SCE&G wants quick ruling on its rate increase request

By Ben Werner, The State

October 30, 2004

SCE&G is anxious for a quick decision on its request to raise electric rates in January.

The utility is slated to present its case Monday before the S.C. Public Service Commission. A decision is expected before the year ends.

SCE&G wants to increase electric rates by 3.56 percent or about $51.1 million. For the average household, that works out to $4.88 extra each month. Initially, SCE&G asked for a 5.66 percent hike but lowered that request after reaching a settlement with the commission staff.

By law, the commission has to grant SCE&G a rate case when asked. It also has to reach a decision within six months of the request.

This year, SCE&G timed its request so a decision would arrive just before it closes its financial book on 2004.

Since the company’s annual meeting last April in Charleston, SCE&G’s parent, SCANA Corp., has told investors and analysts to be patient and that a new rate structure and other plans will be in place by Jan. 1. SCE&G is seeking permission to:

• Use tax credits to cover the $275 million Lake Murray dam project

• Use a base rate increase to cover the cost of building a $450 million power plant in Jasper County.

Without a decision, SCANA starts 2005 with these questions still hanging over its financial reports and the general mood of analysts and investors.


Friday, the commission considered the role of Scott Hempling, a Maryland attorney and utilities industry expert hired for the upcoming rate case.

The commission will pay Hempling $225 an hour to help a depleted legal staff that advises the commissioners.

The move was encouraged by the state Regulation of Public Utilities Review Committee, according to a statement released by George Dorn, the commission’s interim executive director.

Outside legal counsel was sought “so that neither the commission nor the office of regulatory staff would be hobbled in the completion of their duties,” Dorn’s release stated.

S.C. Attorney General Henry McMaster approved the hire, but SCE&G officials balked at an outside expert, prompting Friday’s meeting.

Cathy Love, a SCE&G spokeswoman, described the utility’s objection as a legal matter concerning Hempling’s ability to practice law in South Carolina.

Instead, Love said, SCE&G preferred a proposal floated by the commission’s remaining lawyer, Jocelyn Boyd. Instead of taking an active role during the hearing, Hempling basically would watch the week’s worth of testimony and only help Boyd with the wording of the commission’s final ruling.

Commissioners sided with SCE&G, despite arguments from other state officials that Hempling could have an expanded role.

The commission sought outside help because one of its attorneys has joined a new state agency that will start reviewing rate cases in January. Another attorney is in Afghanistan with the National Guard.

Frank Knapp Jr., chief executive of the Small Business Chamber of Commerce, sees SCE&G’s desire for a speedy decision differently.

Knapp opposes SCE&G’s request and thinks the utility is more interested in muscling through a rate hike to its liking before it has to undergo tough regulatory scrutiny after the first of the year.

Otherwise, he said, SCE&G would not have opposed the hiring of Hempling — a move designed to make sure the commission could process the utility’s rate case in a timely manner.

“This was a very good strategy by SCE&G to basically overpower with resources and expertise to overwhelm the Public Service Commission staff,” Knapp said. “The (commission) staff has already admitted the legal staff has been depleted.”

Love stressed that financial reporting requirements are driving SCE&G’s desire to have its rate case settled before the year ends.


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