Santee Cooper approves rate increase, including early expenses for new gas plant

Customers of South Carolina’s state-owned utility will see their bills go up 9% over the next two years under a rate hike unanimously approved by the company’s governing board Friday.

Under the new rates, Santee Cooper residential customers’ base rates will increase 4.7% starting Feb. 1 of next year and another 4.6% in 2028. That comes to about $13 more per month for the standard residential customer by the time the new rates take full effect.

The governing board voted unanimously to enact the increased rates for the utility’s more than 220,000 direct customers, located in Berkeley, Georgetown and Horry counties.

These rates do not apply to the roughly 800,000 customers of the state’s rural power cooperatives, which buy electricity from Santee Cooper through a separate contract.

“Nobody wants to make changes to our rates, but the board went through an incredibly thorough process,” CEO Jimmy Staton told the board Friday. “These rates will enable us to improve the grid, to bring much-needed capacity to the state and provide reliable service while balancing that against affordability. And our rates remain very affordable.”

Industrial and commercial customers will see rate increases between 2.1% and 2.9% each of the two years.

Critics of the plan, including South Carolina’s consumer advocacy agency and environmental groups, argued the changes put a greater burden of costs on residential customers. The state’s utility watchdog and an outside consultant hired by Santee Cooper to evaluate the plan said that wasn’t the case.

What’s included

Utility regulators permit $5B natural gas plant proposed in SC Lowcountry

Within the expenses included in the rate hike is about $120 million worth of parts needed for a new 2,200-megawatt natural gas power plant.

In May, utility regulators signed off on the gas plant, which is being built in cooperation with Dominion Energy on the site of a former coal plant along the Edisto River, near Canadys, in the Lowcountry.

To stay on track to open the gas plant in mid-2033, Santee Cooper and Dominion paid deposits to save their spot in line to receive some of the hard-to-get components, such as turbines.

“There are so many folks that want to build generating assets, so many people that want to construct generating facilities, that what we’re seeing is a little bit of a time lag associated with building those resources,” Bryan Lewis, director of retail customer service, told the board. “So, we’re trying to purchase them a little bit earlier.

“Many utilities are spending earlier in order to minimize the impacts of inflation and also minimize the impacts of receiving some components later than they would like to,” Lewis added.

However, this rate increase won’t cover the total cost of the gas plant, for which the total price estimates doubled — to $5 billion — up from a $2.5 billion told to senators last August.

That early estimate was based on historical costs to build similar units. But prices have increased dramatically since then as utility companies globally rush to build similar plants, Staton said last December.

Until the Canadys plant can be built, Santee Cooper also has had to buy power from other producers “to bridge the gap,” Chief Financial Officer Tami Wilson told the board earlier this year.

That power is expensive, Wilson said, and the utility expects to spend nearly $90 million more on the open market in 2027.

Other expenses the company has taken on include $300 million for a pair of natural gas turbines on the site of an existing coal plant near Georgetown and $270 million for the expansion of an existing natural gas plant in Anderson County. That spending is part of what’s driving the rate increase, along with higher prices across the board for operations and maintenance, spokeswoman Mollie Gore previously told the Daily Gazette.

Energy efficiency

To help those customers Santee Cooper has deemed “energy burdened,” the utility plans to spend $400,000 in its upcoming budget to expand its energy efficiency program.

Launched in 2025, the Power Partners Program is available to homeowners and renters in qualified neighborhoods. The company offers free energy efficiency assessments to look for ways a home’s power usage could be reduced. The company may then pay for the cost of some home improvements, such as LED lighting, weather stripping and pipe wrapping and insulation.

Santee Cooper will publish more information on the program expansion at a later date.

Meanwhile, residential bills already climbed about 13% last year. Residential customers who used 1,000 kilowatt-hours a month — considered the industry standard — were asked to pay about $16 more per month after the utility came out of a court-mandated rate freeze.

Power customers had sued the Moncks Corner-based utility after cost overruns and mismanagement led to the 2017 abandonment of the V.C. Summer nuclear expansion project. That lawsuit led to the five-year rate freeze that began in 2020.

Since then, Santee Cooper has added 4,270 new customers between January 2025 and April 2026.