Citizens are pushing back against data centers, fearing that their power and water needs will cause utility bills to increase. Congress is trying to address this issue with a bill that has cleared a House subcommittee, known as the Ratepayer Protection Act, but it also faces headwinds. What does all this mean for our state? Mike Switzer interviews Weston Adams, an attorney with the Nelson Mullins law firm in Columbia, SC.
TRANSCRIPT:
Switzer: Hello and welcome to another edition of the South Carolina Business Review. This is Mike Switzer. Citizens are pushing back against data centers, fearing that their power and water needs will cause utility bills to increase. Congress is trying to address this issue with a bill that has cleared a House subcommittee known as the Ratepayer Protection Act. But it also faces headwinds. What does all this mean for our state? Weston Adams is an attorney with the Nelson Mullins law Firm, and he joins us by phone now from his office in Columbia. Weston, welcome to the program.
Adams: Yes, sir. Mike, thanks for having me.
Switzer: Give us an overview of this law that is trying to make its way through Congress.
Adams: There are parallel bills in the House and Senate. Incidentally, there are actually a number of bills at the state level in South Carolina that sort of get to the same point. But effectively, what the federal bill is trying to do is to enable state utility commissions to address the sharing and allocation of cost around generation of power, transmission of power, and distribution of power. And how do you allocate those costs related to data centers that are either in the generation bucket, the transmission bucket, or the distribution bucket? And effectively, what these proposed bills are doing is sort of sending down to state utility commissions some guidance in enabling statutory provision to allow those state utility commissions to more easily address these items. And these are very complicated issues.
Switzer: Do you feel that this legislation is adequate enough to protect consumers?
Adams: The tech companies and the data center developers have sort of gotten out ahead of this issue. And if you actually look at the details of the deals that have been announced kind of across the country, I think you will find tech companies effectively covering their generation costs, being willing to cover their portion of the transmission costs, and being willing to share their portion of the distribution cost as well. But that is not really being caught up in the press. The coverage of this is understandably alarm on the ratepayer side about how all these costs being shared. But effectively, what you're really seeing even prior to the legislation is tech companies just effectively shouldering their share of this cost. And so some of this is an education question.
Switzer: In the interest of full disclosure, we should ask you if you are representing either side of this issue.
Adams: Our practice effectively is representing, tech companies and large industrials and private equity firms and renewable developers. We represent everybody but the investor owned utilities. We typically don't represent the investor owned utilities. And we're doing this sort of work all over the country.
Switzer: All right, now we are also hearing that some of these tech companies and developers are looking to provide their own sources of power, such as solar and wind. Is this under consideration?
Adams: I think this is actually being done to find tech companies that are paying for the generation that is then owned by the investor owned utility. You also see that a number of these tech companies have essentially commitments to 100% offset of the natural gas usage on the CCGT units that are being built, and they're offsetting that 100% with renewable power. So you often will see a deal where they are building a gas plant or gas plants, but they are offsetting 100% of that through some combination of solar, wind, geothermal. And I think the future of that offsetting, Mike, really is the small modular nuclear reactors. And that technology is still in the stage of trying to figure out how to make this financeable.
Switzer: And now here in our state, we're also hearing that that's one of the goals for the power from the, scrubbed nuclear plant that is possibly going to be restarted in the Midlands.
Adams: Yeah, I think that, you know, think about it. Our state, we have a higher percentage of power from nuclear sources than a lot of other states do. So we have actually a lot of expertise in both North Carolina and South Carolina in the nuclear area. If you can look around the Charlotte area, there's a ton of, nuclear expertise and a lot of operational expertise on nukes in South Carolina as well through this sort of just built generation that already exists. So I think that there's a role there that South Carolina and North Carolina together are already sort of playing a leadership role on the nuclear side. And I think Savannah River Site is a place that can play an important role in that. So you're seeing that play out in real time, with the Savannah River Site being sort of a center for nuclear energy development and generation.
Switzer: Well, Weston, thank you so much for spending time with us today.
Adams: Mike, that was a treat. Thanks for having me.
Switzer: Weston Adams is an attorney with the Nelson Mullins law firm in Columbia. Remember, you can hear this show again at our webpage, SouthCarolinaPublicRadio.org and you can find us wherever you find podcasts. With the South Carolina Business Review, this is Mike Switzer.
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