Electric rates in North and South Carolina are set in two ways.
Investor Owned Utilities
In one case there is a regulatory system that reviews rates of companies that are investor-owned. There is a corporate and state-level give-and-take to manage the process. Public Service Commissions (PSC), also called the Utility Commission in NC, do the review and approval. Dominion Energy, Duke Energy, NextEra, and Southern Company are examples of investor-owned utilities.
An investor-owned company, like Dominion or Duke, has operations in various states and must work with the PSC in each state.
In North Carolina the Utility Commissioners are nominated for certain terms from the Governor.
In South Carolina (left), PSC applicants must meet various requirements, take a test, and go through a review process. The Legislature votes on the applicants. That process has been done in 2020 and four new PSC commissioners are in place. Check the criteria here.
The public staffs in each state help represent the consumers before the commission. In NC it is called the public staff, and the attorney general intervenes in utility cases, too. In SC it is the Office of Regulatory Staff that represents consumers with investor-owned utilities.
Public Power and Cooperatives and Municipals
In another case – public power companies and cooperatives – there are boards of directors who manage the company and can vote on rates for their customers. No PSC authority at all. In municipal electric systems rates can change within the city management structure in the Carolinas, no PSC involvement.
Here’s a visual from that shows how these rate mechanisms work in South Carolina. There are business and technically-oriented reviews in the investor-owned systems. For Santee Cooper there is a public comment period with no mandate to follow what the public says.
Santee Cooper is a public power company. It makes or buys power and sells electricity to its retail customers (also called direct customers) and to Central Electric Power Cooperative. Central provides power to South Carolina’s electric cooperatives. So, while Santee Cooper has only one contract – with Central Electric – Santee Cooper effectively has 20 different obligations, one with each co-op. The co-ops set their rates to cover the costs from Santee Cooper and Central Electric.
There are 20 electric cooperatives in South Carolina; 26 in North Carolina.
How’s it Work?
Is there a benefit of one system versus another? There are differing opinions.
In the PSC and investor-owned utility process the professional power experience at the PSCs and companies provide a useful expertise. Their interaction is a check-and-balance. The experience is across a wide geography and the exposure to energy issues can be broad and deep.
For public power and cooperatives there may be a comfort in local board interaction and accountability. A constituent can “tap them on the shoulder at the diner” to ask a question, in effect. A cooperative board can be voted out if needed. That was done within the last several years with one coop board in South Carolina.
The Santee Cooper board is not a geographically local board; not a community level. It is appointed by an elected official and approved. The Santee Cooper board cannot be removed by a customer or investor vote once appointed, either. The board individually or collectively could, however, resign from its board positions.
So within a state there are different ways that consumers – depending on their electric companies – can be impacted by rates, who can change the rates, and the kind of analysis of those rates. Consumers are wise to understand how their rates are determined. Stay educated about the utility and how it operates. It is always important for consumers to make their voices heard in a constructive way.