News | October 6, 2016

Seniors in South Carolina forced to choose between medicine, power bill

Lorraine Simmons pulled up her chair to the table and tugged down the gooseneck microphone. In front of her, seven members of the Public Service Commission of South Carolina peered down from an arcing wooden dais.

The commissioners were considering a request from South Carolina Electric & Gas to approve $831 million in cost overruns, which will ultimately be passed on to customers like Simmons. Eight times in seven years the utility has made similar requests to cover the blown budget of an under-construction nuclear power plant.

Just a couple hours earlier, Kevin Marsh, CEO of the utility’s parent company, told commissioners about 17 percent of every customer’s SCE&G bill is diverted to reactor construction. SELC attorney Gudrun Thompson told commissioners that amounts to more than $23 on the average bill.

At the same time, Thompson told the commission SCE&G could be doing more to help seniors like Simmons defray some of those costs. The utility’s energy-efficiency program has flagged over the years, and is outpaced by the programs of other regional utilities, like Duke Energy. A report submitted to the commission shows a more robust energy-efficiency program could save some customers up to $350 a year.

Simmons, a retiree, leaned forward and told the commissioners these ongoing rate hikes stress her budget. Two dozen AARP members like her told similar stories. Sometimes, a few said, they must decide between paying for medicine and paying the ever-growing electric bill.

In the middle of her testimony, Simmons paused. She started to cry.

She and her AARP comrades, including some who made the trip from Charleston to testify in Columbia, are on one side of this battle over the power bill. AARP members say they can’t shoulder any more increases. Marsh, the CEO, says passing these cost overruns to customers is necessary to keep the construction moving forward, and to maintain profits for shareholders and investors.

The VC Summer Nuclear Power Station is years behind schedule and will cost billions more than first planned. The ongoing requests for rate hikes have become a contentious issue for SCE&G customers who say the company’s management and shareholders should cover more of the overruns.

SCE&G officials have told the commissioners they’ve worked out a deal to make this the last time they will have to ask for a hike to cover the ballooning financing and construction costs. But a lawyer for the Sierra Club pointed out to the commission that the CEO wouldn’t guarantee that, and there are plenty of loopholes in the agreement that could lead to still more rate increases.

The Coastal Conservation League says this increase should be rejected unless the utility makes a commitment to help customers save money with a better energy-efficiency program.

“The Public Service Commission should not approve another penny of cost increases without boosting efficiency programs to save the vast majority of customers money on their bills,” said Kenneth Sercy, the Conservation League’s Energy Specialist.  “Strong efficiency programs reduce bills for all customer populations while giving people greater comfort in their homes.  At a time when its efficiency program should be flexing up to help people with their bills, SCE&G’s program has gotten weaker and weaker.”

CCL, represented by SELC, has for years participated in numerous proceedings before the Public Service Commission seeking to boost SCE&G’s energy efficiency programs. Those proceedings have left detailed suggestions largely unaddressed while SCE&G’s programs sputtered downward.

“When it comes to electricity, what counts is monthly power bills – and that’s exactly where strong efficiency programs kick in,” said Blan Holman, a SELC attorney representing CCL. “Strong programs help lower bills for millions of people in Arkansas, in Maryland, and in other parts of South Carolina. It’s time they helped the people and businesses served by SCE&G.”

Thompson, the SELC attorney, told the commission a new study shows SCE&G could save its customers millions of dollars a year if the utility matched the energy-efficiency program in place at Duke Energy. The average yearly savings would be anywhere between $20 and $350.

The commission had planned to end the two-day hearing on Wednesday but a government shutdown in advance of Hurricane Matthew cut the gathering short. The PSC will resume the hearing on Wednesday.