January 14, 2003, Columbia, SC, - SCANA Corporation (NYSE:SCG) reported that, at a meeting held today, the Public Service Commission of South Carolina (SCPSC) approved a 5.8 percent, or $70.7 million, increase in retail electric base rates for the Company's principal subsidiary, South Carolina Electric & Gas Company (SCE&G).
In allocating the 5.8 percent overall revenue increase among customer groups, the SCPSC approved an increase of 5.11 percent for residential; 8.0 percent for small commercial; 8.0 percent for medium commercial; and 3.89 percent for large commercial and industrial. For a residential customer using 1,000 kwh per month, the new rates will result in a monthly increase of approximately $4.23, or an annual increase of approximately $51. The new rates will go into effect in February.
This electric rate increase request, SCE&G's first since 1995, was largely associated with additional capital investments related to construction of new electric generation facilities and improvements to existing plant facilities, including upgrades to meet more stringent environmental and air quality standards. Public hearings on SCE&G's request were held by the SCPSC in November 2002.
"Based on the information made available at today's meeting, we believe this decision demonstrates sound regulatory support for the company and will support our efforts to continue to provide adequate, reliable and affordable electric power to our customers in the future," said SCE&G President Neville Lorick. In its application, SCE&G sought, and the SCPSC allowed, recovery of approximately $248 million in capital and operating costs associated with the recently completed repowering project at its Urquhart Generating Station and approximately $277 million of costs incurred through the end of 2002 for the ongoing construction of the 875 MW Jasper County Generating Plant.
The SCPSC voted to base the approved rates on a 12.45 percent authorized return on common equity that results in an overall return on rate base of 9.94 percent. The SCPSC updated the test year capital structure to September 30, 2002 and included approximately $150 million in new common equity from the issuance of 6 million shares of SCANA common stock in October 2002, proceeds of which were contributed to SCE&G.
The SCPSC authorized a capital structure for SCE&G of 43.41 percent long-term debt, 4.41 percent preferred stock and 52.18 percent common equity. The associated cost of capital was set at 7.23 percent for long-term debt, 6.81 percent for preferred stock and 12.45 percent for common equity.
Kevin Marsh, SCANA's senior vice president and chief financial officer, said that today's decision will not change the earnings guidance previously provided for 2003.
The company said it could not comment on other details of today's decision until it receives the SCPSC's written order.
SCE&G is a regulated public utility engaged in the generation, transmission, distribution and sale of electricity to approximately 557,000 customers in 24 counties in central, southern and southwestern South Carolina. The company also provides natural gas service to approximately 267,000 customers in 33 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, telecommunications and other energy-related businesses. The Company serves approximately 557,000 electric customers in South Carolina and about one million natural gas customers in South Carolina, North Carolina and Georgia. Information about SCANA and its businesses is available on the Company's website at www.scana.com.