Critic: SCE&G builds profits into rate hikes

Lexington County Chronicle
August 20, 2015

S.C. Electric & Gas has no incentive to rein in costs.

That’s because it built an 11% profit into it rates.

That’s the view of Teresa Arnold, state director of the AARP (American Asociation of Retired People).

She said SCE&G rates from two new nuclear power plants are hurting thefixed-income families she represents, many of whom will never use power from the nuclear plant they are paying to build.

SCE&G wants a 2.8% increase, part of a decade-long series of rate hikes it says it needs to help pay for construction of two new reactors at the V.C. Summer Nuclear Station — a $10 billion project scheduled for completion in June 2020.

If approved, this would mean SCE&G has increased customers’ bills by more than 31% since 2008.

This amounts to nearly $36 more for each 1,000 kilowatt hours used.

Arnold said the commission has rubber-stamped annual increases without considering whether “this current process for financing power plants remains the most economic path.”

State lawmakers should review SCE&G’s financing to see if it really is saving money, said S.C. Small Business Chamber of Commerce CEO Frank Knapp said.

In a news conference, Knapp said that:

• The plan may only be a way for the power company to pass costs it should absorb on to its customers.

• Lawmakers need to change state law to give SCE&G customers “some needed relief.”

• High electricity rates have cost local jobs and harmed small businesses.

“SCE&G small business customers are losing twice. Their electricity bills are higher than expected and their customers have fewer dollars to spend with them.”

SCE&G responds that the state already reviews the project’s finances and proposed utility rate increases, all of which are available for public review.

But Knapp said he’s not convinced the financing method — under a state law called the Base Load Review Act — is fair to consumers, including the business owners he represents.

“At what point would it be in today’s customers’ interest to cease the funding of ongoing construction financing costs and approval of cost overruns and instead require SCE&G to complete the construction on its own dime and then ask the state’s Public Service Commission for the appropriate rate increase?” he asked.

“There is and has been only one loser for the past and future delays and added costs — the ratepayers,” Knapp said.

Eric Boomhower of SCE&G said the state looks out for consumers through reviews conducted by the Office of Regulatory Staff, which represents the public in utility matters.

That office is not opposing SCE&G’s latest proposed rate increase, which could be approved next month.



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