There was a legislative committee meeting in Columbia Thursday. It didn’t garner headlines; it wasn’t on the evening news. Not even a Tweet or peep from the usual Capital reporters who follow such things report out in 280 characters or less.
But the committee was a domino falling, the first step in an electric market reform process that could change how South Carolinians get their electricity, their ability to depend on having power, and how much they pay for it.
The committee is studying whether or not to move South Carolina into a Regional Transmission Organization (RTO).
Here are some issues in an RTO that consumers (voters) may consider watching.
South Carolina may need to cede authority. A key issue in the contentious Santee Cooper debate was maintaining South Carolina’s control over electricity generation – there was clear disdain over selling to an entity outside the Palmetto State. Senator Tom Davis raised this concern over “sovereignty.” If the legislature is as concerned about local control as they were during the Santee Cooper debate, they need to understand an RTO shares authorities with others – the “others” being other states.
South Carolina has a history of throwing in with other states and then regretting it. If “sovereignty” is their concern, they should think twice here. (See: “Energy Regulation Should Be Local: Not the Case with an RTO”)
Government overreach. The meeting participants discussed this – in a power imbalance market, utilities make decisions on their own but in a government-created market mechanism the state sometimes “helps” utilities make decisions.
There is a certain, “I’m from the government and here to help,” flavor to this. Overlay that with South Carolina’s track record on making policy and implementing it successfully: South Carolina’s Baseload Review Act had the admirable goal of saving consumers money and could have if managed well. Good intentions do not automatically translate to good management. In the end, policymakers blamed their tools (the Act) versus their skills (which mostly do not include utility management).
Where will renewables land? Or nuclear? In the meeting it was said, creating a wholesale market will create more renewable energy. Maybe. Maybe not.
That blanket statement is not really accurate to me. It depends on what kind of market is designed. If a market is designed to favor one kind of energy, stakeholder group, or company, that is what it will deliver. Ask Texas, which wrote rules for the least cost system possible, and by gosh, last winter Texas got just that along with power outages that lasted days during freezing weather.
Bureaucracy costs. Will South Carolina policymakers factor in the cost to build and run a new, complex organization? Will there be a reckoning with the added layers of people in addition to the Office of Regulatory Staff, and the Public Service Commission, or feds like the Federal Energy Regulatory Commission? Obviously, added layers of power never create fiefdoms and political issues, right?
Or consider this. South Carolina’s state government will have to stand up an organization for an energy market. How is the state’s record on managing energy? Or its ability to discuss and decide tough energy issues? In that case, there are billions of reasons to be very careful about all this.
Watch this debate carefully, consumers. At the outset of the legislative committee meeting, they said there was no preconceived notion that an RTO is a done deal.
Personally, I’m not there.
The legislative hearing happened because of South Carolina’s Act 187 which created the Electricity Market Reform Measures Study Committee. Look at the bill. Have a pot of coffee ready because there is a load of “to-dos” in the bill. Importantly, the bill requires solid stakeholder engagement. Citizens should take advantage of that. Don’t let groups take your voice and be sure to challenge the assumptions that policymakers may have already made.