SCE&G customers to see lower electric bills starting in May

Some South Carolina Electric & Gas Co. customers can expect to see lower power bills beginning in May, as a result of lower costs in producing electricity, the utility said Wednesday.

Electricity customers can expect an average bill drop of $6.74 starting next month, because the cost of fuels needed to generate and purchase power for its customers has decreased, SCE&G said.

For the average residential customer who uses 1,000 kilowatt hours of electricity each month, their 30-day bill will fall from $149.58 to $142.84, the company said.

There is more good news, the utility said.

The electricity cost decrease should be enough to offset this year’s projected annual electric rate increase that will still be sought by SCE&G, and if approved, be used to offset the finance costs of the nuclear construction that is underway at the V.C. Summer Nuclear Station in Fairfield County.

The S.C. Public Service Commission approved the 4.5 percent rate decrease on Wednesday, at the request of SCE&G, according to the utility.

“Our efforts to ensure a balanced and diversified fuel mix have contributed to a downward trend in our fuel costs,” said Steve Byrne, SCE&G chief operating officer. “We’re pleased to pass those lower costs on to our customers.”

The annual electric rate increase has not been fully determined yet, Bryne said. “But we anticipate our customers will be paying no more for their electricity at the end of the 2016 than they were at the start of this year, and perhaps even less.”

Included in the monthly electric rate decrease, is a $.34 monthly increase charge the public service commission also approved on Wednesday, that allows SCE&G to recover costs incurred promoting the utility’s energy efficiency programs.

On electric customers’ monthly bills beginning in May, they should see a new line item charge labeled, “Renewable Energy Resources,” reflecting the $.34 monthly charge. That charge is covered in the $6.74 monthly decrease electric customers will begin seeing, SCE&G said.

For at least seven consecutive years, SCE&G, the principal subsidiary of SCANA Corp., has sought and been granted approval to raise electric rates under the state’s Base Load Review Act to retire finance costs of the construction of two new reactors at the Summer station.

Those rate increase requests are normally made each May and approved by the PSC in the fall. The practice, which so far has withstood widespread criticism and review, is designed to lower the costs of constructing the now $11 billion plant expansion.

SCE&G says the practice will save its customers $4 billion in rates over the life of the new nuclear reactors by reducing the interest that would be owed on the project. The reactors had an initial cost of $9.8 billion, but delays and problems in fabricating parts has been blamed for inflating the cost of the project by about $1.2 billion.

“Gas prices are down, so they were able to seek a reduction in the rates due to the fuel (natural gas and other fuels used to generate electricity),” said Dukes Scott, executive director of the South Carolina Office of Regulatory Staff, which is charged with representing the public interest of South Carolina in utility regulation for the major utility industries before the PSC.

“We review (SCE&G rates) every year, but for the last several years there have been increases rather than reductions,” Scott said. “This is good.”

This story was originally published April 20, 2016 at 6:22 PM with the headline "SCE&G customers to see lower electric bills starting in May."