Hamilton Davis is Southern Current’s VP of Regulatory Affairs. He chairs the South Carolina Regulatory Committee for the Carolinas Clean Energy Business Association. Hamilton also represents CCEBA on South Carolina’s Electricity Market Reform Measures Study Committee. Recently the Brattle Group presented a study to SC legislators detailing measures to reduce electricity cost and improve reliability to South Carolinians.
From your perspective, what is the most important takeaway from the Brattle Report (“Assessment of Potential Market Reforms for South Carolina’s Electricity Sector”)?
I’d say the most important takeaway from Brattle’s South Carolina report is the identification of a wide array of potential policy and regulatory reforms that could deliver significant economic and reliability benefits to both electric customers and the state as a whole. These reform options range from being narrow in scope (E.g., increased use of competitive procurements for new generation) to considerations around fundamental changes in how the electricity sector operates in the state (E.g., creating or joining an RTO). South Carolina is actively evaluating its energy policies in light of the extensive changes that have taken place due to the emergence of new technologies and evolving customer preferences, and the Brattle report goes a long way towards informing those decisions.
South Carolina initiated this study process to better understand what electricity market improvements should be considered at the state level to increase competition, ensure we remain economically competitive at the national and global level, be responsive to the customer preferences, and maintain system reliability. At a time when South Carolina is planning for the retirement and replacement of existing generation, and large employers are increasingly requiring expanded access to clean energy options, this report provides a comprehensive menu of options for policy makers and regulators to consider as the state looks to ensure its electricity marketplace is meeting customer expectations in a reliable and cost-effective manner.
People and the media tend to focus on the potential for big market changes – like moving to an RTO – but there are lots of interim options Brattle recommends that the state should also consider. Is SC on a path to capitalize on these policy options?
South Carolina has made significant strides in recent years on a number fronts, including a much improved regulatory process for review and approval of utility integrated resource plans, as well as increased reliance on competitive procurements for adding new generation resources like solar and storage to the grid. The Brattle study affirms that additional and more expansive utilization of a competitive procurement framework can be in the best interest of customers by ensuring the lowest cost and lowest risk resources are being selected to meet the needs of customers.
Although some South Carolina utilities do have approved large customer programs for clean energy access, those programs have been undersubscribed to date, and the Brattle report includes additional guidance around improved access to clean energy via expanded clean energy tariff and pricing programs. With recent economic development announcements of major new employers like Scout Motors, it will be imperative that additional policy attention is focused on creating viable clean energy pathways that meet the needs of large energy users while balancing reliability and cost.
Does Brattle address the benefits of increased regional cooperation and a more diverse energy resource pool to bolster grid reliability and efficiency?
Reliability has been a major focus of the SC Market Reform Study Committee, especially in light of the grid challenges experienced during Winter Storm Elliot. The Brattle report provides significant insight into how regional coordination, either through participation in an organized wholesale market or through enhanced inter- and intra-state coordination, can reduce costs while maintaining or increasing reliability for customers. By coordinating resource adequacy needs and generator dispatch across a larger geographic footprint, a utility and its customers can benefit from a greater diversity of generation resources that are being jointly operated and planned for. This enhanced coordination can result in the lowest cost generation being dispatched to meet utility load while also maintaining adequate overall capacity on the system during extreme weather events.
The electric grid is already highly interconnected between utilities and between states, but there is limited ongoing regional coordination amongst many southeastern utilities. By expanding the scope and level of that coordination, a more efficient use of diverse generation resources will deliver needed cost and reliability benefits to utility customers. As utilities and customers seek to decarbonize their energy generation and a growing diversity of generator types are added to the grid, each with their own strengths and weaknesses, elevated levels of regional coordination will become increasingly important.
What can North Carolina learn from South Carolina’s leadership in passing S.998/H.4940 in 2020 and commissioning the Brattle Study?
The energy landscape has changed dramatically and rapidly over recent years, and it is incumbent upon policy makers and regulators to ensure that the marketplace in which these changes have occurred is capable of delivering the best value at the lowest risk to electric customers. South Carolina undertook a comprehensive study to understand the menu of options that should be considered when re-evaluating its electricity sector, without tipping the scale in favor of any one solution. As a result, the state is well positioned to make informed decisions on how best to update its energy policy in ways that reliably meet electricity demand and the preferences of residents and businesses.
Undertaking a similar study in North Carolina could similarly inform policy and regulatory decisions during this period of energy innovation and market evolution.
Recent Comments