SCE&G customers shouldn’t be surprised that the utility wants to increase their rates.
But it is certainly understandable for them to be angry.
This time, SCE&G has informed the state that it wants to increase rates by 3.1 percent. That’s on the heels of last year’s 2.59 percent hike and hikes ranging from 2.31 percent to 2.82 percent from 2010 through 2014.
SCE&G says it needs still more money for costs related to financing the ongoing construction of two nuclear plants in Fairfield County. Aside from pain in the pocketbook that such an increase would bring, customers resent that construction delays and costs have been allowed to mount — at their expense.
The estimated cost of the facilities has grown from $9.8 billion in 2008 to $14 billion. Why isn’t the utility holding contractors accountable for their work — or lack of it? Why aren’t stockholders taking a hit?
The delays could actually cost even more. SCE&G has budgeted under the assumption it will receive a federal tax credit for electricity produced by new nuclear power plants. But to qualify for it, a new nuclear power plant must be in service by Dec. 31, 2020. The plants are now expected to reach completion in the fall of 2019 and the fall of 2020. That’s cutting it too close.
SCE&G has said that its contract with the project’s new construction company “fixes” costs. Fixing costs would have made sense from the onset of the project. But then the S.C. Office of Regulatory Staff is skeptical about whether even the new deal will fix all costs.
It doesn’t help customers feel any better toward SCE&G that in April it announced its intention to charge customers annually an additional $9.96, on average per household, so that its employees’ pension plans will continue to grow.
It wouldn’t be the first time. In 2012 the S.C. Public Service Commission (PSC) said SCE&G could charge extra money to cover shortfalls in its pension plan.
These hikes despite the reality that only 17 percent of the largest companies in the U.S. still have pension plans — and most are phasing them out.
That same PSC will decide whether the utility can raise rates.
Let’s hope the PSC will apply necessary scrutiny this time to make a sound decision that assures SCE&G’s ability to provide dependable power to its customers without penalizing those customers unduly — and repeatedly.