News

Utility seeks rate hike to help pay for reactors

COLUMBIA, S.C. (TheĀ  Associated Press) - Jul 30

> South Carolina's largest private utility is seeking a 1.1 percent
> rate hike starting with October's bills to help pay the financing cost
> of building two nuclear reactors.
>
> It would be South Carolina Electric & Gas Co.'s second rate
> increase this year for construction on the two, 1,100-megawatt
> reactors at the V.C.
> Summer Nuclear Station near Jenkinsville. The company expects the
> first reactor to generate power by 2016, and the second in 2019.
>
> Customers would see an increase of $1.31 monthly per 1,000
> kilowatt hours.
>
> "Based on our audit, the company would be entitled to the
> additional revenue under the law," said Dukes Scott, executive
> director of the Office of Regulatory Staff, which released the report
> Thursday.
>
> The state Public Service Commission will decide in September
> whether to approve the increase.
>
> The request follows a 0.4 percent increase that began with March
> bills and equaled 48 cents per 1,000 kilowatt hours. That was included
> in the commission's approval of the project in February. Such rate
> hike requests will come annually going forward.
>
> Appeals of the roughly $11 billion project are before the state
> Supreme Court.
>
> The environmental group Friends of the Earth says the state
> Public Service Commission did not adequately consider alternatives -
> notably energy conservation and efficiency programs - before giving
> approval.
>
> The group also says the law allowing utilities to collect money
> upfront to pay for the reactors' financing is unconstitutional. Tom
> Clements, a nuclear campaign coordinator with the group, said it may
> also formally oppose the rate hike request.
>
> The company has said customer rates will go up roughly 2.5
> percent yearly for the next 10 years to help pay the financing cost
> for SCE&G's portion of the project. The two reactors will be jointly
> owned and operated with state-owned utility Santee Cooper. The
> utilities already operate one reactor at the nuclear station about 25
> miles northwest of Columbia.
>
> SCE&G's current request up for approval came in below the
> forecast 2.8 percent due to a drop in construction costs, said SCE&G
> spokesman Robert Yannity.
>
> "We're asking customers to pay a little bit each year rather than
> a huge rate increase at the end of the project," Yannity said. "This
> allows us to collect money ahead of time to pay off interest so we're
> not having extra interest accumulate over time."
>
> He compared the method to a family saving interest by paying off
> a mortgage early. The company estimates it will save customers about
> $1 billion.
>
> SCE&G's electric rates have also risen this year to cover the
> utility's higher costs for coal and rail transportation. The 2.44
> percent rate increase in May equaled $2.80 monthly per 1,000 kilowatt
> hours.
>
> Also on Thursday, SCE&G's parent company, SCANA Corp., reported
> second quarter earnings of $55 million, compared to $57 million in the
> second quarter of 2008.