SCE&G Agrees to Smaller Rate Hike

Published on November 28, 2012

By EVA MOORE, Free Times

Electric bills will probably go up soon — but not by as much as South Carolina Electric & Gas Co. originally requested.

The utility company wanted to raise its base rates by 6.61 percent. But under a new agreement reached with state auditors and groups that opposed the hike, the company will ask for an overall increase of 4.23 percent. Add in a lower fuel cost the company will pass on to customers, and the average rate would go up by 1.38 percent.

The average residential customer using 1,000 kilowatt hours of power a month would pay an extra $31 a year under the new plan, according to The State.

As Free Times went to press, the Public Service Commission was in the midst of a two-day hearing in Columbia on the rate hike request, including a Tuesday night session. Already, the PSC has held public hearings in Charleston and Graniteville.

The utility’s request has stirred up public anger. Some 150 people attended the Charleston hearing, according to the Post and Courier, and two dozen spoke out — before the new deal was struck. Just three people spoke up at Monday’s daytime hearing in Columbia to oppose the rate hike.

Doris Fletcher, an elderly West Columbia resident, suggested Public Service Commission members come home with her to see how she lives on her small income; alternately, she said, she could go home with one of them.

David McNamee, a West Columbia resident, argued — among other things — that SCE&G should be tightening its belt in this tough economy, and that South Carolina’s system of state-regulated utility monopolies is a bad model.

“Where there is no competition, there is no incentive for price controls,” he said.

Fletcher waved her hand and repeated “Amen” throughout McNamee’s testimony. A representative of the manufacturer Kimberly-Clark also spoke out against the rate hike. The company has a toilet paper-making facility in Aiken County — one of the largest manufacturing plants in North America.

Bill Cummings, who heads Kimberly-Clark’s Energy Supply team, told commissioners SCE&G’s rates are among the highest his company pays.

The company has 23 plants in 17 states; the rates for the Aiken County plant are seventh highest. (Those with higher costs are Kimberly-Clark plants in California, Texas, Oregon and Wisconsin.)

In testimony, an SCE&G executive said rates vary across the country for a variety of reasons, including customer distribution, the mix of power generation sources and other factors.

There’ve been other reasons for public anger, too. As Free Times reported in October, SCE&G included expenses like Zumba classes for employees, and $50 glasses of scotch at board meetings, as justification for the rate hike request.

According to SCE&G, the Zumba classes are part of its employee wellness program, which keeps health care costs down. The alcohol expenditures should not have been included in its filing.

The commission still has to approve SCE&G’s request, but with most interveners agreeing to the new plan, it is likely to pass. Among the groups protesting the hike are Walmart, AARP, the Department of the Navy and Frank Knapp, president of the South Carolina Small Business Chamber of Commerce.

As part of the deal, SCE&G will not ask for any further base rate hikes until January of 2015, unless there are “unforeseen extraordinary economic or financial conditions.”

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