South Carolina Regulator Raises Dominion Energy’s Compensation Rate for Solar Developers

The South Carolina Public Service Commission on Jan. 3 voted to increase the rates that Dominion Energy Inc. must use to compensate independent solar providers under the Public Utilities Regulatory Policies Act, or PURPA. The vote revokes a November 2019 decision that lowered the rates and would have stifled solar development in the state.

The new directive established four different rates based on peaks and seasons. Solar power supplied during the peak off-season will be priced at $32.52/MWh, while off-peak, off-season  will be offered at $28.93/MWh. Peak on-season rates will be $31.05/MWh, and on-season, off-peak rates will be $27.51/MWh. The previous directive would have required Dominion pay solar providers $21.43/MWh over 10-year contracts.

The order lowered an interim fee the utility will charge developers for integrating energy resources with variable output. The commission slashed the Variable Integration Charge, or VIC, from $2.29/MWh to $0.96/MWh, with the value subject to a “true-up,” either up or down, depending on the actual integration cost determined after a study is performed.

The commission reversed its earlier decision following requests for rehearing from clean energy and environmental groups including the Southern Alliance for Clean Energy, South Carolina Coastal Conservation League, and the South Carolina Solar Business Alliance.

The decision stems from a proceeding opened in May to implement the Energy Freedom Act, requiring the agency to establish each electrical utility’s standard offer, avoided cost methodologies, and contract power purchase agreements. The commission has yet to determine the contract length. The law authorized the commission to approve contract terms longer than ten years, but the original order did not do that, according to SACE.

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