The BLRA is a state law enacted in 2007 to add structure and consistency to the process SCE&G and other regulated electric utilities must follow when building nuclear power plants. SCE&G and Santee Cooper, a state-owned electric and water utility in South Carolina, are planning to build two 1,117-megawatt nuclear electric-generating units at the site of the V.C. Summer Nuclear Station near Jenkinsville, S.C. The first unit is expected to come on line in 2016, the second in 2019. The BLRA allows for annual adjustments to rates during construction of the units as a means of recovering financing costs associated with the project.

SCE&G President Kevin Marsh said 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 have to pay through rates for such things as the cost of capital, depreciation, property taxes and insurance associated with the project. "We estimate this will save our customers at least $4 billion in electric rates over the life of the new units," he said.

If approved, today's filing would increase electric rates at the end of October as follows:

1.21 percent for residential customers

1.07 percent for small commercial customers

1.13 percent for medium commercial customers

0.95 percent for large commercial/industrial customers.

The average monthly bill for a residential customer using 1,000 kilowatt hours of electricity would increase $1.42, going from $117.48 to $118.90.

As construction of the new nuclear plants continues, rates will be adjusted each year based on actual construction expenditures since the last increase. "The actual amount and timing of adjustments may vary from year to year," said Marsh. "For instance, our costs for this project are lower to date than we had anticipated, so the 1.1 percent increase we filed for today is somewhat lower than the 2.8 percent increase we had forecasted in our initial BLRA application."

In a report filed with the PSC and the ORS last week, SCE&G indicated that construction of the two nuclear units is proceeding in full compliance with the cost and schedule projections approved by the Commission earlier this year.

PROFILES

South Carolina Electric & Gas Company is a regulated public utility engaged in the generation, transmission, distribution and sale of electricity to approximately 652,000 customers throughout central, southern and southwestern portions of South Carolina.