How are electric rates set?
A regulated electric utility wanting to change its rates, must apply to the PSC.
The ORS investigates:
- The company’s request for rate change through asking the utility to justify all of its expenses for the operations of the company.
Any expenses that the ORS determines to be improper or unnecessary is disallowed and excluded from the amount the utility is allowed to collect from its customers.
The amount utility stockholders have invested in plant and other facilities and allows a reasonable return on investments necessary to provide quality service.
Rates are calculated to produce the amount needed for the approved expenses, plus the authorized return on company’s investment; however, there is no guarantee that the authorized return will be achieved.
What happens after the Hearing?
After the hearing on the matter, the PSC reviews the information presented by the ORS and other parties in the case and issues a decision at the Commission's regular meeting. The commissioners’ decision determines the level of rates the company will be permitted to collect. Once the final order is issued, the Commission’s decision can be appealed to Circuit Court in South Carolina.
Can a customer participate in a Hearing?
Yes. Click here for link to Participating in the Hearing Process.
How often can an investor-owned electric utility raise its rates?
A utility can file a request to the PSC for a ‘general’ increase in rates and charges only once in a twelve-month period. State law requires a public review every twelve months of each utility’s fuel expenses, which may result in an increase, a decrease, or no change in a company’s base rates.
How were the retail service areas established for the electric companies in South Carolina?
Legislation was passed in 1969 that required the assignment of areas outside the corporate limits of municipalities to the electric cooperatives or the investor-owned utilities in South Carolina. Areas were generally agreed upon by the suppliers and exclusive territories were subsequently assigned by the PSC. A separate statute provides for retail service by Santee Cooper in portions of Berkeley, Georgetown, and Horry Counties. Rate differentials among electric suppliers were specifically excluded by the legislation as a consideration in determining area assignments.