Electric market reform could save SC customers up to $362 million annually
South Carolinians have some of the highest energy bills in the country, and when faced with extreme weather like Winter Storm Elliott, experience power outages that threaten their health and safety. A new report commissioned by the South Carolina General Assembly provides a menu of options to address high energy costs and reliability issues, with up to $362 million in annual savings for customers possible.
The report, developed by the Brattle Group, lays out multiple recommendations to the Electricity Market Reform Study Committee that could lower customer costs, improve power grid reliability, increase access to abundant, clean energy sources, and drive innovation through a more competitive market.
If adopted, the findings from this report could make South Carolina a regional leader in energy reform and serve as an example for other Southern states looking to reduce costs for customers and improve reliabilityKate Mixson, SELC senior attorney
The report’s recommendations aim to address the state’s outdated monopoly utility structure that discourages economic competition and explore an energy market that would better serve customers and drive economic development. Following a $9 billion abandoned nuclear plant debacle and a series of free-market reforms from the General Assembly, the report’s findings make the case for South Carolina to avoid similar costly boondoggles and fortify its energy sector by making its operations more efficient.
“We encourage South Carolina legislators to take these recommendations seriously,” says Senior Attorney Kate Mixson.
One option, joining an independent grid operator and regional market known as a regional transmission organization, or RTO, could provide the biggest savings to customers, up to $362 million per year. This would require interstate coordination if South Carolina and North Carolina either joined the RTO to the north, PJM, or formed a new RTO with neighboring utilities.
Several other options can be enacted by the General Assembly without coordination with other states, like requiring increased competition when sourcing new power plants or issuing bonds to reduce the cost of retiring coal-fired power plants, both of which have been discussed at the State House.
In addition to cost savings and reliability improvements, the recommendations include opportunities to expand clean energy sources, reduce toxic air and carbon pollution, and make the state more attractive for clean energy investments and jobs.
There’s upwards of hundreds of millions of dollars in savings on the table for other states in the South if they too explore market reform options.Nick Guidi, senior attorney
While most of the country has moved to a reformed energy market structure, the Southeast is the only region that relies entirely on investor-owned, monopoly utilities to choose the power plants that serve customers. The report recommends options for both North and South Carolina, but if applied more broadly, could mean savings and grid improvements for other states across the region.
“These recommendations make clear the tremendous opportunity to save millions for North Carolina and South Carolina and improve the efficiency of their energy sectors,” says Nick Guidi, SELC senior attorney.
SELC will continue to advocate for robust market reform in our region and pursue policies that strengthen the South’s energy solutions, protect people and the environment, and reduce energy burdens.