G&T Focus: New Rate Protects Members as Large Loads Grow in South Carolina

Cen­tral Elec­tric Pow­er Coop­er­a­tive is well acquaint­ed with data cen­ters and the chal­lenges and oppor­tu­ni­ties they can bring to the pow­er grid. As more of these large-load enti­ties set­tle in South Car­oli­na, the gen­er­a­tion and trans­mis­sion co-op will apply a new rate to sup­port its long-stand­ing com­mit­ment to afford­able, reli­able ser­vice.

“We’re pro­tect­ing the mem­ber at the end of the line from deci­sions that are dri­ven by a sig­nif­i­cant large load,” says Cole Price, Cen­tral’s exec­u­tive vice pres­i­dent of mem­ber ser­vices who works with the Colum­bia-based G&T’s 19 dis­tri­b­u­tion co-ops on con­tracts, rates and eco­nom­ic devel­op­ment issues.

“Our oblig­a­tion is to sup­port the South Car­oli­na fam­i­lies and busi­ness­es we serve, pro­tect them from risk, to keep costs low and put down­ward pres­sure on rates,” he says.

With that in mind, Cen­tral’s board recent­ly approved a rate for data cen­ters and any oth­er large loads of 20 megawatts or more com­ing on to their sys­tem. The rate for­mal­ly locks in pro­tec­tions for exist­ing co-op mem­bers that Cen­tral has pre­vi­ous­ly includ­ed as terms in ser­vice con­tracts with large loads.

The rate requires the fol­low­ing min­i­mum pro­tec­tions:

• Con­tracts of at least 15 years with ear­ly ter­mi­na­tion penal­ties.
• Cash deposits and oth­er finan­cial secu­ri­ties.
• Advance pay­ment of nec­es­sary elec­tric infra­struc­ture upgrades.
• Accep­tance of inter­rupt­ible pow­er pro­vi­sions to avoid ener­gy short­ages.
• Month­ly ener­gy demand min­i­mums, which ensure suf­fi­cient rev­enues are gen­er­at­ed to cov­er sys­tem costs.

“Large ener­gy users bring chal­lenges, but they can also bring sig­nif­i­cant ben­e­fits to the pow­er grid, cre­at­ing effi­cien­cies and pay­ing for sys­tem costs that oth­er­wise would have been borne by oth­er South Car­oli­na co-op mem­bers,” Cen­tral CEO Rob Hochstetler says. “Our job is to max­i­mize those ben­e­fits while min­i­miz­ing risks and costs to our co-ops and the South Car­olini­ans they serve.”

Cen­tral’s first expe­ri­ence with data cen­ters came 20 years ago when Google set up shop along Berke­ley Elec­tric Coop­er­a­tive’s pow­er lines. Now, that inter­net giant is expand­ing in both the Mon­cks Cor­ner-based co-op’s ter­ri­to­ry and into the ser­vice area of Bam­berg-based Edis­to Elec­tric Coop­er­a­tive.

Look­ing ahead, more data cen­ters are locat­ing in coop­er­a­tive-served com­mu­ni­ties with Meta and QTS cur­rent­ly build­ing facil­i­ties in areas served by Aiken Elec­tric Coop­er­a­tive and York Elec­tric Coop­er­a­tive, respec­tive­ly.

Cen­tral is pro­vid­ing its co-ops the sup­port they need along the way.

“From a gen­er­a­tion and trans­mis­sion per­spec­tive, some of our dis­tri­b­u­tion co-ops don’t have a lot of staff to deal with these larg­er, more com­pli­cat­ed projects and so they can rely on us to aug­ment their staff,” says Price.

The new large load rate will facil­i­tate that work.

Under the rate, data cen­ters agree to cur­tail or reduce con­sump­tion when ener­gy sup­plies get tight due to extreme weath­er or some unfore­seen inci­dent. The G&T notes this pro­vi­sion will min­i­mize the chance of rolling out­ages for fam­i­lies and busi­ness­es even when the grid is under strain.

“In South Car­oli­na, when we have an extend­ed cold peri­od, our peak demand can go well above and beyond what was fore­cast­ed and then if you have a gen­er­a­tion resource trip offline, well, that’s not a good sit­u­a­tion,” says Price. “So, while data cen­ters want pow­er avail­able 24/7, we have found ways to get them the pow­er they need with­out impact­ing sys­tem reli­a­bil­i­ty for every­one else. This com­bi­na­tion helps us opti­mize our sys­tem.”

Cen­tral does not cur­rent­ly own or oper­ate gen­er­a­tion but pur­chas­es whole­sale pow­er from Duke Ener­gy, an investor-owned util­i­ty, and San­tee Coop­er, the state-owned pub­lic pow­er util­i­ty. Price says the new rate will enhance their col­lab­o­ra­tion to pro­tect the sys­tem.

The rate also helps accel­er­ate ener­gy infra­struc­ture improve­ments while help­ing man­age costs, as data cen­ters and sim­i­lar large loads must pre­pay for the trans­mis­sion and sub­sta­tion upgrades nec­es­sary for their inter­con­nec­tion.

“There’s a lot of upgrade work that is required for serv­ing these large loads,” says Price. “It helps us do work that would need to be done even­tu­al­ly now so they’re going to pay for the accel­er­a­tion and the upgrade.”

For G&Ts with data cen­ters and oth­er large loads in their co-ops’ ter­ri­to­ries, Cen­tral offers three key sug­ges­tions: Com­mu­ni­cate ear­ly and often with the board, learn what the local impacts actu­al­ly entail, and start get­ting pre­pared.

Price under­scores the impor­tance of hav­ing finan­cial guar­an­tees in place—such as let­ters of cred­it or cash deposits—from devel­op­ers to cov­er cer­tain costs over their length of oper­a­tions.

“Make sure you under­stand the risks and the ben­e­fits,” he says. “Put tools and poli­cies in place to han­dle the work process­es. Pro­tect­ing your con­sumers with the right finan­cial safe­guards and met­rics is impor­tant. Our new rate helps with that.”

Man­aged respon­si­bly, data cen­ters and their high load fac­tor can make co-op sys­tems more effi­cient, ben­e­fit­ing exist­ing mem­bers. They take on a large share of the co-op’s fixed costs, reduc­ing what every­one else must pay for the co-op’s facil­i­ties and infra­struc­ture.

Which takes us back to the co-op mem­ber at the end of the line.

“A 200-megawatt data cen­ter will help absorb some of those fixed costs that would oth­er­wise be paid for by fam­i­lies and small busi­ness,” says Price. “The new rate is focused on mak­ing sure South Car­olini­ans are get­ting the ben­e­fit.”