Lawmakers, utilities and large energy users debate retail choice and grid risks amid data center growth

Members of a South Carolina Judiciary subcommittee spent more than an hour weighing whether large electricity users — notably data centers and heavy industry — should be allowed broader options to buy or self-supply power, a move supporters say would attract jobs and critics warn could shift costs to residential ratepayers.

The question drew testimony from hyperscalers, industry trade groups, utilities and consumer advocates, and focused on three linked issues: whether opening retail choice would worsen transmission or balancing risks; how to prevent stranded costs for utilities and other customers; and whether a threshold such as 5 megawatts should limit eligibility.

Katie Ottenwiller, southeast lead for energy market development at Google, told the committee Google has large ongoing investments in South Carolina and wants more procurement options to help meet growing demand while protecting other customers. “We’re now increasing our ability to respond to grid events, during weather crises and work with our utility partners to reduce or shift our load to ease system demands,” Ottenwiller said. She outlined Google’s local investments — the company said it is investing more than $3,300,000,000 in South Carolina, employs about 900 people in Berkeley County with plans to add 200 more in Dorchester County, and has backed local energy‑efficiency grants totaling roughly $2,400,000.

Dan DiOrio, senior director for state policy at the Data Center Coalition, urged keeping “open marketplaces” for a range of solutions, including behind‑the‑meter generation, demand response and grid‑enhancing technologies, so the industry can partner with utilities and regulators as demand grows.

Industry representatives and large users described tangible cost benefits from retail options. John Dezee of Century Aluminum said his company once purchased power in Alabama and wheeled it into South Carolina under an existing tariff, producing costs about 25% below Santee Cooper’s rate at the time. He described contractual terms that required backup arrangements and penalties if off‑system supply failed.

But consumer and utility witnesses cautioned that allowing existing customers to leave a utility’s load forecast or to rely on off‑system supply can create operational and financial risk. Lynn Teague, testifying for consumer interests, warned that data center demand is “extremely unpredictable in the long run” and said uncertainty is a risk that should not be shifted onto “residential users and small businesses.”

Representatives of utilities and Santee Cooper emphasized balancing‑area obligations and transmission constraints. A Santee Cooper representative said the utility previously permitted off‑system supply under a customer‑supplied power tariff and charged customers the full cost when contracted supply failed; the speaker added that South Carolina has limited interstate transmission interties and that upgrades or reservation of capacity can be costly. Committee members and utility witnesses noted Federal Energy Regulatory Commission (FERC) rules govern wholesale transmission (so‑called open access transmission tariffs) while state Public Service Commission (PSC) proceedings oversee retail rates for investor‑owned utilities.

Several witnesses and senators discussed thresholds for any retail choice—Scott Elliott of the South Carolina Energy Users group said a 5‑megawatt threshold is a cautious proposal that targets large industrial and data center loads without opening choice to smaller customers; others noted Georgia’s lower threshold (900 kilowatts) as a contrasting example. Supporters argued higher thresholds would limit takers and reduce disruption; skeptics said any program for existing customers raises stranded‑cost and allocation questions that would need PSC or legislative safeguards.

Committee members asked technical questions about whether a large customer’s contract with an off‑system supplier could fully relieve the incumbent utility of balancing obligations; utility witnesses said balancing‑area operational responsibilities remain in place while contractual constructs can shift some commercial risk but not the system‑integrity duties governed by FERC and grid operators.

No formal votes or committee actions were taken at the session. Chairman Massey said the panel will consider continuing the discussion at a future meeting and will solicit further technical input on modeling, transmission impacts, and how to allocate costs if new generation is needed.

The hearing combined competing policy priorities: companies seeking price and supply options as they assess rising demand tied to digital services, and regulators and utilities emphasizing operational reliability and protections for ratepayers.

(Committee time and next steps) The subcommittee reserved another meeting slot for follow‑up testimony; staff will attempt to schedule utility balancing experts and provide comparative state examples on retail choice for the committee’s next session.