A state agency that represents the public in disputes against power companies says South Carolina Electric & Gas (SCE&G) should stop a program that was meant to benefit customers but is so complicated that those customers claim they have no way of knowing whether or not they are actually saving money.
SCE&G uses its Electric Weather Normalization Adjustment to keep bills from fluctuating too much during hot or cold weather, according to spokesman Eric Boomhower. He said the program began in 2010 after an exceptionally cold winter the previous year.
But Office of Regulatory Staff director C. Dukes Scott says the complex formulas used end up confusing ratepayers. “It was so complicated, that it wasn’t easily explained to the customers,” he told South Carolina Radio Network. “Further, we found that if a customer presented a bill to us, we couldn’t independently make a determination whether that bill was accurate or not.”
He says that only SCE&G can make the calculations, making it difficult for regulators to ensure the rates are correct. He said it also discourages a homeowner or business from making energy efficiency upgrades, as a customer could use less electricity from one month to the next but still be charged a higher price due to the weather.
As a result, the Office of Regulatory Staff recommended Friday that SCE&G terminate the program with December’s bills.
But Boomhower defended the adjustments, saying the relative stability of the prices month-to-month meant customers were saving money. “Our customers, in total, would have paid another $25 million on their bills than they have to this point because of that program,” he told South Carolina Radio Network.
However, he said he could understand why customers believe the formula is overly complicated. The Associated Press reports SCE&G uses 19 different equations to calculate the adjustments for different groups of customers, with each group having 20 separate billing cycles. That means customers are billed differently even within the same category. In all, nearly 22,000 weather-based adjustment factors were applied to customers’ bills between the program’s launch in August 2010 and August 2013, Regulatory Staff reported.
The ORS report is only advisory. Any real decision to end the weatherization adjustments would have to come from SCE&G and the Public Services Commission, Boomhower said. He added that SCE&G hopes to work with state regulators to ease any concerns. The report is part of an agreement with SCE&G to evaluate what was originally launched as a pilot program.
The South Carolina chapter of the American Association of Retired Persons, which had complained about the weatherization program, praised the ORS report. “The best way for customers to handle extreme highs and lows on their power bill and to better plan for monthly expenses is to enroll in SCE&G’s budget billing plan,” state director Teresa Arnold said in a statement.