SCE&G's latest rate hike request aimed at helping to pay for new nuclear units
The surge of price hikes requested by South Carolina Electric & Gas keep on coming.
If approved, this is how the latest rate hike would affect SCE&G's customers:Residential: 3.1%Small commercial: 3.04%Medium commercial: 3.07%Big commercial/industrial: 2.66%Rate hikes over past 5 yearsJan. 2008: 5.4% base rateMarch 2009: 0.4% base rate (nuclear units)Oct. 2009: 1.1% base rate (nuclear)July 2010: 2.3% base rateOct. 2010: 2.6% base rate (nuclear)June 2011: 0.1% base rateAugust 2011: 1.6% base rateOctober 2011: 2.5% base rate (nuclear)May 2012: 0.5% fuel adjustment and base rateAug. 2012: 0.9% base rateOct. 2012: 2.5% base rate (nuclear)Jan. 2013: 1.38% base rateFuture projected rate increases and decreases related to the nuclear project. They generally take effect in October.2013: 2.97%2014: 5%2015: 4.7%2016: 2.9%2017: -0.3%2018: -1.0%Source: SCE&G
Since 2009, SCE&G raised its electric rates five times to help pay for its share of the $10 billion in construction costs for two new nuclear units being built north of Columbia.
Now, as it had warned several years ago, the Cayce-based subsidiary of SCANA Corp. is up for another rate increase, one of several more to come through 2018.
The utility is asking the state Public Service Commission to OK an overall 2.97 percent increase in rates to raise an additional $70 million a year.
If approved, the monthly bill residential customer uses would rise 3.1 percent, or $4.32, for every 1,000 kilowatts used, to $142.43. That's almost $52 a year. Commercial and industrial customers would also see their bills go up.
The rate hike would take effect in October. SCE&G serves about 673,000 electric customers across South Carolina. About half of those are in the Charleston area.
Homeowners and businesses said it's another hit from an industry with no competition.
Palmetto Moon gift shop co-owner Bob Webster is both an SCE&G customer at home and at his string of stores in the Charleston area.
“No one likes to have rate increases,” Webster said. “We don't have an option, do we? If the rate increase goes through, we'll have to pay it. You can't run a business without electricity.”
Bob Ellis Shoes owner Barry Kalinsky said the King Street shop in downtown Charleston has tried to adopt energy savings where possible, but he believes the proposed rate increase will cut into his efforts.
He said SCE&G offered “a rebate program where if you changed your incandescent lights to LED lights, they'll rebate you the cost. It was $300 a month less.”
With no way to control price hikes, Kalinsky has tried different ways to lower his utility bill, including raising the air conditioner thermostat to 76 degrees at closing time, putting timers on the lights and using the LED bulbs that don't produce heat.
“It does sound like the money I'm saving in a rebate is coming back to them in a rate increase,” Kalinsky said.
The proposed rate hike is part of the annual increases of about 2.5 percent spread over 10 years to help pay for the cost of building two new nuclear reactors at the V.C. Summer Nuclear Station north of Columbia. SCE&G jointly owns the nuclear power plant with state-owned Santee Cooper.
The new reactors are scheduled to go online in 2017 and 2018.
Paying financing costs while construction is ongoing, as opposed to waiting until the project has been completed, lowers the cost of the new units by about $1 billion, according to SCE&G.
The investor-owned utility estimates the pay-as-you-build plan will save customers about $4 billion in electric rates over the life of the new units. A spokesman for the Nuclear Energy Institute agreed.
“When you have pay-as-you-go, the overall cost savings are significant,” said Mitch Singer of the Washington, D.C.-based organization. “It's like not having a lump sum payment on a mortgage. You are paying interest and principal as you go along.”
A similar payment method is being used for the Plant Vogtle nuclear expansion in Georgia, Singer said. Other states allow the pay-as-you-go plan as well.
Rates for SCE&G customers have jumped 12 times over the past five years. Five of those were connected to the nuclear units. The others were general rate hikes, including one in January that averaged 1.38 percent.
That increase and others helped boost profits for SCE&G's parent company by $30 million in the first quarter, the utility reported in April.
Nicholas Watson of The Post and Courier contributed to this report.
Reach Warren L. Wise at 937-5524 or twitter.com/warrenlancewise.