South Carolina Electric & Gas Co. customers on Tuesday blasted a deal the utility cut with a state agency to trim its nearly 10 percent rate hike proposal by about a third.

SCE&G announced late Monday that it signed an agreement with the Office of Regulatory Staff that would trim its proposed 9.52 percent rate increase to 6.55 percent, if the state Public Service Commission gives it its blessing.

The plan provides a $25 million credit to the company's 655,000 electric customers and snips the amount of profit SCE&G shareholders would get from the price hike to 10.7 percent from 11.6 percent.

It also creates a pilot program to address weather-driven spikes in electric bills.

"We agreed to credit customers to recognize that abnormal temperatures created a financial advantage for the company," SCE&G spokesman Eric Boomhower said.

He emphasized that the agreement is not a done deal, that the ORS is just one of many parties involved in the rate case and that the deal must be approved by the PSC.

"There are plenty of opportunities for things to change as we move forward," Boomhower said.

But some critics of the requested rate increase said the company intentionally asked for more than it needs with the expectation that the approved amount will be sufficient.

"They over-ask and then negotiate down," said Robert Johnston, an executive vice president with The InterTech Group Inc., a North Charleston company that owns a large stake in a Vermont electric utility. "It's done routinely, and it's not a win for the consumers and businesses in this state. The amount of the proposed rate hike should have been zero to negative in this economic environment."

Boomhower said the rate hike request is justified. It would pay for $1 billion in federal environmental mandates, equipment upgrades, shareholders' returns and other items.

"We can make a sound case for everything that's in there," he said. "We think this will help us strike a balance for the financial health of the company."

Dukes Scott, executive director of the ORS, said he feels the Cayce-based utility asked for more than it expected to get. But he thinks some increase in rates will be granted, and that it should be smaller than 6.55 percent.

Scott emphasized the 6.55 percent figure is SCE&G's, and not the ORS.

The ORS is recommending a roughly 4.87 percent increase spread out over three years: 2.5 percent the first year, 1.2 percent the second and 1.17 percent the third, said Scott, whose agency represents consumers in rate cases.

He added that SCE&G has not received 100 percent of any rate request since 1971. Also, it has never been turned down, and, once, in 1998, it was ordered to decrease rates.

"We have come up with a well-balanced number that will protect the financial integrity of the utility," Scott said.

If the commission accepts SCE&G's latest plan, the average residential customer using 1,000 kilowatt hours of electricity would tentatively see monthly bills rise by about $7.78, or $93.36 a year.

That's about $46 less than the original amount requested, but still not the outright rejection sought by customers in letters and public hearings over SCE&G's rate hike in the midst of a recession.

Some customers said SCE&G hasn't done enough to tighten its belt. The company didn't furlough employees, and it gave bonuses to some workers during the recession.

"They haven't tried hard enough to minimize the increase to do what they have to do," said Ron Follman, president of Legends Owner's Association, a neighborhood organization in Mount Pleasant.

Isle of Palms resident Byron Davis said the higher rates will force prices up for everything. "You can't open a restaurant or make anything without electricity. The cost just gets passed on," he said. "You can't go after the consumer with a vengeance."

Scott of the ORS urged consumers to attend the public hearings because the emotion of the case is not reflected in the documents.

"The public witnesses could have an impact in this case," he said.

The next night hearing is set for Thursday in Graniteville and another at the PSC's headquarters in Columbia on May 24. That's also when the formal rate hearing before the commission begins.

A decision is expected by mid-July.

James Island Public Service Commissioner Eugene Platt testified at a hearing last week that the proposed 9.52 percent rate increase would cost the district about $17,000 a year.

"We will just have to absorb it and look at it again next year when it's fully implemented," he said Tuesday.

He called the request "outrageous."

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