Senate replaces energy bill with pledge to fully tackle state’s power needs later

COLUMBIA — It could be lights out for a massive bill that would have paved the way for a new power plant in South Carolina and overhauled the state’s utility regulations.

Refusing to ram the complicated bill through the Senate in the session’s closing days, senators voted this week to turn the legislation into a promise to deal with utilities’ request after a full vetting this fall.

A 40-2 vote by senators Wednesday returned the stripped-down legislation to the House, which refused Thursday to agree to the largely symbolic recognition of the state’s need for more electricity. But it’s not dead.

The chambers voted to send the two versions to a House-Senate committee for the special session to try to negotiate a compromise. Whether a middle ground is possible between the vastly different versions remains to be seen.

“I recognize the window’s closing on the utility reform bill, but I also believe it’s a priority amongst everybody,” House Speaker Murrell Smith, the bill’s chief sponsor, told reporters after the regular session ended, by law, at 5 p.m. Thursday. “We’ll likely have a bill because when everyone makes something a priority, it ends up happening.”

Smith had tried to quietly pressure senators to take up his priority legislation in full, to no avail.

Senate Majority Leader Shane Massey said it’s possible that senators could reach agreement on a plan this fall that could replace both versions and still become law this year. But that’s unlikely, he cautioned.

“It’s so comprehensive and it’s so consequential — not just for now or next year, but for the next 40 years or longer — that we need to make sure we get this right,” the Edgefield Republican told reporters. 

As amended this week by the Senate, the measure acknowledges the state’s growing population, economic development success, surging energy demand and the associated need for new power generation and transmission lines.

Advocating for the replacement language, Sen. Tom Davis argued it doesn’t approve anything but makes clear the Legislature will indeed work toward a comprehensive fix — not simply create a study committee that does nothing, as often happens when legislators aren’t sure what to do.

“I think this is a substantive way for us to express that this isn’t something we’re gonna kick the can down the road on,” the Beaufort Republican said. “It is something we have to address. … We do have capacity issues. We do have transmission issues.”

As introduced by Smith in February, the proposal would have granted permission for Dominion Energy and state-owned utility company Santee Cooper to partner on a possible 2,000-megawatt natural gas plant on the site of a former coal-fired power plant along the Edisto River in Colleton County.

At the same time, the legislation introduced sweeping regulatory changes criticized by environmental and consumer groups.

Senators rail against fast-tracked gas plant proposal: ‘That still burns me!’

It appeared to be on the fast track. The bill cleared the House in March and advanced in the Senate committee process without testimony from consumer advocates.

But when it hit the Senate floor, the wheels came off.

Massey went to the podium last month to rail against how quickly it made it to the Senate calendar, “with a push that we’ve got to get it done.” He urged senators to wait until the off-session this fall to fully vet the proposal.

Davis said the Senate’s proposed pledge came at the urging of utility companies. They wanted that rather than nothing, he said.

“The intention of this is to reassure the utilities, to reassure the people of South Carolina, to reinsure capital markets that provide money to the energy sector that we are taking this and will take this seriously,” Davis said. “It is to send a signal that we are going to be acting upon this in the near future.”

Data center incentives

In separate legislation, senators also sought to address a second aspect of South Carolina’s energy landscape: Data centers.

These centers house rows of servers needed to run modern technologies, such as the 5G streaming of videos on mobile devices and high-speed financial trades.

They also are major power and water users. At least four large projects are in the works in the state, collectively needing an estimated 800 megawatts of power daily. By comparison, a single megawatt is enough to power between 400 and 900 homes in a year, according to federal estimates.

On Wednesday, the Senate passed a pair of amendments to House tax incentive legislation. The changes dialed back the use of state sales tax and county property tax deals available to prospective data centers.

One change, proposed by Sen. Michael Johnson, R-Tega Cay, ups qualifications and sunsets sales tax exemptions the state offers to certain data centers on the computers, servers, software and electricity they use.

To qualify under current law, a data center developer must invest more than $50 million and employ 25 people. Just a couple of the state’s current centers meet that threshold.

Still, the Senate wants to cut off any new tax deals in the state’s most populous counties at the end of June. For more rural counties, data center developers must invest $75 million to qualify and no new deals could be inked after June 30, 2025.

The state would continue honoring existing tax deals.

The second amendment, proposed by Massey, puts a temporary moratorium on new city and county property tax breaks for data centers. The pause would go into effect July 1, 2025, and last for a full year. Massey said this would allow any deals already in the works to be finalized while also giving lawmakers time to study the impact of these centers on the state’s power grid.

Data centers gobble up energy. Should SC block them from getting special deals?

Proponents argue data centers are not without benefits, particularly in more rural parts of the state with less industry, because they raise a considerable amount of property tax revenue.

While the centers may bring in more dollars to communities, Massey and others argued they can also cost power customers if utilities have to build more power plants to support them.

“It may be that we think (data centers) are wonderful economic development tools,” Massey said. “Maybe we want to entice more of them to come. I just want to make sure that we understand the pros and the cons of that before we do it.”

The House refused Thursday to agree to the Senate’s changes. That bill is also headed to a negotiating committee in the special session.

Legislative maneuvers

Finally, the Senate shrugged off the House’s attempt to force the issue by attaching the controversial energy legislation to a series of bills.

Over the staunch objections of Democrats and some Republicans, the House last week tacked the energy bill on to legislation related to suicide prevention training, professional counseling licenses, fighting financial crimes, cancer coverage on firefighters’ insurance and the duties of organizations that help independent pharmacies.

SC House pushes to restart stalled power plant legislation

In response, Massey called on the Senate to strip the energy legislation from four of the proposals and “give those underlying bills a chance.”

“I don’t want to get in a petty back and forth with our friends in the House because our emotions are high,” Massey said.

He made clear, however, that the Senate will not negotiate if the House insists on keeping the energy bill tacked onto the unrelated measures.

On Thursday, the House agreed to send three of those bills to the governor’s desk. The fourth, on firefighters insurance, was never taken up by the Senate. The fifth, on financial crimes, is also heading to a negotiating committee.

Reporters Skylar Laird and Abraham Kenmore contributed to this report.

Editor’s note: This story was changed to correctly reflect the subject matter covered by one of a series of bills amended by the House to include unrelated legislation on power generation in the state.