Cayce, SC, May 3, 2010...SCANA Subsidiary (NYSE:SCG) South Carolina Electric & Gas Company today signed a stipulation with the South Carolina Office of Regulatory Staff concerning certain conditions related to the company’s request for a 9.52 increase to retail electric rates. If approved, the stipulation would:
- lower SCE&G’s proposed return on common equity from 11.6% to 10.7%;
- support a 12-month pilot of a weather normalization mechanism for electric rates; and
- provide for the issuance of a credit of approximately $25 million to electric customers.
The stipulation, without consideration of any other proposed adjustments, effectively reduces SCE&G’s proposed increase to 6.55 percent. The Public Service Commission of South Carolina will conduct a public hearing on SCE&G’s rate request beginning May 24, 2010.
The PSC must approve the stipulation before the Company may issue the credit. Under the stipulation, the implementation of a pilot weather normalization program will adjust customers' electric bills to reflect normal, rather than actual, weather conditions. “Normal” weather is based on a 15-year-average of temperatures. This program will protect customers from large spikes in their electric bills during periods of unseasonably hot and cold weather.
“We are not looking to gain a financial advantage at the expense of our customers from abnormal weather like we experienced this past winter,” said SCE&G President Kevin Marsh. “Shortly after we gave notice of our pending increase request with the Public Service Commission, our service territory experienced one of the coldest winters on record. As a result, customer usage was up significantly compared to the same time period last year, which meant much higher electric bills for most SCE&G customers. Since that time we have been looking for a way to provide some relief to our customers and protect them from spikes in their bills due to extreme weather.”
If the proposed weather normalization mechanism had been in place since the beginning of 2010, SCE&G estimates its electric customers would have saved approximately $22.5 million in the first three months of the year. Marsh said if the stipulation is approved, including the weather normalization mechanism, SCE&G will provide its electric customers with a $25 million credit. The company is still working through details of how the credit would be applied.
“Both SCE&G and the ORS recognize the struggles customers have had this past winter, not only due to the economy, but also from prolonged cold weather,” said Marsh. “We are pleased that we were able to work with the ORS to craft this solution. Our customers could use some relief, and the $25 million will certainly be helpful.”
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. The Company serves approximately 655,000 electric customers in South Carolina and more than 1.2 million natural gas customers in South Carolina, North Carolina and Georgia. Information about SCANA and its businesses is available on the Company’s web site 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, estimated construction and other expenditures. In some cases, forward-looking statements can be identified by terminology such as “may,” “will,” “could,” “should,” “expects,” “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 and environmental regulations; (3) current and future litigation; (4) changes in the economy, especially in areas served by subsidiaries of SCANA Corporation (SCANA); (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; (12) 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; (13) the availability of skilled and experienced human resources to properly manage, operate, and grow the Company’s businesses; (14) labor disputes; (15) performance of SCANA’s pension plan assets; (16) higher taxes; (17) inflation; (18) compliance with regulations; and (19) the other risks and uncertainties described from time to time in the periodic reports filed by SCANA or South Carolina Electric & Gas Company (SCE&G) with the United States Securities and Exchange Commission (SEC). The Company disclaims any obligation to update any forward-looking statements.