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The utility company is asking for an overall 2.73% increase to its electric rates under provisions of a state law known as the Base Load Review Act. This comes after the company agreed to a reduced 4.88% increase, a reduction from nearly 10% the company asked for in a separate rate request earlier this year.
Staff Report
Published June 1, 2010
S.C. Electric & Gas Co. filed for another rate increase with the Public Service Commission of South Carolina and the S.C. Office of Regulatory Staff on Friday.
The utility company is asking for an overall 2.73% increase to its electric rates under provisions of a state law known as the Base Load Review Act. This comes after the company agreed to a reduced 4.88% increase, a reduction from nearly 10% the company asked for in a separate rate request earlier this year.
The 4.88% increase, SCE&G said, is to help recover costs associated with government-mandated environment and safety initiatives; a public hearing on that request concluded Wednesday.
The Base Load Review Act effectively reduces the cost of building nuclear power plants in South Carolina by allowing the state’s regulated utilities to adjust rates annually during construction to recover related financing costs, SCE&G said.
SCE&G and state-owned utility Santee Cooper are building two nuclear electric-generating units at the site of the V.C. Summer Nuclear Station near Jenkinsville. The first unit is expected to come on line in 2016, the second in 2019, pending approval by the Nuclear Regulatory Commission.
SCE&G President Kevin Marsh said paying financing costs while construction is ongoing, as opposed to waiting until the project has been completed, lowers the cost of building the new units by about $1 billion, which in turn reduces the amount SCE&G customers will pay through rates for such things as the cost of capital, depreciation, property taxes and insurance associated with the project.
“We estimate this will save our customers at least $4 billion in electric rates over the life of the new units,” he said.
In a report filed with the PSC and the Office of Regulatory Staff last week, SCE&G indicated that construction of the new nuclear units is proceeding in full compliance with approved cost and schedule projections.
Rate increases under the BLRA currently are expected to average a little more than 2% annually through 2019, but will vary year to year based on actual construction expenditures incurred.
If Friday’s filing is approved, SCE&G’s current electric rates would increase in October as follows:
Previous coverage
Majority of intervenors now say SCE&G rate hike request acceptable
Nuclear can provide power, economic punch, says development group
SCE&G cuts request for rate increase by half
SCANA earnings higher than usual; refunds coming
SCE&G to decrease rate request with credit to customers
SCE&G to host first public meeting on rate increase tonight at Summerville Town Hall
Rate increase proposal puts heat on SCE&G
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