Payne: Fairfield Electric has not increased rates

BLYTHEWOOD – Reading in the October Living magazine that the four-and-a-half-year Santee Cooper freeze on electricity rates ended Dec. 31, and seeing the increase in power bill this winter, many residents have thought Fairfield Electric power rates had gone up.

But Doug Payne, Vice President of Member Service at Fairfield Electric Coop, told The Voice on Tuesday that the Coop has not raised its power rates.

“We have not had a rate increase,” Payne said. “The higher bills our members are experiencing are due to increase in energy use due to the colder weather.  It has been significantly colder this winter than last.”

Payne said December had 13 days below freezing. January had 20 days below freezing, with 13 of those days below 25 degrees. 

An All-Time High

“This significantly impacts heating units,” he said. “Electric furnaces are running much more and heat pumps are calling on back up heat strips much more during these extremely cold periods. We anticipate seeing an all-time high in total kilowatt-hours consumed this January.”

Pulling up a random residential power bill, Payne pointed out that the kilowatt-hours used on the January bill was 65% higher than that home’s December bill.  It was 20% higher than last January.

“We’re going to see an increase in wholesale power cost this year and we’re currently performing a rate study. A rate change may be implemented later this year,” Payne said.

He said the impact of inflation has also impacted the Coop’s costs for materials and operating expenses.

“We’re always managing the costs we can and operate as efficiently as possible,” Payne said.

“The story we ran in the Coop’s Living magazine back in October, 2024, was about Santee Cooper and their rate freeze expiring, not a rate increase announcement,” he said. “We want to communicate the costs increases we are seeing and prepare our members.” 

In the October story, Fairfield Electric CEO Bruce Bacon talked about the Coop’s frustrations as they work to keep power bills low.

“Managing costs and smart business moves have kept our electric rates stable for years, but not everything is in our hands,” Bacon said. “Government regulations, skyrocketing prices for critical materials, and other factors are driving up our costs. We also face the prospect of significant cost increases from our primary source of wholesale power, Santee Cooper. Here’s why.

“We join with other electric cooperatives to buy wholesale power through Central Electric Power Cooperative, an energy portfolio manager that negotiates on our behalf to purchase electricity at the best possible rates from Santee Cooper, Duke Energy and others,” Bacon said.

“Central’s long-term contract with Santee Cooper requires the cooperatives to pay for about 70% of Santee Cooper’s costs, including for large construction projects such as power plants,” he said. “Notably, that includes the billions of dollars Santee Cooper and SCE&G spent before abandoning their effort to expand the V.C. Summer nuclear plant in Fairfield County.”

Bacon said Coop members across South Carolina will be charged for that V.C. Summer debt for decades to come—until 2056. He said that debt is actually already factored into power bills, a small percentage of the monthly total.

Rate Freeze Ends

“Unfortunately, even more costs are coming,” Bacon said. “After the V.C. Summer project’s 2017 cancellation, Santee Cooper agreed to freeze its electric rates for four and a half years to settle the “Cook” class-action lawsuit brought by the utility’s customers.”

That rate freeze, he said, has kept the Coop’s power costs low and its member’s power bills stable.

However, that rate freeze ended Dec. 31, and Bacon said the Cook case settlement also provides that Santee Cooper may recover certain unbudgeted costs incurred during the rate freeze.

“Unfortunately,” he said, “Santee Cooper has claimed that a series of events during the rate freeze caused the utility to incur approximately $744 million in unbudgeted costs – what Santee Cooper calls the “Cook Settlement Exceptions.”

With the rate freeze ended, it is expected that Santee Cooper will begin charging its customers—including co-op members—to recover those costs. These charges will come on top of Santee Cooper’s other planned rate increases.

“We don’t yet know exactly how much co-op members will have to pay for these Santee Cooper costs,” Bacon said, “but we expect it to be substantial. Fairfield Electric likely will have to adjust its electric rates to cover these expenses.

“In keeping with our mission to protect our members from paying unreasonable costs, Fairfield Electric— through Central—continues to ask questions and scrutinize Santee Cooper’s plans to charge consumers for these claimed Cook Settlement Exceptions,” he said. “The court-appointed attorneys for the Cook class are also involved in this process.”

Bacon said Central will be negotiating with Santee Cooper to ensure Coop members pay only their fair share.

“We hope these negotiations lead to a resolution regarding these Santee Cooper costs and how they are collected,” Bacon said.

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