By Jack Toole
Six months,” Tom Cruise’s fast-talking Navy lawyer famously tells his client in A Few Good Men, pushing him to take a plea deal. “It’s nothing. It’s a hockey season.”
It’s also the amount of time South Carolina’s Public Service Commission (PSC) has given itself to review the largest utility merger in U.S. history — the proposed $67-billion deal between Florida power behemoth NextEra and Virginia’s Dominion Energy, which operates in 20 states including S.C.
By contrast, the PSC took just over 11 months to approve the Dominion-SCANA merger in 2018.
“The only thing a quick decision serves is the interest of NextEra and Dominion,” S.C. Small Business Chamber of Commerce President Frank Knapp told the Charleston City Paper this week. “It’s not in the interest of ratepayers — and it’s not in the interest of getting the best deal for all our consumers, including residential and small business.”
Knapp is part of a growing coalition of S.C. ratepayers, business leaders, environmentalists and Dominion shareholders who are asking the PSC to slow down the process, despite what they call open pressure from state legislative leaders to accept the companies’ six-month deadline.
In late July, S.C. House Speaker Murrell Smith, R-Sumter, and Senate President Thomas Alexander, R-Oconee, formally moved to intervene in the PSC case, telling commissioners they agree with the expedited timeline. The move followed a Smith-sponsored 2025 energy bill that streamlined the PSC approval process for new power plant approvals.
Merger critics contrast that with the approach of Virginia political leaders like Gov. Abigail Spanberger, who this week announced her intention to intervene on behalf of ratepayers.
“I remain skeptical of the benefits this merger would deliver to Virginia — particularly if those benefits come at the expense of affordability, existing jobs, or meeting our homegrown clean energy goals,” Spanberger said in an Aug. 17 release. “Virginians deserve to know that their long-term interests, not simply those of the companies involved, are being put first.”
What’s more, critics argue, given Virginia’s six-month statutory deadline, S.C. should tap the brakes while commonwealth leaders use their outsized leverage as Dominion’s home state to work out the best deal possible for consumers.
“Suppose Virginia negotiates a $20-a-month average bill reduction for their customers instead of the $10 we’re being offered,” Knapp said. “Aren’t we going to look silly?”
More of the same corporate rhetoric?
For their part, officials with the companies are focusing on the merger’s upside, arguing that consumers will benefit from a larger company that “can buy, build, finance and operate energy infrastructure projects more efficiently.”
“Together, we will be better positioned to partner with states and communities to attract new investment, support new jobs and invest in the all-of-the-above energy infrastructure customers need,” NextEra CEO John Ketchum said last month.
But it was Ketchum’s earlier announcement to shareholders that the company plans to add 15 gigawatts of power generation to support data center growth that caught the attention of S.C. ratepayer advocates.
“It’s all about data centers,” S.C. League of Women Voters Vice President Lynn Teague said with a sigh. “That’s what’s making Dominion such an attractive target.”
To understand why data centers — increasingly controversial in S.C. due to their high water and power usage — have emerged as a major issue in the merger, experts say it helps to know four facts:
About one-third of all U.S. power demand growth is currently being driven by data centers, according to NextEra’s Ketchum in a recent interview.
Virginia is the largest data center hub in the world, with more than 35% of all known hyperscale data centers worldwide, per the Virginia Economic Development Project.
South Carolina’s data center market is unregulated and growing fast, with more than 32 known hyperscale projects already built or planned, according to market intelligence firm Cleanview.
As S.C. residents learned in 2017 when the $9 billion planned nuclear project at V.C. Summer failed, tax- and ratepayers can be forced to pick up the tab when private power projects go belly up — a live possibility in the still-speculative data center industry.
Facts like those have led environmental and ratepayer groups to join in the S.C. case, including the Southern Alliance for Clean Energy.
Or as SACE energy analyst Eddy Moore put it: “We thought it was important to intervene in the merger case because having the largest utility company in the world fund power plants in the Lowcountry to serve new data centers could negatively affect both our electric bills and our landscape.”
More regulation?
Beaufort Republican Sen. Tom Davis, who considers himself a supporter of data centers and expanded home-state power generation, told the City Paper he understands and, to a significant degree, shares those concerns.
“I get the apprehension,” Davis said. “Especially to the extent the legislature doesn’t act.”
In fact, Davis argues it was “irresponsible” of lawmakers to adjourn for the year in May without passing his bill to establish a strong regulatory framework for data centers.
“You could see all this coming a year ago,” he said. “The need to lay down these benchmarks was critical. And we just didn’t do it.”
Specifically, Davis said he believes the legislature needs to act on two fronts before new capital flows into the state for additional data centers.
First, the hyperscalers must be required to use environmental best practices, including water-saving technologies and responsible siting policies that keep data centers away from sensitive locations like the A.C.E. Basin.
And second, utilities must be obligated to demand long-term proof of financial stability from their hyperscaler customers before building new capacity to serve them, ensuring that ratepayers don’t get stuck with the bill for companies that fail.
But with a timetable that would have the merger fully approved just as the legislature is coming back into session next January, Davis worries that it will only be harder to legislate with a massive new utility potentially lobbying against it.
“Frankly, if you’re a utility coming into this space with certain expectations, aren’t you going to oppose those benchmarks?” Davis asked. “After 18 years, I know how hard it is to pass legislation, especially when you have stakeholders with real financial and economic interests fighting you.”
Nevertheless, Davis said he thinks his bill will get through the legislature next year because “it has to.”
“I like the idea of having a utility with capital capacity because we have real power generation needs, but this laissez faire environment regarding data centers is an area where the legislature has to, and I believe will, act,” Davis said. “And any utility coming into the state needs to do so with their eyes wide open to that reality.”
Use the link above to read more at the Charleston City Paper.
