The South Carolina Public Service Commission (SCPSC) approved an increase in the fuel component of rates for Progress Energy customers in South Carolina today.

The SCPSC approved an average increase of about 12 percent for all customers: 9 percent for residential customers, 10 percent for commercial customers and 15 percent for industrial customers. The increase is lower than what was previously requested due to an agreement to spread a portion of the cost recovery over 3 years.

"I'm pleased that all parties involved were able to work together to lessen the impact of fuel costs on all of our customers," said Emerson Gower, vice president of Progress Energy Carolinas' Southern Region, which includes all of the company's South Carolina service area. "Providing reliable power at the lowest possible cost continues to be our priority."

The company requested the change to recoup unrecovered fuel costs for the previous 15 months and to meet expected fuel costs in the near future. The increase, which reflects an agreement among Progress Energy, large energy users in South Carolina and state government agencies representing all customers, will take effect July 1.

In an effort to keep large energy users apprised of fuel-related costs that can impact them in the future, Progress Energy will begin providing monthly fuel reports to industrial customers upon request. In addition, on a quarterly basis, Progress Energy will provide to commercial and industrial customers the company's most recent fuel factor forecast for the next fuel case with supporting gas and coal price forecast.

Progress Energy Carolinas does not make a profit from the increase. The fuel rate is a regulated, direct pass-through charge to all electric consumers for the actual cost of fuel the utility uses to produce electricity to meet customer electricity demand. The fuel charge is part of the total rate, but is separate from the base rates. Progress Energy Carolinas has not requested a general rate increase since 1988.

The average increase will be 9 percent for residential customers. This translates into a $7.31 per month increase for a residential electric bill, based on usage of 1,000 kilowatt-hours (from $84.18 currently to $91.49).

The primary cause of the increase is the rising cost of coal and natural gas needed to generate electricity. The price of natural gas has doubled since 2003. The cost of coal increased more than 60 percent in the last year. In addition, the cost of transporting fuel to the company's generating plants has also increased. This increase is due to significantly higher freight rates, the cost of fuel used to operate rail cars and other rail maintenance expenses.

Customers who qualify for assistance from Progress Energy's Project Share program may contact the Customer Service Center. Project Share provides assistance to residential customers whose income is at or below 150 percent of the federal poverty level and who are experiencing a heating- or cooling-related crisis. The South Carolina Division of Economic Opportunity determines customer eligibility.

The Progress Energy Project Share program is maintained through voluntary contributions from employees of Progress Energy subsidiaries, shareholders, customers, civic organizations, churches and the Progress Energy Foundation, which provided $250,000 in matching funds in 2004. Since it began in 1982, the program has provided more than $15 million to families in need who live in the Progress Energy Carolinas service area.

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