Businesses oppose SCE&G rate hike

Businesses oppose SCE&G rate hike

By Dave L’Heureux, Staff Writer

Business leaders say they will oppose the double-digit electric rate increases SCE&G wants to impose on small- and medium-size firms next year.

South Carolina Electric & Gas Co. proposes an average 14 percent increase on small companies within its territory.

Medium-size businesses, such as supermarkets, would pay an average 12 percent more, while large industrial customers would face nearly 5.4 percent increases.

SCE&G says the rate increases will help cover the costs of boosting generation capacity and reducing plant effluents.

The Public Service Commission will hold a public hearing Nov. 18 about the rate increase.

PSC executive director Gary Walsh said the commission will take into account the rate impacts on both businesses and residents before deciding how to handle the SCE&G request.

Some business leaders say they will attend the hearing to oppose the rate increase. They say many companies will have trouble paying double-digit rate increases while the economy remains slow.

“With manufacturing struggling, we have to question the timing of these increases,” said Todd Atwater, president of the S.C. Manufacturing Alliance. Its 80 members include some of the state’s largest manufacturers, including BMW and Michelin.

Executives of the S.C. Small Business Chamber of Commerce say they will challenge the proposed SCE&G rate increases.

“It seems to me that SCE&G should be going to its customers only as a last resort,” said Tim Wilkes, president of the chamber.

Wilkes, an accountant and former state representative, said SCE&G should cut corporate and administrative costs before raising its customers’ electric costs.

“Businesses have a hard enough time paying their bills now,” he said.

Frank Knapp, who owns an advertising agency in Columbia, said many small businesses cannot easily pass on increased costs to their own customers.

Knapp, who also is executive director of the Small Business chamber, said he paid $1,100 in July to power his 5,000-square-foot office building at 1717 Gervais St.

A 14 percent electric rate increase would boost that summer cooling bill by another $150.

“I have other businesses in my building on long-term leases, so I can’t just charge more because my electric bill goes up,” he said.

An expert in air conditioning systems said many small firms could lower their bills by simple maintenance.

“Cooling costs go up when you fail to change (air conditioning) filters and clean the refrigerant coils,” said Mickey Lawler, owner of 2nd Wind, an air conditioning and heating firm in Columbia.

Lawler said his own 10,000-square-foot office on 6130 Shakespeare Road pays $1,600 to $1,700 in monthly utility bills during the summer. A 14 percent electric rate increase could boost that monthly bill by roughly $225.

SCE&G, a division of SCANA Corp., said Aug. 6 that the rate increases could bring in an extra $105 million or more per year. The company also hopes to raise another $150 million by issuing new stock in the fall.

The division, which serves about 550,000 customers in South Carolina, would use most of the extra revenues to generate more electricity.

The company said it needs to raise rates because it plans to spend:

• $248 million to expand and run its Urquhart Generating Station near North Augusta;

• $277 million to build its 875-megawatt Jasper Generating Station near Hardeeville;

• $222 million to cover environmental improvements at other power plants.

“These projects are bringing critical new generation supply to our system to ensure reliable and adequate power for the next 10 years,” SCE&G president Neville Lorick said at the time.

The company uses complex formulas to determine what it charges its business customers, said John R. Hendrix,SCE&G’s supervisor for electric pricing and rate administration.

“These classes (of business customers) are very, very diverse,” Hendrix said. “They take service under a wide range of rates, which vary by usage patterns and amount of (power) consumption.”

As a result, SCE&G can supply no “average” cost per kilowatt-hour for its business customers.

By comparison, SCE&G says an “average” residential customer using 1,000 kilowatt-hours per month would pay $88.57 per month under the new rates, which would increase residential electric bills by 7 percent.

Business customers concerned about future electric rates should call SCE&G for more information.