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High coal prices could drive up energy costs

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Palmetto Electric Cooperative will hold its annual meeting starting at 1 p.m. Saturday at its Ridgeland offices on U.S. 278, roughly three miles west of the town. Food, music and children's entertainment will be featured, along with a flea market. Four members of the Palmetto Electric board will be elected, but all four are running unopposed. All members attending will receive a compact florescent light bulb. Registration for members runs from 1 to 6 p.m.

Surging coal prices could lead to sharply rising electricity rates nationwide this summer, but the two power utilities serving Beaufort County say costs shouldn't spike here.

Coal, however, is the primary fuel to create energy here. Palmetto Electric Cooperative buys its electricity from Santee Cooper, which generates 80 percent of its power at coal-fueled plants.

South Carolina Electric and Gas generates just under 60 percent of its power from coal plants, said Robin Montgomery, public affairs manager for SCE&G.

SCE&G recently had a cost of fuel adjustment of 1.06 percent approved by the state Public Service Commission, Montgomery said.

For a home using 1,000 kilowatt hours of electricity per month, bills will increase to $107.67 from $106.54 in May, he said.

SCE&G typically seeks fuel adjustments each May. In 2007, that adjustment was 1.15 percent; in 2006 it was 2.27 percent; and in 2005 it was 5.36 percent, said Eric Boomhower, a public affairs manager for the company.

Palmetto Electric doesn't have to send its rates through the Public Service Commission because those decisions are made by a locally elected board of directors, said Jimmy Baker, vice president of marketing and public relations for the cooperative.

Palmetto Electric adjusts its wholesale energy costs on consumers' bills monthly by using an average of wholesale costs over the previous 12 months, Baker said.

Energy prices for the summer months "don't look particularly ominous for us," Baker said.

Santee Cooper, which supplies Palmetto Electric with its power, bought a substantial amount of coal on the spot market last year when prices dipped and has a number of long-term coal contracts that will help keep energy production costs down this summer, said Laura Varn, vice president of corporate communications for Santee.

Central Appalachian coal, a grade of coal that's widely used in power plants, has jumped from around $40 per ton in early 2007 to almost $90 per ton now.

In West Virginia and Kentucky some utilities are planning rate increases of 12 percent to 15 percent. The national average retail price of electricity rose 2.3 percent last year, the Energy Department says.

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