Electricity reliability and electric cooperatives in South Carolina

Electric cooperatives have welcomed the attention of Gov. Henry McMaster and state regulators on the supply and projected reliability of electricity service in South Carolina following mass outages in Texas. 

Texas was hit with widespread loss of power when freezing temperatures and damaging ice and snow arrived last week. Some Texans also received huge energy bills because they had selected purchasing plans that allowed their costs to float with wholesale prices, which may be cheaper than fixed rates during good weather but can spike when demand exceeds supply. 

Could those things happen here?

As the threat of bad weather moves to the east and south, Gov. McMaster has asked the state Office of Regulatory Staff (ORS) to explore our state’s readiness. 

ORS has asked the state Public Service Commission to seek information from utilities on how they have prepared for a catastrophic storm like the one in Texas—and how they will prepare now that they’ve seen what can happen—to ensure reliable power supply for South Carolinians. The governor asked ORS to include Santee Cooper and electric cooperatives, though ORS does not oversee the state-owned utility and the member-owned cooperatives. 

“Even though there are numerous differences between Texas and South Carolina’s energy market, we appreciate our leaders asking questions,” said Robert C. Hochstetler, president and CEO of Central Electric Power Cooperative, the power aggregator for the state’s 20 independent, member-owned electric cooperatives. 

Here are some questions being asked about the two states. 

Could widespread outages and shortage of power occur in South Carolina if we had the same weather as Texas? 

It’s difficult to predict weather events not yet experienced, but extensive planning goes into the amount and type of power generation sources used. 

Also, the structure of the southeastern energy market and regional availability of power matter. Our generation sources are sufficient and we have reserves (generators beyond our normal needs). We also have connections with other utilities that make accessing more power possible. That’s why it’s good to learn from Texas.

What’s the largest threat to South Carolina’s power supply in severe weather events?

While the availability of supply is getting a lot of attention in the wake of the Texas storm, another major threat to reliable power in South Carolina is the loss of transmission and distribution systems. Electric cooperatives alone operate more than 75,000 miles of power line, enough to circle Earth more than three times. 

Ice and wind can severely damage transmission lines, which carry high-voltage bulk power between power plants and substations, and distribution lines, which carry lower-voltage electricity from substations to homes and businesses. 

When this happens, the electric cooperatives work together to restore the poles, wires and substations by sharing utility crews from across the region and sometimes across parts of the nation outside our region.

Why don’t utilities just build stronger lines? 

We could do that, but the cost would become prohibitive. Cooperative consumer-members simply would not accept the significant cost difference. So, all utilities build their systems and maintain their rights-of-way to withstand weather events that can be reasonably anticipated. But, again, it’s hard to build and afford protection against everything Mother Nature can bring. The Texas experience last week has a number of causes, and one was a winter storm so extreme that no one would have reasonably anticipated it to occur that far south. 

What are the basic differences between Texas and South Carolina and their energy supplies?

Interconnection with other utilities — Texas does not have the same level of physical interconnections beyond state borders, so its ability to purchase and receive electricity from outside of the state are limited. Texas is the only state that maintains a one-state power grid. Other states are either in the eastern grid or western grid, and those two areas are further divided into smaller regions, but they’re all physically interconnected. Except Texas. 

Reliance on natural gas — Texas relies heavily on power plants fueled with natural gas, and gas supply systems were restricted in the extreme cold. South Carolina relies less on natural gas and has excess electricity supply that is not generated by burning gas.

Wind Power — A portion of the power supply in Texas is generated by wind turbines, which were unavailable because of the extreme cold and ice. The wind does not blow with sufficient consistency and force in South Carolina, so we do not use wind turbines to generate electricity. We do generate some electricity with solar panels, and they don’t work when the sun does not shine (as in rain and snow storms), but our reserves account for that variability. 

Explain how interconnections in our region are different from Texas.

Simply put, Texas has only a couple of interconnections to regions outside that state. Texas operates its own, mostly isolated grid through the Electric Reliability Council of Texas (ERCOT). 

Outside of Texas, large swaths of the country are far more interconnected—meaning they have physical connections where power can be exchanged. 

Utilities in South Carolina are part of the Virginia-Carolinas (VACAR) sub-region, which is part of the SERC Reliability Corporation covering the southeastern U.S. (See maps below.)

SERC’s mission is to reduce the risks to the reliability and security of the electric grid. SERC achieves these goals by enforcing reliability and security standards across the electric utilities in our region.

If the demand grows higher than a utility or utilities in a region can supply, the interconnections can be used to bring in power from farther distances. Texas didn’t have that option last week. 

What does this mean to the cooperatives of South Carolina? 

  • South Carolina benefits through collaboration and cooperation among utilities in the region. While each member of a reliability organization is independent, they act together to operate the bulk electric system, with more than 70 points of interconnection between the members.  
  • The cooperatives’ wholesale suppliers have a combined reserve margin of 26% for this winter with nearly 48 GW of generation and for over 38 GW of load.
  • For South Carolina’s cooperatives, this translates into over 5,500 MW of capacity standing by. (Generally, 1 MW can supply about 650 average homes.)
  • Similar reserves held by other utilities can be shared across SERC.
  • When needed, SERC coordinates with utilities across the region, and from other regions, to find the power supply and ensure the reliability.

Some news reports have featured Texans who received bills totaling thousands of dollars after the storm hit. Could electric cooperative members face similarly high bills if South Carolina endured freezing weather with ice and snow like Texas? 

No. Unlike South Carolina, Texas has deregulated its electricity market, and some folks had chosen purchase plans with risks of price spikes in extreme events. When power supply fell short of the need, those power purchase plans allowed some consumers’ bills to rise into the thousands of dollars because their power was billed at wholesale rates, which fluctuate. 

Power costs rise and fall on the wholesale market even in South Carolina. However, retail consumers—that is, homes and businesses—are less exposed to wholesale price fluctuations than in the Texas examples that appeared in news reports. While some South Carolina consumers do pay a “fuel cost adjustment” related to the cost of natural gas or coal used to produce power, the exposure to extreme variations is not the same.