills.  

Seeking to amend this legislation presents an opportunity not only to prevent harmful natural gas expansion and weakened utility oversight, but also to secure provisions that ensure transparent and standardized electricity demand forecasting, fair electric rate structures for all customers, and expanded energy efficiency and solar programs. 

Read below to learn more about our top priorities in for the 2025 this year’s legislative session. 

#1) Electric utilities should modernize and synchronize their approach to predicting future electricity demand. 

Every three years, electric utilities create Integrated Resource Plans, or IRPs. These plans outline how they expect demand to grow and how their energy resources, such as power plants, will meet that demand. Utilities update IRPs annually and rely heavily on electric load forecasting, which is the process of predicting future demand for electricity. 

South Carolina law has very little guidance on how our electric utilities should conduct load forecasting, and utilities use different forecasting methods. There are effective forecasting best practices that state legislation should incorporate to minimize discrepancies in utilities’ approaches and improve accuracy of predicted demand. The Applied Economics Clinic examined how South Carolina can modernize its load forecasting methods to meet current demand trends and real-world conditions: 

1. Foster open dialogue among utilities, regulators, researchers, and the public.
2. Establish clear data quality, data sharing, data retention, and data security protocols. 
3. Ensure rigorous scenario analyses to account for uncertainties, such as policy implementation, economic fluctuations, population growth, technological advancements, and non-energy constraints.  
4. Require detailed forecasts and long-term service commitments from new large industrial customers.  

Accurate forecasts are important. If electric utilities underestimate electricity demand, they risk power outages during peak times when the most people are using electricity. If electric utilities overestimate electricity demand, they might build unneeded power plants, forcing ratepayers to foot the bill for costly, underutilized infrastructure called “stranded assets.” We should ensure our utilities are using the latest forecasting methods to predict electricity demand before making costly infrastructure investments.  

#2) Future electricity demand should be met without overbuilding new natural gas infrastructure. 

South Carolina faces a growing demand for energy, largely driven by the rise of industrial data centers. To address this demand, Dominion Energy and Santee Cooper have proposed jointly financing and owning a 2,000 megawatt gas-fired power plant at the site of the former Canadys coal plant. The original coal plant’s capacity was 490 megawatts, so this natural gas project would need substantial transmission pipeline upgrades. The plant is located along the Edisto River, so new gas pipeline could run through critical wetland habitats in the ACE Basin. 

The South Carolina Public Service Commission (PSC) is responsible for reviewing power plant proposals under the Siting Act, which was established to regulate the construction, operation, and location of energy facilities primarily to minimize environmental impact and ensure public safety.  

But before the Canadys proposal reaches the PSC, a crucial question lies within the state legislature’s purview: Is it a responsible use of public funds for Santee Cooper, a state-owned entity, to share the financial and ownership risks of a power plant with a private, investor-owned utility?  

It is helpful to first understand how electricity is generated with natural gas. Electric utilities’ natural gas supplies begin with extraction from shale or other sedimentary rocks through drilling and hydraulic fracturing. The raw gas travels to processing plants where impurities are removed. Next, it is transported via interstate pipelines to power plants, where mostly methane gas is combusted with air, ultimately generating electricity. The proposed Canadys gas plant would expose Santee Cooper, and therefore the public, to undue environmental, public health, and financial risks.  

The processes for natural gas collection and transportation leak methane, which is a potent greenhouse gas. Nationwide, gas-fired power plants produced approximately 976 pounds of CO2 per megawatt-hour in a year. Using natural gas for power generation also has concerning public health impacts, specifically nitrogen oxides and air pollutants that contribute to smog and respiratory problems. 

A for-profit utility prioritizes shareholder returns and returns on investments, not necessarily what is in the best interest of the customer or our planet. Dominion Energy’s profit motive could result in higher electric rates for customers, potentially conflicting with Santee Cooper’s obligation to protect the public interest. This project, estimated by Santee Cooper to cost up to $2.5 billion for construction alone, involves upfront investment in pipelines and natural gas infrastructure. The specter of V.C. Summer, a failed $9 billion nuclear expansion venture between Santee Cooper and SCE&G (later acquired by Dominion), underscores the financial risks of such large-scale projects. These costs are then passed on to customers through higher energy bills. 

#3) Ratepayers should not subsidize the costs associated with serving large energy users. 

The rise of data centers represents a relatively recent development, posing new challenges for electric utilities as they adapt to serving these large-scale customers. The concept of a data center originated during the Second World War with the creation of the ENIAC, a military computer housed in a “mainframe” to rapidly calculate artillery fire. Over the following decades, computer technology has evolved dramatically. Today, data centers operate at an industrial level. They store, manage, and process large amounts of data for cloud services, such as Google Drive, Amazon Web Services, and Microsoft Azure, as well as artificial intelligence. 

Data centers are expected to consume up to 12 percent of electricity nationwide by 2028—nearly an 8 percent increase within five years. Meeting this demand may require substantial investments in power generation, transmission, and distribution infrastructure. An electric utility could construct an entire power plant to serve new data centers. If electric utilities maintain their current rate practices, the costs of constructing and operating new power plants would be distributed to residential and commercial customers as well. This should raise questions around fairness. Conversely, if utilities invest in anticipation of data center growth that does not materialize, or if data centers close prematurely, then utilities face the risk of stranded assets; ratepayers would still bear the cost of this underutilized infrastructure.  

Some utilities and regulators are exploring innovative solutions to balance the needs of data centers with the interests of existing customers. American Electric Power (AEP) Ohio has proposed a tariff that would require data centers to pay 85 percent of their projected monthly energy use upfront, regardless of actual consumption, to cover related infrastructure costs. This proposal is currently under review by the Public Utilities Commission of Ohio. Similarly, Duke Energy has incorporated “minimum take” provisions into recent data center agreements; these provisions guarantee a minimum payment regardless of actual energy use. These contracts are subject to approval from regulators. The Georgia Public Service Commission unanimously approved a rule allowing Georgia Power to charge new data centers (over 100 MW) for the transmission and distribution infrastructure associated with their projects. This rule also extends contract lengths from five to 15 years, providing greater stability for the utility. The Lawrence Berkeley National Laboratory (LBNL) January 2025 technical brief details additional electric utilities that are modifying rate structures for large-load customers. 

#4) We can reduce energy demand through energy efficiency programs and meet growing needs with renewable energy. 

South Carolina’s energy needs demand a forward-thinking approach to ensure our state has reliable, affordable power that does not unduly threaten public health or the environment. Households can reduce their energy consumption through energy efficiency upgrades. The Department of Energy estimates that these upgrades, including appliance maintenance and replacement, improved insulation, and air sealing, could lower energy bills by up to 30 percent. However, Wallethub ranks South Carolina in last place for energy efficiency, highlighting the need for increased investment in energy-efficient solutions. 

Utility-scale solar has vast potential as a cornerstone of a diversified energy portfolio. South Carolina ranks 19th for total installed solar capacity, while neighboring states North Carolina and Georgia rank fifth and seventh, respectively. Solar can provide low-cost power and a valuable source of revenue for our state’s declining timber industry without taking up too much land. The Department of Energy has estimated that ground-based solar would occupy just 0.5 percent of land nationwide by 2050.  

South Carolina has already begun to reap the economic benefits of the clean energy transition, with the creation of thousands of jobs in our state. In 2023, we saw a 3.4 percent increase in clean energy jobs, and our state is a national leader in the growth of energy-efficient lighting and HVAC jobs. However, our clean energy job growth could be much higher. Texas and Florida are leaders in overall energy efficiency, renewable energy (especially solar), and biofuels employment. Among the top 100 U.S. counties for clean energy jobs, only one South Carolina county—Greenville—makes the list, and it occupies the very bottom rung. This reality underscores the urgent need for greater investment and a more proactive approach to clean energy development in our state.