South Carolina: Dominion Power seeking to hike solar fees

Utilities and powerful special interests are working – often out of public view – to undermine rooftop solar power across America. In this series, excerpted from our report Blocking Rooftop Solar, we tell the stories of five utility attacks on rooftop solar, shining sunlight on the tactics utilities are using to limit the growth of local renewable energy.

In May 2019, South Carolina governor Henry McMaster signed into law the Energy Freedom Act, which had passed the legislature with unanimous support. The law was designed to bolster the state’s strong and growing demand for solar power and was supported by utilities and solar developers alike. It lifted the cap on net metering, ensured full compensation for solar power for at least two years, and created a customer bill of rights.

A major incumbent utility in the state, South Carolina Electric & Gas Company, was renamed Dominion Energy South Carolina in 2019 after Virginia-based Dominion acquired the South Carolina utility’s parent company. Dominion operates electric and natural gas service across a large portion of south and central South Carolina. In 2020, Dominion proposed a suite of new fees, fixed charges and changes that undermine the Energy Freedom Act and directly threaten the growth of solar power in South Carolina.

Dominion targeted a new charge specifically at solar customers that would more than double their monthly service charge, from $9 to $19.50. Dominion also proposed a new monthly “solar subscription fee” that would charge customers $5.40 for every kW of solar power they install – $43 a month for an 8 kW system (a large residential system of this size takes up to 600 square feet of space and can generate 500-1400 kWh/per month of power, often enough to meet a home’s full power consumption needs). Combined with the newly doubled monthly service charge, these additional fees would cost the average solar owner $750 every year.

Frank Knapp, President and CEO of the South Carolina Small Business Chamber of Commerce, expressed an understanding that some utility fees might be necessary but also concern that Dominion’s proposals were unreasonable and counterproductive, saying “if it’s so draconian, the new tariffs that Dominion is offering, that no one will want to do it, well we’ve basically said goodbye to the solar industry in South Carolina.”

Dominion is also attempting to reduce the compensation solar customers of all types receive for supplying power back to the grid. While the current net metering system compensates solar owners for the full value of the electricity their panels generate, Dominion is trying to slash this compensation, known as the solar export credit. The South Carolina Public Service Commission (PSC) held a hearing on March 23 in which only five of over 250 attendees supported Dominion’s proposals targeting solar customers. In late April, the PSC ruled unanimously against Dominion’s proposals, instead adopting a proposal put forward by solar advocates to use Dominion’s time-of-use retail rates in determining compensation for Dominion’s solar customers. The ruling re-affirmed that solar energy has real value to South Carolinians, and that utilities have to take that value into account when setting solar policies.

Beyond discouraging rooftop solar, Dominion also substantially undervalued the rate it offered to pay large, independent solar providers and has resisted pressure from stakeholders and the PSC to expand its community solar offering. The PSC overturned the utility’s earlier proposal to pay about $21 per megawatt-hour (MWh) of solar, which would have been among the lowest rates in the country. Dominion will now pay between $27.51 and $32.52 per MWh over 10-year contracts.

To learn more about the efforts of special interest groups to undermine rooftop solar, and about how the public and policymakers can support the continued growth of local renewable energy, read our report: Blocking Rooftop Solar.

Image: Annual average daily solar energy resources in South Carolina. Lighter shades indicate less solar energy available, darker shades indicate more. Map courtesy of the National Renewable Energy Laboratory.