South Carolina Electric & Gas annual earnings surged by $46 million in 2016 and $18 million in the fourth quarter ending Dec. 31, 2016, according to SCANA, parent company of SCE&G.
The earnings spike comes on the heels of continued electric rate hikes designed to help the private utility cover $1.1 billion in cost overruns at the V.C. Summer Nuclear Plant that SCE&G and Santee Cooper are jointly building in Jenkinsville.
Earnings also come in the wake of ballooning gas bills in Aiken County and elsewhere in the state due to an obscure “weather normalization adjustment,” or WNA, charge designed to offset declining energy usage during the unusually warm winter.
A SCANA spokesperson couldn’t be reached for comment Thursday, though a SCANA executive in a news release offered praise for the earnings report.
“We are pleased with our annual results and the continued growth in our electric and gas companies,” said Jimmy Addison, executive vice president and chief financial officer.
“Our earnings outlook continues to support our long-term growth expectations, based on expected customer growth and investment in our electric and gas infrastructure driven by the economies of the Carolinas,” the statement continued.
The S.C. Office of Regulatory Staff, which regulates SCE&G, said it’s received more than three dozen rate-related complaints concerning the private utility so far in 2017.
Dukes Scott, the agency’s executive director, said as of Thursday afternoon, the ORS has fielded 37 WNA-related complaints in 2017.
Twelve complaints previously had been filed through Tuesday, shortly after the Aiken Standard published its first story about the WNA charge on Feb. 14.
Twenty-eight complaints originated in the area of Columbia, Lexington and Cayce. Three were from the Aiken area and a fourth came from Warrenville. Other complaints came from Ridgeville, Okatie, Walterboro and Goose Creek, according to the ORS.
Scott said the ORS conducts annual audits of SCE&G earnings, a process that’s usually done in September. Any decision about rate modifications wouldn’t happen until then.
“We do review to make sure they are not earning in excess of what the South Carolina Public Service Commission has authorized,” Scott said. “If they earn an excess of what the commission has authorized, then we would lower the rate.”
SCE&G’s annual earnings rose from $480 million in 2015 to $526 million in 2016, while fourth quarter earnings soared from $75 million to $93 million, a SCANA news release said.
SCANA attributed the gains to several factors, including rate increases tied to the V.C. Summer plant, favorable weather conditions and higher gas margins, according to the release.
SCANA’s earnings report doesn’t include numbers for January 2017, when Aiken customers felt the full brunt of SCE&G’s WNA rate on their gas bills.
The WNA is a variable rate that’s multiplied by therms of gas used to calculate the total bill. WNA rates have fluctuated wildly in December and January due to an unusually warm winter.
As a result, many customers reported being billed more than $300 for the month of January despite minimal natural gas usage, triggering more complaints to the Office of Regulatory Staff.
A SCANA spokeswoman has said the WNA fee is necessary to ensure steady revenue streams during warm periods, such as the one occurring last month, when the National Weather Service in Columbia said daily high temperatures averaged a balmy 67.5 degrees.
SCANA also has sought and received approval for multiple electric rate increases since 2008 to fund construction of two nuclear reactors at the V.C. Summer nuclear plant.
SCE&G has 55 percent ownership while state-run Santee Cooper owns the remaining 45 percent, financial records state.
A copy of SCANA’s fourth quarter report with the Securities and Exchange Commission was not available as of press time, but according to its third quarter report filed in September 2016, the corporation told the SEC it planned to raise electric rates by 2.7 percent and natural gas rates by 1.2 percent in October 2016.
Both increases took effect in November 2016. They were part of a deal that halts further electric rate increases tied to V.C. Summer until January 2019, according to the SEC report.
The SEC filing also states that total costs at V.C. Summer currently stand at $7.7 billion, with completion not set until August 2020.
SCE&G serves about 709,000 electric customers and 358,000 natural gas customers, mainly in the Midlands and Lowcountry.