New South Carolina law could help electric customers save millions

A new law recently passed in South Carolina could save electric customers in that state millions of dollars in costs to restore service after weather events, Duke Energy said Wednesday.

The legislation – Senate Bill 1077 – gives the Public Service Commission of South Carolina the authority to approve the securitization of storm costs if a proposed plan submitted by a utility would result in lower overall costs for customers, the company said.

“Ensuring reliability and rapid recovery following natural disasters for families across our state in the most cost-effective manner is a critical priority,” said Senate President Thomas Alexander, a lead sponsor of the legislation. “We are grateful for the broad collaboration that made this possible to protect our families and ratepayers.”

The company said that South Carolinians have endured many record-breaking storms, floods, and other severe weather-related outages. In 2018, over four months, South Carolina saw three massive storms that destroyed homes and businesses, resulting in hundreds of millions in costs incurred by utility companies in S.C. In some locations, the costs included completely rebuilding the power grid.

Under a securitization plan, bonds are issued to help pay for storm-related expenses. Those bonds are issued on financial markets at lower interest rates. The proceeds are then used for everything from planning and staging for the storms; work from line technicians, damage assessors, and contractors; replacement and repair of electric generation, transmission, or distribution equipment; and facility repair.

Similar legislation has been passed in other coastal states like Texas, Louisiana, Florida, and North Carolina to lower costs for customers.

“Duke Energy and other organizations supported this legislation – a prudent, proactive, cost-effective response to significant storm costs,” said Mike Callahan, Duke Energy’s South Carolina state president. “I want to both thank and congratulate all involved in this effort to deliver true savings to our most important stakeholder of all – our South Carolina customers.”