Central adopts new rate for data centers, other major power users

South Carolina’s electric cooperatives have adopted a new rate that  makes permanent their existing practices that protect Palmetto State families and businesses  from energy costs created by data centers and other major energy users. 

Today, the Central Electric Power Cooperative Board voted unanimously to formalize a set of  consumer protections the Columbia-based generation and transmission cooperative and its 19  member cooperatives previously have employed on a case-by-case basis. 

“Data centers can bring significant benefits to the power grid, creating efficiencies and paying  for system costs that otherwise would have been borne by South Carolina co-op members. Our  job is to maximize those benefits while minimizing risks and costs to our co-ops and the South  Carolinians they serve,” said Central CEO Rob Hochstetler. “Our responsibility is to secure  reliable electricity at the best price for the 2 million South Carolinians who rely on electric  cooperatives for power. This new policy helps accomplish that goal.” 

The new rate, which applies to large consumers that need 20 megawatts of electricity or more, includes the following protections, all of which have been endorsed by third-party advocates as  pro-consumer: 

• 15-year minimum-term contracts with early termination penalties 
• Prepayment for necessary electric infrastructure upgrades
• Provisions for ramping down electricity use during potential energy shortages • Cash deposits and other financial security requirements
• Monthly energy demand minimums, which ensure sufficient revenues are generated to cover system costs. 

Central’s board, which consists of representatives from South Carolina’s 19 electric  cooperatives, adopted the rate after a months-long study process that examined industry best  practices. 

“All of our ratemaking decisions are about fairness,” said Berl Davis, chairman of Central’s  board and CEO of Palmetto Electric Cooperative. “South Carolina families and businesses  shouldn’t subsidize the energy costs of major corporations. We have always recognized and  ensured our rates were consistent with that ideal, and this rate reinforces that approach.”

Electric cooperatives currently serve one data center in South Carolina, which established  operations in 2007. Three others are under development, and the contracts that govern those  relationships already include the consumer protections outlined in the new rate. 

Central’s new rate requires long-term commitments from major energy users that will provide the certainty Central and its member cooperatives need to make capital-intensive investments  to the electric grid, including adding power generation resources, transmission lines and  substations.  

“We need accurate plans and solid commitments from large consumers so the right facilities are  built at the right time and for the right price,” Hochstetler said. “This will help us keep South  Carolina open for business and protect our members from unnecessary costs while we invest in  the reliability of our power grid.” 

About Central Electric Power Cooperative 

Central is a Columbia-based not-for-profit generation and transmission cooperative that secures  reliable, affordable power for South Carolina’s 19 electric distribution cooperatives and the 2  million South Carolinians they serve. Formed in 1948, Central helps its member cooperatives  compete in a complex and capital-intensive industry by negotiating and managing long-term  power supply contracts, coordinating transmission access, facilitating demand-response  programs and managing fuel and market risk. Central and its member cooperatives together  serve more than 70% of the state’s land mass, including consumer-members in all 46 counties.