South Carolina Electric & Gas is asking for a roughly 3 percent rate hike to help pay for two new nuclear reactors that the Cayce-based utility is building in Fairfield County.
A customer using 1,000 kilowatt hours a month would see his or her bill increase by about $4.32 to $142.43 a month if the rate hike is approved, the utility said. That comes out to an added $51.84 a year.
The energy company is asking the state’s Public Service Commission to approve an overall 2.97 percent rate increase. Under the plan, residential customers would see their bills increase by 3.1 percent.
The new rates would go into effect in October.
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Since 2009, annual rate increases to help pay for the construction of the nuclear plants – co-owned by state-owned Santee Cooper utility – have been approved under the Base Load Review Act. Raising rates now to pay for construction costs for the nearly $10 billion nuclear plants at the V.C. Summer Nuclear Station, near Jenkinsville, is intended to reduce the utility’s long-term borrowing costs for the project.
The utility estimates the rate hikes mean it will save $1 billion in financing costs, which will reduce rates for future customers. Consumers are expected to save $4 billion over the life of the units, scheduled to begin operating in 2017 and 2018, according to SCE&G’s estimates.
The need for the new nuclear power plants and the electricity that they produce is questioned by some.
For years, Santee Cooper has been trying to sell off parts of its 45 percent stake in the two plants. The state-owned utility says it no longer expects it will need the plants’ capacity because of waning customer demand. Demand has dropped as the Great Recession slowed South Carolina’s population growth, and businesses and consumers have become more energy efficient. So far, Santee Cooper has been unable to reach a deal to sell any of its stake in the Fairfield plants to other utilities.
SCE&G, meanwhile, says the nuclear-power plants are needed to meet South Carolina’s future energy needs and ensure the state has diversified, clean energy sources.
The Public Service Commission has approved multiple rate hikes in the past four years for SCE&G – to build the nuclear plants, and to pay for increased operating costs and federally required upgrades.
Last November, however, SCE&G gave ground in a rate-hike request amid customer backlash, reducing the increase it asked for by $50 a year for consumers who use 1,000 kilowatt hours a month and accepting a lower profit for its investors.
The latest rate-hike request would boost the monthly bill of a customer using 1,000 kilowatt hours to $142.43. At the beginning of 2010, the bill for that use was $118.79 a month – meaning that customer will be paying $23.64 a month more than three years ago.
Also under the proposal, rate hikes would include:
• 3.04 percent for small commercial customers
• 3.07 percent for medium commercial customers
• 2.66 percent for large commercial and industrial customers
The utility serves about 673,000 S.C. electric customers.