ML20035D099

Scana 1992 Annual Rept

ML20035D099
Person / Time
Site:	Summer
Issue date:	12/31/1992
From:	Gressette L SCANA CORP.
To:
Shared Package
ML20035D098	List: ML20035D099 RC-93-0085, Forwards Summary of Present Levels of Property Insurance & Cash Flow Statement for VC Summer Nuclear Station & 1992 Annual Rept
References
NUDOCS 9304120140
Download: ML20035D099 (38)

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SCE&G fleets already use natural gas to power various types of vehicles.

!! is nearly impossible 10 ditterentiate j

between the operation of naturcl ges and l

gosoline. In fact the some vehicle can l l',

carry botn fuels. The National Energy Policy Act of 1992 mandated the use of f

cliernatively tueled vehicles in fleets for l

federal and state government os well os

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otternative fuel providers such as SCE&G.

beginning in tne mid-1990s.

4 TABLE OF CONTENTS i

CHAIRMAN'S LETTER 2

i TOP ACHIEVEMENTS OF 1992 1

4 COMING CHALLENGES

~ ~

6 3

i DIRECTORS & OFFICERS a

e FIN ANCIAL REVIEW I

f r

10 j

INVESTOR INFORMATION i

33 l

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l UTILITY SERVICE AREA

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NORTH CAROLINA l

l Propone oroge Coverns i

t NATURAL GAS SERVICE AREA AREA OF SUPPLEME NTAL NATURAL GAS SUPPLY Stevens C

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GEORGIA j

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4 ted Natural lont l

SCANA Corporation, ATMNTIC

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headquartered in Columbio, OCEAN j

SC, is a $3 bilhon energy-l based holding company with 11 M Gas hansrn:ssion Lines j

direct valol!y-owned subsidiones engaged in electric and no+ ural gas ELEcTmc a utikty operations and related businesses.

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f SCANA's principal subsidiary South Corviino AREA l

Electnc & Gas Company (SCE&G), is a reguicted pubhc i

utility serving approximately 462,000 electnc customers I

in a 15,000 square-mile temtory in the centrol, southem j

and southwestern portions of South Carolino.

Through the combined operofions of SCE&G and Sou*h Corchna Pipeline Corporation, SCANNs gas transm:ssion suosidiary, natural gas services are l

provided througnout the state on a direct or i

suppiernental bas:s The total population of SCAN 4s s,.c m o e m -

uthty semce creas is approximately three million.

l SCE&G o!so provides transit services in the metropokton I

creas of Columbio and Charleston Other regulated utahiy subsidiones own on electric genero!!ng plant near u

i Charleston and provide financing for SCE&G's cool and

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nuclear tuel inventones.

SCANKs nonregulated diversified operot:ons I

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extend beyond South Carolino and includo oil and e

l naturci gas production, purchase, dehvery and sole of l

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propone, marketing of no* ural gas and other hght 1--

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hydrocarbons, fiber-optic based teiecommunicofions,

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f reo! esto+e development and property management, and l

power piant monogement semces. At year-end 1992,

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SCANA and its subsidiories had 4,849 employees.

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UTILITY CUSTONIER PROFILE STEAM GENERATION ELECTRIC j

Conodys Dunng 1992 we added 8.240 net new McMeekin l

Urquhart customers, raising ine total electric customer base by Wateree 1.8% to 461,900 at year-end. Temtoriot sales of Williams i

elecincr!y in 1992 totaled 15 8 bilhon kilowatt-hours i

HYDRO GENERATION (KWH), a 0.6% increase trom 1991. Sales to ultimate Columbia Canal Fairfield Pumped Storage consumers represented 94% of KWH soles in 1992, e

hoo s wh le soles to wholesale customers accounted for 6%

g Saludo algas Stevens Creek hicles.

N ATU RAL G AS entsote INTERNAL COMBUSTION GENERATION During 1992 we added 5,334 net new as and le con Burton customers, bringing the consolidated natural gas Pohey Conodys Coit customer base to 231,153 of year-end, a 2.4%

use of t!S tor Faber Place increase over 1991. Residential customers compnse 3, ell as Hagood Hordeeville 90% of the consohdoted natural gas customer base.

,E&G, 990s.

Port Consolidated soles of natural gas totaled 762 million i

Urquhart l

therms in 1992, a 9.6% increase from 1991.

L l

Williams NUCLEAR GENERATION Approximately 72% of consolidated therms soles in Summer Station 1992 were to ultimate consumers while soles to j

wholesale customers accounted for 28%.

S i

E3ectrec Terrvtorsal P4,etamrael Gas teataaral Gans Sales 992 sases customers rws a r.rmt,

{tws ti vw%

mu m s seaw s I6 240 IM i

I 21 KL 27; fEC IE III'[ l W [i r

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1 FINANCIAL AND OPERATING HIGHLIGHTS

% increase 1992 1991 (Decrease)

(Millions of dollars except statishes and per shore amounts)

COMMON STOOK DATA Eomings Per Weighted Average Shore of Common Stock.

S 2.84 S

3.37 (15.7)

Dividends Declared Per Shore of Common Stock..

S 2.68 2.62 2.3 Book Value Per Shore of Common Stock (Year-End).

S 26.46

$ 25.23 4.9 Market Price Per Shore of Common Stock (Year-End)..

S 40.50

$ 44.25 (8.5)

Common Stockholders' Equity (Year-End)..

S 1,161.9 S 1,029.0 12.9 Common Stock Outstanding:

Average (Thousands).

41.475 40.361 2.8 Year-End (Thousands)..

43.911 40,784 7.7 70TAL COMPANY Total Operating Revenues..

S 1.138.4 S 1,147.8 (0.8)

{

Total Operating Expenses..

S 928 6 S 925.5 0.3 Net income..

S 117.6 S 135.9 (13.5)

Property Addihons and Construchon Expenditures.

S 387.9 S 288 6 34 4 Utility Plant. Net.

S 2.810.3 S 2.664.7 5.5 ELECTRIC OPERATIONS Electric Operahng Revenues..

S 829 5 S 867.2 (4.3)

Electric Operating income S 180 6

$ 198.2 (8.9)

Territorial Sales (Mdhon KWH)..

15,794 15,695 0.6 Customers (Year-End).

461.900 453.660 1.8 Generating CapoDiht(- Net MW (Year-End)..

3.912 3.912 Temtoriot Peak Demand - Net MW.

3,380 3.300 2.4 GAS OPERATIONS Gas Operahng Revenues..

S 305.3 S 276.7 10.3 Gas Operating income..

S 34.9 29.5 18.3 Sales (Thousand Therms)..

761.721 694.801 9.6 Customers (Year-End).

231.153 225.819 2.4 TRANSIT OPERATIONS Transit Operahng Revenues.

S 3.6 S

39 (7.7)

Transit Operating loss..

S (5.7)

S (5.3)

(7.5)

Revenue Possengers Corried (Thousands)..

5.837 6,395 (8.7)

ABOUT THE COVEFt The site of the new 385-TAW Cope Electric Generating Station is located on a plateau of flat farmland encircled by low-lying wetlands. As part of our heightened environmental sensitivity, construction for the plant will only impact one-hoff ocre of the wetlands on the 3000-ocre tract. In addition, the closed-cycle plant will use less water from the river than traditional plants because water circulates through the plant, is cooled and then used again. The plant will blend with the environment, being pointed in neutral earthtones, and will be surrounded by a butter zone of hgetation.

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' CHAIRMAN'S LETTER j

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b0g FellowStockholdersi l

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1992 was a poor year financially for SCANA -

Corporation. We did, however, make important progress in many areas that I will discuss later in this letter.

Eamings declined 16% to $2.84 per common C

' share for several reasons. First, the Supreme Court of y

South Carolina ruled that there was not sufficient evi-dence for the Public Service Commission of South i

4 Carolina to have established retail electric rates on the SCANA devotes a considerable basis of a 13.25% cost of equity in our 1989 retail portion otits philanthropic resources to

+

""U' education. Here SCiNA Chairman of the Board, President and Chief Executive to support a 13.0% retum on equity. The resulting Otticer Lawrence M. Gressette, Jr.

refund covering three years reduced eamings S.27 per enjoys a book with a group of share, and is nonrecurring. Second, very temperate Ainderparten students. In addition to weather and continuing effects of the recession resulted 0"' " ~

pnmar ' mi d e d h gh s o is in th state, SCANA's commitment extends to nesses, despite customer growth at near historic levels, 1

many colleges and universities.

Third, fixed and variable operating expenses increased

)

4%, but were well within budgeted expectations. While j

the financial results are not pleasing, the fundamental operating performance was quite good.

The recent slowdown of the economy in the l

beginning of this decade shows signs of ending, and I believe we will see a new period of growth for the elec-

]

tric operations of the company. Our customer growth l

has continued despite the poor economy of the past j

year, and we see no reason for this to change. Our l

industrial growth recently has shown signs of retuming to former levels. With the addition of the Cope Electric

{

Generating Station, now under construction, we will be j

positioned to meet our customers' future electric energy needs and to assure ample energy for continued eco-1 nomic development in our service creo. In December we e

~ _ _ _ - _

i

+

3 filed with the Public Service Commission for an increase turing, while minimizing losses from the less positive in electric rates, and expect on order from the Com-aspects of the change. In the past few years, we have mission in June 1993. This ruling seeks to increase expanded our natural gas operations to encompass the rates approximately 11.4% in two phases. If the entire explorofion, production and direct marketing segments of increase is allowed, electric rates will remain of approxi-the industry. We now own 151 billion cubic feet equiva-mately 1984 levels. An increase in revenues will allow lent (Bcte) of proved natural gas reserves, at a total us to pay for construction costs associated with the investment of $124.8 million. Last year we sold 17.7 Bcf Cope generating plant and to offset increased taxes, of gas outside our traditional markets in South Carolina, depreciation and operating expenses.

and expect to increase those sales by 50% in 1993.

The cash dividend will be increased effective We continue to evaluate each of our business April 1,1993 to $2.74 per common share. While the segments and to narrow our focus to energy related increase is not as great as I would like, it does reflect activities. As a result, in 1992 we ceased operations in the positive growth in customers in the past year, tne the construction division of Primesouth, but we will con-current cocital needs for construction and the disap-tinue to operate and maintain power plants for indepen-pointing financial results in 1992. This increase is the dent power producers in other states.

18th year in a row that the dividend has increased, ona Our employees continue to perform at extremely the 40th time in the last 41 years.

high levels despite the uncertainties caused by corporate in late 1992, the National Energy Policy Act restructuring. They won numerous awards for the out-was signed into low by President Bush. This Act essen-standing performance of the nuclear plant, extended ser-tially provides for restructuring of the electric industry in vice in the restoration after Hurricane Andrew in Florida, this country. Several years ago we began to reorganize community involvement and other industry recognition.

and structure our electric operations to adapt to the new Our employees, ottive and retired, continue to own 12%

competitive and regulatory realities, and they are out-of the outstanding stock of the company. They are the lined on page 6. I am confident that we are moving foundation of our future success, and I look forward to decisively and quickly to address the challenges and working with them to continue our progress in the future.

j capture the opportunities presented by this new law.

The natural gas business has experienced Respectfu!!y submitted, t

significant change in the past 10 yects in response to the partial deregulation of that industry. In 1992 the c--

Federal Energy Regulatory Commission issued Order 636, intended to be tne final step in this process. Our Lawrence M. Gressette, Jr.

natural gas operations have done an excellent job in Chairman of the Board, President and Chief Executive Officer profiting from the opportunities presented by this restruc-February 8,1993 i

i

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4 TOP ACHIEVEMENTS OF 1992 SOUTH CAROLINA ELECTRIC & GAS COMPANY i h1 g

4

,1 NUCLEAR AND FOSSIL g ag i 1

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l COPE PROJECT PLANT OPERATIONS V

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• We began work in November on our first

• The nuclear operations group #

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major electric construction project since 1984. The 385-posted another outstanding year in f

3 megawatt generating station near Cope, South Carolina 1992. Twice the V.C. Summer i /- f 5 t

g& +2 will be the sixth coal-fired, baseload plant on our sys-Nuclear Station was recognized as/g. a r

' heh tem and will satisfy customers' increasing demand for one of the top nuclear plants in

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g electric power. All major permits needed to date have the cour*ry by the Nuclear l

been secured, and the project is within budget and on Regulatory Commission (NRC).

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-y schedule. Construction is expected to be completed by The top performer designation is one of the

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the spnng of 1996. The cost of the plant is approximate-industry's highest honors and is based on a semiannual ly $450 million, most of which is covered by a fixed-review that identifies those plants demonstrating a level price contract.

of safety deserving of formal NRC recognition. In addi-

• We continued to demonstrate our commitment tion, Summer Station received another top Category 1 g

to good environmentnl stewardship by using design rating from the Institute of Nuclear Power Operations criteria that will make the Cope facility one of the most (INPO), on industry oversight group which promotes benign coal-fired plants in the nation. The Cope plant overall excellence in the nuclear utility industry. Only s

I site was selected following the most comprehensive about 20 of the 71 nuclear facilities in the United States

\\ environmental impact study in our history. Less than evaluated by INPO carry this rating. Summer Station

\\ one-half acre of nearly 1700 acres of wetlands on has received INPO's highest rating in three of its last the project grounds will be impacted by the con-four evaluations.

, struction and operations of the plant. The facility

• Summer Station also recorded impressive d will employ a closed-cycle cooling system that operational results in 1992. For the 12 months ended will result in minimal water withdrawal from a December 31, the unit availability factor was 97.1%

k nearby river used for fishing and other recre-while the capacity factor was 96.7% A 65-day refuel-ntional purposes. About $70 million of the ing and maintenance outage - the plants seventh -

investment will be for emission and is scheduled to begin in March.

pollution control equipment that will

• The record of our fossil plants was also out-i allow the plant to meet the require-standing. We recorded the highest availability factor in

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ments of the Clean Air Act our history, 88.1% with a forced outage rate of 1.8%

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Amendments Both of these measures are considerably better than 1

pf1990.

national averages.

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HURRICANE ANDREW RELIEF

• In September the PSC approved continued

• Repaying a tavor from three years earlier, we operation of a Weather Normalization Adjustment sent line crews to South Flondo to help in the recovery (WNA) for retail natural gas customers for one year.

from Hurricane Andrew. We rotated four 55-member line The implementation of the WNA provided significant crews clong with transmission crews and support per-stabihty to our retail natural gas operations during the sonnel while holping to restore power to customers of post year's mild winter.

Florida Power & Light. FP&L was one of dozens of utili-tres that come to our aid in the aftermath of Hurricane

. SOUTH CAROLINA 46 PIPELINE CORPORATION Hugo in 1989.

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• Our intrastate natural gas pipeline subsidiary

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gegon construction in Marct' on a $24 milhon liquefied g

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natural gas satelhte facility. The new facihty will increase NgJ-

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peak day deliverabihty and reliabihty, provide odditional

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o storage capacity and reduce the cost of gas supplies.

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The facihty will store up to 900,000 Mcf of houefied

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natural gas that con be converted back to a gaseous

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state and used at times of peak winter demand. The REGULATORY ACTIVITIES new plant is being bul!t on a centrally located 200-ocre e in December we filed on opphcotton with the site which will allow us to supplement oil of our trans-Public Service Commission of South Carolina (PSC) for mission knes that supply gas to major metropohton the first general increase in retail elecinc base rates in markets. The new facihty is

• M nearly four yeo:s. The fihng proposes o two-phase expected to be operational in increase. The phase one request is for 8 9% in addi-early 1994.

g tional revenues, or $72.9 milhon annua!!y, expected to

\\ g-take effect in June 1993. In phase two, we requested on

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cdd:tional 2.5% increase in revenues, or $20.2 milhon annually, which would take etiect in June 1994. The p;, p.,__4 [,

PSC is expected to issue on order by June 1993. If the C. _*~~

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full amount is granted by the PSC, our resident:cl C-,--

dQ customers will be paying in 1994 approximately y

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the some price for electricit/ as they did in 1984.

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s COMING CHALLENGES SCANA PETROLEUM RESOURCES, INC.

• Two significant acquisitions highlighted our NATIONAL ENERGY STRATEGY oil and natural gas develonment and production activi-

• Deregulation is the most sign:ficant issue ties during 1992. In September we purchased a produc-facing the electric utility industry. The National Energy ing field in Mississippi with 51.6 billion cubic feet Policy Act passed by Congress in 1992 created new and equivalent (Bcte) of proven natural gas reserves. Earlier pervosive competition in the generation of electricit{

in the year, we purchased ottshore properties in the Gulf Addition 0!!y, it removed many of the traditional barriers of Mexico with 44.5 Bcfe of proven reserves. Since to competition for the sole of electricity to wholesale 1990 we have made eight acquisitions and now own customers, commonly referred to as wholesale access.

approximately 151 Bcfe of reserves. These acquisitions

• While wholesale access is sign;ficant, we bring our total investment to $124.8 million. We expect believe it is only a prelude to customer choice of the to make additional ocquisitions and to develop addition-retail level, a fundamental change that will reshape the al reserves in these properties. Despite widely fluctuating electric utility industry. In possing the National Energy gas prices, these operations were profitable during 1992.

Policy Act, Congress left the question of retail access in the hands of state regulators. Debate is underway in a MPX SYSTEMS, INC.

number of states. The question is not if, but when, retail

• During 1992 we completed a 130-mile fiber access arrives.

optic line from Atlanto to Columbus, Georgia. Anotner

• We realize that to prosper in an era of cus-30-mile line under construction in Alabama should be tomer choice, we must be competitive in the price of our completed in early 1993. With these additions, we will product and in the quality of service ID have opproximately 625 miles of fiber optic lines in we provide. We are positioning our-operation in three Southeastem states. In addition, we selves to capitalize on this compe-unveiled a new wide creo Specialized Mobile Radio tition with aggressive changes of fh Network for the State of South Corolina that is the first of ourown.

its kind in tne notion. This system enables law enforce-

• We have reorga-gijjd t

$h,flfMbb),Y J

ment, public safety and other users of two-way radio nized our company into communications to talk directly on one chonnel instead Strategic Business Units

?

of individual frequencies that must be patched together.

(SBUs) to improve our e

We will build and monoge the network utilizing our exist-occountability and

(.o 2

} g ing fiber optic and microwave communications systems.

flexibility. SBUs d j

j will olign our gg,3' r

i ino$e" s'n'ec7z*ed k F

industry segments i

7 N

h l

crected by deregulation and allow us to measure

• This latest change, and the ones which accountabihty on a business-by-business basis. In preceded it, have created new opportunities for us. By oddition, the compet;tiveness of in-house service orgo-forming our own marketing company to sell natural gas nizations that support the SBUs will be evoluoted directly to end-users, we are unbundling our pipeline against outside service providers We have eliminated transmission and supply businesses. This company is nonessential levels of management by reviewing our now selling substantial volumes of natural gas in South orgon:Zofionoi structures. And, we have embroced a Corohno and equoi omounts outside the state. Because customer-focused continuous improvement philosophy of our long history of directly negotiating sales contracts that constantly cnves us to be cost-effective, efficient with industrict customers and others, we beheve our and quick to respond to customer needs.

natural gas businesses will be able to operate success-fully and profitably in this new environment.

NATURAL GAS INDUSTRY RESTRUCTURING

• On Apnl 8,1992 the Federal Energy FINANCIAL REQUIREMENTS I

Regulatory Comm:ssion (FERC) issued Order 636,

• For the next few years, capital expenditures which significantly changed the structure of interstate associated with new electric generation, the continued natural gas pipeline service These changes will have a growth of our retail customer base, the resolve to com-substantial et'ect on our natural gas operations. The ply with environmental requirements and the acquisition trod!!!onal interstate pipehne soles service is a bundied of natural gas reserves will require capital investment service that includes gas supply, firm transportation and which, in total, Will exceed funds generated from opero-underground storage at a sing!e rolled-in price. Order tions. In anticipation of the need for significant external 636 requires the unbundhng and separate pncing of financing we strengthened our position by substantial these services by oil interstate pipehnes. Unbundhng will additions to common equity in 1992. The timing and allow US the opportunW to purchase the level of each nature of the extemol financing Will depend on the service needed to best serve our customers' requirements.

condition of the f;noncial markets, the pace of capital

• Order 636 o!so requ:res pipehnes to provide spending and the results of operations.

transportation service inot is equal in quohty for o!! gas suppliers whether the customer purchases the gas from

'l

%, < l, n.m _

the pipeline or another supp!!er That equal access,

[

ff ff along with unbundhng, is designed to complete the h'

d m..'

i transition to o competitive natural gas industry. During h;;._

l I lkk i fl Y

'[

g' i{

{h}.

!K il J 1992 we saw wide gas pnce vonctions resulting in part r

from the industry's decling with unregulated gas mor-kets. Prices should stabihze os the natural gas industry Q~

gains expenence in the fully compef>tive world.

Ja l

l L

I i

e a

DIRECTORS Henry Ponder, Ph.D. 2.3.5 W. B. Timmerman l

SCANA Corporation President Senior Vice President, Controller and Fisk University Chief Financio! Officer (2) i B. L Amick 2A 5 Nash

e. Tennessee Chairman of the Board and R. D. Hazel Chief Executive Officer J. B. Rhodes 2,3.5 Vice President Amick Forms Chief Executive Officer Public Attoirs Batesburg. South Carchno Rhodes Oil Company, Inc.

K* B Marsh Wanetom, South Comhno W. B. Bookhart, Jr. 2 4 5 y ce President i

Partner W. B. Timmerman Finance, Treasurer and Secretary (3)

Bookhart Forms Senior Vice President, Controller E. C. Roberts Elloree, South Corchno and Chief Financial Officer Vice President SCANA Corporation W. T. Cassels, Jr. 2.3.5 General Counsel and Columbia, South Carolino Chairman of the Board Assistant Secretary Southeastem Freight Lines E. C. Wall, Jr.1,3 5 Columbia, South Carolino President (1) Also Chairman and Chief Executive Officer of oil subsidiaries Canal Industnes, Inc.

H. M. Chapman 13 5 Conway, South Carolino (2) Also Chief Financial Officer of all Chairman subsidiones i

NationsBonk South John A. Warren 4.5.6 (3) Also Secretary of all subsidiaries j

Atlanto, Georgio Chairman of the Board Ementus j

SCANA r ratio" q

J. B. Edwards, DMD 1.4 5 OFFICERS OF Comhno l

President PRINCIPAL Medicol university of 1 Member of Executive Committee SUESSIDIARIES

})

South Comhno 2 Member of Audit Committee South Carolina Electric Charleston, South Corchno 3 Member of Monogement

& Gas Company Elaine T. Freeman 2 4 5 Development and Corporate B. D. Kenyon Execut ve Director Performance Committee President and Chief Operating Officer ETV Endowment of South Corchno Member of Nuclear Oversight i

4 Committee

0. W. Dixon Spartanburg. South Corchno 5 Member of Long-Term Executive Vice President L M. Gressette, Jr.1 Compensation Committee Special Projects Chairman of the Board, President 6 Chairman of the Executive and Chief Executive Officer Committee G. J. Bullwinkel, Jr.

SCANA Corporchon Senior Vice President Columbio, South Carchna DIRECTORS EMERITI Fossil and Hydro Production j

W. R. Bruce B. A. Hogood 2 3.5 K. W. French R. W. Stedman Chairman of the Board J. B. Guess,111 Senior Vice President i

j Wm. M Bird and Co, Inc-J. F. Hassell, Jr.

Administrative Support Gioup 4

Charleston. South Corchno F. M. Hipp

^

J. H. Lumpkin J. H. Young, Jr.

W. H. Hipp 13~5 A. C. Mustard Senior Vice President l

h,f, S m er^

h e Execut ve Officer 1

The Libert/ Corporchon J. E. Addison 1

Greenviiie, South Corchno Vice President and Controller i

O FFIC ERS

{

Pre den and ce res dent Chief Operat ng Officer LM. Gressette, Jr.

Gas Operations i

South Carolina Chairman of the Board, President Elecinc & Gas Company and Chief Executive Officer (1)

J. D. Gregg, til Vice President Columbia. South Carohno Cathy B. Novinger Marketing and F. C. McMaster 14 5 Senior Vice President Economic Development President Administration and Winnsboro Petroleum Company Govemmental Attoirs B. T. Horton, Jr.

l!

Vice President and Treasurer Winnsboro, South Corchno A

o Johnny Kinloch G. J. Wilson, Jr.

M. L. Holmes, Sr.

Execut ve Vice President and Vice President Vice President i

Transit and Fleet Morntenance and General Manager Commercial Operations Community Affairs l

R. L. Easterwood B. S. Samuel C. B. McFodden Vice President Vice President Vice President Residential Development Customer Relations.

Don Hollmark Southem Division Controller E. C. Roberts Assistant Secretary S. C. McMeekin, Jr.

H. E. Dickard Vice President Assistant Secretary MPX Systems, Inc.

i Customer Relations-E. C. Roberts L. M. Gressette, Jr.

Northem Division Assistant Secretary President E E tAoore, Jr.

M. D. Blackwell SCANA Fossil and Hydro Operations wrecaens, Inc.

Seche %ce Nsdem and General Manager i

Max Earwood J. L. Skolds President and Treasurer W. B. Timmerman

(

Vice President Senior Vice President Nuclear Operations C. A. Rompey, Jr.

Executive Vice President and J. H. Young, Jr.

neral on ge n

ice Resided ce Preside and General Counsel T. Paul Bulmohn Judith H. Battle Vice President Controller STMg Vice President B. J. MacInnis B. T. Horton, Jr.

Power Delivery Vice President Treasurer l

E. C. Roberts George Fosano, Jr.

E. C. Roberts Assistant Secretary Controller Assistant Secretary Ass si nt Treasurer Assisto t cretary roup nc South Carolina Primesouth, Inc.

W. B. Timmerman Pipeline Corporation J. M. Woods,111 Max Ecrwood President and Treasurer D. L. Sharp President and Treasurer Executive Vice President and J. C. Chapman General Manager H. T. Arthur, ll Senior Vice President and Vice President and Assistant Secretary J. M. Clark, Jr.

General Counsel Vice President R. M. Kightlinger Controller H. N. Harrell Vice President Treasurer and Controller

3. J. Mocinnis Assistant Secretary E. C. Roberts Vice President Assistant Secretary South Carulina Real George Fasano, Jr.

Estate Development tAarie B. Burns Controller Company, Inc.

Assistant Secretary Sarah A. Davis A. H. Gibbes J. C. Eldridge Assistant Secretary President and Treasurer Assistant Treasurer Judith H. Battle SCANA Petroleum Resources, Inc.

Vice President - Finance and Accounting. Controller and Max Earwood Assistant Secretary President and Treasurer

to FINANCIAL REVIEW sneeurra on cornman searket pr6ce and =~*

capetas seructnare usquety vaaue Per Carewnon Share uw rur>

m sso un, ra se m

I 7

ia r

sr in sm a

5 1

1%

$10 X4 i

u.-

wwwww wwwww wwwww_

m From opersions M Bot

• vaue M Long Term Deo; Nei m mcuang owTime Gain on S36e E Matet Pnce M Preterred Six*

"*""*"'*I*""*#

1

. Common Equity

j. l N hESCIMI $3OSIRIOBs InSS StretagttsessocI sagstif5carst#3r.

TABLE OF CONTENTS MANAGEMENT REPORT n

11 INDEPENDENT AUDITOR'S REPORT 11 CONSOLIDATED FINANCIAL STATEMENTS 12 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 18 y

MANAGEMENT'S DISCUSSION &

ANALYSIS OF FINANCIAL C(' 4DITION

& RESULTS OF OPERATIONS 26

[

SELECTED FINANCIAL DATA I

30 i

COMMON STOCK INFORMATION i

32 i

i 11 MANAGEMENT REPORT INDEPENDENT AUDITORS' REPORT The management of SCANA Corporation SCANA CORPORATION:

(Company) is responsible for the preparation and We have audited the Consolidated Bolonce integrity of the financial dato included in thc accompo-Sheets and Consolidcted Statements of Capitalization of nying Consolidated Financial Statements. These state-SCANA Corporation and subsidiaries (Company) as of ments have been prepared in conformity with generally December 31,1992 and 1991 and the related accepted accounting principles, as applicable. In situo-Consolidated Statements of income and Retained tions tnot prevent exact accounting measurements, Earnings and of Cash Flows for each of the three years monogement has used informed judgments and esti-in the period ended December 31,1992. These finon-l mates. Financial information presented elsewhere in cial statements are the responsibility of the Company's this Annual Report is consistent with these financial management. Our responsibility is to express an opin-statements.

ion on these financial statements based on our audits.

The Company maintains and relies upon a We conducted our audits in occordance with l

system of internal accounting controls designed to pro-generally accepted auditing standards. Those ston-l vide reasonable assurance that all transactions are dards require that we plan and perform the audit to properly recorded in the books and records and that obtain reasonable assurance about whether the finan-l ossets are protected against loss or unauthorized use.

Ciol statements are free of material misstatement. An The degree of intemol accounting control is based upon audit includes examining, on a test basis, evidence the determination of the optimum balance between the supporting the amounts and disclosures in the financial cost incurred in maintaining a system of intemal con-statements. An audit also includes assessing the trols and the benefits to be derived. The system of inter-accounting principles used and significant estimates not accounting controls is supported by wntien policies mode by monogement, os well as evoluoting the over-and guidelines and is complemented by the selection, all financial statement presentation. We believe that our training and development of professional financial audits provide o reasonable basis for our opinion.

managers and by a staff of intemol auditors who con-in our opinion, such financial statements pre-duct comprehensive intemol audits.

Sent fairly, in all material respects, the financial position The Board of Directors provides oversight for of the Company at December 31,1992 and 1991, and the preparation of the financial statements through its the results of its operations and its cash flows for each Audit Committee, which is composed entirely of non-of the three years in the period ended December 31, employee directors. The Audit Committee meets periodi-1992 in conformity with generally accepted accounting colly with management and intemol auditors to review principles.

their activities and responsibilities. The Audit Committee otso meets periodically with the Company's indepen-dent auditors, Deloitte & Touche. The intemol and inde-pendent auditors have free access to the Audit

--[

Committee to discuss intemol occounting controls, DELOITTE & TOUCHE ouditing and financial reporting matters.

Columbia, South Carolino February 8,1993 W. B. TIMMERMAN Senior Vice President, Controller and Chief Fincncial Officer i

i i

12 CONSOLIDATED BALANCE SHEETS A CEMBER 31 1992 1991 ASSETS (Thousands of Dollars)

Utility Plant (Notes 1,4 and 5):

Electnc..

S3.203.849

$3,068,542 Gas.

411.584 390.131 Transit.

3.287 3.626 Common..

65.1" 59.209 Totoi.

3.683.84-3,521,508 Less occumulated depreciation and omortization.

1.192.873 1,124,296 Total 2.490.971 2,397,212 Construction work in progress..

250,229 195,571 Nuclect tuel, net of occumulated amort:Zotion..

39,916 41,708 Acquis: tion adjustment-gos, net of occumulot.d amortizonon.

29.163 30,160 Utility Plant. Net.

2,810.279 2,664.651 Nonutility Property and investments (net of occumulated depreclotion) (Note 10).

250 084 162,133 Current Assets:

Cash and temporary cash investments (Note 10)..

32.050 68.175 Receivables.

138.684 127,083 inventones (c! average cost)'

Fuel (Notes 4 and 5).

52,598 51.984 Motenois and supplies..

46 274 46,654 Prepoyments.

22.628 36.310 Total Current Assets.

292,234 330,206 Deferred Debits:

Unamonized debt expense..

10 104 9,033 Accumulated detened income taxes (Notes 1 and 8)..

45.599 27,253 Uncmort: Zed deterred retum on plont investment (Note' 1 and 2).

19.,106 23,352 Nuclect plant decommissioning fund (Note 1)..

20.841 17.602 Other (Notes 1 and 10).

109.474 71,632 Toto! Detened Debits..

205.124 148.872

]

TcroL

. $3,557,721

$3.305,862 l

l

13 December 31, 19if2 1991 CAPITALIZATION AND LIABILITIES (Thousands of Dollars)

Stockholders

• Investment (Note 6)-

Common equity.

$1.161896 Sl.028,990 Preferred stock (Not subject to parchase or sinking funds).

26 027 26.027 Total Stocknolders' investment.

1.187,923 1,055,017 Preferred Stock, Net (Subject to purchese or sinking funds)(Notes 7 and 10).

56,154 59.469 Long-Term Debt, Net (Notes 4 and 10).

1.204.754 1,122,396 Total Cap:talaction..

2.448.831 2.236.882 Curreni L;cbH!!!es-Sho t-term borrowings (Notes 9 ona 10).

41 156 20,766 Cu rent portion of long-term debt (Note 4)..

24.704 92,290 Current pomon of preferred stock (Note 7)..

2 46:

2,369 Accounts payable..

101.785 94,764 Estimated rate refanos and related interest (Note 2)..

17.811 Customer deposits..

14 102 14,300 Taxes accrued..

65.004 63,313 interest accrued..

29 295 28.632 Drvidends dectored.

31,302 28,616 Other..

8 438 11,457 Tota: Current Liabilities..

336 082 356,307 Deferred Credits:

Accumulated detened income taxes (Notes 1 and 8)..

539 432 532,135 Accumulcted cetrred investment tax credits (Notes 1 and 8)..

95.639 102,306 Accumulated reserve for noclear picnt decommissioning (Note 1)..

20 841 17.602 Other (Note 1).

I13.889 60.430 Total Deterred Cred;ts..

772.808 712,473 Commitments and Contingencies (Note 11).

Total..

. S3 557.721

$3,305.862 See Notes to Consolidated Financal Statements.

14 CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS For the Years Ended December 31, 1992 1991 1990 (Thousands of dollars exceptpershare amounts)

Operating Revenues (Notes 1 and 2):

I Electnc..

.S 829.477 S 867,215 S 851,146 i

Gas..

305.275 276.742 292,380 Transit..

3.623 3,869 4,033 Total 0perating Revenues..

1.138.375 1,147,826 1,147,559 Operating Expenses:

fuel used in electnc generation.

206,151 224.867 208,595 Purchased power..

7,323 9,816 15,377 Gas purchased for resale-191,577 171,869 191,939 Other operation (Note 1).

215.800 208,614 198,388 Maintenance (Note 1)..

65.442 61.599 67,499 Depreciation and omort20 tion (Note 1).

108,315 102,669 97,801 income taxes (Notes 1 and 8).

60,947 77,562 77,392 Other taxes.

73.040 68,470 64,611 Total Operating Expenses.

928.595 925.466 921,602 Operating income..

209.780 222,360 225,957 Other income (Note 1):

Allowance for equity funds used dunng construction..

5.495 3.454 1,630 Garn on sole of investment, net of income taxes (Note 3)..

46,150 Other income, net of income taxes..

6,388 8.201 7,094 Total Other income.

11.883 11,655 54,874 income Before interest Charges and Preferred Stock Dividends..

221,663 234.015 280,831 Interest Chorges (Credits):

Interest on long-term debt, net..

93.052 88.690 85,244 Other interest expense -

8,819 7,648 10.552 A!!oworce for borrowed funds used dunng construction (Note 1)..

(4.271)

(4,880)

(3.479)

Total interest Chorges, Net..

97.600 91.458 92,317 income Before Preferred Stock Cosh Dividends of Subsidiary..

124.063 142,557 188.514 i

Preferred Stock Cosh Dividends of Subsidiary (At stated rates)..

6.473 6,706 6.911 Net income -

117.590 135.851 181,603 Retoined Earnings of Beginning of Yeat -

457,393 428,626 344,652 Common Stock Cosh Dividends Declared (Note 6).

(112.090)

(105.868)

(101,916)

Other..

(1,216) 4,287 Retalped Earnings of Er1 of Year..

~

.S 462 893

$ 457,393

'S 428,626 Net income.

. $ 117.590

$ 135,851 S 181,603 Weighted Averope Number of Common Shores Outstanding (Thousands).

41.475 40,361 40.882 Earnings Per Weighted Averoge Shore of Common Stock..

$2 84 S3.37 S4.44 See Notes to Consohdoted Financial Statements.

15 CONSOLIDATED STATEMENTS OF CASH FLOWS For the Years Ended December 31, 1992 1991 1990 Cosh Flows From Operating Activities:

@*"80808 0'To#0rs)

Net income.

. $117 590

$135.851 S181,603 Adjustments to reconcile net income to net cash provided from operchng activities.

GO n on sole of investment, net of income taxes..

(46.150)

Depreciation and amo:tzation..

126 695 117,402 117,977 Amortization of nuclect fuel..

23.190 18.384 22,585 Deterred income taxes, net.

(10.783) 30,199 7,120 Deterred investment tax credits, net....

(3 667)

(3,646)

(3.399)

Dividends declared on preferred stock of subsidiary..

6,473 6.706 6.911 Allowance for funds used dunng construction.

(9.766)

(8.334)

(5,109)

Nuclear refuehng occruol....

11.862 (6.192)

(2,671)

Equity in (ecmings) losses of investees.

652 412 (1,062)

Over (under) co: lections, fuel odjustment clouse.

7,482 (1,207) 20.574 Changes in certain current assets and habihties:

(Increase) decrease in recervab:es.

(8 918)

(2.506) 8.613 (Increase) decrease in inventones..

(234) 7,785 (14 335)

Increase (decrease) in accounts poycble.

7,282 6,978 (16 216) increase (decrease) in este 1ed rate refunds and related interest.

17,811 Increase (decrease) in customer deposits..

(196) 110 778 increase (decrecse) in taxes accrued..

1.691 9.095 (18 241)

Increase (decrease) in interest accrued.

663 4.410 (1,271)

Other, net.

12,471 3.628 (4,804)

Net Cash Provided from Operating Act:vities..

300 296 319.075 252,853 Cosh Flows From investing Activiiles:

Utihy propeny odditions and construction expend:tures..

.(277,636)

(239,140)

(229.682)

Non%hty propeW odditions and construction expenditures.

. (110 228)

(23,917)

(94,536)

Repurchase /rerssuance of common stock for immatenol acquisrtion, not of cash acquired..

(25,514)

Scie of investment.

139.789 investments.

(2 591) 4,895 5,824 Pnncipo! noncash item AHowance for funds used dunng construct on.

9 766 8,334 5.109 i

Net Cash Used For hvesting Activities (380.689)

(275,342)

(173.496)

Cash Flows From Financing Activities:

Proceeds:

Issucnce of notes.

150 900 Issuance of common stock.

126 809 Issuance of bank loans.

3.354 80.000 3,164 issuance of First and Ratunding Mortgage Bonds Repoyments 300.000 Notes.....

(95 217)

(81,016)

(5.000)

First and Refunding Mortgage Bonds.

(35 890)

(8.000)

(16.600) 0:ner long-term debt..

(310)

(76.649)

(307)

Repurcncse of common stock..

(3.656)

Proiened stock.

(3199)

(2,622)

(3,578)

Drvidend payments:

Common stock..

.(109 383)

(104.910)

(100,942)

Pretened stock.

(6.558)

(6,718)

(6.975)

Short-term borrowings, nef.

20 390 (113.304) 96.483 Fuel financings, net.

(6 62B)

(4,292)

(10.458)

Net Cash Provided By (Used For) Financing Activrhes.

44 268 (21,167)

(44,213)

Net increase (Decrease) in Cosh and Temporary Cosh investments..

(36 125) 22,566 35,144 Cash and Temporary Cash investments, January 1.

68175 45.609 10.465 Cosh and Temporary Cash investments, December 31

.S 32.050

$ 68,175

$ 45,609 Supplementof Cash Information:

Cosh paid for - Interest..

5100 3:0 S 90,623

$ 96,387 income taxes.

51 6i9 45,357 94,800 Noncash Financing Activities:

Capital lease obhgations recorded.

2,864 See Notes to Consolidaled FinancciStatements

1e CONSOLIDATED STATEMENTS OF CAPITALIZATION December 31 1932 1991 Common Equity (Note 6):

(Thousands ot Dollars)

Common stock. wrthout por value. oumonzed 75,000.000 shares. issued and outstanding. 1992 - 43.910 631 shores and 1991 - 40.784.327 shores S 699 003 S 571,597 Retained eomings 462 893 457.393 Total Common Equtty 1 161.896 48 % l.028 990 46%

South Carolino Electric & Gas Company:

Cumulative Preferred Stock (Not subject to purchese or sinking funds)(Note 6):

S100 Por Value - Autnonzed 200.000 shores

$50 Por Votue - Autnonzed 125,209 shores Shores Outstanding Redemption Pnce Eventuot Senes 1992 1991_

Current Through tAnimum

$100 Por 840%

197.668 197.668 102 80 11-30-96 101 00 19.767 19.767 S 50 Por 5 00 %

125 209 125.209 52 50 52 50 6 260 6.260 Total Preferred Stock (Not subject to purchase or sinking funds) 26 027 1%

26 027 1%

South Carolino Electric & Gos Company:

Cumulative Preferred Stock (Subject to purchase or sinking funds)(Note 7):

S100 Por Value - Authonzed 1550.000 shores Shores Outstanding Redemption Pnce Eventual Senes 1992 1991 Cu' rent Through FAnimum 7 70%

96.000 98.081 101 00 101 00 9 600 9 808 8 12 %

136.265 140.282 102 03 102 03 13 626 14.028 232.265 238.363 S50 Por value - Authonzed 1.652.586 shores Shores Outstanding Reoemption Pnce

?

Eventuo:

Senes 1992 1991 Current Through IAnimum 4 50 %

22 400 24 000 51 00 51 00 1 120 1.200 460%

5 334 6 834 50 50 50 50 267 342 4 60%(A) 32 052 34.052 51 00 51.00 1.602 1.702 4 60%(B) 65 000 88.400 50 50 50 50 4 250 4 420 5 125%

75 000 76.000 51 00 51 00 3 750 3.800 6 00 %

92.800 96.000 50 50 50 50 4 640 4.800 8 72 %

192 000 224 000 52 00 12 31-93 50 00 9 600 11.200 9 40%

203 678 210.755 51 175 51x75 10 184 10 538 708 264 760041 S25 Por Vo!ue - Authonzed 2.000.000 shores None outstanding in 1992 and 1991 Total Preferred Stock (Subject to purchase or sinking tunas) 58 639 61.838 Less Current portion. including sinking fund requirements

?485 2.369 Totol Preferred Stock, Net (Subject to purchese or sinking funds) 56 154 2%

59,469 3%

17 December 31.

1992 1991 Long-Term Debt (Notes 4 and 5):

(Thousands of Dollars)

South Carolina Electnc & G:s Company:

First and Refunding Mongage Bonds:

Year of Senes Matug 47/8%

1995 16.000 16.000 5.45%

1996 15.000 15.000 6%

1997 15.000 15.000 61/2%

1998 20.000 20,000 8%

1999 35,000 35.000 91/8%

1999 15.000 15.000 8%

2001 35,000 35.000 7 1/4 %

2002 30.000 30.000 9%

2006 145,000 145,000 91/8%

2006 50.000 50.000 8.40%

2006 50.000 50.000 83/8%

2007 30,000 30.000 8.90 %

2008 30.000 30.000 10 1/8%

2009 35.000 35.000 97/8%

2009 50.000 50,000 12.15 %

2010 35,890 8 3/4 %

2017 100.000 100.000 87/8%

2021 155.000 155,000 Pollution Cont o! Facilities Revente Bonds:

5 95% Senes. due 2003 6 855 6,945 Fairfield County Senes 1984, due 2014 (6.50%)

56.820 56.820 Richland County Senes 1985. due 2014 (6 50%)

5.210 5.210 Fairfield Count Senes 1986, due 2014 (6 50%)

1.090 1.100

/

Colleton and Dorchester Counties Senes 1987, due 2014 (6 60%)

4,365 4.365 Cop tchzed Lease Gungations, due 1991-1997 (vonous rates between 5 3/4% and 10%)

4.875 6.511 Soutn Carolino Generating Company. Inc.:

Berkeley County Pollution Control Facihties Revenue Bonds due 2014 (6 50%)

35 850 35.850 Term Loon, due 1992 63.500 Note,7.78% due 2011 74 800 South Carchno Fuel Company. Inc :

Nuclear fuel habMy 36.S86 41,679 Fossil fuel habMV 18.812 20.647 South Corchna Pipehne Corpora + ion Note,9.27% due 1991-1994 16 000 24,000 Soutn Corchna Real Estate Development Company. Inc.

Note,8.5% due 2002 395 423 Bank Locn. 5.50% due 1994 2 900 2.974 Bank Loon,5 50% due 1994 4 696 4.751 Bank Loon,6 00% due 1997 3 354 Note, 9.125% due 2004 989 1.015 Pnmescuth:

Term Loon,10 0% due 1995 887 904 Capitalized Lease Obligation, due 1994 (vancble rate - 10 0% ct 12/31/92) 15 24 SCANA Corporation:

Bank Notes, due 1994 (vanoble rate - 3.79% at 12/31/92) 60.000 80.000 Medium-term notes. 7.17% due 1999 42.400 Medium-term notes. 6 60% due 1999 30 000 Total Long-Term Debt 1 233.201 1,218.608 Less - Long-term debt matunties, including sinking fund requirements 24,704 92,290 Unamortized d:scount 3.7a3 3,922 Total Long-Term Debt, Net 1 204 754 49% 1,122,396 50%

Total Capitollroflon

$2.448 831 100 % S2.236,882 100 %

See Notes to Consohdated nnancial Statements

l 1a NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.

SUMMARY

OF SIGNIflCANT ACCOUNTING FOUCIES:

operchon' and ' Maintenance" expenses A. Organization and Principles of Consolidction SCANA Corporchon (Company). o South Corchno corporation.

Allowance for funds used dunng construction (AFC), a noncash is o pubhc uthty holding company within the meaning of the Pubhc item, reflects the penod cost of capital devoted to plant under con-Utikty Holding Company Act of 1935, but is exempt from registration struction. This accounting practice results in the inclusion, os a uns 2 M component of construction cost (construction work in progress), of The accompanying Consohdated FinancicI Statements refut the costs of debt and equtty capitol dedicated to construction invest-the conschdotion of the nccounts of the Company and its wholiy ment. AFC will ultimotely be included in rate base investment and s h ones depreciated as o component of plant cost in estabhshing rates for ReguIcted utses utikty services The Company's regulated subsidiones calculated South Carohno Electnc & Cos Company (SCE&G)

AFC using composite rates of 9 6% 9.7% and 9 5% for 1992, South Corchno Fuel Company, Inc 1991 and 1990, respechvely. These rates do not exceed the maxi-South Carchno Generating Company. Inc. (GENCO) mum allowable rate os calculated under FERC Order No 561.

Sou'h Carokna P;pehne Corporot on (Pipehne Corporofion)

Interest on nuclect fue! in process is capitchzed at the octual interest Nonreguloted businesses amount.

MPX Systems, Inc.

E. Deferred Return on Plant Investment p$t Resources, Inc.

Commencing Juty 1,1987, as approved by o PSC order on SCANA Hydrocarbons. Inc.

that date, SCE&G ceased the deferrol of carrying costs ossociated SCANA Petroleum Resources. Inc.

with 400 W of eleche generahng capacity previously removed South Carchna Rect Estate Development Company, Inc.

from rate base and begon amorhzing the occumi.iloted defer'ed cor-Suburban Propone Group, Inc.

ryng costs on a straighme basis wer a teny ear period (see Note y

21). Amortizahon of deterred carrying costs, included in investments in joint ventures in real estate are repor*ed using

' Depreciation and amort 2chon," was approximately $4.2 milhon for the egurty metnod of accounting Significant intercompany balonces 1992,1991 and 1990.

and transactions have been ehminated in conschdation.

F. Revenue Recognition B. System of Accounts Customers' meters are read and bills are rendered on a monthly The accounting records of the Compan(s regulated sub-cycle bosts. Base revenue is recorded dunng the accounting penod scones are mo:ntoined in occordance with the Uniform System of in wtr:h the meters are read.

Accounts presenbed by the Feoeral Energy Regulatory Commission Fuel costs for electnc generation are collected through the fuel (FERC) and as adopted by the Pubhc Service Comm:ssion of South component in retail electnc rotes The fuel component contained in Carokna (PSC).

electnc rates is estab5shed by the PSC dunng semionnual fuel cost C. Utstify Plant heonngs. Any difference between actual tuel cost and that contained

" E "*"

"'"9 Uhhty ptont is stated substonho?!y at onginot cost. The cos's of m

ng nd semnuM W mng.

odditons, renewo!s and betterments to utihty plant, including direct labor, matenal and indirect charges for engineenng. supervision and the electnc fuel clause component opproximate'y $17.7 million and an allowance for funds used dunng construchon, are odded to utihty N'

plant accounts The onginot cost of uthty property retired or otherwise drsposed of is removed from utikty plant accounts and genero!!y Customers subject to the gas cost adjustment clause are bill 6d charged, along with the cost of removo!, less salvage, to occumulot-based on a fared cost of gas determined by the PSC dunng annua!

ed depreciation. The costs of repairs, replacements and renewals of gas cost recovery heonngs. Any difference between octuoi gas cost items of property determined to be less than o unit of property are and that contained in the rates is deferred and included when estab-charged to maintenance exoense' lishing gas costs during the next onnual gas cost recovery hearing.

SCE&G, operator of the V C. Sum' s Nuclear Stahon (Summer At December 31,1992 and 1991 the Company had undercolheted Stohon). and the South Corchno Pubhc Service Authonty (PSA), a through the gas cost recovery procedure approximately $6.2 milhon body corporate and pohhc of the State of South Carchno. are joint and 501 million, respectively, which are included in ' Deferred owners of Summer Station in the proportions of two-thirds and one-Debits-Other

• third, respectvely. The port:es shore the operat ng costs and energy In November 1991, the PSC odopted a weather normakzatino output of the plant in these proporhons. Each party, however, pro-odjustment (WNA) for SCE&G's and the Company's directly owned vides its own financing. Plant in service related to SCE&G's portion gas distribuhon systems os part of their firm gas rote schedules for of Summer Stahon was coproximate!y $916 0 milhon of December resioent al, small commercial and small industnol customars (see 31,1992 and 1991. Accumulated deprecichon associated with Note 20)'

SCE&G's shore of Summer Stahon was opproximately $262.2 mil-hon and $247 6 million as of December 31,1992 and 1991, G. Depreciation and Amortization respechvely. SCE&G's shore of the direct expenses ossocicted with Provisions for depreciohon are recorded using the straight-hne operchng Summer Stahon is included in the Company's 'Other method for financio! reporhng purposes and are based on the

w estimated service lives of the vanous classes of property The com-Investment tax credits were generally oeferred and are being posite weighted-overage oeprecichon rates were os follows.

omo-tized over the deprecioble hves of the respective ossets in February 1992 the Financial Accounting Standards Board I992 1991 1990 (f ASB) issued Statement No.109

• Accounting for income Taxes "

SCE&G 3000 2 97 %

2 97 %

This Statement requires tre use of the 'liabikty method

• whereby a GENCO 2 63 %

2 59%

2 68 %

deterred tax liability or asset would be recognized for deterred tax Pipehne Corporation 2 62%

2 62 %

2 56 %

consequences of oil temporary di'terences The Statement (1)

Aggreoote of Above 2 96 %

2 94 %

2 93 %

requires that a deturred tax liability or asset be adjusted for the effect of a change in tax low or rates, (2) prohibits net-of tax occounting Nuclear fuel amortization, wruch is included in ' Fuel used in and reporting, and (3) reauires recognition of a deferred tax habihty electnc generchon" and is recovered through the fuel cost component for tax benefits that are flowed through to customers when temporary of SCE&G's rates, is recorded using fne units-of-produchon method-differences onginate and for the equrty comporent of AFC Statement Provisions for amort:totion of nuclear fuel include amounts neces-No.109 is efiect ve for fiscal years beginning offer December 15, sory to sofis'y obhgTions to the United States Department of Energy 1992. The Company does not anticipate that opphcohon of this under a contract for d:sposal of spent nuclear fuel.

Statement will have o significant impact on results of ogerations or The acqu:s; tion adjustment relohng to the purchase of certain financial position.

gas properhes in 1982 is being amortized over a 40-year penod using the st cight-line method J. Pension Expense The Company hos o noncontnbutory defined benefit pension H. Nuclear Decommissioning plan covenng substonhally oil permanent employees. Benefits are Decommissioning of Summer Station is presently projected to based on years of accredited service and the employee's overage commence in the year 2022 when the operating hcense expires.

annual base earnings received dunng the lost three years of employ-The expend;tures (on a before-tox basis) related to SCE&G's shore of ment. The Company's pohcy nos been to fund pension costs decommissioning actwit es are currentry estimated (in 2022 dollars, occrued to the extent pr/m!!ted by the opphcoble Federal income tax assuming a 4 5% annual rote of inflohon) to be opproximate!V regulo'Ms os determined by on andependent actuary S545.3 milhon including partial reclomation costs SCE&G is pro-Net penodic pension cost, os determined by on :ndependent viding for estmo ed decommission:ng cos's of its shore of Summer actuary, for the years ended December 31,1992,1991 and 1990 Station over the life of Summer Stahan SCE&G currently collects included the following components-through rates $16 million annua!!y and deocsits amounts collected in on external trust fund in coraphonce with the financio! cssurance Year Ended December 31, i9n 1991 1990 requirements of the NRC. Management intends for the fund, includ-ing earnings, to provide for oil eventual decommissioning expend" tures on on o'fer-tax basis cunng the penod S 7,174 $ 6.367 S 5.656 Inte%t cost on prop knent obhgchon i9 628 18.334 17.239 in addthon, pursuant to the National Energy Pokcy Act possed Adjustments Retum on plan ossets g8 607; (51,440) (3,117) by Congress in 1992, SCE&G has recorded o habihty for its estimat-Net omortization and deterrol 8 096 36.263 (12.717) ed shore of amounts required by the U, S Department of Energy for Net penodic pension cost 5 L291 S 9.524 S 7,061 tne study of nuc ear waste disposal. SCE&G will recover these pay-ments, fotolkng $7.1 rnilhon at December 31,1992, through the The following table sets forth the funded status of the plan, os fuel cost componera of its rates; accordingly, these amounts have determined by on independent actuary, at December 31,1992 and been deterred and are included in 'Detered Debits - Other' and 1991:

' Deterred Credits - Other "

Year Ended December 31, 1992 1991

1. Income Taxes tetaanot present value of teofit obkgations The Company and its subsidiones file consohdoted Federal and vested benefit obhgation

$177 930 S183 966 State income tax retums income taxes are allocated to oil sub-Nonvested benefit obhgation 17i10 3.506 sid, anes based on ineir contnbuhons to conschdoted toxoble Accumutoted benent obhgat on s195040

$187,472 KoM Projected benefit obhgation

$256 440 S241,179 Because tax laws and financial accounting standards dder in Plan ossets of fair value 304 114 276.464 their recognthon and measurement of economic events, d:fferences Plan ossets greater than projected onse be+ ween (1) the amount of 10xoble income and reported prefox benefit obhgation 45 674 35,285 financial income for a year and (2) the tax bases of assets or liabili-Unrecognized net transition habiley 11.555 13,654 bes and the.r reported amoun+s in the financial statements Unrecognized poor service costs

0.563 11,829 Accordingly, the Company provides deferred income taxes for sub-Unrecognized net gain m3 633; (62,196) stantially all timing differences. poncipolly occelerated tax deprecio-Pension osset (habihy) recognized in hon, empt for certain basis dfferences onsing poor to 1982-Conschdoied Bolonce Sheets 5 4.159 J

Dete~ed income tax provisions are included in income currently with correspond:ng credits or charges to occumulated deferred income eg mM W W mn The following table sets forth the assumptions used in the amounts

20 shown oDove for the years 1992,1991 and 1990.

$18 3 million at December 31,1992 and are included in ' Deterred s-W Annual discount rate used to determine benefit obhgations 8.0%

Exoected long-term rote of retum on plan ossets 8.0%

M. Gas Futures Contracts Discount rate used in determining pension cost 80%

The Company's gas production subsidiary, SCANA Petroleum Assumed annual rate of future solary increases for projected Resources, Inc. (SPR), sells gos futures contracts in order to hedge benefit obligation 5.5%

price nsks for o portion of SPR's production Gains and losses on such contracts, which are not matenal, are recognized concurrently in oddition to pension benefits, the Company provides certain with the revenue from the associated gas soles.

i hecith core and hte insurance benefits to active and retired employ, ees. Currently, such benefits are generally charged to expense when N. Statements of Cash Flows claims and premiums are paid The annual cost of providing such The Company considers temporary cash investments having benefits to retired employees is opproximately S3 0 million.

original maturities of three months or less to be cash equivalents in December 1990 the FASB issued Statement No.106 Temporary cash investments are generally in the form of commercial

' Employer's Accounting for Postretirement Benef;ts Other Than paper, certrficates of deposit and repurchase agreements.

Pensions

• The Statement, which will be effective for calendor year 1993, requires that the cost of postretirement benefits other than O. Reclassificottons pensions be accrued dunng the years the employees render the ser-Certain amounts from pnor periods have been reclassified to vice necessory to be ehgible for the opphcoble benefits The conform with the 1992 presentation.

Company has estimated that its accumulated obligation for these

2. RATE MATTERS:

i benefits o' December 31,1992 is opproximately S64 milhon (tron _

sition liabikty) and the annuchzed increase in expenses (not of pay-A. On December 7,1992 SCE&G fded on opphcation with the ments to current retirees), including the omomzotion of the transition PSC for on increase in retail electnc rates. The request proposes a habihty previoed for by the Statement, is approximate!y $4 7 million.

two phase ircrease; phase one, expected to commence June 1, The Company expects either that most of the increased costs attribut-1993, would produce additional revenues of coproximately 8.9%

oble to regulated operations wdl be recovered currently through rates or $72 9 milhon annually, and phase two (based on additional con-or that they wdl be recorded as o regulatory osset to be recovered struction expenditures for the Cope plant), expected to commence through rates in the future os tne costs are paid. In addition, the PSC June 1,1994, would produce additional revenues of opproximately or the FERC may require the Company to fund the habihty resutting 2.5% or $20 2 miikon annually. No assurance con be given as to from implementation of Statement No 106. The PSC, in other utikty the adequacy or timing of such rate rehef A heonng is scheduled to rote decisions, hos occepted odoption of Statement No.106 in set.

begin in IJorch 1993.

ting rates On December 10,1992 the PSC issued on occounting B. On September 14,1992 the PSC !ssued an order granting order allowing SCE&G to defer the increased expenses resulting from SCE&G o $.25 increase in transrt fores from S 50 to S.75 in both ocoption of Statement No 106 through IAay 31,1993 owort ng Columbio and Charleston, South Corchna, however, the PSC also consideration of their recove y in SCE&G's pending electnc rate cose required S 40 fores for low income customers and denied SCE&G's (see Note 2A) and in a future gas rote proceeding. Therefore, the request to reduce the number of routes and frequency of service. The Company beheves this Statement will not have a significant impact new rates were placed into effect on October 5,1992. SCE&G hos on the Company's financial posttion or results of operations appealed the PSC's order to the Circuit Court.

However, there can be no assurance that such recovery will be C Since November 1,1991 SCE&G's gas rote schedules for granted its residential, small commercial and small industnol customers have included a weather normahzotion odjustment. The WNA mini-K. Debt Premium Discount and Expense mizes fluctuations in gas revenues due to obnormal weather condi-Long-term debt premium, 0:scount and expense ore being tions and has been opproved through November 1994 subject to on omothzed as components of ' interest on long-term debt, net" over annual review by the PSC. The PSC order was based on a retum on the terms of the respective debt issues.

common equity of 12.25% (see Note 2G), The PSC also approved the WNA for the Company's directly owned natural gas distabution L Environmental system ocquired in 1990. The new rates become effective the first The Company has on environmentof assessment program io bdhng cycle in December 1991. As port of the 1992 annual review identity and ossess current and former operations s:tes that could the PSC issued on order in September 1992 which mode certain require environmental cleanup. As site ossessments are initiated, on modifications in the WNA but did not offect the overoll intent.

estimate is mode of the amount of expenditures, if any, necessary to D. In May 1989 the PSC opproved a volumetnc and direct investigate and clean up each site. These estimates are refined as bilkng method for Pipeline Corporofion to recover toke-or-poy costs additional information becomes available; therefore octual expendi-incurred from its interstate pipehne supphers pursuant to FERC-tures could significantly differ from the original estimates. Amounts opproved final and non-oppeolable settlements in December 1992 estimated to cote for site ossessments and cleanup relate pomorily the South Carolina Supreme Court (Supreme Court) opproved to regulata1 operations and have been occrued and deterred pur-P pehne Corporation's full recovery of the take-or-pay charges suont to on oc:ounting order from the PSC pending consideration of imposed by its supphers and treatment of these charges os a cost of their recovery in future rate proceedings. However, there con be no gas However, the Supreme Court declared the PSC-opproved assurance that such recovery will be granted Such amounts totolled i

F W

I

(

' purchase deficiency" methodology for recovery of these costs to be enorges to its subsidiones The Company does not beleve the r.aw l

unlawful retroactive rotemoking ano temonded the docket to the PSC reporting obhgations or oliocations will have o matenol effect on its to reconsider its recovery methodology. The petitions Dy the PSC, financial position or results of operations.

l the Company and the Consumer Advocate to the Supreme Court for I in the Consumer Advocate's appeal to the Supreme Court of

~

reheoring were dened. The Company believes that the eliminchon of the PSC order dated July 1,1987, concerning restorohon to the purchase deficiency method of recovery will offect the timing for SCE&G's rote base of the net production investment ossociated with 7

recovery of toke-or-pay charges and shift the o!!ocotions omong 400 MW of electric generating capacity previously removed by the Pipehne Corporation's customers (including SCE&G) but that all PSC in its order doted March 2,1984, the Supreme Court upheld such charges should be ultimately recovered.

restoration of the 400 MW to rote base. The Supreme Court also E. On August 8,1990 the PSC issued on order, effective remanded the case to the PSC for tactual finding on the prudence of November 1,1990, opproving changes in Pipelire Corporation's the derating of 69 MW of SCE&G's total production capacity and the i

gas rate design for soles for resole service and upholding the 'volue-effect, if any, of the deratings on depreciation cnd conying cost of-service' method of regulot on for its direct industnot service.

issues offecting its rate base and cost of service. The PSC issued on i

Direct industnol customers seeking ' cost-of-service

• based rates ini-order reaffirming its decision and stating in its findings and conclu-tioted two separate appeals to the Circuit Court, which reversed and sions that the 69 MW reroting had no effect on rote base and cost of remanded to the PSC tts August 8,1990 order. Pipeline Corporation service. The Consumer Advocate then appealed this order to the l

has appealed that decision to the Supreme Court. Although Pipeline Circuit Court which consolidated this appeal with the oppeal of the l

Corporation beheves that the decision of the PSC lies within the dis-electric rate order described in Note 2F above and offirmed the PSC cretion granted it by the lows of South Carolino, the outcome is order. The Consumer Advocate oppealed the decision to the j

uncertain.

Supreme Court which, in on opinion dated August 31,1992, i

F. On July 3,1989 the PSC granted SCE&G opproximately offirmed the order of the PSC.

$21.9 million of a requested $27.2 milhon annualincrease in retail

3. GAIN ON SALE OF INVESTMENT:

electnc revenues based upon on allowed retum on common equity of 13.25% The Consumer Advocate oppealed the decision to the On August 14,1990 fdCl Communications Corporation Supreme Court (see Note 2I) which, on August 31,1992, found thof ocquired all outstanding shores of Tehcom. USA common stock for the evidence in the record of that cose did not support a retum on cash of $42 per shore. Through its investment in Telecom Partners, common equity higher than 13.0% and remonded to the PSC o por.

MPX Systems, Inc. (a wholly-owned subsidiary of the Company) tion of its July 1989 order for o determination of the proper retum on owned opproximately 3.3 milhon shores of Telecom. USA common I

common equity consistent with the Supreme Courts opinion. On stock of the date of acquisition. The gain from the sole of the Stock, January 19,1993 the PSC issued on order allowing a retum on net of income taxes, was opproximately S46.1 milhon, or $1.13 per common equity of 13.0% opproving a refund based on the differ, shore of the Company's common stock, and was reported in the i

ence in rates created by the difference between the 13.0% and the third quarter of 1990.

I 13.25% retum on common equity and making other non-moterial

4. LONG-TERM DEBT:

odjustments to the calculation of cost-of-service SCE&G hos peti-tioned the PSC for reheonng and reconsideration of the new odjust-The annual amounts of long-term debt matunties, including the ments to cost of service. The annuot effect on electnc revenues of omounts due under nuclear and fossil fuel agreements (see Note 5),

and sinking fund requirements for the years 1993 through 1997 ore the decrease in rote of retum is opproximately $3.7 milhon. The summarized as follows-estimated cmount of occumulated refund through December 31, 1992, before interest and income taxes, is approximately $14.6 mil-year Amount Year Arnount lion, and has been charged against 1992 'Electnc Revenues.' The (Thousands of Dollars) refund plus interest will be made dunng 1993.

1993

$ 24.704 1996

$15.313 G. On November 28,1989 the PSC granted SCE&G on 1994 110 701 1997 17.890 increase in firm retail natural gas rates, effective November 30, 1995 53.491 1989, designed to increase annuot revenues by $10.1 million, or Approximately $10.9 milhon of the current portion of long-term 89.5% out of the requested increase of approximately $11.3 mil-debt for 1993 may be satisted by either deposit and concellation of hon. In its order the PSC outhonzed a 12.75% retum on common bonds issued upon the basis of property odditions or bond retirerrent equity. The Consumer Advocate oppealed to the Supreme Court credits, or by deposit of cash with tre Trustee.

which on August 31,1992 remanded the order to the PSC for rede-On July 13,1992 the Company issued S42.4 milhon of medi-termination of the proper omount of litigation expenses to include in um-term notes, 7.17% due July 15,1999. On October 8,1992 l

the test period. In January 1993 the PSC reduced the amount of liti-the Company issued $30 0 million of medium-term notes, 6 60%

gotion expense and ordered a refund which SCE&G estimates will be due October 8,1999. The procoeds from the sales of these securi-opproximately $163,000-ties, which are unsecured, were used in the funding of nonuhlity sub-1 H. The PSC has completed its investigation of the financial sidiary octivities.

relationships behveen SCE&G ond its offiliates. On November 13, On August 21,1992 GENCO issued a S78.5 milkon, 7.78%

1 1992 the PSC issued a final order establishing certain reporting note, due December 31, 2011. The proceeds from the issuance requirements for SCE&G and its regulated offiliates, including the were used to refund a S63.5 million loon due December 31,1992, Company, and changing the method of allocating SCANA overhead to repay advances from the parent and for construction expenditures.

l

. -. ~

j 22 l

l 2

i SCE&G's Pollution Control Bonds (which do not include the in 1991 the Company registered 2,000,000 shores of 5 95% Senes, due 2003) are secured by like pnncipal amounts of Common Stock to be issued under its Stock Purchase-Sovings Pion its First and Refunding Mongage Bonds. On September 1,1992 and 1,000,000 shores of Common Stock to be issued under the SCE&G completed a Fixed Rote Conversion and Reoffenng of $631 terms of its Dividend Reinvestment and Stock Pur: hose Plan. Dunng million and $4.4 milhon of such Pollution Control Bonds to bear 1992 422,082 and 404,222 shores totolkng $17.7 million and interest at the rate of 6.50% and 6.60% respectively. The bonds

$16.9 million were issued pursuant to these plans, respectively.

moture September 1, 2014.

On November 18,1992 the Company issued 2,300.000 On October 1,1992 GENCO converted Pollution Control Bonds shares of common stock with net proceeds fotoihng $89.9 milhon, of $35 85 million to a f;xed interest rate of 6.50%. The bonds.

The proceeds have been contributed by the Company to the common which are joint obligations of SCE&G and GENCO, are unsecured stock equity of SCE&G and used by SCE&G for general corporate and mature in 2014.

purposes, including the financing of its construction program and the in January 1993 the Company arranged for on unsecured bank reduction of short-term indebtedness incurred for such purposes.

loon in the principal amount of $60 milhon, due January 14,1994.

The Restated Articles of Incorporation of the Company do not The interest rate is the three month LIBOR rote plus 30 basis points limit the dividends that may be payable on its common stock.

and is reset quarterly. Proceeds from the loon were used to repay However, the Restated Articles of incorporation of SCE&G and the

$60 milhon in bank notes due January 15,1993; occordingly, such indenture underlying certoln of its bond issues contain provisions notes are included in long-term debt of December 31,1992.

that may hmit the payment of cash dividends on common stock. In Substantially all utikty plant and fuel inventones are pledged as addition, with respect to hydroelectric projects, the Federal Power Act collaterol in connection with long-term debt.

may require the appropriation of a portion of the eomings therefrom.

At December 31,1992 approximately $10.2 milhon of retained

5. FUEL FINANCINGS:

somings were restricted as to payment of cash dividends on com-Nuclear and fossil fuel inventones are financed through the mon stock.

i issuonce of short-term commercial paper. These short-term borrow-Cosh dividends on common stock were declared at on annual ings are suopork! by irrevocable revolving credit ogreements which rate per shore of $2.68, $2 62 and $2.52 for 1992,1991 and expire July 31,1995 (nuclear) and July 31,1994 (fossil).

1990, respectively.

Accordingly, the amounts outstanding have been included in long-l 4

term debt. The credit ogreements provide for maximum omounts

7. PREFERRED STOCK (Subject to Purchase or Sinking Funds):

($75 million related to nuclear fuel and $25 milhon related to fossil The call premium of the respective series of preferred stock in fuel) that may be outstanding at any time.

no cose exceeds the amount of the annual dividend. Retirements Commercial paper outstanding and weighted overage interest under sinking fund requirements are of por values.

rates of December 31,1992 and 1991 are os follows-At any time when dnndends have not been paid in full or declared and set oport for payment on oil senes of preferred stock, 1932 1991 SCE&G may not redeem ony shores of preferred stock (unless all shores of prefened stock then outstanding are redsmed) or pur-l Nuclear fuel Chase or otherwise acquire for value any shores of preferred stock i

l Amount outstanding

$36 9

$41.7 Weighted verage interest rate 3 74 %

4 88 %

except in occordance with on offer made to all holders of preferred stock. SCE&G may not redeem any shores of preferred stock (unless Fossil Fuel Amount owng

$18 8

$20 6 011 shares of preferred stock then outstanding are redeemed) or pur-Weighted werage interest ' ate 383%

510%

chose or otherwise ocquire for value any shores of preferred stock i

O

6. STOCKFOLDERS*lNVESTMENT (including Preferred Stock Not for one or more series of preferred stock) of any time when it.is in default under the provisions of the purchose fund or sinking fund for The changes in ' Common Stock / without por value, during any senes of preferred stock.

1992,1991 and 1990 are summonzed as follows:

The oggregote annual amounts of purchase fund or sinking fund requirements for preferred stock for the years 1993 through i

Number Thousancs of Shares of Dollars 1997 are summarized os follows:

Bolonce December 31,1989 40,296,147

- $573,583 Year Amount Year Amount Acquisition of gas distnbution propees 586.029 611

[

g,g gg Omer LOM 1993 S2.485 1996 S2.515 Balonce December 31,1990 40.882,176 575.251 1994 2,515 1997 2,515 I

Repurchase of common stock (1,000,000)

(37,425) 1995 2,E15 Acquisition of propone operations 902,311 33,769 Other (160) 2 The changes in

• Total Preterred Stock (Subject to purchase or Baio,ce omemte 31,1991 40 784.327 57i,597 sinking funds)' dunng 1992,1991 and 1990 are summarized os

!ssance of coman sts 3,126,304 127.406 follows:

l Bciance Demte 31.1992 43 91o,631 5699 003

23

'70101 deterred taxes' results from timing differences in recogni-g d Shores d Dollars tion of the following items:

Bolonce December 31,1989 1,111,859 S68.038 1992 1991 1990 Shores Redeemed (Thousands of DcHars)

$100 por value (9.913)

(991)

Charged (credited) to expenses.

50 por value (51.745)

(2.587)

Accelerated depreciation and Bolonce December 31,1990 1,050.201 64 460 omorteotion

$ 2,313

$23.900 $26,763 Shores Redeemed Deterred fuel accounting (2.958) 461 (7,674)

S100 por value (628)

(63)

Property taxes 562 1,692 (5,310) 50 por value (51.169)

(2.559)

Cycle billing (1,321) 3,608 (6.023)

Boboce Decerrter 31.199 I 998.404 61.838 Toke-or-pay contracts (1.118)

(1,099)

(1.817)

Shores Redeemed intongele drilhng costs 5.122 276

$100 por vo!ue (6 098)

(610)

Nuclear refuehng oceruol (4.430) 2.052 (168) 50 por value (51.777) r2.589)

Electnc rote refund (6.571)

Bmonce Decemter 31 1992 940.529 S58.639 injunes and domoges 0,377)

Other net (i 697)

(689) 231

8. INCOME TAXES:

Total deterred taxes S(11,475) $30.201 S 6.002 Total income tcx expense for 1992,1991 and 1990 is as follows:

At December 31,1992 the cumulative net amount of income 1992 1991 1990 tax timing d;fterences on which deferred taxes have not been provid-(Thousands ofDollars) ed totaled opproximately $56 million (see Note 11).

Current taxes.

The intemal Revenue Service has examined and closed consoli-Federal S67.240

$43.485 S 92.608 dated Federal income tax retums of the Company through 1986 and State 8 146 5 284 13,356 hos completed on examination of the 1987,1988 and 1989 Total currenttaxes 75 386 48,769 105.964 returns. The preliminary Revenue Agent's Report, with which the Deterred taxes. net Company has tentatively agreed, will not have o significant impact Federal (11 888) 25.548 4 482 on the eamings or financial position of the Company.

Total dete red taxes (11 5 30 investment tax credits.

The Company pays fees to banks as compensation for its lines Amortection of amons deterred (crest) (3 659)

(3.645)

(3.764) of credit. Commercial paper borrowings are for 270 days or less.

Total income tcx expense S60.252

$75.325 S108.202 Details of lines of credit and short-term borrowings at December 31, 1992,1991 and 1990 and for the years then ended are os follows:

Totof income taxes differ from amounts computed by applying the statutory Federal income tax rate of 34% to pretax incort ;s follows-o (Millions of tbliars)

M l991 1990 Available lines of credit of year-end

$127 8

$1416 $137.5 (Thousands of Dollars)

Snort-term borrowings (including tv.?ncome 51 D.590 $135,851 S181,603 commercial paper) dunng the year:

oral income tax expense-Maximum outstanding S143 0

$1340 S154 3 Charged to operating expenses 60 947 77,562 77,392 Average outstanding S 75.3 S 74.3

$101.2 Charged (cre$ted) to other income (695)

(2.237) 30.810 Weighted overage daily eterest rates.

Preferred stock dividends 6 473 6,706 6.911 Bank loans 4 47%

6 32 %

8 44 %

Toto! pretox income S184 315 S217.882 S296.716 Commercial paper 3 69 %

6 31 %

8.12%

income taxes on above of statutory Short-term borrowings outston$ng federalincome tax rate S 62567 $ 74,080 $100,883 of year-end; increases (decreases) ottnbutable to Bank loans S 41 1 S 20 7

$ 23 6 Allowance for funds used dunng Weighted overage interest rate 4 49%

589%

860%

construction (exclumng nuclear tae!) (1 868)

(1,174)

(555)

Commercial paper

$110.4 Deferred return on plant investrrent, Weighted overage interest rate 7.99%

net of omortection 1,444 1,444 1,444 Depreciation differences 2.129 1,613 1,427

10. FINANCIAL INSTRUMENTS:

Amortection of investment tax crests (3 659)

(3.645)

(3.764)

The carrying amounts and estimated fair values of the State rncome taxes (less Federot Company's financial instruments of December 31,1992 are os foi-income tax effect) 5.649 6.559 9.851 lows:

Defened income tax flowback of higher than statutory rates (5.565)

(3,226)

(3.043)

Other ditterences, net (545)

(326) 1.959 Total income tax expense S 60.252 S 75,325 S108.202

24 SCE&G paid $35,798,857 under the contract in 1992.

ESmHD CARRY F FAIR B. Nuclear Insurance AMOU,(

VALUE The Pnce-Anderson Indemnification Act, which deals with pubhc (Thousands of Dollars) liabikt/ for a nuclear incident, currently estabhshes the liabihty limit Cash and temporary cash investrnents

$32,050

$32,050 for third-party claims associated with ony nuclear incident of $7.8 investments 5.066 10,195 bilhon Each reactor heensee is currently liable for up to $66.2 mil-Short-term bonowings 41.156 41.156 lion per reactor owned for each nuclear incident occumng of any Total tortg-ter n debt 1,233.201 1.272.922 reactor in the United States, provided that not more than $10 milhon Total Pretened stock (subject to ci the liabihty per reactor would be ossessed per year. SCE&G's purchase or sinking funds) 58.639 53.771 maximum ossessment, based on its two-thirds ownership of Gas futures contracts 338 5,527 Summer Station, would be opproximately $44.1 milhon per incident, but not more than $6.7 million per year, The information presented herein is based on pertinent information menW moWns pods @ M and on W d available to the Company as of December 31.1992. Although ihe the PSA) with Nuclear Electnc insurance Limited (NEIL) and Company is not aware of any factors that would significantly attect Amencon Nuclear insurers (ANI) providing combined property onu the estimated folr value amounts, such financial instruments have decontam.ination insurance coverage of S1.325 bilhon for any loss-not been comprehensively revolued since December 31,1992, and es in excess of $500 milhon pursuant to existing pnmory coverages the current estimated fair votue may dstfer significantly from the este (with ANI) on Summer Station. SCE&G pays annual premiums and, moted fair value of that date The following methods and assump-amon, mwd M msessM o reme Mum @o em 6

tions were used to estimate the fair value of the above classes of 71/2 times its annual premium in the event of property domoge loss to any nem gene @ng MMes med W R Bsed on me a

n e p rary cash investments, including commercial nual premium, this retroactive premium would not exceed paper, repurchase agreements, treasury bi!!s. and notes are valued hrren g

of their carrying omount.

To the extent that insurable claims for property domoge, decont-Fair values of investments and long-term debt are based on omination, repair and replacement and other costs and expenses quoted market pnces for similar instruments. or for those ins'ruments arising from o nuclear incident at Summer Stoton exceed the pokcy for which there are no Quoted market pnces ovallable, fair values are 1 mits of insurance, or to the extent such insurance becomes unavo:1-based on net present value calculation 1 Investments which are not able in the future, and to the extent that SCE&G~s rates would not considered to be financial instruments (goodwili) have been exclud-recover the cost of any purchased replacement power, SCE&G will ed from the carrying amount and estimated fair votue Settlement of retain the nsk of loss os o self-insurer. SCE&G hos no reason to long term debt may not be possible or may not be o prudent man-anticipate o serious (Nelear incident of Summer Station. If such on d

could have o matenolly adverse impact on Sh orrowings are valued of their carrying amount.

Co s on The fair value of preferred stock (suoject to purchase or sinking funds) and gas futures contracts is estimated based on quoted mar.

C. Litigation ket pnces.

SCE&G. octing for itsett and the PSA (as co-owners of the 885 Potential taxes and other expenses that would be incurred in on MW Summer Station), filed on action against Westinghouse Electric actual sole or settlement have not been taken into consideration Corporation (Westinghouse) on March 22,1990 in the U.S. Distnct

11. COMMITMENTS AND CONTINGENCIES:

Court for South Carolino. SCE&G is seeking a judgment that Westinghouse is obhgated to correct the detects in the steam genero-A. Construction tors supplied by Westingnouse to Summer Station that are defective SCE&G has entered into o contract witn Duke / Fluor Daniel to in design, workmanship and matenols at no cost to SCE&G, and for design, engineer and build a 385 MW cool-tired electne generating octuoi and punitive domoges and treble domoges in on amount to plant near Cope, Soutn Carohna in Orangeburg County. Construction be determined.

of the plant began on November 12,1992 with commercial opero-D. Environmental tion expected in the spnng of 1996 The estimated pace of the Cope plant, excluding financing costs and AFC but including on allowance As described in Note I L the Company has on environmental for escolation, is $450 milhon. In addition, the transmission knes for ossessment program to identity and assess current and former oper-interconnection with the Company's system are expected to cost $26 otions sites that could require environmental cleanup. As site milhon. On April 7,1992 the PSC approved a Certificate of cssessments are initiated, on estimate is made of the amount of Environmental Compat;bility and Public Convenience and Necessity expenditures, if any, necessary to investigate and clean up each site.

regarding the plant construction.

These estimates are refined as additional information becomes avail-Under the Duke / Fluor Daniel contract SCE&G must make speci-able, therefore octual expenditures could significantly differ from the fied monthly minimum payments These minimum payments do not origino! estimates. Amounts estimated to date for site ossessments include amounts for infiction on a cenoin portion of the contract and cleanup relate pnmonly to regulated operations and have been which is subject to escalation (approximately 3A% of the total con-occrued and deferred pursuant to on accounting order from the PSC tract amount). The oggregate amount of such required minimum pending consideration of their recovery in future rote proceedings.

payments remaining at December 31,1992 is os follows (in thou-However, there con be no assurance that such recovery will be 9""*

sands):

1993 S107,920 1994 168,045

12. SEGMENT OF BUSINESS INFORMATION:

1995 59,766 Segment information at December 31,1992,1991 and 1990 1996 5.603 and for the years then ended is os follows.

Total

$341,334

as 1990 mv 62 W

W flectoc Gas Transit Tota!

QO;sym 1DNyi.

(IhadSa'ldS Of 0. Mars)

Ow::s rmu 5 OG7 5305275 S 3 f 23 $; 73a 0; eating revenues S 851.146 S292.380 S 4.033 $1.147.559

&.ern; ny.3er Operating egenses.

mcg succ exdu$ng oeprecchon J amnzman 554 BF 25c D-9 205 E20290 and amortizaton 565.055 250.246 8 500 823 801 mean xc Depreciaton and anotfsar 93 PB

!4174

, f.3

'08 315 amo tecton 84.5B7 12 991 223 97.801

' w awarn; ewm M6c5 2703:2 9 368 928 595 bral opera'ing expenses 649 642 263 237 8 723 921.602 Dymng eme ; /

S ' B? 902 S 34 923 1 745 209 730 Operating income (ioss)

S 201.504 S 29 143 S(4 690) 225 957 e 0% ncame v i1 683 Add - Other income. net 54 874 Lecs. Wes' c+cges 97 600 tess - Interest charges 92,317

se rec sto a arc _

6 473

- Preferred sixk dmdends 6 911 Ne nwe S !17190 Net income S 181.603 mu ewaves Capital expenstates w# cme

$ 234 918 5 33495 5 346 S 2fe 759 13entifedie S 185 041 S 39 736 S 81 S 224 858 wre; fx wai: Onry apecons 8 577 Utced for overall Company operatons 4 824 E 277 636 Total S 229.682 ada cssa s identifeble asse's at Dsemy 31 1992 December 31,1990 Ute ;e ' v S2 456 691 5299 E91 $ 1240 $2 757122 Util@ pont net

$2.234.789 $270 213 $1.207 S2 506 209 F mees 82717 E 155 48i 91 353 inventones 93 307 6942 498 102 747 be S2 539 438 $307 746 S172' 2 648 E75 Total

$2.328 096 S279 155 S 1,705 2,608 956 te,es 0 o 0ta werr Oa c r y o w so^s 708 646 Assets utilced for overall Campany ope atons 535 980

%cm

$35 9 721 Total assets

$3144 936 1991 Electric Gas Transit Tob{

13. QUARTERLY FINANCIAL DATA (UNAUDITED):

tThousaus of Dola:s)

99; 0;ectng reven;es S 867.215 S 276.742 S 3 869 $1.147.826 fes' Semd

'vd Faae Operatng eoenses, gggg7

gg3, gg7.,.

g,g, 4, 33i excluding depreccton and a notaton 580265 233 509 9 023 822 797 "D

Deprecation and re,enses 900)

S297414 5255 343 S335 594 S280 C24 $1 135 375 amatiaton 88 803 13 720 146 102 669 m (Ts0; 56 97E 4D ?O3 64 4B6 48 113 209 78D Total operating expenses 669 06B 247 229 9.169 925 466

. e nm %Q 34 132

'6 753 39 643 27 062 117 590 Opeatng income (less)

S 198.147 5 29 513 5(5 300) 222 360 E:mngs ;s wpe A3d - Other ncome, ne' 11.655

" S" Less Interes! cha ges 91 458 3w

- Pretened strk $videnas 6.706 64 2 64 Ne' ncome S 135,851 1991 Ca:dal emenaitses Fest Second Third fou1h bentifcDie S 205 704 S 25.380 S 89 $ 231.173 Daaner Qaader QJa$er QJa'tet Annual Totai operating Ut* zed for overall Canpany ope atons 7367 revenues (000)

$297 993 $256 212 $309 837 S283.7B4 S1.147.826 Total S 239 140 0;, eating identitable asse's a, mm M 59349 68M 73.328 43# 9 222.360 DeceNe 31.1991 Net ncome (000) 38 573 24 352 49 705 23.221 135 851 Utmty pbnf net

$2,333 877 $ 280 805 S 1,073 $2.615.755 U"25 P8 "2*

INentanes 83 637 7.242 476 91 355

1. U2' "" #

common stack Total

$2 417.514 S 258,047 S 1,549 2 707.110 asre;oded 94 60 1 25 58 3 37 Asse's utih7M tar osa:1 Company opectes 598 752 Tata: asse's S3 305 662

26 IVtANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS tlOUIDITY AND CAPITAL RESOURCES 1992 the Company issued $72.4 milhon of such medium-term notes The cash requirements of the Company onse pnmonly from The proceeds from the sales of these secunties were used for the funding SCE&G's operatonal needs and its construction program The of nonutikty subsi$ary activities At December 31,1992 the Company Company o!so raises extemol capitol cs required to fund the activities or hos avadable for issuance $127 6 milhon under this program.

investments of as non-regulated subsidiaries The abilW of the On August 21,1992 GENCO issued o $78.5 milhon,7.78% note Company's regulated subsidiones to replace existing plant investment, due December 31,2011. The proceeds from the issuance of the note os well as to expand to meet future demand for elecincity and gcs, will were used to retund a $63.6 milhon loan due December 31,1992, to depend upon their ability to attract the necessary financial cop!!al on repoy advances from the parent and for construction expenditures reosonable terms The Company's regulated subsidiones recover the Dunng 1992, SCE&G ond GENCO converted $67.5 million and costs of providing services througn rates charged to customers. Rotes

$35 85 mdhon respectively, of Pollution Control Bonds to fixed rates for regulated services are based on historical costs As inflation occurs SCE&G's first mortgage bond indenture contains provisions pro.

and SCE&G expands its const uction program it is necessary to seek hibiting the issuance of addtional bonds unless net eamings (as therein increases in rates As discussed in Note 2A of Notes to Conschooted oefined) for 12 consecuive months out of the 15 months prior to the Financial Statements. on December 7,1992 SCE&G filed a formal opph.

month of issuance is at least twice the annual interest requirements on cation with tre Pubhc Serwce Commission of South Carchna (PSC) to all bonds to be outstanding (Bond Ratio) For the year ended December increase electnc rc+es SCE&G had not filed a request for on increase in 31,1992 the Bond Rotic was 2.98. The issuance of od$tional bonds elecinc rates since 1989. The Company's future financici position and is restricted also to on ad$tional pnncipal amount equal to 60% of results of operations will be anected by the regulated subsidones' abihty unfunded net property additons (which unfunded property oddtions to obtain adequate and timely rate rehef lotolled approximately $481.7 million at March 31.1992), bonds As a resu!! of continuing customer growth. SCE&G hos entered into issued on the bas:s of retirements of bonds (which retirement credits a contract with Duka/ Fluor Donrel to design, engineer and build a 385 totalled $10.9 million at December 31,1992) and bonds issued on the MW cooLfired electnc generating plant near Cope. South Carohno in basis of cash on deposit wr!h the Trustee. SCE&G s Restated Articles of Orangeburg County Constructon of the plant began on November 12, incorporation prohibit issuance of additional shores of preferred stock 1992 with commercial operaten expected in the sonng of 1996 The without consent of the preferred stockholders unless net earnings (os estimated pace of the Cope plant, excluding financing costs and defined therein) for the 12 consecutive months imme$ctely preceding ollowance for funds used dunng construction (AFC) but incluing on the month of issuance is at least one and one-hoff times the aggregate o!Iowance for escalation is $450 millon. In oditon. the transmission of cil interest charges and preferred stock cvidend requirements lines for interconnecten w:th the Company's system are expected to cost (Preferred Stock Ratio). For the year ended December 31,1992 the

$26 milhon until the completion of the new plant, SCE&G plans to pur.

Preferred Stock Ratio was 2 09.

chose power, cs necessary, to maintcln its reserve margins.

SCE&G hos authorized a Collaterol Trust Mortgage (New Mortgage)

Apptcximately 48 4% of total cosh requirements (incluing divi.

under which its future mortgage-backed debt will be issued. New Bonds dends) wcs prodded from intemol sources in 1992 os corrpored to are expected to be issued under the New Mortgage on the bcsis of a like 47.5% in 1991.

pnncipal amount of bonds (Close Ronds) issued under the existing in January 1992 the Company renewed for one year unsecured SCE&G First Mortgage Bond '

• joted April 1,1945 (1945 bank loans totolkng $80 mdhon On July 15,1992 S20 milhon wos Indenture). which have been ow sited with the trustee of the New repaid using proceeds from the issuance of mesum-term notes in Mortgoge, until such time os all present!y outstanding Closs A Bonds January 1993 the Company arranged for on unsecured bank loon in the are retired Thereo'ter, New Bonds will be issuoble on the basis of prop-principal amount of $60 mil.

erty oditions to be kmtted to 70% of the original cost of electnc and hon. due January 14,1994. to common plant properties (compared to 60% of value for Class A Bonds

% ""*da" refinance the $60 milhon bot.

under the 1945 Indenture), cash deposited with the trustee, and retire-once The interest rate is the ment of New Bonds New Bonds will be issuoble under the New three month UBOR plus 30 Mortgage only if Adjusted Net Earnings (as defined) for 12 consecutive basis points and is reset quor.

months out of on 18 month period are of least twice the annual interest terly.

requirements on all outstondng bonds (incluing Class A Bonds) and m,

The Company has in New Bonds to be outstanding (New Bond Putio). SCE&G hos autho-e'tect a medium-term note pro.

rized issuance of up to $300 milhon of New Bonds and issuance and 3;,

gram for the issuance from deposit of a like amount of Class A Bonds The pro formo New Bond s y; time to time of unsecured me$-

Ratio was 2.30 for the year ended December 31,1992. SCE&G um-term debt secunties. The expects to place the New Mortgage in effect by early spnng 1993 to be S FJo proceeds from the sales of oble to issue and sell New Bonds

_5 _.__

1.._

these securities may be used to Poor to placing the New Mortgage into effect, SCE&G could issue W

N fund oditional business activi.

up to on od@tional S300 million of Class A Bonds to finance its con-M E m Cons w ties in nonutlhty subsid ones, to struC?lon program Gas cmsma reduce sho$ term debt incurred Without the Consent of of least a majority of the total Voting power M omer cmsw in connection therewith or for of SCE&G's preferred stock, SCE&G may not issue or assume any unse-general corporate purposes in cured indebteoness if, after such issue or assumption, the total pancipal E2 hicto Fse. Pemses M umgomms

k 27 cmount of cil such unsecured indebtedness would exceed 10% of the 1993-1997 penod (excluding dollars for new construction) and on oggregate pnncipal amount of o!! of SCE&G s secured indebtedness and increased operation and maintenance cost of $14 4 milhon per year (in capital and su*plus; prnvided, however, that no such consent sholl be 1992 do!! cts) To meet comphonce requirements beyond the year required to enter into agreements for payment of pnncipal, interest and 2000, the Company cnticipates total capital expenditures of $198 5 premium for secunties issued for pollution control purposes milhon (in 1992 doilars)

On November 18.1992 the Company issued 2.300 000 shares As descnbed in Note il of Notes to Conschdated Financial of common stock with net proceeds totalhng $89 9 milhon The pro-Statements, the Company has on environmental ossessment program to ceeds have been contnbuted by the Company to the common stock identity and cssess current and former operations sites that could equi'y of SCE&G cod used by SCE&G for general corporate purposes, require environmental cleanup. As site essessments are initiated, on includ ng the financing of its const'uction program and the reduction of estimate is moce of the amount of expenditures, if any, necessary to short-term indebtedness incurred for such purposes investigate and clean up each site. These estimates are refined cs addi-Dunng 1992 the Company issued 404.222 shares of the tional information becomes avoilable, therefore octual expend;tures Company's common stock under tne Company's Dividend Reinvestment could significantly differ from the onginal estimates Amounts estimated and Stock Purchase Plan (DRP) Effective for 1993 and subsequent to 0;te ($18 3 million) for site essessments and cleanup relate pnmari-years, the Company has crnended the DRP to o! low direct purchases of ly to regulated operations and have been accrued and deferred pursuant shares by nonstockholders and to increase amounts of stock pur-to on accounting order from the PSC pending consideration of their chcsable to $36.000 in any twelve month penod in addition, the recovery in future rate proceedings. However, there con be no assur-Company issued 422,082 shares of its common stock pursuant to its once that such recovery will be granted Estimates to date include, Stock Purchase-Scvings Plan (SPSP). The Company has authonzed among other things, the matters discussed in the following porographs and reserved for issuance 595,778 and 1,577,918 shares of common The Company and its pnncipal subsidiary, SCE&G, each own two stock pursuant to the DRP and the SPSP, respectively.

decommissioned manutoctured gas plant sites which contain residues Pursuant to Section 204 of the Federal Power Act SCE&G and of by-product chemicals The Company and SCE&G have each main-i GENCO must obta;n FERC cuthont/ to issue short-term indebtedness toined on active review of their respective sites to monitor the nature and Tne FERC has outnonzed SCE&G to issue up to $200 milhon of unse-extent of the residual contamination cured promisso'y notes or commercial paper with matunty dates of 12 In September 1992 the U S Environmental Protection Agency months or less but not later inan December 31,1995 GENCO has not (EPA) notified SCE&G, the C ty of Charleston and the Chcrieston sought such cuthonzo' ion Housing Authontg of their potential habihty for the investigation ono The Company has $153 9 milkon outhor! zed knes of credit and cleanup of the Calhoun Park Area Site (SI'e) in Charleston, South has unused lines of cred;t of $127.8 milhon at December 31,1992.

Carolino The Site encompcsses cpproximately 18 acres and includes The Company anticipctes that its 1993 ccsh requirements will be properties which were the locations for one of SCE&G's decommissioned met througn intemopy generated funds (approximately 50% subject to manufactured gas plants, a wood preserving (creosote) plant and other rc's rehef), the sales of additional equcy secuntes and the incur *ence of industnol companies The Site has not been placed on the National additional sho$ term cod long-term indebtedness The t; ming and Pnonty List but may be added before cleanup is inifacted The potentiol-amount of such financing will depend upon market cona;hons, the ode-ly responsible parties (PRP) have agreed with EPA to porticipate in on quacy and timing of rate rehef, and other factors Actual 1993 expendi-Innovatrve approach to Site investigation and cleanup called 'Superfund tures moy vary from the estimates set forth cDove due to fcctors such as Accelerated Cleanup Model,' cliovang the pre-cleanup site investigations infiction and economic conditions regulation and leg:sichon, rc'es of process to be compressed signn, ty The PRPs hcVe negotiated on lood growth, environmental protection stan3ards and the cost and avoil-odministrative order by consent la the conduct of a Remedial obihty of cop;tal.

Investigation /Fecsibihty Study and a corresponding Scope of Work.

The Company expects inct it has or can ootain odeauate sources Fino! site inveshgation and cleanup costs have ye! to be determined by of financing to meet its projected cnsh reauirements the EPA and no allocation of costs among the PRPs has been mode Environmental Matters ece@ WN&honsentedo become a Wdeme Superfund Act foi cleanup of residue removed from one of its manufac-The Cleon Air Act reauves elecinc utikties to reduce substonhol!y tured gas plant sites and taken by a s1voge company to the Mocon-emissions of suttur dioxide and nitrogen oxide by he year 2000 These Dockery waste disposal site near Rockingham, North Corokno. In re;uirements are being phased in over two penods The first phase has February 1990 SCE&G paid $125.000 to the EPA for its shore of post a comphonce date ct January 1,1995 ond the second. January 1, response costs On January 9,1992 the EPA notified SCE&G and the 2000. The Company meets o!! requirements of Phase I and therefore other PRPs of its selected cleanup alternot:ve for the Macon-Dockery wi!! not hcve to implement changes until compliance with Phase 11 site Agreements with the EPA set SCE&G's share of costs of approxF reautrements is necesscry The Company then mcy reduce su! fur diox-mately S1,ll 5,000 over o 30 year penod.

Ide emissions througn the buming of gas or lower su fur coal and the in order to gain protection against potenhal hhgation by other addition of scrubbers to coal fired generating units Low nitrogen oxide PRPs, in January 1992 SCE &G made o good faith offer to pay $16.136 bumers moy be insta!!ed to reduce nitrogen oxide emissions to the EPA to parhcipate os a de minim!s PRP in financing a Remedial The Company is wo* king on a det0iled Comphance plan that must D? sign /Remediol Action (RD/RA) for the Yellow Water Road Superfund be filed with and approved by the Environmentd Protection Agency by Site noor Jacksonville. Horida, on the condition that EPA and the other 1995 The Company currently est mates that the implementation of necessary PRPs reach an agreement on a consent degree for the con-Phcse 11 would reauire copstal expend;tures of $144 0 million over the

28 duct of the RD/RA. SCE&G does not beheve it has any responsibihty for habihty provided for by the Statement, is opproximately $4.7 milhon this site The Company expects eitner that most of te increased costs attnbutable SCE&G has been hsted as o PRP, for which no occruols have been to regulated operations will be recovered currently through rates or that mode, in proceedings for two other waste disposot sites as detailed itey will te recorded as a regulatory asset to be recovered through rates below. SCE&G does not beheve that its invotvement of these sites will in the future as the costs are pold. The PSC, in other utsty rate doch have a matenol impact on its financial position or results of operations.

sions, has accepted odoption of Statement No 106 in setting rates in in 1988 SCE&G was hsted as a PRP under the Superfund Act for addition, the PSC or the FERC may require the Company to fund the ha-investigation and cleanup of Elkoffs Auto Ports, formerly Sohne County bikty resulting from implementation of Statement No 106. On Sotvoge Site. located in Benton, Aionsos in 1988, SCE&G informed December 10,1992 the PSC issued on accounting order allowing EPA thof SCE&G had no informat on it had ever done business wrlh any SCE&G to deter the increased expenses resulting from adoption of of tre site owners, operators or transoor'ers On December 28,1992, Statement No.106 fnrough May 31,1993 owaiting consideration of SCE&G reiterated its position to the PRP Steering Committee.

their recovery in SCE&G's pending electac rate cose (see Note 2A of in 1991 SCE&G was hsted as a PRP under the Superfund Act for Notes to Conschdoted Financial Statements) and in a future gas rate cleanup of a lonell owned by Lexington County in South Carchno. The case. Trerefore, the Company believes this Statement will not havc a county has stated that it will cssume responsibility for any cleanup.

significant impact on the Companys financial position or results of According'y, SCE &G beheves that it will have no financial responsibihty operations. However, there con be no assurance that such recovery will for the site, however it will podicipate in proceedings to determine the be granted precise status of the lon@ll The county has not yet estimated the total The Compon(s regulated business operations are likely to be costs of cleanup of the site impacted by the National Energy Policy Act and FERC Order No. 636.

However, in the opinion of the Company, it will be oble to successfully U

meet the challenges of these o!!ered business chmates.

The stec i generator tubes of the 885 MW V. C. Summer Nuclear RESULTS OF OPERATIONS Station (Summer Station) were supphed by Westinghouse Electnc Earnings and Dividends Corporation (Westinghouse) and have expenenced stress corrosion cracking. which causes deterioration and degradation of the tubes and Eamings per shore of common stock, the percent increase reduces the stcon's copoc4 SCE&G has decided to replace tne steam (decrease) from the previous year and the rcte of retum eamed on com-generators at the scheduled refuehng outage in 1994, significantly pnor mon equity for the years 1990 through 1992 were os follows.

to the end of their intended 40-year service life SCE&G estimates the 1992 1991 1990 outage to replace the steam generators will take approximately 100 Eamings per shore

$2 84 S3 37 S4 44 days and its two-thirds shore of the replacement cost could be cs much Percent increase (decrease)in as $80 milhon, excluding AFC cnd replacement power costs eamings per shore (15 7%)

(241%)

46.1 %

SCE&G, ochng for itsett and The South Carchna Pubhc Service Retum eamed on common Authonty, as co-owners of Summer Station, has fded on action against equity (year-end) 10 1 %

13.2 %

18 1 %

l Westinghouse in the U S Distnct Court for Soutn Carchno seeking a judgment that Westinghouse is obhgated to correct tne detects in the

• 1992 In 1992 eamings per shore and retum on common equq steam generators of no cost to SCE&G, and for actual and pun:tive dom-decreased primority due to the recording of a $11.1 million (ofter inter-oges and treble domoges in on amount to be determined est and income taxes) reserve against earnings related to the August 31,1992 retail electnc rate ruhng from the South Carchno Supreme DU

8 Court (see Note 2F of Notes to the Consohdoted Financial Staternents)

On December 7,1992 SCE&G tded on opphcotion with the PSC for and increases in other operating and interest expenses.

on increase in retail electric rates Tre request proposes a two phase

• 1991 Eomings per share and retum on common equity decreased in increase phase one, expected to commence June 1,1993. 8 9% in 1991 from 1990 pnmarity as a result of the sole of the Compan(s additional revenues, or $72 9 milhon o' nually, and phase two (based investment in Telecom USA to MCI on August 14,1990 The goin, net on additional construction expenditures J the Cope plant), expected to of tax, from the sole of the stock owned by MPX Systems, Inc. was commence June 1,1994, 2 5% in addittnot revenues, or $20 2 mil-opproximately $461 million, or $1.13 per shore of the Compon(s hon annually. No assurance con be given as to the odequacy or timin9 common stock. The ettects of increases in the electric and gas margins of such rote rekef A heonng is scheduled to begin in March 1993 for 1991 were more than offset by higher other operating expenses.

In December 1990 the FASB issued Statement No.106 AFC is a uhhty accounting practice whereby a portion of tre cost of

'Employe s Accounting for Postretirement Benefits Other Thon both equity and borrowed funds used to finance construction (which is r

Pensions

• The Statement, which will be effective for calend'>r year shown on the balance sheet as construction work in progress) is copi-1993, requires that the cost of postretcement tenefits other than pen-tahzed. Both the equity and the debt portions of AFC are noncash items sions be occrued dunng the years the employees render the service nec-of nonoperating income which have the ettect of increasing reported net essary to be ehgible for the opphcoble benefits The Company has esti-income AFC represented opproximately 8% of net income in 1992, mated that its occumulated obligation for these benefits of December 6% in 1991 ond 3% in 1990.

31,1992 is opproximately $64 milhon (transition habihty) and the in 1992 the Company s Board of Directors rotsed the quarterly annuchzed increase in expenses (net of payments to current retirees of cash dividend on common stock to 67 cents per share from 65 5 cents approximately $3 0 million), including the amortization of the transition per shore. The increase, ettective with the dividend payable on April 1,

29 1992, raised the indicated annual dividend mte to $2 68 per share from increases in nuclear regulatory fees, and nuclear and transmission sys-

$2 62 The Company hos increased the d'vidend rate on its common tems maintenance Tre increase in 1991 in other operation and main-stock in 39 of the ics? 40 years tenance expenses is pnmarny due to increases in employee-related expenses and on increase in uncollectible customer accounts. The Electric Operations increase in depreciation and omort zotion expense for 1992 and 1991

+ 1992 The 1992 electne margin decreased trorn 1991 due to the reflects additions to plant in service. Income tcxes for 1992 decreased recording of a S14 6 mdhon reserve, before interest and income taxes, pnmarily due to the tax impact of the rate refund (see Note 2f of Notes related to the August 31.1992 ruhng from the South Corchno Supreme to Consohdated Financial Statements) and to otner decreases in income Court (see Note 2F of Notes to Conschdoted Financial Statements) and income taxes for 1991 remained relot:vely unchanged t'om 1990 o $1.9 milhon bilkng reicted litigoSon settlement included in 1991 elec-Other taxes increased for 1992 and 1991 pnmanly from higher property inc operating revenues.

taxes caused by property additions and increased mdlage rates in

• 1991 The electac margin increase from 1990 to 1991 is pnmarity addition to the above, other tcxes for 1992 increased due to state due to increased KWH residential and commercio! sales os a result of hcensefees residential and commercial customer growth and due to the recording of the bilkng-related htigation seffiement mentioned above.

Interest On Lon9-Term Debt An increase in the number of electnc customers of 8.240 resulted in

• 1992 Interest on long-term debt increcsed opproximate!y $4 4 mdhon on oil time peck cemand record of 3,380 MW on July 13.1992. The in 1992 compared to 1991 due to the issuances of the $145 mdhon previous years' record of 3,300 MW was set on July 23.1991.

and S155 milhon of First and Refunding Mortgage Bonds on July 24, 1991 and August 29,1991, respective!y, which more than offset the Gas Operations decreoses in interest expense resulting from the repayment of debt and a 1992 The gas margin for 1992 increased from 1991 cs a result of lower interest rates on remaining debt.

recovenes of $4.2 mdhon allowed under a weather normchzation

• 1991 Interest on long term debt increased opproximate!y $3 4 mdhon adjustment which become effect:ye the first bilhng cycle in December in 1991 compared to 1990 The increase for 1991 resu!ted pomanly 1991, increases in residential usage due to cooler weather dunng 1992 tmm five months of interest related to the above mentioned bond and increased transportation volumes issuances, which more than offset the ehmination of interest expense on

= 1991 The increase in the 1991 gas margin is pnmon'y due to the debt repaid from the proceeds increased transportat;on volumes and increased natural gas sales to higher margin resident al and commercici customers os o result of resi.

Other Interest Expense dential and commercial customer growth

• 1992 Other interest expense increased from 1991 to 1992 pnmarity Dekatherm soies increased 66.921 from 1991 to 1992 due to on as a result of interest ocerued on the provision for rate refunds (see Note increase of 5 334 customers and pennds of cooler weather.

2F of Notes to Consohdated Financial Statements) which was portially offset by decreases in sales of commercio! pcper Other Operating Expenses 1991 Other interest expense decrecsed S2 9 mdhon in 1991 com-Other operation and maintenance expenses increased for 1992 pn-pared to 1990 pomonly as o resuff of decreases in soies of commercial mordy due to increases in administrative and general expenses, paper and in interest rates E5ectric Marpri Gas Maryrs Oth,w Operwureg Brutorest Experuse m%

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so SELECTED FINANCIAL DATA For the Years Ended December 31 1992 1991 1990 1989 1988 1982 Statement of income Data (Thousands of dollars except stat:stics and per shore amounts)

Operating Revenues Electnc S 829.477 $ 867,215 S 851,146 S 841,453

$ 803,727 $577,172 Gas 305.275 276,742 292.380 297,069 291,308 266,389 Transit 3.623 3.869 4.033 4,102 4.060 2.603 Total Operating Revenues 1.138 375 1.147.826 1.147,559 1,142,624 1,099.095 846.164 Operating Expenses-Fue! used in electnc generation and purchased power 213.474 234,683 223.972 241,352 233.637 250,177 Gas purchased for rescie 191.577 171,869 191,939 212,112 209,344 220,502 Other operation and morntenance 281,242 270,213 265.887 249.464 228.808 115.339 Depreciation and amort zation 108.315 102,669 97,801 102,296 97,389 43.406 Taxes 133.987 146.032 142,003 124,216 125.247 77,033 Total Operating Expenses 928,595 925.466 921.602 929,440 894,425 706,457 Operating income 209.780 222,360 225.957 213,184 204.670 139.707 Total Other Income 11.883 11,655 54.874 7.125 4,147 5.230 Income Bctore interest Charges and Preferred Stock Dividends 221.663 234.015 280.831 220.309 208,817 144.937 Total interest Chorges, Net 97,600 91,458 92,317 90.421 80.057 57,121 Preferred Stock Cash Dmdends of Subsidiary 6 473 6,706 6.911 7,263 8.014 16,371 Net income S 117,590 S 135.851 S 181,603

$ 122.625 S 120,746 S 71,445 Percent of Operating income (Loss)

Before income Taxes:

Electnc 85 89 89 91 90 98 Gas 18 14 14 12 13 5

Transit (3)

(3)

(3)

(3)

(3)

(3)

Common Stock Dato:

Weighted Average Number of Common Shores Outstonding (Thousands) 41,475 40.361 40,882 40.296 40.296 34,387 Eamings Per Weighted Average Shore of Common Stock S2 84 S3.37 S4.44

$3 04

$3.00

$2.08 Dividends Dectored Per Share of Common Stock

$2 68 S2 62 S2.52 S2 46 S2.40

$192 Common Shores Outstanding (Year-End) (Thousands) 43 911 40,784 40.882 40.296 40.296 36,526 Book Value Per Shore of Common Stock (Year End)

S26.46

$25 23

$24.56

$22 79

$22 23 S18.05 I

a1 December 31 1992 1991 1990 1989 1988 1982 Bolonce Sheet Data (Thousands of dollars except stchstics and per share amounts)

Utihty Plant, Net

$2 810 279 $2.664.651 $2,549.763 $2,444,278 $2,384.633 S1,960,016 Total Assets

$3 557 721 $3,305,862 S3,144.936 S2,984,507 $2.887.279

$2,210,709 Common Equity

$1.161 896 $1,028,990 $1,003,877 $ 918,235 $ 895,727

$ 659.135 Preferred Stock (Not Subject to Purchase or Sinking Fund Requirements) 26.027 26.027 26,027 26,027 26.029 26,262 Preferred Stock, Net (Subject to Purchase or Sinking Fund Requirements) 56.154 59,469 62,704 66,099 69,329 160,604 Long-Term Debt. Net 1 204 754 1,122,396 938,933 1,003,972 885.679 862,487 Tojal Capitchzation S2.448 831 S2,236.882 S2,031,541 52,014,333 S1,876,764 S1,708.488 Other Statistics Electnc:

Customers (Year-End) 461 930 453.660 446,516 435,004 427,092 356,711 Temtonal Sales (M>ihon KWH) 15 794 15.695 15.385 14.885 14,457 11.490 Residential.

Average annual use per customer (KWH) 13.037 13,246 13,330 12,891 12,805 11,712 Average annual rate per KWH

$0695 S0700 S.0707 S0699 S0691 S.0637 Generotng Copabikty - Net MW (Year-End) 3.912 3,912 3,891 3.891 3.891 3,359 Temtonal Peck Demand - Net MW 3.380 3,300 3,222 3,144 3.021 2,463 Gos:

Customers (Year-End) 231.153 225.819 220.817 205.657 201.399 186,320 Soles (Thousand Therms) 761.721 694,801 711,821 714.585 677,580 590.257 Residential Average annual use per customer (Thrrns) 577 521 497 575 617 570 Average annual rate per therm S 74 S.77 S.77 S 69

$ 70

$ 56 Transit.

Number of Coaches 95 102 109 84 114 104 Revenue Possengers Comed (Thousands) 5 P37 6,395 6,788 6.430 6,723 10,720

32 COMMON SYOCK INFORFAATION 1992 1991 4th 3rd 2nd 1st 4tn 3rd 2nd 1st Otn O'r Qtr.

Otr.

Otr.

Otr.

Otr.

Otr.

Price Range: (a)

High 43 1/8 44 3/4 41 3/4 44 3/8 44 1/4 40 1/2 38 37 Low 39 3/8 40 1/2 38 5/8 38 5/8 40 37 1/8 35 3/4 33 1/2 Dividends Per Shore:

1992 Amount Date Declared Date Poid First Quader S 67 February 18,1992 Apnl 1,1992 Second Orrter 67 Apnl 22,1992 Juty 1,1992 Third Quorter 67 August 26,1992 October 1,1992 Foum Quader

.67 October 20.1992 January 1,1993

(

1991 Amount Date Declared Date Poid First Quarter S 655 February 27,1991 April 1,1991 Second Quarter 655 April 24,1991 July 1,1991 Third Quarter

.655 August 28,1991 October 1,1991 Fourth Quarter

.655 October 23,1991 January 1,1992 December 31, 1992 1991 Number of common shores outstanding 43,910,631 40,784,327 Number of common stockholders of record 42.937 42,811 The princ:po! market for SCANA common stock is the New York Stock Exchange. The ticker symbol used is SCG The corporate nome SCANA is used in newspaper stock listings.

(a) As reported on the New York Stock Exchange Composite Listing.

SECURITIES RATINGS (As of December 31,1992)

SCANA CORPORATION SOUTH CAROLINA ELECTRIC & GAS COMPANY Rating First and Refunding Preferred Commercial Agency Medium-Term Notes Mortgoge Bonds Stock Paper Duff & Phe!ps NR A+

A NR Moody's A3 Al al P-1 Standard & Poor's A-A A-A-1 NR - Not Roted

l as INVESTOR INFORIMATION NOTICE OF ANNUAL MEETING Prospechve stockholders may join the Plan by making on initial SCANA Corporation's 1993 Annual Meeting of Stockholders will cash investment of of least $250 but not more than $36,000. A be held in Chorteston, SC on Thursday, April 29 The meeting will Prospectus desenbing the Plan and enrolhnent information are i

begin of 10 00 o rn at The Omni Hotel of Charleston Ploce,130 ovoilable upon request.

Market Street. A formal nohce of the meehng and a proxy statement AUDITORS will be mailed to all stockholders in March. Stockholders who are Deloitte & Touche, Certified Pubhc Accountants i

unable to attend the Annual Meeting should retum their proxies 1426 Main Street - Suite 820, Columbia, SC 29201 pomptly by mail.

RECORDKEEPING AND PAYING AGENTS MAlLtN3 ADDRESS Common Stock and SCE&G Preferred Stock:

SCANA Corporchon, Columbia, SC 29218 SCANA Corporation CORPORATE HE ADQUARTERS Shoreholder Services Department (054), Columbio, SC 29218 Palmetto Center,1426 Main Street, Columbio, SC 29201 TRANSFER AGENTS Telephone: (803) 748-3000 Common Stock:

COMMON AND PREFERRED STOCK LISTINGS SCANA Corporation The common stock of SCANA Corporation is hsted and traded on Shoreholder Services Department (054), Columbio, SC 29218 the New York Stock Exchange and hos unksted trading privileges on Chemical Bank the Boston, Cincinnati, Midwest, Pacific and Philadelphic ex-Stock Transfer Department - 10th Floor changes The trading symbol is SCG. The corporate nome SCANA is 450 West 33rd Street, New York. NY 10001 used in newspaper stock hstings. The 5% series cumulative pre-8"8# ## #

terred stock of South Corchno Electnc & Gas Company (SCE&G),

SCANA's pnncipal subsidiary, is also listed and traded on the New creho s Depo 1 ment (054), Columbio, SC 29218 York Stock Exchange. The trading symbol is SAC Pr; the newspaper hsting is SCrE pt SCE&G's other preferred stock senes are not Mellon Securtties Trust Company, Securities Transfer Services ochvery traded and market pnces are not published.

85 Challenger Rd., Overpeck Centre, Ridgefield Park, NJ 07660 PRCPOSED 1993 COMMON STOCK DIVIDEND DATES BOND TRUSTIE AND PAYING AGENT Dectorchon Ex-Dtvidend Dividend Dividend Dates Dates Record Dates Payment Dates Chemical Bank Corporate Trust Department - 15th Floor Feb 16 Mar.4 Mar.10 Apr 1 450 West 33rd Street, New York, NY 10001 Au.25 3

INVESTOR COMMUNICATIONS Oct.19 Dec. 6 Dec.10 Jan.1(94)

Intenm reports providing summary financial statements and Company news are mailed to stockholders following the close of the Note: Dividend dectoration dates, record dotes and poyment dotes first, second and third quarters. A copy of SCANA's Annual Report on are subject to the dtscrehon of the Board of Directors of SCANA l

Corporation. Dates shown are based on the cssumption that post Form 10-K (os filed with the Securities and Exchange Commission)

)

and the Stahshcol Supplement to the 1992 Annual Report are avail-pottems will prevail. D!vidends on SCE&G's issues of preferred stock oble without charge. Inquiries concerning ochvities of SCANA ore paid quarterly on the some dotes as the common stock dividenos.

Corporchon and its subsidiories and requests for corporate publico-I STOCKHOLDER INQUiRIE$

tions should be addressed to the investor Relohons Department l

Stockholders with queshons about stock transfer requirements, (Mail Code 054) of the Company's maihng address replacement of lost or stolen stock certficates, drvidend poyments INVESTOR CONTACT

[

(including replacement of lost or stolen dividend checks), direct H. John Winn, ll1 j

deposit of dividends, changes of address, ehmination of duplicate Manager-Investor Relations & Shoreholder Services l

mollings or other stock ownership mo'ters may wnte the Shoreholder Telephone: (803) 748-3240 l

Services Department (Moil Code 054) of the Company's maihng WVESTORS' ASSOCIATION address, or call toll-free 1-800-763-5891. Co!!s received outside of norrnal business hours (8.00 o rn to 5:00 p m, Mondoy through For information about this orgontzotion's activities, wnte to:

Fnocy) will be recorded and handled the next business day.

Association of SCANA Corporation investors DIYlDEND REINVESTMENT PLAN U"

22 Broughton Road, Charleston, SC 29407 The Plan provides current and prospective stockholders with o convenient and economical method of purchasing shores of SCANA's common stock without brokeroge commissions or service This report is issued solely for the purpose of provding information charges. Current stockholders may purchase shares through outo-S "# #** * "S* I" C ""* " " ** ""Y Sd* " # 8# " "Y mohc reinvestment of cash dividends and/or by making optional cash poyments of up to $36,000 during a calendor year.

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