South Carolina Electric & Gas Co. has asked for a nearly 3 percent rate increase that would start this fall for almost 700,000 customers, the seventh hike linked to the construction costs of two new nuclear reactors.
If approved by the state Public Service Commission, the typical residential customer’s electricity bill will rise by $4.01 in November, Eric Boomhower, spokesman for SCE&G and its parent company, Cayce-based SCANA Corp, said Monday.
A 2.8 percent boost would increase monthly bills to $149.88 from the current $145.87 for homeowners who consume 1,000 kilowatt hours per month, he said.
Commercial customers would see increases that range from 2.6 percent to 3 percent, depending on how much power they use, according to the request filed Friday with state regulators. Altogether, some 692,000 electricity customers would be affected, Boomhower said.
Annual increases related to construction of the reactors, at the V.C. Summer Nuclear Station near Jenkinsville in Fairfield County, are likely to continue, the spokesman said.
“These increases will occur whether the final project cost comes in above or below our initial forecast,” Boomhower said. “It’s about recovering financing costs, not construction costs. Recovering financing costs while construction is ongoing, as opposed to waiting until the project is complete, saves our customers billions of dollars over the life of the plant.”
SCE&G projects the construction savings will be $1 billion and the savings in electricity rates to customers will be $4 billion.
The cost of the two reactors – still four to five years from completion by the latest calculations – are projected to be $514 million more than initially forecast, according to the company’s figures. The latest projected price tag is now $6.8 billion.
State law allows utilities to ask for yearly rate hikes to offset the financing costs of plant construction. “It’s the law ... that provides for the ability to make these annual adjustments to rates to recover the financing costs,” the spokesman said.
The Public Service Commission has until Sept. 30 to decide if it will approve a rate hike and its size.
So far, SCE&G has requested and been granted six increases for the financing of the new Summer reactors: 1.5 percent in 2009; 2.3 percent in 2010; 2.4 percent in 2011; 2.3 percent in 2012; 2.87 percent in 2013; and 2.82 percent in 2014, the spokesman said.
All have taken effect in the fall. The law allows for utilities to make the requests in May. It takes several months for regulators and customer advocates to review, debate and settle on the size of increases, Boomhower said.
The Summer-related hikes exclude increases that totaled 4.88 percent that began in June 2010 and were implemented in three stages, Boomhower said. That increase was tied to complying with mandated environmental and safety initiatives, respectively, according to published reports.
Overall, SCE&G electricity rates have increased 27.7 percent since 2009, Boomhower said. The company has had two rate reductions during that period.
Reach LeBlanc at (803) 771-8308.
Reactor cost rate hikes
SCE&G customers have paid six times for the construction cost of two nuclear reactors being built at the V.C. Summer plant in Fairfield County. A seventh rate hike could be approved this fall.
▪ The first rate hike was 1.5 percent in 2009
▪ The latest could be 2.8 percent
Paying for construction costs
The rate increases tied to the expense of the two new nuclear reactors have been:
2009: 1.5 percent
2010: 2.3 percent
2011: 2.4 percent
2012: 2.3 percent
2013: 2.87 percent
2014: 2.82 percent
2015: 2.8 percent (1)
(1) Requested, not approved
SOURCE: SCANA Corp.