Bipartisan effort gives Public Service Commission of South Carolina authority to approve plans that lower overall costs to customers.
Coastal states including Texas, Louisiana, Florida, North Carolina have enacted similar securitization legislation.
GREENVILLE, S.C. – Newly enacted legislation, which passed the General Assembly with strong bipartisan support and was quickly signed into law by Gov. Henry McMaster, could save South Carolina electric customers millions of dollars in costs to restore service after recent historic as well as future weather events.
The legislation – known as Senate Bill 1077 – gives the Public Service Commission of South Carolina the authority to approve securitization of storm costs if a proposed plan submitted by a utility would result in lower overall costs for customers.
“Ensuring reliability and rapid recovery following natural disasters for families across our state in the most cost-effective manner is a critical priority,” said Senate President Thomas Alexander, a lead sponsor of the legislation. “We are grateful for the broad collaboration that made this possible to protect our families and ratepayers.”
In recent years, South Carolina households and businesses have endured a number of record-breaking storms, floods and associated severe weather-related outages. Within a four-month span in 2018 alone, the Palmetto State endured three massive storms that destroyed homes and businesses. Significant devastation resulted in hundreds of millions in costs incurred by utility companies in the state, including Duke Energy. These unprecedented costs include completely rebuilding the power grid in some locations.
Under a securitization plan, bonds are issued in the financial markets at lower interest rates and the proceeds are used to pay for the extraordinary storm-related expenses incurred. These expenses can include everything from planning and staging for the storms, the work of line technicians, damage assessors and contractors to the reconstruction, replacement and repair of electric generation, transmission or distribution equipment and facilities.
Coastal states such as Texas, Louisiana, Florida and most recently North Carolina, have all enacted similar legislation for the benefit of utility customers. This financing tool can substantially lower costs for customers compared with traditional storm recovery methods.
“Duke Energy and other organizations supported this legislation – a prudent, proactive, cost-effective response to significant storm costs,” said Mike Callahan, Duke Energy’s South Carolina state president. “I want to both thank and congratulate all involved in this effort to deliver true savings to our most important stakeholder of all – our South Carolina customers.”
Duke Energy (NYSE: DUK), a Fortune 150 company headquartered in Charlotte, N.C., is one of America’s largest energy holding companies. Its electric utilities serve 8.2 million customers in North Carolina, South Carolina, Florida, Indiana, Ohio and Kentucky, and collectively own 50,000 megawatts of energy capacity. Its natural gas unit serves 1.6 million customers in North Carolina, South Carolina, Tennessee, Ohio and Kentucky. The company employs 28,000 people.
Duke Energy is executing an aggressive clean energy transition to achieve its goals of net-zero methane emissions from its natural gas business and at least a 50% carbon reduction from electric generation by 2030 and net-zero carbon emissions by 2050. The 2050 net-zero goals also include Scope 2 and certain Scope 3 emissions. In addition, the company is investing in major electric grid enhancements and energy storage, and exploring zero-emission power generation technologies such as hydrogen and advanced nuclear.
Duke Energy was named to Fortune’s 2022 “World’s Most Admired Companies” list and Forbes’ “America’s Best Employers” list. More information is available at duke-energy.com. The Duke Energy News Center contains news releases, fact sheets, photos and videos. Duke Energy’s illumination features stories about people, innovations, community topics and environmental issues. Follow Duke Energy on Twitter, LinkedIn, Instagram and Facebook.
Media contact: Ryan Mosier