The potential of net metering

By John Temple Ligon

Temple@TheColumbiaStar.com

The installation of photo- voltaic cells on a residential roof can cost tens of thousands of dollars and take over 15 years to pay for itself. The 15- year payback period is due to lack of state-required net metering in South Carolina. In the U.S., 40 states require utilities to accept electricity generated by homes and businesses, also called net metering. South Carolina does not.

In central South Carolina and its Lowcountry, SCE&G is the only area utility that accommodates customers who want to feed surplus power into the grid. But there is no state requirement for such service, and there is no state determination of what a utility should pay for the reversed power fed into its grid. The state's cooperatives cannot purchase power from their customers due to contractual restrictions brought on by inflexible agreements with Santee Cooper.

Santee Cooper provides electricity to about 40% of South Carolina. As a classic cooperative networked and connected with members, not customers, Santee Cooper does not fall under review by the South Carolina Public Service Commission, as do SCE&G, Progress, and Duke.

About 20 states recently passed laws setting thresholds for when a stated percentage of electricity must come from renewable resources. South Carolina has no such law. The federal 2005 Energy policy Act requires state regulators to consider net metering, which encourages the development of electric power generation by renewable resources, particularly solar.

South Carolina is comparably profligate in energy use. The state spends about $10 billion annually on energy, which places South Carolina 18th nationally in per capita energy consumption. The state's per capita energy consumption is 381.5 million Btu, and the national average is 337.7 million Btu. Why a relatively poor state spends so much on energy can be partially explained with a relatively poor stock of housing encumbered with inadequate insulation. Also, the electricity rates are low on a national basis, and low price usually encourages purchasing.

Under the federal 2005 Energy Policy Act, the S.C. Public Service Commission is taking public comment through February 1. State residents may comment by letter addressed to the Public Service Commission of South Carolina, P.O. Box 11649, Columbia, SC 29211. By fax the telephone number is 803-896-5246. The docket number must be included on all correspondence: 2005-385-E.

A hearing date will be set later this year. Already Duke, Progress, SCE&G, and two individuals have filed with the PSC as intervenors, which means they can take part in the proceedings at the hearing and even provide testimony.

So far, related hearings in South Carolina have a poor draw. On Wednesday night, December 13, and the next night, Thursday, only three people in the Lowcountry showed up to speak to Santee Cooper executives.

But Santee Cooper maintains its rural roots. Unlike rural S.C., net metering makes the most sense in an urban environment, such as downtown Greenville, Columbia, or Charleston.

In Columbia, for instance, the City Center Partnership's Business Improvement District could organize its own electric power generation and distribution system, particularly now that SCANA has deserted downtown for Lexington County.

With a neighborhood cooperative, downtown Columbia could sell electricity to the churches and government buildings and other tax- free properties with a slight mark- up over cost, and that minor margin could work as a tax. Through the purchase of electric power, tax- free properties could participate in the support of the downtown services.

Suburban subdivisions could work the sale of electric power the same way. Power purchasers would participate in the support of the common amenities, just as it could happen downtown.

Be it urban or suburban, an independent electric power generating/distribution operation could theoretically feed its excess back to the regulated utility monopoly under a state- mandated net metering law. But, given the power of the utility lobby in S.C. , that's not likely to be allowed until the next bold step already taken in some other states: retail deregulation.