SCE&G Files for Rate Adjustment Under Base Load Review Act
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Robert Yanity
803-217-9501
ryanity@scana.com

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Iris Griffin
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Cayce, SC, May 27, 2011…South Carolina Electric & Gas Company, principal subsidiary of SCANA Corporation (NYSE: SCG), today filed with the Public Service Commission of South Carolina and the South Carolina Office of Regulatory Staff for an overall 2.7 percent increase to its approved electric rates under provisions of a state law known as the Base Load Review Act. The BLRA effectively reduces the cost of building nuclear power plants in South Carolina by allowing the state’s regulated utilities to adjust rates annually during construction of such plants to recover related financing costs.

SCE&G and state-owned utility Santee Cooper are building two nuclear electric-generating units at the site of the V.C. Summer Nuclear Station near Jenkinsville, S.C. The first unit is expected to come on line in 2016, the second in 2019, pending approval by the Nuclear Regulatory Commission.

Paying financing costs while construction is ongoing, as opposed to waiting until the project has been completed, lowers the cost of building the new units by about $1 billion, which in turn reduces the amount customers will pay through rates for such things as the cost of capital, depreciation, property taxes and insurance associated with the project. SCE&G estimates this will save its customers at least $4 billion in electric rates over the life of the new units.

In a report filed with the PSC and the ORS last week, SCE&G indicated that construction of the new nuclear units is proceeding in full compliance with approved cost and schedule projections. Rate increases under the BLRA currently are expected to average a little more than 2 percent annually through 2019, but will vary year to year based on actual construction expenditures incurred.

If the PSC approves today’s filing, SCE&G’s approved electric rates would increase in October as follows:

  • 2.83 percent for residential customers (the monthly bill of a customer using 1,000 kilowatt hours of electricity would increase $3.58, going from $126.74 to $130.32)
  • 2.67 percent for small commercial customers
  • 2.67 percent for medium commercial customers
  • 2.49 percent for large commercial/industrial customers.

PROFILES

SCE&G is a regulated public utility engaged in the generation, transmission, distribution and sale of electricity to approximately 663,000 customers in South Carolina. The company also provides natural gas service to approximately 315,000 customers throughout the state. More information about SCE&G is available at www.sceg.com.  

SCANA Corporation, a Fortune 500 company headquartered in Cayce, 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 website at www.scana.com.  


SAFE HARBOR STATEMENT

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 Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include, but are not limited to, statements concerning key earnings drivers, customer growth, environmental regulations and expenditures, leverage ratio, projections for pension fund contributions, financing activities, access to sources of capital, impacts of the adoption of new accounting rules and estimated construction and other expenditures. In some cases, forward-looking statements can be identified by terminology such as “may,” “will,” “could,” “should,” “expects,” “forecasts,” “plans,” “anticipates,” “believes,” “estimates,” “projects,” “predicts,” “potential” or “continue” or the negative of these terms or other similar terminology. 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) the information is of a preliminary nature and may be subject to further and/or continuing review and adjustment; (2) regulatory actions, particularly changes in rate regulation, regulations governing electric grid reliability, environmental regulations, and actions affecting the construction of new nuclear units; (3) current and future litigation; (4) changes in the economy, especially in areas served by subsidiaries of SCANA Corporation (SCANA, and together with its subsidiaries, the Company); (5) the impact of competition from other energy suppliers, including competition from alternate fuels in industrial interruptible markets; (6) growth opportunities for SCANA’s regulated and diversified subsidiaries; (7) the results of short- and long-term financing efforts, including future prospects for obtaining access to capital markets and other sources of liquidity; (8) changes in SCANA’s or its subsidiaries’ accounting rules and accounting policies; (9) the effects of weather, including drought, especially in areas where the Company’s generation and transmission facilities are located and in areas served by SCANA's subsidiaries; (10) payment by counterparties as and when due; (11) the results of efforts to license, site, construct and finance facilities for baseload electric generation and transmission; (12) the results of efforts to attract and retain joint venture partners for South Carolina Electric & Gas Company’s (SCE&G) new nuclear generation project; (13) the ability of suppliers, both domestic and international, to timely provide the components, parts, tools, equipment and other supplies needed for our construction program, operations and maintenance; (14) the availability of fuels such as coal, natural gas and enriched uranium used to produce electricity; the availability of purchased power and natural gas for distribution; the level and volatility of future market prices for such fuels and purchased power; and the ability to recover the costs for such fuels and purchased power; (15) the availability of skilled and experienced human resources to properly manage, operate, and grow the Company’s businesses; (16) labor disputes; (17) performance of SCANA’s pension plan assets; (18) changes in taxes; (19) inflation or deflation; (20) compliance with regulations; and (21) the other risks and uncertainties described from time to time in the periodic reports filed by SCANA or SCE&G with the United States Securities and Exchange Commission. The Company disclaims any obligation to update any forward-looking statements.

South Carolina Electric & Gas Company
Annual Request For Revised Rates
To
The Public Service Commission of South Carolina

Highlights

 

Docket Number

 

2011-207-E

Filing Period

 

Projected Twelve Months Ended June 30, 2011

Requested Effective Date

 

October 30, 2011

     

Requested in Application:

   

Annual Revenue Increase

 

 

$ 58.5 Million 
2.70%

Cost of Capital

 

8.85%

Incremental CWIP

 

$ 484.7 Million

Return on Common Equity

 

11.00%

     

 

Capital Structure and Cost of Capital:

 

Capital
Structure

 

Ratio

 

Embedded
Cost

 

Weighted Average
Cost of Capital

Long-Term Debt

$2,915

 

45.42%

 

6.27%

 

2.85%

Common Equity

3,504

 

54.58%

 

11.00%

 

6.00%

Total

$6,419

 

100.00%

     

8.85%

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