Natural gas prices for SCE&G customers could be going down. South Carolina Electric & Gas Company, subsidiary of SCANA Corporation, has filed for a 2.24 percent or $10 million overall decrease to its retail natural gas base rates.
Marty Phalen, Vice President of the SCE&G Gas Division says while the lowering of price is being driven by several factors, all customers would see a rate reduction.
Overall reduction is being spread proportionately across the customer base, so the residentials, being the larger portion of the base would receive the largest reduction of 4.18 percent. Our medium and small commercial accounts would receive 1.93 percent reduction and our large industrial and large commercial customers would see a 1.3 percent reduction. So all customer classes will be seeing a reduction in their rates.
Phalen says this will be the first decrease under terms of the Natural Gas Rate Stabilization Act (RSA), a South Carolina law designed to reduce volatility of customer rates.
We have not had a reduction in rates since the RSA was implemented. We’ve come very close and have had some very small increases , 1.7 or 1.8 percent, since this mechanism has gone into effect in ’06, but this is the first rate reduction that we’re offering up through the RSA.
Phalen says that the rate decrease request is due in part to lower wholesale prices for natural gas and it means residential customers will be paying an average of about $100 less a year.
It’s cost savings and the use of natural gas. The commodity price, the actual price of natural gas is a pass-through. We do that on a monthly basis through a PGS, purchase gas adjustment, where our customers would see a reduction in their rates as we see the reduction. As we buy the commodity and pass that commodity on to our customers as we see those rate reductions, we pass those on.
Phalen says that the rate decrease request is being driven primarily by an increase in business and lower capital spending costs by their company.
The rate reduction itself is begin driven by a couple of things. One is, our control of cost. We manage our cost relative to our customer base. If demand for, or not a lot of subdivisions are being built because of the economy, we’ll scale back. As the demand comes on we’ll scale up. So obviously over the last year, with the continued recession out there, we’ve been able to manage our expenses fairly well, so that is a component of that reduction.
SCE&G is a regulated public utility that provides natural gas service to approximately 313,000 customers throughout the state.