Frequently Asked Questions
SCE&G Special Franchise Fee District for
sections of Boundary Street Corridor
May 2014

1. What is the SCE&G Special Franchise Fee District?
As construction nears on the $30 million Boundary Street Improvement Project, SCE&G will begin
moving its power lines underground along that stretch of roadway as required by the City. This will
be paid for, in part, by utility customers in that area. This is called the “special franchise fee district.”

SCE&G is paying the upfront costs of the power line project – estimated at $2.9 million – and
will be reimbursed by the 7 percent Special Franchise Fee District as it is collected. The fee is
allowed under state law and under the franchise agreement between SCE&G and the City of
Beaufort. A similar approach was used along Port Republic Street when the city and utilities
made streetscape improvements.

2. Who has to pay the Special Franchise Fee District?
The fee will affect approximately 160 utility customers located along Boundary Street,
roughly from Country Inn & Suites at Boundary and Neil Road to the Boundary Street
intersection with Ribaut Road by the Beaufort County Government Center and City Hall.

3. When does the added 7 percent fee begin and end?
The fee won’t be added to utility bills by SCE&G until after the underground conduit for
power lines is completed, estimated to be about six months to 12 months away. The fee will
end when the amount initially advanced by SCE&G is repaid, but no longer than 10 years.

Major construction along Boundary Street is expected to begin in July after the primary
contracts are awarded by Beaufort County.


4. Why is this special fee approach being used?
The special franchise fee district places a portion of the project cost on those customers who will
receive the greatest benefit from having the utility lines placed underground – benefits that
potentially include higher value to the properties, better utility service and a more appealing look to
customers and shoppers.
“This is the best and least costly way to eliminate the unsightly and potentially dangerous
overhead power lines along the Boundary Street right-of-way,” Beaufort Mayor Billy
Keyserling said. “It’s going to be the first of many pieces that will beautify the western
entrance to the City.”

5. How big is the Boundary Street Corridor Improvement project?
Building a better Beaufort is the goal of a $30 million investment in Boundary Street to create a more
scenic entry to the city, provide better commercial and retail locations, and improve traffic
The project includes realigning the intersection of SC 170 and US 21 and is expected to last about
three years. The Boundary Street Corridor work is part of a larger effort to reconfigure Beaufort from
near the Marine Corps Air Station to annexed areas of Lady’s Island, creating a unified and
connected neighborhood designed for people, not just cars.
As part of the Boundary Street improvements, City Council requires that SCE&G remove its
power poles along Boundary Street, and relocate its overhead power lines into an underground
duct bank to be provided by the roadway contractor.
Underground utilities not only improve the appearance of an area, but also are safer for
motorists and are less likely to be damaged during hurricanes, thunderstorms or the rare sleet
or snow.
In December 2011, the federal Department of Transportation announced that Beaufort had earned a
$12.6 million federal DOT grant to jumpstart Beaufort’s Boundary Street Master Plan with major
roadway improvements at the intersection of highways SC 170 and US 21.

About $13.7 million in local money from the voter-approved penny sales tax originally designated for
Beaufort road projects will serve as match funding for the federal grant.

6. If SCE&G is charging the fee, why is the City involved?
In 1999 Beaufort entered into a Franchise Agreement with SCE&G to secure electric utilities
within the City of Beaufort. That agreement allows City Council to designate a speci al
franchise fee district, not to exceed 7 percent or to be in play longer than 10 years. The fee is
allowed only for projects affecting more than 25 existing SCE&G customers.

7. What’s next?
Beaufort County officials anticipate awarding construction contracts this spring, with work
starting in July 2014. The bulk of the work will take about 18 months.

“Now that we are kicking off the actual construction part of this work, our city residents, the
thousands of nearby residents who drive through Beaufort each day, and our visitors will all
notice changes and improvements,” Mayor Billy Keyserling said.
“We hope people will pardon our progress,” he said. “Anytime you have a project of this
scope, you can expect there to be some traffic delays. We’ll do our best to keep the
community informed as the work unfolds.”

For more information: Please visit www.cityofbeaufort.org and click on Projects, then
Boundary Street.