COLUMBIA — Energy provider SCE&G agrees with a state agency that its complicated bill-adjusting program should end.
The Electric Weather Normalization Adjustment was designed in 2010 to protect customers against spikes in their bills during extreme weather. But the agency that represents the public in utility issues said last month it’s so complex, only SCE&G can determine if customers are being correctly charged.
While it’s a good idea in theory, it’s worrisome that only the utility can make and verify the calculations, said Dukes Scott, executive director of the Office of Regulatory Staff.
In a joint petition filed last Wednesday, SCE&G agreed with his office’s recommendation. But the Public Service Commission has the final say. Its board is expected to meet on the issue in coming weeks.
The petition asks the regulatory agency to order the adjustments to stop with bills issued from December meter readings. Others to sign off on the agreement include AARP, which intervened as the utility sought another proposed rate increase.
AARP members protested the complex billing at public hearings, “and they were right,” said Teresa Arnold, AARP state director.
“They really came to our way of thinking on it,” she said Tuesday about SCE&G. “I was pleasantly surprised and grateful for our members because they complained so much about it.”
In the petition, SCE&G seeks permission to spend up to $300,000 to promote its budget billing program, which averages customers’ usage costs over a year. The three-stage campaign would extend into mid-2014.
About 14 percent of customers already use budget billing, said utility spokesman Eric Boomhower. Arnold called it a better, budget-friendly payment option than the constantly fluctuating rates that made bills nearly impossible to understand.
Under the adjustment program, approved in 2010 following an unusually cold winter, electricity rates are lowered during months when temperatures are hotter or colder than usual and raised during milder-than-normal temperatures.
According to last month’s Regulatory Staff report, SCE&G applied nearly 22,000 weather-based adjustment factors to customers’ bills between the program’s launch in August 2010 and August 2013. Calculations are based on 19 different equations for different groups of customers, with each group having 20 separate billing cycles. So customers are billed differently even within the same category.
The agreement is a good deal for consumers, but concerns of bills spiking during a cold snap will continue, said Frank Knapp, president of the Small Business Chamber of Commerce and another petitioner. That’s why the agreement promotes the budget billing option, he said.
“Especially this winter, I think we’re going to have really cold weather and really high bills,” Arnold said. “People have to be able to budget for variable bills. Budget billing is the way to do it.”
The utility said customers overall have paid $25 million less over the last three years than what they would have without the adjustments. The state has not verified that number, and since the utility’s not looking to recoup it from customers, there’s no longer a need to attempt to do so, Scott said.
The estimated savings to customers include a remaining $8.7 million balance resulting from what SCE&G calls an over-credit in the weather-based adjustments over several months in 2011. The billing error initially totaled nearly $14 million. But it has recovered some through subsequent adjustments, Boomhower said.
It seeks to offset the rest through its interest rate swap contracts, which locked in low interest rates for future debt. The utility will not gain it by raising rates, it pledges in the petition.