SC power utilities tee up new projects as demand strains the grid

Some of South Carolina's electric utilities are sounding alarms about the strain recent development is putting on the power grid.

At the same time, they're asking regulators to approve new projects to accommodate the growing demand.

New factories catering to the electric vehicle industry and energy-intensive data centers needed for the rise of artificial intelligence have utility executives looking for a way to keep up with the recent surge in power needs after decades of slow or stagnant growth.

Add tens of thousands of new homes, offices and retail centers to the mix and the need for solutions in a slow-paced, regulation-heavy industry calls for both urgency and caution.

"Any time we have a change of this size it means we need to think hard and have a good, transparent process to come up with the best plan going forward," said Eddy Moore, decarbonization director for the Southern Alliance for Clean Energy. "When there's a big change, that's the time to be careful."

The fast-growing Charleston region appears to be a hot spot for the state's looming power predicament, but the needs are statewide.

Dominion Energy has added 40,000 new electric accounts since taking over the ailing South Carolina Electric & Gas franchise five years ago. The utility now has about 782,000 electric customers statewide, more than 313,000 of them — or 40 percent — in Charleston, Berkeley and Dorchester counties.

"As a responsible energy company, this means we must invest money needed to keep our plants running, to keep our system reliable and to keep our grid secure ...," the utility said in a statement, adding that at least $1.5 billion worth of new lines, substations and upgrades are planned.

Dominion this month told its regulators at the S.C. Public Service Commission that it "has concluded that continued residential, commercial and industrial development in Charleston County will soon exceed the electrical load service capabilities of the distribution and transmission system in the Charleston area unless upgrades are made."

The utility declined to say exactly what it means by soon — the project is scheduled to begin in 2026 — but a flurry of recent regulatory filings hints at the demanding job ahead.

New projects

Dominion is asking regulators for permission to build a 230-kilovolt transmission line through a roughly 6.5-mile stretch linking points near Azalea Drive in North Charleston and Bees Ferry Road in Charleston.

If the connection isn't built, "then excessive electrical load will flow into the Charleston area overloading existing transmission facilities," Dominion said.

The utility has also applied to replace transmission lines and build a new substation for a data center Google is planning for the Pine Hill Business Campus west of Summerville. The project is needed "due to the substantial amount of energy" the internet search and advertising giant will require at the Dorchester County site, according to the filing.

The utility says the cost is confidential, but Google would pay a power rate that's less than half what residential customers pay.

Also, Dominion asked the commission this month for permission to upgrade portions of a high-voltage transmission line — high-voltage is considered 230 kilovolts or more — serving a proposed Scout Motors plant that will build battery-powered vehicles in Blythewood.

Dominion isn't alone.

Moncks Corner-based Santee Cooper, which directly serves more than 200,000 electric customers in Berkeley, Georgetown and Horry counties and sells power to about 15 mostly rural cooperatives, has about a half-dozen, large-scale projects lined up.

They include an 18-mile, high-voltage line from Cross to a spot near the Camp Hall Commerce Park in Ridgeville that will provide additional capacity for fast-growing areas in the Charleston region. Also, a 230-kilovolt transmission line starting near Camp Hall to the St. George area and then on to Varnville in Hampton County — a total stretch of about 62 miles.

Other projects are on the books to accommodate growth along the Grand Strand.

Chris Wagner, Santee Cooper's director of transmission and planning, said during a Nov. 9 meeting of the state-owned utility's executive committee that new industrial projects are the prime driver.

"We've seen a lot of industrial load growth and a whole lot of potential industrial load growth," Wagner said. "It's not in just one area — it is spread out all over the state. ... Sometimes it's straightforward to handle, sometimes it's not and it can get very complicated."

Even tiny Edisto Electric Cooperative, a rural provider with about 21,000 customers that buys power from Santee Cooper, is feeling the pressure.

"We're seeing a lot of changes," said David Felkel, president and CEO.

During his 43 years with the cooperative, Felkel said he was accustomed to fielding small power requests, like a couple of truck stops — one with a Wendy's, one with a McDonald's — or a 40-room hotel seeking a few megawatts of electricity apiece.

In recent months, though, he's fielding calls from industries looking for much more.

"One started off at 400 megawatts, and at the end of the phone call they asked if we could go to 880 megawatts," Felkel said during the Nov. 9 Santee Cooper meeting.

Two others, he said, wanted 100 megawatts and 600 megawatts.

For comparison, Century Aluminum's Mount Holly smelter near Goose Creek — one of the state's biggest energy users — needs a maximum of 400 megawatts at full capacity, or enough to power about 240,000 homes.

Google is also looking to build another power-hungry data center near St. George in Edisto Electric's service area. It's not clear whether that is among the projects Felkel described.

"I don't know what happened to the good old days when we were satisfied with one, two or three megawatts, and if you got 10 megawatts that was a great day," Felkel said. "But nowadays, every firm that comes in is 100 megawatts, 200 megawatts, 300 megawatts. And that's across the state, not just in Edisto's territory."

Caution urged

The demand for electricity in South Carolina actually dropped until recently, according to the latest data available from the U.S. Energy Information Administration. The state's utilities sold 27.3 million megawatts of power in 2010 but 26.3 million in 2022 as appliances, factories and even lightbulbs grew more energy efficient.

"Efficiencies basically canceled out population growth," said Moore of the nonprofit Southern Alliance for Clean Energy.

But Biden administration policies aimed at slowing climate change, such as hefty incentives for investments in EV and battery factories, and the surge in computing power needed for artificial intelligence and crypto mining facilities have reversed the trend.

The Washington Post reported that the amount of power utilities predict they'll need over the next five years has nearly doubled and is expected to grow, according to a review of regulatory filings by the research firm Grid Strategies.

"Beginning in 2022 and especially in 2023, a surge in data center and industrial development caused sudden, shockingly large increases in five-year load growth expectations," the research group said.

"The growth we're seeing is historic in scale and speed," Kendal Bowman, president of Duke Energy's operations in North Carolina, told The New York Times. "But it's also going to be a challenge, particularly in the near term, to see carbon reduction at the same time we've got this unprecedented growth."

Legislators nationwide are considering laws to make it easier for electric companies to boost capacity. In the Palmetto State, for example, the proposed "South Carolina 10-Year Energy Transformation Act" would loosen permitting regulations, cut the size of the Public Service Commission from seven members to three and give greater weight to testimony provided by utility experts.

The proposal caused Tom Ervin, a commissioner from the Upstate, to resign in protest last week.

In his resignation letter, Ervin said the proposal "would remove regulatory guardrails resulting in dramatic changes in existing law which will give investor-owned utilities a blank check with guaranteed profits, resulting in much higher utility rates for residential customers."

Moore of the clean energy group is urging policy makers to take a measured approach, adding much of the recent surge in electrical demand is unpredictable. He remembers his time with the Arkansas Public Service Commission when the wind power industry was growing at a rapid clip. Ultimately, some of those players fell by the wayside and the frenzy subsided.

"The load growth there wasn't fake, it really happened," he said. "But then it went away."

Many of the factories and data centers that have been proposed in South Carolina — such as Google's twin Dorchester County projects, battery plants and recycling facilities and EV plants — have been announced but haven't started construction. Some have been put on hold because market conditions have slowed demand for their products.

With the massive cost of long-term investments needed to meet what might be a short-term problem, Moore said it's best not to overreact. After all, the November election could usher in major changes that would blunt the demand for new power sources.

"No one can tell you five years or 10 years from now which manufacturers are going to be the most competitive or how big AI is going to be," he said. "Everybody can tell you it's big, but it's hard to predict. We need to be smart about assessing how big it is and how durable it is."

Reach David Wren at 843-937-5550 or on X: @David_Wren_