Santee Cooper Board Approves First Phase of Rate Adjustment; New Rates to Take Effect Nov. 1

August 24, 2009

Board postpones voting on second phase

MONCKS CORNER, SC – August 24, 2009 – The Santee Cooper Board of Directors voted today to enact an overall average 3.4 percent base rate increase beginning Nov. 1, 2009 to offset rising costs of operating and maintaining the utility’s generation, transmission and distribution facilities.

In its vote, the board also postponed adopting a second rate adjustment proposed for 2010, pending further evaluation of the level and timing of that adjustment. The board action supports recommendations by Santee Cooper management on the implementation of new rates in light of a separate board vote, also today, to suspend the efforts to permit a planned 600-MW power plant in Florence County.

The 2009 rate adjustment is Santee Cooper’s first base rate increase since 1996. The new rates feature consolidation of similar rate categories and introduce a seasonal rate that is one cent per kWh higher in the summer months, when it costs more to generate power.  Santee Cooper is also launching an aggressive set of energy efficiency initiatives beginning this fall that can help customers save energy and offset the impact of the higher rates; the board approved the efficiency initiatives in February.

Since last increasing base rates in 1996, Santee Cooper has nearly doubled its generating capacity and invested more than $3 billion in new generation, transmission and distribution, all to serve a customer base that has grown by nearly 60 percent.

“The 2009 rate increase will provide necessary revenues for Santee Cooper to meet the increasing costs to generate and distribute electricity,” said Santee Cooper Chairman of the Board O.L. Thompson. “We have carefully reviewed management’s proposal and the many thoughtful comments we received from our customers and other members of the public. I know that we are in some extremely difficult economic times, and Santee Cooper has delayed this rate increase as long as possible.

“Today, we have also voted to suspend permitting the Pee Dee Energy Campus because of the recession’s impact on sales, pending climate legislation and reduced power load requirements.  This decision has impacts on the timing and cost of future generation additions; therefore, the Board has postponed adoption of the 2010 rates so that management can further evaluate the level and timing of the next rate adjustment.,” Thompson continued.

Specifically, the Santee Cooper board approved an average annual increase for residential customers of 7.6 percent beginning Nov. 1, which equals an average monthly bill increase of $6.59 for a residential customer consuming 1,000 kilowatt hours a month. Commercial customers would see average annual increases of 5.7 percent, and industrial customers would face average annual increases of 1 percent.

Lighting customers, which include municipal street lighting customers and traffic light operators, would see average increases of 2.3 percent, and municipal customers – the city of Georgetown and town of Bamberg – would see average rate increases of 2.8 percent. Santee Cooper sets rates for each class of customers based on the costs of serving each class. Bill impacts for individual customers in all classes will vary depending on each customer’s applicable rate schedule and specific usage.

Today’s board vote followed a period of public comment that began in April and continued through July 5; more than 130 people submitted written comments, and about 100 people offered oral comments during a series of meetings in Berkeley, Georgetown and Horry counties that concluded with a Board of Directors public comment meeting on July 27. The rates approved by the board today reflect changes made in response to some of the public comments.

“Affordable, reliable and environmentally protective electricity will be key to South Carolina’s successful emergence from this protracted recession. Santee Cooper has delivered such electricity throughout our 75-year history, and we are committed to continuing to do so for the next 75 years,” said Lonnie Carter, Santee Cooper president and chief executive officer. “Management weighed the need for the second rate increase, in light of the changes in the recession, potential federal climate legislation and reduced power load requirements. It makes sound business sense to take another look at next year’s potential rate adjustment, and if we can modify our request, we will do so.”

In a related move, Santee Cooper announced today it is canceling a planned fall Mini-Bond offering. Santee Cooper’s Mini-Bond program allows customers and state residents the opportunity to invest tax-free in utility bonds for as little as $200.  The utility has offered Mini-Bond sales annually for the past several years to help support its capital improvement program. Suspending the process for permitting the Pee Dee facility removes the need for additional capital this year, the utility said.

In addition, the board approved increasing the maximum outstanding loan balance for energy efficiency loans from $5.5 million to $10 million. This is due to the significant increase in energy efficiency loans, the addition of customer-owned renewable generation loans and the continued emphasis on new energy efficiency programs. Santee Cooper has offered a low interest energy efficiency loan program to residential customers since 1982. Previously, the outstanding capability limit, set by the board in February 2009, was $5.5 million. Since being increased in Feb., the number of loans has been at record levels, and Santee Cooper is anticipating additional applications with its additional energy efficiency programs that will be launched this fall.

Santee Cooper

Santee Cooper is South Carolina’s state-owned electric and water utility, and the state’s largest power producer, supplying electricity to more than 163,000 retail customers in Berkeley, Georgetown, and Horry counties, as well as to 29 large industrial facilities, the cities of Bamberg and Georgetown, and the Charleston Air Force Base. Santee Cooper also generates the power distributed by the state’s 20 electric cooperatives to more than 700,000 customers in all 46 counties. Approximately 2 million South Carolinians receive their power directly or indirectly from Santee Cooper. The utility also provides water to 137,000 consumers in Berkeley and Dorchester counties, and the town of Santee. For more information, visit www.santeecooper.com. For information on how Santee Cooper lives green and how you can go green, visit www.SanteeCooperGreen.com.