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COLUMBIA, S.C. and MONCKS CORNER, S.C., February 10, 2006 - South Carolina Electric & Gas Company (SCE&G), principal subsidiary of SCANA Corporation (NYSE: SCG), and Santee Cooper, a state-owned electric and water utility in South Carolina, announced today that they have selected the preferred site and preferred reactor design should they go forward with a new nuclear facility. The companies said they have selected the Westinghouse AP1000 pressurized water reactor technology, which would be built on the V.C. Summer Nuclear Station site near Jenkinsville, S.C.
"Even with modest load growth projections, both companies will need to add new base load electrical generation within the next 10 years," said Neville Lorick, president of SCE&G. "Our customers would benefit from the synergies of locating the new nuclear generation at Summer Station. By taking advantage of the skilled workforce and highly-specialized facilities already in place at that plant, including transmission interconnections, a state-of-the art training center and extensive plant security, we would save both time and money, and that would mean a lower overall cost for our customers versus other locations."
Lonnie Carter, president and chief executive officer of Santee Cooper, noted that nuclear power is safe, clean, dependable, stable in cost and can help reduce the country's dependence on foreign fuel sources. "The strong system load growth we are experiencing, coupled with the need for greater fuel diversity and the recent surge in coal and natural gas prices, necessitate that we consider new nuclear capacity. By moving forward, we are allowing both companies to keep all generation possibilities open as we look to provide the lowest overall cost and fuel stability for our customers."
In December 2005, the companies notified the Nuclear Regulatory Commission of their intention to continue work toward submitting a joint application for a combined construction and operating license (COL) for a new nuclear facility to help meet the companies' future electric generation needs. SCE&G would operate the new nuclear plant, and the companies would share the ownership and output of the new facility.
Development of the COL application, which will cover two units, began in early 2006 with a goal of submitting the application to the NRC in the third quarter of 2007. Following an approximate three-year review process, the NRC could issue the COL in 2010. Providing that the climate for nuclear remains favorable, SCE&G and Santee Cooper would then proceed with construction beginning in 2010, with a projected in-service date of around 2015. SCE&G is in the process of joining a consortium of utilities and reactor vendors called NuStart Energy Development, which will work cooperatively to facilitate the COL application process and complete the engineering design of these advanced plants.
Lorick said that a final decision to build a nuclear generating plant could yet be several years away and could be influenced by a number of factors. These could include the NRC licensing milestone attainment, construction and operating costs, maintaining a diverse generation mix, the cost and availability of competing fuels, financial market conditions, the regulatory environment, compliance with clean air regulations and other environmental requirements, and the economic impact of a new nuclear facility.
"Taking into consideration the progress that has been made by the NRC in streamlining the licensing process, the significant increases we have seen in the price of fossil fuels, current and pending clean air regulations and the potential for financial and other incentives for nuclear generation that are provided in the Energy Policy Act of 2005, we believe the nuclear option is extremely competitive with other sources of generation," said Lorick.
Of the three advanced designs considered, the Westinghouse AP1000 pressurized water reactor is the only one that has been certified by the NRC. It is based on a simplified "passive" cooling system design that includes fewer valves, pumps, pipes, cables and motors, which make it less costly to operate and maintain. The AP1000 is rated at about 1,117 megawatts and has a 60-year design life. The other two reactor designs considered were from Areva and General Electric.
"Concurrent with the license application process, we will be working to develop financing and regulatory strategies that will minimize the cost of this new project for our customers and maintain the financial integrity of our Company," said Kevin Marsh, SCANA's chief financial officer. "Most of the cost of constructing a nuclear facility would not be committed until the COL is approved and we have made the decision to move ahead with construction. Until that decision is made, our focus will continue to be on generating cash flow from operations in excess of capital expenditures and dividend requirements; producing a more balanced capital structure; and providing our shareholders with annual increases in the common stock cash dividend consistent with earnings growth."
SCE&G and Santee Cooper are joint owners and share operating costs and generating output of the 1,000-megawatt V.C. Summer Nuclear Station, which began commercial operation in 1984. SCE&G is the plant operator.
Santee Cooper is South Carolina's state-owned electric and water utility and serves 148,000 residential and commercial customers in Berkeley, Georgetown and Horry counties. The utility also generates the power distributed by the state's 20 electric cooperatives to more than 650,000 customers in all 46 counties. All total, more than two million South Carolinians receive their power directly or indirectly from Santee Cooper. For more information, visit www.santeecooper.com.
South Carolina Electric & Gas Company is a regulated public utility engaged in the generation, transmission, distribution and sale of electricity to approximately 610,000 customers in 24 counties in the central, southern and southwestern portions of South Carolina. The company also provides natural gas service to approximately 292,000 customers in 34 counties in the state.
SCANA Corporation, a Fortune 500 company headquartered in Columbia, SC, is an energy-based holding company principally engaged, through subsidiaries, in electric and natural gas utility operations and other energy-related businesses. Information about SCANA and its businesses is available on the Company's web site at www.scana.com.
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Statements included in this press release which are not statements of historical fact are intended to be, and are hereby identified as, "forward-looking statements" for purposes of the safe harbor provided by Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Readers are cautioned that any such forward-looking statements are not guarantees of future performance and involve a number of risks and uncertainties, and that actual results could differ materially from those indicated by
such forward-looking statements. Important factors that could cause actual results to differ materially from those indicated by such forward-looking statements include, but are not limited to, the following: (1) that the information is of a preliminary nature and may be subject to further and/or continuing review and adjustment, (2) regulatory actions or changes in the utility and nonutility regulatory environment, (3) current and future litigation, (4) changes in the economy, especially in areas served by the Company's subsidiaries, (5) the impact of competition from other energy suppliers, including competition from alternate fuels in industrial interruptible markets, (6) growth opportunities for the Company's regulated and diversified subsidiaries, (7) the results of financing efforts, (8) changes in the Company's accounting policies, (9) weather conditions, especially in areas served by the Company's subsidiaries, (10) performance of the Company's pension plan assets, (11) inflation, (12) changes in environmental regulations, (13) volatility in commodity natural gas markets and (14) the other risks and uncertainties described from time to time in the Company's periodic reports filed with the United States Securities and Exchange Commission. The Company disclaims any obligation to update any forward-looking statements.