South Carolina Electric & Gas Co., principal subsidiary of SCANA Corp. (NYSE: SCG), filed with the Public Service Commission of South Carolina and the South Carolina Office of Regulatory Staff for an overall 2.5 percent increase to its approved electric rates under provisions of a state law known as the Base Load Review Act, or BLRA.
The BLRA effectively reduces the cost of building nuclear power plants in South Carolina by allowing the state’s regulated utilities to adjust rates annually during construction of such plants to recover related financing costs.
SCE&G and state-owned utility Santee Cooper are building two nuclear electric-generating units at the site of the V.C. Summer Nuclear Station near Jenkinsville, S.C. The first unit is expected to begin commercial operation in 2017, the second in 2018.
Paying financing costs while construction is ongoing, as opposed to waiting until the project has been completed, lowers the cost of building the new units by about $1 billion, which in turn reduces the amount customers will pay through rates for such things as the cost of capital, depreciation, property taxes and insurance associated with the project.
SCE&G estimates this will save its customers at least $4 billion in electric rates over the life of the new units.
If the PSC approves today’s filing, SCE&G’s approved electric rates would increase in October as follows:
- 2.69 percent for residential customers (the monthly bill of a customer using 1,000 kilowatt hours of electricity would increase $3.57, going from $131.78 to $135.35)
- 2.55 percent for small commercial customers
- 2.46 percent for medium commercial customers
- 2.28 percent for large commercial/industrial customers.