(Dana DiFilippo/New Jersey Monitor)
It wasn’t supposed to go like this.
Last year, the investor-owned utilities serving South Carolina promised the state Legislature that if they were just allowed to raise rates incrementally every year, there would be no need for large rate increases every three to five years in general rate cases.
The utilities wanted a Rate Stabilization Act which would allow annual rate adjustments so they could achieve their return on equity (i.e. profit) that the utilities were permitted by the state Public Service Commission in general rate cases.
During a Senate Judiciary subcommittee meeting in March 2025, a representative of Dominion Energy pitched the Rate Stabilization Act as benefiting customers by increasing rates in “little small bites rather than waiting a few years and then jumping up.”
Dominion’s South Carolina president also told senators that’s what customers wanted.
Over the objections of consumer groups, including the South Carolina Small Business Chamber of Commerce, the Legislature bought into the utilities’ promise of annual “small bites” and included the Rate Stabilization Act as part of the big energy bill passed last year.
Now, Duke Energy Progress has exposed how empty that “small bites” promise was.
On Feb. 1 of this year, Duke Energy Progress’ customers in the Pee Dee region, from Chesterfield to Williamsburg counties, started paying higher electricity rates as approved by the Public Service Commission in a general rate case last year.
Residential rates increased 7.8% and small business rates went up by 9.6%.
Then just 41 days later, on March 13, Duke Energy Progress filed for a rate hike under the Rate Stabilization Act: 6.25% for residential and 7.9% for small businesses (officially called “small general service” in the application).
So much for “small bites.”
The consumer groups had warned the Legislature that this would happen.
Allowing utilities to raise rates every year would not result in rates being stable.
Plus, without the law putting a cap on these annual rate increases there was no incentive for the utilities to control costs.
However, if the Legislature was bound and determined to believe the utilities needed to raise rates every year to benefit their customers and themselves, the consumer groups all supported this amendment to the legislation:
“The (Public Service) Commission shall not approve an upward adjustment in rates under the authority of this section that exceeds 2% per year for each customer class, cumulatively, of the rates set in the most recent general rate case, nor shall it approve an upward adjustment in rates under the authority of this section for a calendar year during which the National Bureau of Economic Research has declared the existence of an economic recession.”
The Legislature, of course, sided with the utilities and did not cap rate increases in the law.
So, here we are today with proposed rate hikes that are almost as high as those awarded by the Public Service Commission last year in Duke Energy Progress’ general rate case.
Customers of Duke Energy Carolinas and Dominion Energy will experience this same outcome down the road.
It is not too late to protect Duke Energy Progress customers and the others who will surely face large Rate Stabilization Act hikes in the future.
Duke and Dominion are in the top 10 utility companies in the United States by revenue.
They continue to grow their revenue every year.
Their stocks are safe investments because the utilities are guaranteed to recover all the prudent costs for providing energy to their customers plus a handsome profit.
The citizens and small businesses of South Carolina are not so well off.
Expenses are growing every day, and utility rate hikes are a big part of the problem.
The Legislature can revisit the Rate Stabilization Act and show whose side they are on, the struggling consumers or the giant utilities.
Courtesy of South Carolina Daily Gazette
