SLADE COLUMN: Heres why youre paying SCE&G more this year
South Carolina Electric & Gas customers who have been carefully watching their electricity use may be perplexed by their power bills this year.
I sure was.
In my household, we spent a good amount of money on insulation and duct sealing early this year. Itís the sort of energy-saving behavior that SCE&G encourages, and, in fact, I received rebates from the utility that paid for some of the work.
But hereís the kicker: While our electricity usage this year has decreased by 17 percent compared to the same January-July period in 2011, our SCE&G bills slightly increased.
You might ask: How can that be?
For my bills to stay about the same, despite the large drop in my power consumption, SCE&G would have to be charging me at least 21 percent more for electricity, and the power company wasnít approved for a huge rate increase like that.
The culprit is an unusual electric rate adjustment program thatís being tested out on SCE&G customers. For the past two years, the utility has been raising and lowering customersí electric rates monthly to account for weather fluctuations and other factors, through what is called the Weather Normalization Adjustment, or WNA.
The adjustments tend to raise bills when they should be falling, and decrease bills when they should be soaring, or at least thatís been the impact on my bills.
The Weather Normalization Adjustment is supposed to reduce big weather-driven changes, but other factors such as the construction of a home go into the equation.
The problem is that the way the program works, power bills are no longer directly tied to power use. While customers are expected to save money over the long run, the program can raise their bills when they least expect it.
SCE&G says the adjustments have saved customers tens of millions of dollars, and state regulators agree that customers benefit. But the adjustment was implemented as part of a rate increase plan, so any savings are savings subtracted from higher rates.
Whatís troublesome for customers is the unpredictability of the adjustments. Thereís no way for a customer to calculate how they will change their bill from one month to the next, because itís based on complex statistics and calculations that vary by customer.
Take my bills, as an example of how the adjustment can work out.
SCE&G tells me I have saved $43 over the past two years, or 24 billing cycles, since the program began. But a close look at my bills also shows that in 2012, Iíve paid the utility $84 more than I would have otherwise.
My three highest bills this year each were increased by at least $20 due to the weather adjustments, and that extra $84 Iíve paid so far this year comes in addition to a 5 percent increase in the base electric rate.
The stated purpose of the adjustment program is to smooth out big changes in electric bills due to weather and unexpected usage, and it appears to have done that. When my power consumption dropped sharply in January, due to mild weather, SCE&G charged me nearly as much as they did the previous January, when I used 46 percent more power.
The weather factor lowered the higher bill and raised the lower bill, so SCE&G got paid nearly the same amount each January despite a huge change in my power use. Itís clear the utility benefits from having a more predictable stream of revenue, and they say customers benefit as well.
But while SCE&G may want the predictability of being paid about the same regardless of how much power I use, this deal doesnít seem to have worked in my favor.
Consider my January-July power bills in the two years before the weather adjustment, and in the two years after it started in August 2010:
2009: $1,346 for 11,478 kilowatts.
2010: $1,450 for 11,837 kw. I used more power, and paid more, than in 2009.
2011: $1,354 for 11,161 kw. I used less power than in 2009, but paid more.
2012: $1,362 for 9,229 kw. My power use plunged, my bills went up.
And SCE&G tells me I saved money.
So, if youíve been wondering what in the world is going on with your SCE&G electricity bills this year, now you know. Iím not usually one to bite the hand thatís offering me a discount, but next time, Iíd rather just have a smaller rate hike.
Reach David Slade at 937-5552 or Twitter @DSladeNews.