A report on possible changes in the structure of South Carolina's electricity market is getting attention here, north of the border, because any changes there could have a big impact.
Members of a South Carolina General Assembly study committee got a more than two-hour briefing last week on the draft report by Boston-based consulting firm The Brattle Group. It estimates that South Carolina electric customers could save anywhere from a few million dollars to a few hundred million dollars a year if the state were to overhaul the way electricity is delivered, by introducing competition and efficiencies.
The report also says reforms also could speed adoption of renewable energy, which would help fight climate change.
The consultants offered four options, from a less formal power-sharing agreement to a major reform of energy production and distribution. Those options are:
- Having all utilities in South Carolina join Duke Energy's "Joint Dispatch Agreement," or JDA, a sort of regional power-sharing agreement. Duke's South Carolina utility is already part of the agreement.
- Forming a Southeast regional "energy imbalance market," or EIM, that manages electricity production and delivery in real time using the lowest-cost source of energy.
- Forming a new Southeast regional transmission organization, or RTO. The organization would coordinate, control and monitor an electric grid over multiple states. This could improve reliability and increase the availability of cheaper, cleaner energy, such as solar and wind, the report says. RTOs don't sell to individual customers; they buy and transmit power from electricity generators and sell it to companies that serve customers.
- Having South Carolina join the existing PJM regional transmission organization, which stretches from northeastern North Carolina to Michigan. This would provide all the benefits of an RTO, and could happen more quickly than starting a new RTO from scratch, the report says.
The two RTO options would save the most money, according to the Brattle Group. A new Southeast RTO would have an annual benefit of up to $183 million, while joining PJM could save up to $362 million.
Brattle's report says joining PJM would be the best option, and could happen in as little as 18 months. Working with other states and utilities to form a new regional transmission organization would require coordination between many groups and could take years, the report says.
South Carolina state Sen. Tom Davis told John Downey at The Charlotte Business Journal last week that a decision by South Carolina to make changes would have a big impact on North Carolina.
The report itself suggests that joining PJM would work best if Duke Energy's North Carolina operations were included. The Charlotte-based utility doesn't currently belong to PJM or any other RTO. "It is theoretically (but likely not practically possible) that Duke’s South Carolina territories could join PJM without the North Carolina portion, as this would require that each Duke utility to reconfigure their internally-pooled operations that currently span the two states, which would introduce operational inefficiencies and also require extensive new metering equipment."
Duke Energy declined to comment on the report.
South Carolina lawmakers began talking about electricity market changes after two utilities in 2017 abandoned plans to expand the V.C. Summer nuclear plant, north of Columbia. The project was years behind schedule and way over budget. The debacle eventually led S.C. Electric & Gas to be sold to Virginia-based Dominion Energy.
