Maintaining the system to ensure reliable energy service is a significant undertaking. People, technology and infrastructure work together to provide power to your homes and businesses when you need it. This requires planning, maintenance, operational excellence and a critical focus on safety. It also requires effective cost management and cost recovery.
Whether it's the addition of million-dollar environmental equipment that helps clean the air or the replacement of aging poles that carry our lines, each addition comes with a cost. Over the past two years, SCE&G has incurred ongoing costs to provide customers with safe and reliable power and is now seeking recovery of those costs for services that benefit customers today. What are the main costs included in this request?
- Providing reliable service: We know you depend on us to keep your lights on 24 hours a day, 7 days a week, 365 days a year – on an electric system that serves more than 660,000 customers each day. With more than 450,000 distribution primary poles and 21,700 miles of distribution and transmission lines, the preventive maintenance and rotation of equipment, poles, etc. is a huge job in and of itself. We are seeking to recover money spent to build and maintain this infrastructure and annual depreciation expenses tied to our continued investments in this infrastructure.
- Safeguarding the environment: At the Wateree Station power plant, a new "scrubber" ($280 million) brought into service in 2010 is helping us meet federal clean air standards. In addition, nearly $30 million has been spent on other environmental upgrades and projects as part of our ongoing commitment to the environment.
- Planning for the future: SCE&G's dedicated employees have devoted their careers to providing reliable power when you need it. We offer our employees a pension benefit plan. With the recent downturn in the financial markets, the Company's expenses associated with the pension plan have increased. We have proactively taken measures to defer the impact of the increased pension costs. We are asking to recover these higher costs in this filing.
- Preparing for a storm: After Hurricane Hugo in 1989, we learned a valuable lesson about storm costs. With PSC approval, we established a storm reserve financed through rates. Two years ago, this collection of this reserve was suspended. We're asking the PSC to reinstate funding to allow us to continue maintaining a storm reserve to help meet the challenges we face from storms. This request also includes paying storm damage insurance premiums through rates that will be used to get our system up and running as quickly as possible in the event of a major storm.
- Paying Taxes: Just like all other businesses, we pay property taxes on our facilities, power plants, buildings and vehicles, as well as other types of taxes. In the past two years alone, SCE&G taxes have increased by $16 million.
- Generating power through natural gas: When our natural-gas-fired Jasper plant was put into service in 2004, we created construction cost efficiencies by building it to a capacity that exceeded our system needs at the time and entering into a long-term contract to sell the excess capacity. That contract expires at the end of this year, making available 250 megawatts of generation for our customers. This will assist us in replacing power that will no longer be available to our customers as we carry out plans to retire some of our older coal generation.