Summer 2007 - SCANA Corporation

A message for our
customers
SCE&G filed an application June 15 with the Public
Service Commission of South Carolina requesting an
overall 6.75 percent increase in retail electric base
rates — the company’s first such request since 2004.
If approved, the monthly bill of a residential
customer using 1,000 kilowatt hours of electricity
would increase $7.62 beginning in January 2008.
The company also filed for an overall 1.33 percent
increase to natural gas rates under the terms of the
Natural Gas Rate Stabilization Act.
That request, if approved, would go into effect in
November; residential customers would pay about
$19.70 more a year for natural gas based on average
annual usage.
Public hearings on both requests will be held in
the fall.
SCE&G President and Chief Operating Officer
Kevin Marsh said electric rates are going up because
the company’s cost of serving customers safely and
reliably has gone up.
“The only reason we would ever go in for a rate
increase is because we think it’s essential to our
ability to continue providing our customers with safe,
reliable service,” said Marsh.
BUILDING AND MAINTAINING THE SYSTEM
Marsh said there are a number of key issues
driving the electric rate request, not the least of
which is a substantial increase in costs associated with
building and maintaining SCE&G’s transmission and
distribution system. He said the company has spent
more than $300 million in this area since 2004.
“Our efforts to support the state’s rapidly rising
demand for power have included placing more than
52,000 new poles in the ground; completing nearly
50,000 new service installations; installing more than
20,000 street lights; and adding more than 1,000 miles
of line to our system,” said Marsh.
“Unfortunately, the cost of materials associated
with all that infrastructure — the steel in our
transformers and meters, the copper in our conductors,
the power poles we put in the ground — has risen
tremendously. We’ve seen a 30- to 45-percent increase
in the costs of underground and overhead transformers
and pole hardware since 2004. Wire and cable is up
about 170 percent for that same period.”
Marsh said SCE&G also has made major capital
investments in its generating plants, particularly in the
area of environmental upgrades. “We’ve invested more
than $100 million in clean air technologies at our coalfired
generating plants since our last rate case,” he said.
“While we are certainly committed to conducting
business in an environmentally responsible manner and
to meeting all local, state and federal environmental
requirements, it’s important to understand that there
is a significant cost associated with meeting that
commitment.”
Some have asked whether this rate case includes any
costs associated with SCE&G’s announced plans to build
a new nuclear plant. Marsh said new generation is not
a part of this rate case, and that recovery of any costs
related to construction of a new nuclear plant would be
handled through future rate proceedings.
SCE&G SYSTEM GROWTH & EXPENSES SINCE 2004
$300 million 48,277 30-45 $100 million
Dollars spent on building
and maintenance costs for
SCE&G’s transmission and
distribution system.
New service installations
since last rate case.
Percent increase in costs of
underground and overhead
transformers and pole
hardware.
Invested in clean air
technologies at SCE&G’s coalfired
generating plants.
2 INSIGHTS • SUMMER 2007