Columbia, SC, April 6, 2005 - South Carolina Electric & Gas Co. (SCE&G), principal subsidiary of SCANA Corporation (NYSE: SCG), announced that the South Carolina Public Service Commission (PSC) today approved an adjustment in the fuel component of base rates that will allow SCE&G full recovery of costs incurred in purchasing fuel to run its electric generation facilities.
The approved adjustment was the result of a settlement agreement among the South Carolina Office of Regulatory Staff (ORS), South Carolina Energy Users Committee, 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 costs prudently incurred in purchasing fuel to run its electric generation facilities. Fuel costs are a direct pass-through to customers; SCE&G cannot, and does not, earn a profit on that portion of its rates.
Approximately seventy percent of SCE&G's electricity is generated through the burning of coal. Transportation and supply pressures, combined with growing international demand, have spurred dramatic increases in coal prices. According to the Energy Information Administration, coal prices have nearly doubled since early 2003, and are up more than 50 percent during the past 12 months. Natural gas and fuel oil costs have also risen.
The agreement approved by the PSC will levelize, over a two-year period, an amount equal to the under recovery of actual fuel costs SCE&G incurred over the past 12 months. Beginning in May, the monthly electric bill of a 1,000-kwh customer will change from $92.40 to 97.34 – an increase of 5.35%, or $4.94.
"We're pleased that the settlement agreement that was entered into was reasonable and that it was approved by the Commission," said SCE&G President Neville Lorick. "We're very sensitive to the impact that fuel costs have on our customers, so we work very hard to obtain reliable supplies of fuel at the lowest possible cost. We also operate our plants at the highest levels of efficiency. SCE&G's power plants have been recognized among the most efficient coal-fired generating plants in the United States."
SCE&G is a regulated public utility engaged in the generation, transmission, distribution and sale of electricity to approximately 585,000 customers in 24 counties in the central, southern and southwestern portions of South Carolina. The company also provides natural gas service to approximately 282,000 customers in 34 counties in the state.
SCANA Corporation, a Fortune 500 company headquartered in Columbia, SC, is an energy-based holding company principally engaged, through subsidiaries, in electric and natural gas utility operations and other energy-related businesses. The Company serves approximately 585,000 electric customers in South Carolina and more than one million natural gas customers in South Carolina, North Carolina and Georgia. Information about SCANA and its businesses is available on the Company's website at www.scana.com.