North and South Carolina state legislators, joined by the Coalition for Energy Market Reform, on Thursday called for a comprehensive study to evaluate the costs and benefits of adopting electricity market reform measures. Most notably, the study would assess potentially moving away from the monopoly-driven business model of the states’ electric utilities, and toward a deregulated regional wholesale market.
Sen. Tom Davis (R-SC), Sen. Wes Climer (R-SC), and Rep. Larry Strickland (R-NC) held a news conference Thursday on the heels of a bill filed in South Carolina Tuesday to establish a study committee that would explore, among other items, establishing or joining a regional transmission organization (RTO), a single regional grid operator. Goals include increasing competition and delivering low-cost, clean energy to consumers. The bill gives the committee until March 2021 to make recommendations. A similar bill has been filed in North Carolina.
“Whenever the producer of a good or service has competition and the consumer of that good or service has choices, all things being equal, that will result in a better product at a lower cost,” Davis said at the news conference.
The purpose of the RTO Study Committee, he said, is to get all the stakeholders together to look at models across the country. Approximately two-thirds of consumers in North America are served under the RTO model.
Climer added that a goal for the committee is to address the question, “How do we lower the cost to our constituents to cut the lights on.”
“If we’re going to change the way we’ve always done energy production in South Carolina, which there is the political will to do, you have to have a baseline of knowledge and education, you have to bring legislators along. Any time you’re doing a departure from the way things have always been done, it’s a heavy legislative lift. That’s not to say it can’t be done,” Davis added.
Strickland said he is “optimistic both states will come up with something that is transparent, useful, and beneficial to ratepayers.”
In addition to examining the potential for establishing an RTO at the wholesale level, the bill would also authorize South Carolina to study the possibility of deregulating the state’s retail market, which would potentially allow individual consumers to select their electricity provider. This “retail choice” model, which has been implemented to different degrees in 13 states and the District of Columbia, would further deregulate the state’s electricity sector.
The Coalition for Energy Market Reform, a newly formed organization comprised mostly of large energy buyers and independent power producers, supports the study and will be working on electricity market reform efforts in the Carolinas moving forward. Coalition members want more options related to how they buy and manage their electricity consumption, including broadening access to low-cost renewable energy. The Coalition is represented by law firm Nelson Mullins.
