Cayce has enacted a new ordinance that will trigger a 5% fee to be added to the energy bills of some of the city’s industrial customers. But the new law places a cap on how much that fee can add to their bills.

Previously, industrial customers were exempt from the 5% fee. Residential customers and small businesses will see no change in fees under the new ordinance.

Cayce and Dominion Energy have been negotiating about the franchise fee the utility pays the city since the city pulled out of their previous franchise agreement back in November. Utilities pay municipalities these fees to cross their land to reach customers, recouping it by adding a surcharge to customer utility bills.

A sticking point for the city in walking away from the previous agreement with Dominion was the 30-year term for the new agreement the company was seeking when it came time to re-up. An agreement has not been reached, but City Manager Tracy Hegler said the parties were able to agree on setting the term closer to 20 years.

In absence of a new agreement, City Council passed the 5% default franchise fee on June 22. The default fee, which extends the 5% charge to industrial customers, will kick in whenever a utility doesn’t have a separate franchise agreement with the city that sets a different rate.

With no agreement in place, the fee will apply to Dominion customers.

Council deferred second reading on the ordinance five times before passing this amended version, which added a cap of $200,000 per year, past which the 5% franchise fee will no longer apply.

Council passed first reading on an initial version of the ordinance that did not cap the fee and had deferred second reading five times while negotiations with Dominion continued.

“[Council] just really wanted to look at what’s modern, what’s best practice, something that worked 30 years ago isn’t necessarily true today,” City Manager Tracy Hegler told the Chronicle after the vote, explaining why the city wanted to rethink its agreement with Dominion.

“Our intention ... is to be fair across the board for all users in our city,” she said of the fee, tempering that by adding “Council did not want to be catastrophic in its application,” hence the cap.

“That should be less damaging to industrial customers,” Hegler said.

Dominion told the Chronicle that it plans to pass the 5% fee along to industrial customers, capped at $200,000.

“Dominion Energy has no plans to propose additional adjustments at this time, and we are open to further discussions at the City’s request,” Media Relations Manager Rhonda Maree O’Banion replied when asked if talks about a separate agreement with the city are ongoing.

Hegler said she had a quick communication with Dominion’s government liaison after the ordinance passed in which the company acknowledged the change, but the city manager said talks about a new franchise agreement have not resumed since the vote.

A representative for CMC Steel South Carolina, an industrial customer in Cayce that has vocally opposed the expansion of the franchise fee, was in attendance and spoke during public comment before the vote.

“Although the city has offered a cap to individual customers of $200,000 a year, we feel that this franchise fee is unfairly targeting CMC steel, especially since we do not use any of the right-of-ways for our incoming power,” Brett Kunce, the company’s director of operations, said, adding that Dominion’s power lines cross private property to get to their facility.

“We would ask that the city approve the Dominion-proposed franchise fee, which does not include a fee on industrials. Or consider a lower cap that is commensurate with what the next three largest industrials in the city would pay annually as other industrials would most likely be nowhere near the $200,000 cap.”

After the vote, Mayor Elise Partin said the city found through research that the industrial exemption on franchise fees doesn’t exist in other utility provider agreements in other municipalities.

“Dominion has stated that excluding industrial users in their franchise fee calculations was for economic development,” she said. “If that’s truly about that, then they should not pass it on to the industrial users or commercial users or residential users. That is a business choice that they are making, not something required by our ordinance.”