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Understanding Rates

How rates are determined and where your payment goes.

Electric and Natural Gas Rates Overview

There are two parts to electric and natural gas rates. The first, often referred to as “base rate,” includes the costs involved with providing service to customers, as well as the opportunity to earn a fair and reasonable profit. The Public Service Commission of South Carolina (PSC) determines what is fair and reasonable.

The other part of rates is slightly different for electric rates than for natural gas rates.

On the natural gas side, it’s called purchased gas costs. Dominion Energy South Carolina is in the natural gas delivery business but is not a producer of natural gas. The costs the company incurs purchasing natural gas on the wholesale market are passed directly on to customers with no markup. The company is not allowed to earn any profit on this part of rates. Our purchased gas costs are reviewed monthly and this part of natural gas rates is adjusted up or down as necessary to reflect those costs. This is called a purchased gas adjustment. Purchased gas costs account for roughly half of your rate.

On the electric side, it’s called fuel costs. These costs include the purchase and transportation of fuel, such as coal or natural gas, to run Dominion Energy South Carolina’s power plants. Fuel costs are a direct pass-through. In other words, customers pay what the company pays. The company is not allowed to earn any profit on this part of rates. Fuel costs are reviewed annually and this part of electric rates is adjusted up or down to reflect those costs. This is called a fuel cost adjustment.

Where Does My Dollar Go?

Dollar infographic

Dollar Percentage Details

The largest percentage goes to fuel to generate electricity.

  • $0.30 cents of each dollar pays for the coal, uranium or natural gas.
  • Fuel costs are passed directly to customer with no markup – no profit.
  • Rate is adjusted annually, up or down, based on our actual costs.

The next largest percentage goes to providing customers with safe and reliable service.

  • $0.29 of each dollar includes the costs involved with building, maintaining, improving and operating the system.
  • Operating power plants; maintaining wires, poles and transformers; service trucks; safety equipment; etc.

In addition to fuel and operation costs, rates include:

  • Taxes (property taxes, income taxes and other taxes);
  • Shareholder return (the return to shareholders whose dollars fund the capital projects necessary to build and maintain the electric system);
  • Financing costs (the costs and interest associated with financing investments in DESC’s infrastructure system such as the building of power plants, lines, transformers, etc.);
  • Employee salaries - 3,504 dedicated employees are focused on providing you with safe and reliable electric service).

* This breakdown is based on retail rates.