Relief for SCE&G customers possible right now

Relief for SCE&G customers possible right now

February 21, 2018

South Carolina General Assembly
State House
Columbia, SC

Re: Relief for SCE&G customers possible right now

Dear Legislator,

In the Post and Courier’s most recent story on the plight of SCE&G consumers (“SCANA customers might be forced to pay another $370 million before utility regulators can act”), reporter Andrew Brown correctly points out that the ratepayers will pay a significant price while we wait for the Legislature and Public Service Commission to find a solution to this vexing problem.

The South Carolina Small Business Chamber of Commerce supports the Office of Regulatory Staff’s (ORS) petition to immediately roll back all the rate hikes under the Base Load Review Act (approximately 18% of the SCE&G customers electric bill) until the issue of the constitutionality of the Base Load Review Act is resolved. A ruling on that petition has been delayed allowing ORS to conduct a detailed financial analysis of SCE&G’s ability to withstand the loss of this revenue.

We also support the legislature taking more time to thoroughly study the issue to arrive at the best permanent decision for the benefit of the ratepayers and state.

However, there is no need to force the SCE&G ratepayers to continue to pay all the 18% higher rates until the regulatory and legislative process is finalized.

On January 30, 2018, we had recommended that the PSC reduce SCE&G electric rates by 3.5% until an expanded ORS financial audit enabled the PSC to rule on that petition. The logic of this recommendation was very simple.  SCE&G had already proposed reducing its electric rates by 3.5% back in November to resolve this issue.  Thus, the utility had already admitted that the loss of this revenue would not pose a significant harm to the company.

On January 31, 2018, the PSC chose not to accept this reduction in rates recommendation.

Then on February 15, 2018, we learned that after SCANA’s 3.5% rate cut proposal was roundly rejected, the utility examined the impact of a 9.75% rate cut (“SCE&G considered cutting electric rates nearly 10 percent before taking Dominion deal”).

According to that story by the Post and Courier’s Thad Moore:

Internally, SCANA described that rate cut as the biggest it could afford. In the documents filed Wednesday, it said the previously undisclosed plan “would provide the largest reduction in electricity rates it could on a stand-alone basis” before being dinged by credit-rating agencies.

The Senate at this time has House Bill 4375 which instructs the PSC to enact experimental rates that essentially would roll back all the 18% of the rate increases under the Base Load Review Act until a future date.

The Senate should take immediate action to debate and pass H.4375 as is or amend it to instruct the PSC to rollback SCE&G electric rates by 9.75%, the rate decrease SCANA has itself determined would not cause subsequent cascading events leading to bankruptcy.

In doing so, and if agreed to by the House, SCE&G customers would quickly receive a much deserved, significant rate reduction. There is no reason to delay reducing the average ratepayer’s monthly bills by 9.75%.  There is no reason to force SCE&G ratepayers to continue to pay unfair rates for 10 months or possibly longer.


Frank Knapp Jr.
President & CEO