South Carolina Electric & Gas customers will see a rate increase of about $4 per month beginning in October to help pay the financing costs of construction of two new nuclear reactors.
The increase was approved Wednesday by the state Public Service Commission, which sets rates for investor-owned utilities like SCE&G, a subsidiary of Cayce-based SCANA Corp.
The increase was approved under the state’s Base Load Review Act, which lets investor-owned utilities charge customers for the financing costs of new construction while a project is being built. SCE&G says the pay-as-you-go method ultimately will save customers $1 billion in financing costs and $4 billion in lower rates during the life of new units at the V.C. Summer Nuclear Station in Jenkinsville.
Opponents have complained that the state law puts an unfair burden on low-income and elderly customers and forces customers to pay for something they might never use.
“The law needs to be amended to better protect the consumer and to get SCE&G customers financial relief,” Frank Knapp, CEO of the S.C. Small Business Chamber of Commerce, said in a statement. The group has formed “SCE&G Enough is Enough” to fight further rate increases, saying the Base Load Review Act “is not holding SCE&G accountable.”
The state Office of Regulatory Staff, which represents the public’s interest in utility regulation, has agreed to conduct an independent analysis of the law to see if it benefits consumers more than traditional financing methods, in which the costs are paid after construction is finished. The latest 2.8 percent rate increase applies to residential customers.
Industrial and commercial customers will see increases of between 2.6 percent and 3 percent depending on their size.
This is the eighth rate increase associated with the nuclear plant since the project started in 2009, and it comes on top of seven additional general rate increases.
All told, SCE&G has increased residential rates by an average of nearly $36 per month for a household using 1,000 kilowatt hours of electricity.
Moncks Corner-based Santee Cooper, which owns 45 percent of the Midlands nuclear plant, is using traditional financing for its part of the total $10 billion construction bill through the sale of $3.6 billion in bonds.
The state-owned utility is now considering rate increases to help pay financing costs for those bonds. More bonds could be sold before construction is finished.
The nuclear plant expansion originally was scheduled for completion in 2016, but the project now is three years behind schedule and about $1.1 billion over budget.
SCE&G provides electricity and natural gas to Charleston and Dorchester counties and parts of Berkeley County. It has 692,000 electric customers and 342,000 natural gas customers statewide.
Reach David Wren at 937-5550 or on Twitter at @David_Wren_