SCANA (NYSE: SCG) utility subsidiary South Carolina Electric & Gas has filed a request with the Public Service Commission of South Carolina and the South Carolina Office of Regulatory Staff for an overall 2.78% increase to its approved electric rates under provisions of the state Base Load Review Act (BLRA).
SCE&G and state-owned utility Santee Cooper are jointly building two nuclear electric-generating units at the site of the V.C. Summer Nuclear Station near Jenkinsville, S.C.
The company filed a quarterly progress report on the nuclear units with the state PSC on May 15. The 68-page report covers the first quarter of 2015.
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 said in a May 29 news release.
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 $1bn, which is passed on to ratepayers, SCANA said. The utility estimates this will save its customers approximately $4 billion in electric rates over the life of the new units.
If the PSC approves the May 29 filing, SCE&G’s approved electric rates would increase in October as follows:
- 2.8% for residential customers (the monthly bill of a customer using 1,000 kilowatt hours of electricity would increase $4.01, going from $145.87 to $149.88);
- 2.9% for small commercial customers;
- 3% for medium commercial customers; and
- 2.6% for large commercial/industrial customers.
In late 2014, SCE&G received preliminary information from the consortium of contractors, led by Chicago Bridge & Iron (NYSE: CBI) and Westinghouse Electric, which predicts the units won’t be finished as soon as earlier predicted. The latest contractor estimate says that Unit 2 is now expected to occur by June 2019 and that the substantial completion date of Unit 3 would be expected approximately 12 months later. But the delay would not yet imperil either unit from qualifying for a production tax credit (PTC) for new nuclear plants.
Said the May 29 application: “SCE&G states that as of June 30, 2015, it will have invested $596,541,000 in the construction of the Units that is not reflected in current rates. In its Request, SCE&G seeks authorization to revise its current schedules of electric rates and charges to add the incremental revenue requirements related to the above-stated amount of investment.”