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11 April -- South Carolina Electric & Gas Co., principal subsidiary of SCANA Corporation, announced that the South Carolina Public Service Commission (PSC) approved an adjustment in the fuel component of customer rates that will allow SCE&G full recovery of costs incurred in purchasing fuel to operate its electric generation facilities. Beginning in May, the monthly electric bill of a 1,000-KWh residential customer will increase $2.61 -- or 2.68 percent -- going from $97.34 to $99.95.
The approved adjustment is the result of a settlement agreement among the South Carolina Office of Regulatory Staff (ORS), South Carolina Energy Users Committee, CMC Steel South Carolina (formerly known as SMI Steel) and SCE&G.
The PSC annually reviews SCE&G's electric fuel costs and authorizes the company to adjust base rates either upward or downward to reflect those costs. Fuel costs are a direct pass-through to customers; SCE&G cannot, and does not, earn a profit on that portion of its rates.
The cost of natural gas used in electric generation increased substantially over the past 12 months and coal prices remained high -- nearly twice what they were in early 2003. As a result, SCE&G's under-recovered fuel costs for the past 12 months totaled nearly $38.5 million. The agreement approved by the PSC will reduce the immediate impact on customers by spreading SCE&G's recovery of that amount over a two-year period. SCE&G will be allowed to collect interest on the deferred collections.
"We're pleased that the Commission approved the settlement agreement," said SCE&G President Neville Lorick. "We realize that fuel costs have a direct impact on our customers. That's why we work so hard to obtain reliable supplies of fuel at the lowest possible cost and to operate our plants efficiently. SCE&G runs some of the most efficient electric generating plants in America."
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