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Will apply to facilities that require 50MW or more.
South Carolina’s state-owned utility Santee Cooper has enacted a new special electricity rate on data centers and other large load customers across its coverage area.
Executives at the company said the new rate is required to ensure data centers are covering the cost of generating the electricity they use, to prevent the costs falling on other rate payers.The new rate was voted in unanimously at a board meeting last Friday (25 April) and will come into force immediately. It will only apply to large load customers who require 50MW of power or more, and will run for four years on an “experimental” basis, before the board considers whether to implement the rate permanently.
Under the new rate, large load users will be required to sign a 15-year contract with the utility. In addition, the utility will have the ability to charge more for power during periods of high demand. Lastly, the new rules will require large load users to ramp up to their full contracted power usage within three years, to prevent companies from overselling and not meeting their contracted capacity.
It comes into effect as Santee Cooper grapples with increasing demand from the data center sector across its footprint. Mike Smith, director of billing and pricing at the company, said that he anticipates that more than 1GW of new power capacity could be required to meet the demand from large load customers by 2030.
According to Smith, the new capacity would represent “significant growth for a system the size of ours.”
However, despite the move, the utility stressed it is still welcoming large loads to the state. “We do welcome large loads because they’re good loads for the system. However, because of their size and operating characteristics, they’re difficult for Santee Cooper to absorb,” Smith said.
Some concerns were voiced during the board meeting, with worries over whether the new rules are coming into force too quickly. Usually, new rates would take around 18 months to come into effect, in order to allow for vetting and implementation. However, the new rates were brought in after a matter of months.
Santee Cooper has announced plans for several new power generation projects in an attempt to meet soaring demand. Earlier this year, the utility launched a Request for Proposals to acquire and complete or propose alternatives for two partially constructed generating units at the Virgil C Summer Nuclear Power Station in Fairfield County, South Carolina.
The new rules are similar to several other utility companies, which have enacted similar rules to manage the growth of the data center sector. Earlier this year, Indiana Michigan Power enacted a revised tariff agreement that ensures that large load users like data centers will pay for the grid upgrades necessary to serve them, preventing the costs from being passed on to existing customers.
Another example is American Electric Power Ohio, which submitted a settlement agreement last year to address data center power demand. The filing, if approved, will require new data center customers to pay for a minimum of 85 percent of the energy they say they need each month, even if they use less, to cover the cost of infrastructure required to bring electricity to those facilities.
