ML20073F506
| ML20073F506 | |
| Person / Time | |
|---|---|
| Site: | Summer  |
| Issue date: | 12/31/1990 |
| From: | Gressette L SCANA CORP. |
| To: | |
| Shared Package | |
| ML20073F400 | List: |
| References | |
| NUDOCS 9105020274 | |
| Download: ML20073F506 (45) | |
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- as ston C Illectric and Natural Gas Service 9 w f 4 sw* ' , g4 l
w N-- ) p V' M i M Natural Gas Service Supplemental Natural Gas Supplier n P ul'or( g
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i , < 4, 4) j ug Internal Combustion Steam Generation: Ilydro Generation: Generation: Nuclear Generation: I memummmummwnawwxxxcxmmxxammanummucauauummaawnum Canadys Columbia Canal Burton Summer ! IIagoo'd FairDeld Pumped Storage Canadys l McMeekin Neal Shoals Colt Urquhart Parr Faber Place l Wateree Saluda lierdeeville l l Williams Stevens Creek Parr
~~ Gas transmission Urquhart lines are represented Williams in grey. i 1
l
Utility Service Area b vowgntarumw=mg cauquartered in , (. <w ,; 1 Columbia, SC, SCANA D i 4 4, L *>- L . Corporation is a holding - Mg,'i' company engaged in a t>'
. . . variety of regulated electric and gas utility and '
nonregulated diversified , businesses. e SCANA's principal sub-sidir. y, South Carolina Electric , n
& Gas Company (SCE&G), .; ,' . =
provides electric service to more than 446,000 customers N hg.j .. gg. in a 15,000 square mile service : area in the cei, tral, southern and southwesterc oortions of the state that extenas into 24 of South Carolina's 46 couctles. SCE&G and South Carolina Pipeline Corporation, SCANA's gas transmission subsidiary, i provide natural gas availability throughout the state on a direct , service or supplemental basis. The total population of SCANA's l. combined utility service area is . approximately three million. SCE&G also provides transil l service in the metropolitan ; areas of Columbia and Charleston. Other regulated i utility subsidiaries are engaged , j in electric generation and fossil j and nuclear fuel financing. ,_ _ The predominant manufacturing Industries in Major nonregulated businesses propane distribution; and SCANA's utility service area operating primarily throughout natural gas production include synthetic libers and the Southeast include liber properties. Various textile products: chem- optie based telecommunica- SCANA and its sub-ical and allied products; fiber- tions; real estate development sidiaries had approximately glass and liberglass products; and property management: 4,600 employees at year end. paper and wood products: metal commercial construction, mm ~ x = _ma fabrication; and stone, clay and maintenance and power plant sand mining and processing. management services: retail
M G ,-o . CUS(Olller Pf0llle 1:.lectric Customers Electric Sales lilectric d'U"""'"" "1" "h""""""4""'""" System wide electric sales nu wmammanc=mma ma m m mu m auww=ma grew by 3.4 percent in 1990 to 15.4 billion kilowatt hours (KWill. llesidential and com- IS U 4f'O mercial sales accounted for , Q the increase. The electric 15.0 c 1 ! 440 % customer base grew by 2.6 3 l i l , l percent to 446,514 at year- [ f{ j F d 420 g 12.0 i 4 end.The number of residen-tial customers increased 2.5 3 [ h
; j g l ll 1 4
i 9.o ! im g percent, while commercial 400 9 I customer growth was up 3.4 f; l f g j g f j gg P- i g g percent. 0ver the last four years, total electric customers q and KWil sales increased at 339 l
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average annual rates of 2.4 ""Id""""I """""'"l"I I"d"*I"I and 3.0 percent, respectively. "hD*'I"'"I 724 2.430 m,.514 tustomers 3 % .004 57.356 33 0 28.5 29 5 90 moo Nittt1 rill Gils "*of lotalKwllsales System wide natural gas sales in 1990 totaled 712 mil- Natural Gas Customers Natural Gas Sales anunons orownna lion therms, don 0.4 per cent uhnusamisana.en<n from 1989, pr!/ .'ay the urtrasunummwwmamana raumunmxmraswxmmma result of an unseasonably mild winter. The Company had 220,817 customers at 230 750 , year end 1990, up 7.4 per-cent over 1989. The acquisi- 700 l g n,--- g 22o tion of Peoples Natural Gas n g l l j Company of South Carolina .gg g30 g ]l j 3 3l in Octcher was the principal j - ( N L f h f factor. An eggressive residen-tial water heater sales pro-gg
. j i
g 1 gg g 9 ,l -g 1 L_0, a ! i i l i gram also contributed to this
- increase. Over the last four 190 i
U l i j !
! S 550 fli lk i yests, consolidated natural M M M M '90
'N> M 'ss M '90 gas customers and therm Residential commercial Industrial Wholesale lotal sales increased at average 199.713 20.450 cao 24 220.si7 tusto. acts annual rates of 3.5 and 1.7 12 s 45 6 2s 0 1W 0 o oMotamenn sal 6 13 6 percent, respectively,
3 Mnancial & Operating liighlights
% Increase i 1990 1989 (Decrease)
I (.tllllions ofDollars c.tcept statistles and per share amounts) linancial 5 lotal Operating licvenues $ 1.133.2 $ 1,123.3 0.9 Total 0perrting thpenses $ 907.3 $ 910.1 (0.3 ) Net income $ 181.6 $ 122.6 48.1
!!arnings Per Share of Common Stock $ 4.44 5 3.04 46.1 Dividends Declared Per Share of Common Stock $ 2.52 $ 2.46 2.4 Ilook Value Per Share of Common Stock (Year.lind) $ 24.56 $ 22.79 7.8 Market Price Per Share of Common Stock (Year.lind) $ 34.63 $ 35.75 (3.1) 4 Common Stockholders' I!quity (Year.lind) $ 1,003.9 $ 918.2 ' 9.3 Common Stock Outstanding t'fhousands; Year.lind) 40.882 40.296 1.5 Pro)erty Additions and Construction ihpenditures 5 229.7 $ 181.5 26.6 lJtil ty Plant, Net $ 2.549.8 $ 2,444.3 4.3 lilectric Operations lilectric Operatin llevenues 5 836.8 $ 822.1 1.8 lilectricoperatin income $ 201.5 $ 193.8 4.0 Sales (Million M 11) 15.385 14,885 3.4 Customers (Yoar.lind) 446,514 435,001 2.6
- Net MW (Year.lind) 3,891 3,891 -
- Generating Territorial Peak Capability Deman d - Net MW 3.222 3,144 2.5 Gas Operations Gas 0perating ilevenues $ 292.4 $ 297.1 (1.6)
Gas O $ 29.1 $ 24.4 19.3 Sales (perating Thousand Therms)income 711.821 714,585 (0.4) Customers (Year.litid) 220.817 205.657 7.4 Transit Operations - Transit Operating llevenues $ 4.0 $ 4.1 (2.4) Transit 01erating income (l. ass) 5 (4.7) $ - (5.1) (7,8) Revenue 'assengers Carried (Thousands) 6.788 6.430 5.6 seamemammmwamanammammonw summwenemmmenemmmaamewamamrmamema About the corcr- For small Financial & Operating liighlights........................... ... ... 1 farms and giant industries, bustling subutbs and growing citles, C h a i r m a n's i.e i t e r. .. . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 SCANA companies provide energy and related services that serve as a - i.ca r in lie s.le w. .. ... .. .... .. .. .. .. . .. .. . . . .. . .. .. . . . .. . . . . . . . . . . . . . . . . . . . . . . . . 4 basis for economic growth and a better way oflife. Financial & Operating Charts........... ............................ 16 Officers & Directors .......... .................................... ....... 18 Fin a nclal llevie w .. ... .. . . . .. . . .. ... . . . . . . . .. . . . . .. . .. . . . . .. . . ... .. . .. 2 0 This report is printed on recycled paper, investor Information .. .. .... . . .. ..... ....... ...... .......... .. 40
, 1
Olfilrillllll'S lel(Or Fellmy Stockholders: I am pleased to provide you with the 1990 Annual lleport of SCANA Corporation, which details the significant achievements of the past e year. The folkming table summarizes earnings per share which resulted from regular operations and the special gain on the sale of Q. Yy the Company's investment in Telecom* USA common smck. 1989
. Earnings per shaic attributable to: 1990 f* Ongoing operations $3.31 $3.04
, Sale ofinvestment in Telecom* USA _1,13 -
Total carnings per share $4.44 $3.04 , y These operating results were achieved despite a very mild
. winter.1 or a complete discussion of the highlights of the current and prior years' operating results, please read
- Management's -
- Discussion & Analysis of Financial Condition & Ilesults of Operation" beginning on page 35.
m=mmaammmmmmmaca In April 1990 the lloard of Directora increased the annual cash dividend on the Company's common stock from $2.46 to $2.52 per share. This increase was consistent with our polley of raising the dividend to the extent of growth in our fundamental businesses. Three significant challenges continue to confront the Com-pany in its core cleriric hue'sss for the naxt decade.1:lrst is the potential deregulation or restructuring of the industry. We have continued to emphasize cost containment and effective use of tech-nology to improve our competitiveness. As a result, our electric rates - today are 10.3 percent below those in cRect in March 1984 and remain extremely competitive with surrounding investor owned utilities and electric cooperatives. We have a commitment to be the low cost producer in our region and to provide our customers with the best price /value relationship in their electric supply. We believe these objecdves will minimize any adverse impact on our customers and stockholoers from structural change in the industry. Our socond challenge is to supply the energy required to meet custome grmvth in our service territory. On August 29,1990 wo experienced a new peak demand of 3,222 megawatts, a 2.5 percent increase over the previous summer peak. At that time, the electric sysem had a generation reserve margin of 21 percent, which is close to our minimum reserve requirement. During 1991
. the Company will complete installation of a 93 megawatt combus-tion turbine to meet the expected increase in peak demand. Our -
forecasts indicate that several more of these units will be required during the remainder of the decade. More iniportantly, our total electric sales increased 3.4 percent in 1990, reflecting the continued economic development and population growth in our service territo-ry. We currently are evaluating several options to meet the ever-2 i
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1 increasingload.These options able credit from the fir"melal employees who do their work
'L include purchasing power on a system, we can purchase these superbly every day of the year.
1b firm basis from third prrty sup- reserves at reasonable prices, in 1990 SCE&G's employees L pliers or construction of a coal. We intend to sellthis natural won the coveted Edison Award i fired base load generating sta- gas'to markets outside South for their service during Ilurrl-
;L' tion.'A decision is imminent and Carolina, thereby broadening cane llugo. To me, this award
; will be made on the basis of tho' our customer base, For over 30 recognizes the training, skills,
, long range best interests of our . years, we have sold natural gas attitude and commitment they customers and stockholders. .to industrial customers through . bring to.the workplace, Our .
Emironmentalissues direct negotiation in competi- employees, active and retired, a are our third m$r challenge. tion with alternate fuels and ' ' own in excess of12 percent of - 4r SCANA Corporation and its- alternate gas suppliers. Entry the common stock of SCANA; 1 pndecessor companies have into this sector of the energy They are the foundation for i
.aMays demonstrated great- businessis a natural extension those strategies we are follow-
-respect for the environment and of prior success and better ing, and they will be the founda-7' Unve an excellent record of focuses our operations, tion of whatever success we o compliance with emironmental: .During 1990 death - enjoy.
matters;We adopted and pub- . claimed Arthur M. Williams, Jr., in closing,we face real , retired chairman, chief execu-
~
' lhhed a formal environmental . challenges during the next few
; policy which commits the tive officer and director of .
years. The potentialimpact of -
< Company to continue and SCE&G Ilis wise counsel will be evems in tim Persinn Guii,iim
-Improve upon its prior perfor - greatly missed.On October 31, ultimato depth and length of the mance,l. ate last year Congress 1990 Thomas C. Nichols, Jr. . current recession and' weak-enacted the Clean Air Act ' retired as president of SCE&G, nesses in the nation's financial
' Amendments of1990 which set During his nearly 38 years of- - system make it diflicult to
'significant limitations on power ' service, he was a significant predict the demand for our -
plant emissions. Please refer to - factor in the growth of our products in the near term. We page 6 for a detailed review of- excellent energy company,in ; intend to maintain maximum our approach lo' meeting theso October 1990 Bruce D. Kenyon 11exibility in selecting our
, requirements and an estimate - was elected president, Mr. options, to focus diligently on of their cost ; Kenyon, formerly senior vice customer satisfaction and to
. Our long standing- president of Pennsylvania keep a long term view toward strategy of diversifying the Powei& Light Company, has opportunities for growth.The over 20 years experience in the result should be the maximum a operations of SCANA produced positive results in 1990;0ur; electric utility industry,includ- return for us as stockholders.
investment in Telecom* USA was ing a significant background in purchased in August 1990 by nuclear power operatlans.
? MCI Communica.tlons Colpbra- It is too easy to get flespectfully submitted, tion.We are using a part of involved in the cansideration of the net proceeds from this sale-to. acquire natural gas reserves, long' term strategies which meet the increasingly complex pres-(O ,y M I.awrence M. Gressette, .Ir.
Because of the present uncer- sures we face and forget that taintles of the domestic econo- our current success comes from chainnan orthe Board, President my and the reduction of avall- the performance of nearly 4,600 and Chief becuthe Officer 3
L Year Id lleVIOW i have been provided by SCANA Corporation and its cor-Reliabic and affor porate predecessors for more than 140 years. During our evolution from a small gas light company founded in 1846 to a diversified holding company today, SCANA has ahvays provided a cornerstone for economic growth in the areas it serves. The same characteristics that have helped us successfully capitalize on opportunilles in the past - commit-ment, expertise and insight - are still at work today. emes ===ctm:ammmm .a SCANA's companies produce and distribute electric power, bring natural gas to homes, businesses and industries, provide communications services, manage natural resources, develop sites for new industry, operate power plants, construct buildings and hospitals, and produce natural gas, i umm.=tummuunum All of our businesses adhere to a set of fundamental principles. We believe in customer satisfaction. Our cicetric rates are among the lowest in the Southeast and our level of customer service continues to improve. We believe in a clean environment. Our operational commitment is to meet or exceed the requirements of all pertinent laws and regulations. We believe in contributing to a better way oflife. Our econom-ic development investments stimulate matching grants that spur critical water and sewer plant construction in small towns across our service area, We believe in quality education. Our scholarship program helps more than 90 outstanding high school students attend collece each ye . And finally we believe in providing a sound return on our stockholders'
- investment. Our history of operating existing businesses suc-
- cessfully.while making sound investment decisions has provid-ed significant returns to our stockholders as SCANA develops as a growing energy company.
emammcam=ammawra The following brief review of our activities during 1990 is intended to highlight current accomplishments as part of the achievements of our longer term strategies. i
-4
i ( i I!!ectric Operatlons mployees Earn
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l- ! industry's liighest . l llonor ! tunasuccamnermem m-I South Carolina !!!ectric , .
, ,y
- & Gas Company (SCl!&G) and * -
j ; its employees Were honored In . ,
- i l June with lidison l'lectric _
] Institute's nationally acclaimed .
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l I!dison Award in recognillon of . l " humanitarian concern for its - customers and dedication to [ . l the restoration of service" .
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i following 1989's llurricano L llugo.The I!dison Award is the . ! ' highest honor awarded by the utility industry. . Y. ..
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plants. searching for addition- 555 million annually. SCE&G's Policy Put- al ways to recycle waste prod- electric rates have declined by EnVironinental In Writing ucts and using more recycled about 10 percent since 1984, , products. This annual report is but the capital spending and printed on recycled paper, additional operating expenses SCE&G took several associated with the Clean Air steps in 1990 to strengthen its can & Act alone could increase elec. Stral0giOS
- commitment to conduct bust- tric rates as much as 15 per-ness in a way that exhibits Unht belopinent cent over the next ten years, ecological concern and in November SCE&G produces results, announced plans to upgrade We adopted a written The five coal plants' environmental control equip-environmental policy which supplying power to SCE&G's ment at its hichicekin general-formally documents our system are notimmedistely ing station. This $35 million beliefs, intentions and alTected by the Clean Air P project willimprove air quality commitments toward the envi. Amendments of1990 adopted at the 32 year 41d plant by ronment. SCE&G pledges to by Congress. These Ove plants, reducing Dy ash emissions and ;
continue to meet or exceed the which were built for the most improving the dispersal of requirements of alllocal, state part over 25 years ago and sulfur dioxide emissions. Even and federal enviromnental provide more than 70 percent though hicMeekin's air emis-laws and regulations, and to - of our customers' electric sions are below existlag per-investigate and encourage new needs, have a system average mitted limits, SCANA's Board technologies whose ultimate sulfur dioxide emission rate of Directors felt the project benefit is a cleaner environ- thatis wo!! belowlimits was necessary for SCE&G to ment. Wo will aggressively imposed by the Act for opera- achieve its environmental oversee all of our activities to tions through 1999. goals and get a head start on ensure continued compliance llowever, to comply the new emission standards with these pledges, withlimits requirvl after that for the year 2000. We continued to show date, we anticipate capital n==h wmemm outlays of $200 $400 million I concern for the environment lingfhf nastrg,s g during 1990 through reforest. In the second half of this demonstratedits concernfor ' ing an ash storage area, recy. decado. Associated operating the encironment. In cooperation cling more than 75 percent of and maintenance costs are
"$#flf/r'ddt 3 d the ash from our generating expected to increase by equipmentfor grinding trees intofree mulchfor the public.
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a coal Dred generating plant load demands. These pro-Shrinking fleserve that could begin conunercial grams include promoting the PcakDemand i Margin operation in the mid to late design and construction of 1990s. 0ur last coal fired new homes that maximize generating plant came on line energy elliclency, oliering spe. During the past live in 1973. clal rates for o!T peak electric years SCl!&G's electric sales Additional!y we have usage, and encouraging the l.. j grew 18 percent while our heen working to delay the use of high elliciency heating p ak load demand increased need for new generating and cooling systems by our l ! by 19 percent. We have install- capacity with electric market- residential and large conuner-i ed no new generating capacity ing programs that reduce peak clal and industrial customers. since the V.C. Summer Nuclear mammmmmmmnummmwa Station came on line in 1984. l Since that time we have met : .
' d l customer demand by utilizing i our reserve margin. The
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percent at 1990's summer peak, indicating that addition- ], y , ! al generation is needed to , ! meet our customers' service !' , s ! requirements in the coming , i decade. [ In May construction .
. f j began on a 93 megawatt com-hustion turbine that will help l _
j meet immediate peak load demand. Ilis expected to filectric marketing's standby I- gennator program, in n'hich begin commercial operation in customers recelee a monthlyfee 1991. Adding peak generating to accept standby status duriny i units such as combustion periods ofpeak demand,is an , important part ofSGMi's turbines, however,is only part strategy to delay the needfor j of the solution. We are study- neu'generatingfacilities. l ing the possible construction of i i
! 8 !L __-________ _ _ - _ - -
i l uclear Operations . i llemain T < ! Outstanding
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The V.C. Sununer m - .
~i Nuclear Station continued its 4 4 ,
Outstanding operating per. - l formance during 1990. For the j - ' ~ year, which included a 62 day . scheduled refueling outage, the unit's capacity factor was ? - 79 percent, compared to a requalifying for operators' finding was " superior perfor-L l nationalindustry average of licenses.The control room mance in the majority of 66 percent. !!!hninating the shnulator is being upgraded to assessment areas." l refueling outage, Sununer provide an even more realistic Maintaining the oper-Station's capacity factor was training vehicle, and each ating safety, reliability and . L 95 percent. operator will be scheduled to efficiency of Summer Station is L The refueling outage spend a greater amount of a key component of SCl!&G's I was completed in May ahead thne on the shnulator, corporato strategy to remain a of schedule and under budget, in June SCl!&G high quality, low cost provider llased on the plant's 18 month roccived excellent marks from of energy. There is no substi-fuel cycle, the next refueling the NitC in the agency's tute for operational excellence outage will take place in the Systematic Assessment of at Summer Station, fall of1991. 1.lcensee performance (sal pl g9y, 9 SCE&G has an out- report. The report was based Employee training at Summer standing success rate for ini- on operations at the plant for Station has been c.rpanding 5 tiallleensing of control room the 18 month period ending [p"f//[g'."[dI/ 'NI< I" operators. Considerable effort April 30,1990. SCl!&G Regulatory Commissionforits was expended during 1990 to received the highest Category incestment in and decelopment ofsupenorprc.eticaltraining meet and exceed evolving 1 rating in four of,the seven aids. Plant employees hace Nuclear llegulatory Commis- areas evaluated and a Cate- been instrumentalin the madon ofun>se training twIs. sion (NilC) requirements for gory 2 rating in the other the training, qualify!ng and three areas. The NitC's overall 9
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One key element of our 4h ,, h~,,' '$ strategy to increase customer , satisfaction is low rates, and j7 ,g l . . SCE&G's customers enjoy F . ; 5 .# l some of thelowest electric i . rates in the country. Our resi- t I N- N ! dential rates are 3 percent h- ; l below the Southeast average '_ . 4 g'.l 3 and 7 percent below the . national average. Our com;
- mercial and industrial rates able, we plan to do an even with comments about our are 7 and 9 percent, respec- betterjob. We developed a quality of service so that j
- tively, below the regional aver. comprehensive training pro. - appropriate action can be tak-l
. age and 15 percent below the gram that will be offered to all en, As a result we are provid-
, national average. We continu- employees during 1991. Our ing our customers with more ously strive to maintain our omcers continued to make personalized services and a competitive position. regular visits to our larger greater array of choices. commercial and industrial cus- We recognize that p' nCouraging tomers.We formed citizens' SCE&G must maintain the TWo Way highest level of customer satis-l advisory coinmittees In'a pilot L Communication. program to develop direct iaction possible to be success-access to, community leadersf- ful as an energy providerin
, - - These activities will provide us the 90s.
.The other key determi. emmumnum mw w e s=mn nant af customer satis (action Shou'n aboce- For the ei hth straight year, SCE&G emplo! ce ,
colunteers helped make t e cold u,eather more coutfortabis for is superior senico. During elderly and needy customers by caulking teindon's, tecatheotnp-l- 1990 we asked our customers ping cloors and installing plastic over u'indon's as part ofSl?&G's their opinion about the quality Ireatherhation Program. L of service that they received. While the response was favor-1 i 11 aw----
4 i Natural Gas Operations i (gg~ cquisitions Key ipeline Corporat10n l
,fo Strategic ~
Achieves Record Expans10n . Throughput
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I l' u t , ,4 N.( y. - L umme: warm - SCANA continued . Total throughput on expansion ofits natural gas -C b 1. South Carolina Pipeline , distribution and propane Al N Corporation's system in 1990 l businesses during 1990 with 8 /,es.kNfiA . was a record 87.5 million MCF, several strategic acquisitions. ; . a 5.3 percent increase over g,,t , , , , , , , in October SCANA :/ . Peoples Na y 1989. Better than expec'.ed completed the merger with , industrial sales and greater Peoples Natural Gas Company transportation volumes for end of South Carolina, a regulated f users offset r"luced sales to public utility whh 10,300 natu- resale customers. Pipeline i ral gas customers and 2,800 Corporation continued pur-propane customers. SCE&G continues to chasing on the spot market so in August Carotane, emphaslie the sale of gas that it could compete elTective-SCANA's retall prepane sub- water heaters as a part ofits ly with alternative fuels. sidiary, purchased the assets business expansion. During in 1990 Pipeline Cor- , of Southern Gas Company in 1990 we added 9,150 new poration also renegotiated its Aiken, one of the fastest grow- water heating customers. Gas supply contracts for natural ing regions in our state. With was the fuel of cholco to heat gas, lowering the cost of gas to the addition of Southern's 91 percent of the new homes its resale customers, one of 1,400 propane customers and and apartments in our service which is SCE&G. People's 2,800 propane cus- area where gas is availabic. A h@ pressure &> in n'as tomers, Carotano doubled its completed between the natural Shrn abm'e-slie in 1990 and enhanced its The merger ofSCANA and g s systems sereing Columbia Peoples NaturalGas Company and \Yest Columbia as part of position as one of the major a multi million dollar natural ofSouth Carolina in October propane suppliers in the state. opened new marketsin the gas main replaument project. eastern porti,I of the state and Hy yearqnd,661 of 700 miles continued SCANA's e.rpansion ofmmn had been replaced. ofits naturalgas distribution Ongmally estimated as a 1 andpropane businesses. 20 yearproyct, work willbe completed by the end of1991, ten years ahead ofschedule. 12
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UlVPI'Si[}0ll O[101'illiollS Cl000ll1IllllillCallOrlS A portion of our net proceeds from the sale of T!!1vestillellt Sold Telecom* USA is being used for the acquisition of producing natural gas reserves. 'l\vo As a result of the acquisitions, representing pro-August 1990 merger between duction of 21 million cubic feet Telecom* USA and MCI Com- per da), were closed in 1990. munications Corporation, These investments SCANA sold its 12 percent broaden significantly our interest in Telecom* USA for natural gas business and are
$140 million, resulting in a closely aligned with our ener-one time, after tax gain of $46 gy expertise. Through addi-million, or $1.13 per share. tional development of these Our remaining fiber optic facil. reserves and other acquisi-liles, with a totalinvestment of tions, we intend to increase
$19 million, continued to our position in the natural gas operate successfully, production areas.
l SCANA sigmficantig broadened its naturalgas business u'ith thepurchase ofproducing naturalgas resereesin lexas and Louisiana. 14
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Financial & Operating Cliarls Earnings and Dhidends Wet Price and flook Value Return on Common I?quity Per Comillon Share Pr immon Share i> ear endi fye Il las . ~ ., .=x s. wx rn 1L a ~ ~n . :c t
' Dividends Declared IEIM8 MarLet Price II881 from Ongoing Operations Iman I arn!ngs from ongoing Operations Em8 ihL Yalue tinse including One Time Gain on sale num 00e Time Gain on Sale of of h lecomel'SA Imestment Telecomal!5A investment
$5.00 540.(K) 20%
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$4.(K) h $32.00 l 18%
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'86 '87 '88 'k9 V) '86 'h7 '88 '89 '00 'h6 '87 '88 '89 '90 1 arnings in 1990 included a one-timi gain The market to book ratio was 141% at I.arnings from ongoing operations of 51.13 per share on sale of $ CAWS year end 1990. continue to provide a consistent return imestment in 'lelecomWSA. for stockholders Capital Structure Average Annual Use Per Electric Generating Capability Hesidential Electric Customer and Peak Demand (Lilowatt hoursi (megawatis) umy:cw s : s ma:aw a,u ea x <
, . . .t , w w -
to 2 . zn< amme 1.ong. Term Debt, Net amma Generating Capability 1128 Preferred Stock Nas Territorial Peak 1)emand
> ci Common Equity 1004 l l 13,500 40(X) g g I
8 809 13,000 l 7 i 3000 a f i
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Maintaining a well balanced capital Aserage annual KWil use per residential Providing customers with reliable service at structure is a key financial goal. customer has grown 2.1% annually oser a competithe price requires an integrated the past five years. plan that addresses both the demand for electricity and sources of supply.
j . . i i 1 4 i ! Generation 1:uel Mix l Uncludes GI NCO) Total SC Pipeline Gas Sp(:orporationtein Supply-J j D'. ? e ?f5(tN 90 0lMQhst ' aiiMJ ^l,"E %3 s! 's > if'.E ' ?.MNW 4 liCJD P/f:Lhi j uma Coal muss Spot Market Purchases rt Nuclear N 9 Contract I etheries Southern rann flydro and Other and Transco seas Transportation of
- Customer Owned Gas l .
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! . ' t: j,1 5 l. 1990 1990 t
- Customer electricitv needs are met through About 15% of the record 1990 throughput a balanced ink of Iow;l, nuclear and hydro solume represented customer owned gas generation. transported on hpeline's 9 stem, Average liesidential 1:lectric Itates (annual cost in rents per KWil) i Ad if\ .1" -i - .'sk h. f-, ' ). k_) h ' h hof . h v. kh) ) [ $h h -h y [g .b [
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'85 '86 'b7 SCIAG's aserage annual residential electric rate at year end 1990 was 10% below the
'h h n '89 ll
'90 comparable rate in 1984.
l' 17
h ki' 3 ,# L i xs $ f[,N r i4 k& Directors & Ollicers j)jrec(Ors l' C. htchtaster u ()flicers - President
- 11. L Amick r.4 Winnsboro Petroleum SCANA Corporation Chairman of the Board and Company Chief Executive Officer Winnsboro. South Carolina L hl. Gressette, Jr.
Amick Farms llenry Ponder, Ph.D. z. Chairman of the lloard, ' llatesburg, South Carolina President President and W.11. Bookhart, Jr. 2.4 l'Isk University Chief Executive Officer
- Partner . Nashville. Tennessee Cathy 11. Novinger W.11. Ilookhart Farms J.11. Ithodes a Senior Vlec President Elloree, South Carolina Chlef Executive Officer Administration and W. T. Cassels, Jr. 2.3 Rhodes 011 Company,inc* Governmental AITalts Chairman of the Board- Walterboro, South Carolina W. II. 'llmmerman Southeastern Freight IJnes E. C. Wall, Jr. u Senior Vice President and Columbia, South Carolina President Controller 11.hl Chapman u CanalIndustries. Inc. Chief Financial Oflicer Vice Chairman . Comvay, South Carolina H. L Cohen C&F/ Sovran Corporation John A. Warren u Vice President Atlanta Georgla; Chairman of the Board Corporate Development J.11. Edwards, DhtD u hmeritus 11. T. Ilorton, Jr.
President SCANA Corporation Treasurer hiedical University of Columbia, South Carolina llarbara D. lilair South Carolina Secretary Charleston, South Carolina j fi;*n!Yr"$lIf$$n'jly,l"" E. C. Iloberts L hl. Gressette, Jr. I 3 Member orinvesunent compen. General Counsel and
' Chairman of the lloard, sation & Management Development Assistant Secretary and corp rau, Pertonnance President and Chief Executivo Officer 4 si$*,"$""e"Ner"d[' Principal Subsidiaries.
- SCANA Corporation commluce Columbla, South Carolina 5 chainnanof thelaccuuve South Carolina Electric &
C """l"e" Gas Company
- 11. A. llagood u President H.D.Kenyon Wm. ht. Bird and Co., Inc. U.""'IUIS I5*0fIU. President and Charleston, South Carolina J. K. Add!/ Chlef Operating Officer J. F. llassell, Jr. u h!R Bruce ,
- 0. W. Dixon, Jr.
llettred Chairman and K UIITf8fh Executive Vice President Chicf Executive Ollicer l* U* 6Nf88> III Operations l<.' M. IhpF 11. W. Stedman Pre Stress Concrete J. //. I,umpkin Senior Vice President Company,Inc. Charleston, South Carolina A. C. Mustard Administration li. H.' Pike, Jr. W.11. Ilipp u J. II. Young, Jr. K C. Summer Senior Vice President President and Chief fixecutive Officer Customer llelations The Liberty Corporation Greenville, South Carolina 18
G. J. Ilullwinkel, Jr. Patricia T. Smith SCANA ll3 drocarbons,Inc. Vice President Vice President Max Earwood Customer lle!ations- Itates. Purchasing and President and Treasurer Southern Division llegulatory AITalrs C. A. llampey, Jr. W. A. Darby J. G. lilack,11 !!xecutive Vice President and Vlec President Assistant Treasurer General Manager Gas Operations 11. J. MacInnis it. D. llatel South Carolina Pipeline Vice President Vice President Corporation George Fasano, Jr. Administration- Max Earwood Controller Southern Division President and Treacurer
- 11. T. Ilorton, Jr. II.T. Arthur Primesouth. Inc.
Vice President and Vice President and J. M. Woods,111 Treasurer General Counsel President and Treasurer Johnny Kinloch 11. M. Kightlinger J.C Chapman
- Vice President Vice President Senior Vice President and Transit and Supply and Engineering Assistant Secretary-1 lect Maintenance 11. J. MacInnis J. A.Schinderle C.11. McFadden Vice President Controller Vice President ' -Operations lluman liesources and 11. A.Steinacker South Carolina llent listate Corporate Communications Vice President Development Company. Inc, S. C. McMeekin, Jr. Contract Administration A.11. Gibbes Vice l' resident George Fasano, Jr. President and Treasurer Customer llelations- Controller Judith 11. Ilattle -
Northern Division Controller D. C. McNamara SCANA Petroletim
- Vlec President llesources,Inc. MPX Systems,Inc.
Electric Marketing / Sales Max Earwood L M. Gressette, Jr. K.11. Marsh President and Treasurer President Vice President and G. J. Wilson, Jr. W. II. 'llmmerman Controller Executive Vice President and Senior Vice President W. E. Moore, Jr. General Manager J.11. Young, Jr. Vice President W.11.Timmerman Senior Vice Predent Fossil and llydro Operations Senior Vice President E. C. Iloherts C. A. Itampey, Jr. Carotane,Inc.
. Vice President and' Vice President W. II. Timmerman General Counsel and George Fasano, Jr. President Assistant Secretary Controller J. M. Clark J. L Skolds 11.T. Arthur Vice President and Vice President Assistant Secretary General Manager Nuclear Operations K. Is. Marsh Controller 19
i Financiallleview i e have continued to emphasize cost containment and effective use of technology to improve our competitiveness. As a result, our electric rates today are 10.3 percent below those in effect in March 1984 and remain extremely competitive with surrounding investor owned utilities and electric cooperatives. We intend to maintain maximum flexibility in selecting our options, to focus diligently on customer satisfaction and to keep a long-term view toward opportunities for growth. The result should be the maximum return for us as stockholders. Management iteimrt . . . . . . . . . . .. . 21' +v% /(. <M lleport ofIndependent Public Accountants... 21 Consolidated l'ine.ncial Statements.. . . . 22 Notes to Consolidated l'inancial Statements . . 28 Management's I)lscussion & Analpis of 1inancial Condillon & liesults of Operation . 35 Common Stock infarmation.. . . . . . . .. 37 Selected Hnancial Data. , 38 20
Management Ileport lleport ofIndependent The Management of SCANA Corporation Ptiblic Accotititants (Company)is responsible for the preparation and SCANA CollP0llAT10N: Integrity of the financial data included in the accom- We have audited the Consolidated Balance panying Consolidated Financial Statements. These Sheets and Consolidated Statements of Capitalization statements have been prepared in conformity with of SCANA Corporation and subsidiaries (Company) as generally accepted accounting principles, as applica- of December 31.1990 and 1989 and the related ble. In situations that prevent exact accounting Consolidated Statements ofincome and lletnined measurements, management has used informed judg- Earnings and of Cash Flows for each of the three years ments and estimates. Financialinformation presented in the period ended December 31,1990. These linan-elsewhere in this Annual lleport is consistent with cial statements are the responsibility of the Company's these financial statements, management. Our responsibility is to express an opin-The Company maintains and relles upon a lon on these nnancialstatements based on our audits. system of internal accounting controls designed to We conducted our audits in accordance with provide reasonable assurance that all transactions are generally accepted auditing standards. Those stan. properly recorded in the books and records and that dards require that we plan and perform the audits to
. assets are protected against loss or unauthorized use- obtain reasonable assurance about whether the nnan-The degree ofinternal accounting control is based clal statements are free of material misstatement.' An upon the determination of the optimum balance audit includes examining, on a test basis, evidence between the cost incurred in unintaining a system of supporting the amounts and disclosures in the finan-Internal controls and the benefits to be derived. The clal statements, An audit also includes assessing the -
system ofinternal accounting controls is supported by accounting principles used and sigullicant ' estimates - written policies and guldelines and is complemented made by management, as well as evaluating the over-by the selection, training and development of profes- alliinar.clal statement presentation. We believe that sional financial managers and by a staff oflaternal our audits provide a reasonable basis for our opinion. , auditors who conduct comprehensive internal' audits- In our opinion, such financial statements pre-The Board of Directers prmides oversight for sent fairly, in all material respects, the financial posi-the preparation of the financial statements through its tion of the Company at December 31,1990 'and 1989,-
. Audit Committee, which is composed entirely of and the results ofits operations and is cash flows for nonemph,yne directors. The Audit Committee meetr each of the three years in the period ended December periodically with management and internal auditors to 31,1990, in conformity with generally accepted review their activities and responsibilities. The Audit accounting principles.
Committee also meets periodkally with the Company's independent auditors, Deloitte & Touche. The h)ternal y----- gg and independent auditors have free access to the Audit Committee to discuss internal accounting con- Columbia, South Carolina-trols, auditing and financial reporting matters. February 11,1991
- p
@jA ,
z w , W. B. Timmerman Senior Vice President Chief Financial Officer 21
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Consolidated Balance Sheets December 31, 1990 1989 ASSETS ' Ohousands ofDollars) Utility Plant (Notes 1,4 and 5): Electric $2,SSS,919 $2,794,405 Cas 369.715 333,640 Transit 3,835 4,034 Common 53,403 49,074 Total 3,315,872 3,181,153 1.ess accumulated depreciation and amortization 1,037,125 956,137 Total 2,27S,747 2,225,016 Construction work in progress 196,464 129,287 Nuclear fuel, net of accumulated amortization 43,394 57,821 Acquisition adjustment ras, net of accumulated anmrtization 31,158 32,154 Utillh Plant Nel 2.549,763 2,444,278 l Other Propert) and investments: Nonutihty aroperty (substantially at cost, net of acemnu ated depreciation) 129,548 67,542 Investments (Notes I and 3) S,304 68,673 Total Other Prcperty and investments 137,S52 136,215 Current Assets: Cash and temporary ctsh investments 45.609 10,465 Heceivables 124,577 133,190 inventories (at average costh Fuel (Notes 4 and 5) 61,85s 48,200 Matea ds and supp'aes 44,565 43,838 Prepayments 19,S54 18,661 TotalCurrent Assets 296,463 254,354 Deferred Debits: Unamortized debt e.xpense 6,469 6,901 Accumulated deferred income ta.ses (Nmer I ana D 33,43S 22,038 Unamortized deferred return on plant invevment (Notes 1 and 2) 27,59S 31,844 Nuclear plant decommissioning fund (Note 1) 14,683 12,016 Other (Note 1) 78,670 76,861 Total Deferred Debits 160 S58 149,660 Total S3,144,936 52,984,507 22
December 31, 1990 1989 CAPITAL.l/.ATION AND 1.lAllil.lTIES (Thousands ofDollars) Stockholders' Investment (Note 6):
$1,0; 377 $ 918,235 Conunon Equity Preferred Stock (Not Subject to Purchase or Sinking Funds) 26.027 26,027 1,029.904 944,262 Total Stockholders' Investment 64,460 6S,038 Preferred Stock (Subject to Purchase or Sinking 1:unds)(Note 7) 938,933 1,003,972 1.ong. Term De!,t, Net (Note 4) 2,033,297 2,016,272 Total Capitalization Current Ilab!!! ales:
134,070 37,587 Short term berowings (Note 9) 67,16s 33,687 Current pottfon oflong term debt (Note 41 Accounts payable 87,7h6 104.002 14,190 13,412 Customer deposits 54,21S 40,377 Taxes accrued 24,222 ?.5,493 Interest accrued 27,506 26,544 Dividends declared 9,12S 11,273 Other 418,2SS 292,375 Total Current I.iabilities Deferred Credits: 507,667 489,144 Accumulated deferred income taxes l Notes 1 and S) 105,952 109,351 Accumulated deferred investment tax credits (Notes 1 and 8) Accumulated reserve for nuclear plant decommissioning (Note 1) 14,6S3 12,016 65,049 65,349 Other (Note 1)
'693,351 675,860 Total Deferred Credits _.
Commitments and Contingencies (Note 10) - 53,144,936 $2,984,507 Total See Notes to Omsalidated Finuncial Statements. 23
l wammmumwnawwm Consolidated Statements ofincome and itetained Earnings For the Years Ended December 31, 1990 1989 1988 (Thousands ofDollars except per share amounts) Operating flesenues (Notes 1 and 2): Electric $ 836,809 $ 822,112 $ 787,956 Gas 292,3N0 297,069 291,308 Transit 4,033 4,102 4,060 Total Operating itevenues 1,133,222 1,123,283 1,083,324 Operating Expenses: Fuel used m electric generation 208,595 224,035 224,278 Purchased and interchange power, nel 1,040 (2,024) (6,412) Gas purchased for resale 191,526 212.112 209,344 Other operation (Note 1) 19S,801 180,126 174,758 Maintenance (Note 1) 67,499 69,338 54,050 Depreciation and amortization (Note 11 97,801 102,296 97,389 income taxes (Notes 1 and 8) 77,392 65,535 69,030 Other taxes 64,611 58,681 56,217 Total Operating Expenses 907,265 910.099 878,654 I Operating income 225,957 213,184 204,670 Other income (Note 1): Allowance for equity funds used during construction 1,630 2,194 1,821 Gain on sale ofinvestment, net ofincome taxes (Note 3) 46,150 - - Other income, net ofincome taxes 7,094 4,931 2,326 Total Other income 54,874 7,125 4,147 Income liefore Interest Charges and Preferred Stock Dividends 280,831 220,309 208,817 Interest Charges (Credits): Interest on long term debt, nel 85.244 86,178 75,075 Other interest expense 10.552 8.244 9,352 l Allowance for borrowed funds used during construction (Note 1) (3,479) (4,001) (4,370) Total Interest Charges, Net 92,317 90,421 80,057 Preferred Stock Cash Dividends of Subsidiary (At stated rates) 6,911 7,263 8,014 l Net lacome 181,603 122,625 120,746 l Iletained Earnings at lleginning of Year 344.652 321,155 297,120 Common Stock Cash Dividends Dedared (Note 6) (101,916) (99,128) (96,711) Other 4,287 - - l hetained Earnings at End of Year 5 428,626 $ 344,652 $ 321,155 Net income $ 181,603 $ 122,625 $ 120,746 Common Shares Outstanding (Thousands) 40,882 40,296 40,296 Earnings Per Share of Common Stock S4.44 $3.04 $3.00 See Notes to Consolidated I:inancial Statements. 24 l i l
f.S e - ! *~ +4 4 C0HS0lidated S(H(em0HlS Of CHSh MOWS For the Years Ended I)ecember 31, 1990 1989 1988 (Thousands ofDollars) Cash I' lows From Operating Arthitles: Net income $ 181,603 $ 122,625 $ 120,746 Adjustments to reconcile net income to net cash provided from operating activities: 1 Gain on sale ofinvestment, net ofincome taxes (46,150) - -
]
1)epreciation and amortization 97,S01 102,296 97,389 l Amortization of nuclear fuel 22,5S5 19,584 14,732 , 1)eferred income taxes, net 7,120 34,759 32,246 I)eferred investment tax credits, nel (3,399) (4,282) (3,544) I)ividends declared on preferred stock of subsidiarv 6,911 7,263 8,014 Allowance for funds used during construction (5,109) (6,195) (6,191) Application of deferred credis to storm costs (Note 2) - (13,783) - Nuclear refueling accrun! (2.67I) 8,863 (4,002) : Equity earnings in imestees (Note 1) (l.062) (357) (1,140) Changes in certain current assets and Ihtbilities: 4 (Increase) decrease in receivables S,613 (9.292) (18,857) l (Increase) decrease in inventories (14.385) (7,805) 1,333 I increase (decrease)In accounts payable
~
i16.216) 3,969 17.244 Increase (decrease) in customer deposits 778 (3,298) 1,450 Increase (decrease)in taxes accrued t 18,24 I ) 4,401 (424) Increase (decrease)in interest accrued (1,27I) 7,555 1,254 Other, net 3,416 26,270 (1,450) Net Cash Provided From Operating Activities 220,323 292,573 258,800 Cash Flows From imesting Activilles: Property additions and construction expenditures (229,682) (181,545) (182,890) Sale ofinvestment 139,759 ' Other property and investments (56,182) (24,210) (40,643) Principal noncash item: Allowance for funds used during constructmn a,109 6,195 6,191 Net Cash Used For Investing Activities (140,96M (199,560) (217,342) Cash Flows From Financing Activities: Hank notes sold 3,164 153,000 - Note sold - 34,000 - Increase (decrease)in short term borrmvings, net 96,483 (61,264) 77,286 I)ecreas? in fuel financings, net (10,458) (6,158) (778) Reduction oflongterm debt (21,907) (92,231) (19,794) Retirement of preferred stock (3,578) (9.208) (7,388) Payment of dividends on preferred stock of subsidiary (6,975) (7.441) (8,163) Payment of dividends on common stock (100,942) (98.524) (96,144) Net Cash Used For Financing Activities (44,213) (87,826) (54,981) l Net increase (Decrease) in Cash and Temporary Cash Ins estments 35,144 5,187 (13,523) Cash and Temporary Cash investments, Janitary 1 10,465 5,278 18,801 l Lash and Temporary Cash investments,1)ecember 31 5 45,609 $ 10,465 $ 5,278 l l Supplemental Cash information: Cash paid for - Interest 5 96,3S7 $ 86,155 $ 83,173
- Income taxes 94,800 22,836 47,218 Noncash Financing Activilles:
Direct billing obligations under supplier take or pay arrangements (Note 2) - - $ 50,036 See Notes to Consolidated FinancialStatements. 25 l l
u weemn + wu :monwnwrc mutwg Consolidated Statements of Capitalization December 31, 1990 19s9 Common I:quity (Note 6): (Thousands of Dollarsi Common stock, no par value, authorized 75,000,000 shares; issued and outstanding, 1990 - 40,882,176 shares and 1939 - 40.296,147 shares 5 573,231 5573,583 Retained earnings 42$.626 344.652
'Iotal Common l{quity 1.003.877 50% 918.235 46%
South Carolina 1:loctric & Gas Cv.npanyi . Cumulathe Preferred Stock (Not Subject to Purchase or Sinking f unds)(Note 6):
$100 Par Value - Authorized 200,t,00 shares
$50 Par Value - Authorized 125,209 shares Shares Outstanding '
Redemption Price Inentual Series 1990 1989 Current Through Alinimum
$100 Par 8 40% 197,66S 197,663 104.70 11 30-91 101.00 19J67 19,767
$50 Par Surt 125,209 125,209 52.50 - 52,50 6,260 6,260 Total Preferred Stock (Not Subject to Purchase or Sinking i unds) 26.027 1% 26,027 1%
South Carolina Electric & Gas Compan3: Cumulathe Preferred Stock (Subject to Purchase or Sinking Funds)(Note 7):
$100 Par Value - Authorized 1,550,000 shares Shares Outstanding Redemption Price bentual Series 1990 1989 Current Through Minimum 7.70% 98,270 103,683 101.00 -
101.00 9,827 10,368 8.12% 140.721 145,221 102.03 - 102.03 14,072 14,522 238,991 248.904
$50 Par Value - Authorized 1,677,986 shares Shares outstanding fledemption Price thentual Senes 1990 1989 Cun ent Through Minimum 4.50% 23,600 27,200 51.00 -
51.00 1,280 1,360 4.60 % S.334 9,834 50.50 - 50.50 417 492 4.60%(Al 36.032 38,052 51.00 - 51.00 1,h03 1,903-4.60%(B1 91,800 95,200 50.50 -
- 50.50 4,590 4.760 5.125% 77,000 78,000 51.00 -
51.00 3,850 3,900 6.00% 99.200 102,400 50 50 - 50,50 4.960 5,120 8.72% 255.717 285,000 52.00 12 31 93 50.00 12,786 14,400 9.40% 217.507 224.269 51.175 - 51.175 10.873 11,213 811.210 862.935 =
$25 Par Value - Authorized 2.000,000 shares; None outstanding in 1990 and 1989 Total Preferred Stock (Subject to Purchase or Sinking Funds) 64,460 3% 68.038 3%
26
.~ .- - . _ _ . ~ . - - . ~ - . - - - . - -_-..~ .. - u- - --. - . . . - I l q December 31, 19 % 19s9 lang Term Debt (Notes 4 and Sh (Thousands ofikdlars) j South Carolina 1:lectrk & Gas Company; 1irst and flefunding Mortgage Bonds Year of Series Maturity 10 1/2 % 1990 - 6.6fR) 5% 1990 -- 10J4) 5% . 1991 NMX) hjXH) 47/8% 1995 16JG1 16JKX) 545% 1996 15JH30 15JXX) 6% 1997 15,000 15JMK) 61/2% 1995 20,000 20fX)0 8% 1999 35J100 35jHK) 91/h% 1999 13JW) 15fXX) 8% 2001 35M10 35fe) 71/4% 2002 W uno 30MK) 91/M% 2006 Muh 50AKW1 8.40% 2006 50JN 50JXX) 81% 2007 30MH) 30jk)0 8.90% 200S 30.000 30AM) - 10 1/8% 2009 35,000 35JXX) 97/8% 2009 50,000 SOAK) 12,15% 2010 33,840 35,890 83/4% 2017 100.000 100JXX) Pollution Control Facilities llevenue ilonds: 5,95% Series, due 2003 7,030 7,105 Fairfield County Series 1984, due 2014 (variable rate - 6.20% through 8/11h1) 57,0iM1 57J100 Michland County, duc 2014 hariable rate - 6 20% through S/31S11 5,210 5,210 Faltfield County Series 1986, due 2014 h atlable rate - 6.20% through 8/'11h 11 1,100 1,100 Colleton and Dorchester Counlics Series 1987, due 2014 (variable rate - 6.20% through W31M11 4,365 4,365 Capitalized Icase Obligations, due 1991,1997 (various rates hetween 5 3/4% and 10%) 5,43J 7,909
- Hank loans, due 1992 (variable rate - 8.24% at 12/31MO) 75M)0 75J0)
South Carolina Generating Company, Inc.: Herkeley County Pollution Control
- Facilities Resenue Bonds, due 2014 b ariable rate - 6 40% through 90WI) 35,850 35,850
; Term loan, due 1992 (variable rate - 8,13% at 12/31MO) 66,500 69,500 South Carolina Fue; C,ompany, Inc.:
Nuclear fuelliability - 43,017 60,522 Fossil fuelliability 23,601 16,554 South Carolina Pipeline Corporation: Note,9.27%,due 19901994 - 32JU) 34j)00 South Carolina Real Estate Development Company, Inc.: Notes, duc 19901991 (at various rates) 456 . 487
) Hank (nan, duc 1991 (variable rate - 10.0% at 12/3 th0) I,206 -.
Hank loan, due 1992 (variable rate - 1031% at 12/3 th0) 3,022 3,159 Bank loan, duc 1992 (variable rate - 10.0% at 12/3 thol 4,798 4,841-Note,9.13%, due 20N 1,037 -
. Primesouth,Inc.:
Term loan,10.35%, due 1995 920 - Capitali/ed I. case Obligation, due 1994 bariable rate - 10.0% at 12/3lM01 31 -
- SCANA Corporation:- _
' Bank Notes, due 1992 hariable rate - 8.52% at 12/3 th0) 70J)00 70MX) ;
Total . .
- 1M)7,463 1,039,092 l less - long term debt maturities, including sinking fund requirements 67,168 33,687 y Unamortized discount 1,362 1,433 TotalInn;! Term Debt, Net 938,933 46% 1J)03,972 50%
Total Capitalization $2,033.297 100% $2.016,272 - - 100% See Notes to Consolidated FinancialStatements, 27 te - v = ,
e--m-m--m Notes to Consolidated Financial Statements 1, Summary ofSignificant Arrounting Policies: $198.~ nillion as of December 31,1990 and 19S9, respecdvelp A. Organ 9ation and Principles of Comolidation SCE&tts share of the direct expenses associated with operating Summer Station is included in the Compam s Other operation and SCANA Corporation (Company), a South Carolina cor;mration, is a ' Maintenance
- cxpenses.
public utility holding compan) within the meaning of the Public Utilit) lloiding Company Act of 1935, but is exempt from registradon under D Allo"ance for } unds thed During Construcu,an such Act. Allow ance for funds used during construction ( Al:C). a noncash The accompanying Consolidated Financial Statements reDect the item, reDects the period cost of capital devoted to plant under construe. consolidation of the accounts of the Company and its whou) owned sub- don. 'Ihis accounting practice resuhs in the inclusion, as a component of sidiaries: construction cost (construction work in progresst of the costs of debt Regulatedutihties and equity capital dedicated to construction imestment. AFC will ulti-South Carolina Electric & Gas Compn) (SCE&GI mately be included in rate base imestment and depreciated as a compo-South Carolina Generating Company. Inc. (GENCOI nent of plant cost in establishing rates for utilitt services. The South Carolina Fuel Company,Inc. Company's regulated subsidiaries calculated AIC using composite rates South Carolina Pipeline Corporation (Pipeline Corporation) w hich of 9.5% S.8% and 7.8% for 1990,19S9 and 19S8, respenisely. These wholly owns Carolina Exploration Corporation rates do not exceed the maximum allowable rate as calculated under Nonregulated businesses FFHC Order No. 561, Interest on nuclear fuel in process is capitalized at Carotane, Inc. the actualinterest amount. MPX Systems, Inc. Primesouth, Inc. L. Deferred Return on Plant imestment SCANA Capital Resources, Inc. Commencing July 1,1987, as approved by a P5C order on that - South Carolina Real Estate Deselopment Company, Inc. date, SCE&G ceased the def"rral of carrying costs associated with 400 SCANA Ilydrocarbons,Inc, W of electric generating capacity presiously remmed from rate base Supertane Gas Company and began amordzing the accumulated deferred carrying costs on a SCANA Petroleum llesources,Inc. straight line basis mer a ten year period (see Note 2ill Amortization of deierred carrying costs, included in ' Depreciation and amortization," In October 1990 the Company acquired Peoples Natural Gas was approximately $4.2 million for 1990,1989 and 198S. . Company of South Carolina (Peoples), a distributor c. natural gas in northeastern South Carolina, through an exchange of stock. The trans- F. Depreciation and Amortization action was accounted for as a pooling ofinterests and had no significant Prmblons for depreciation are recorded using the straight line effect on anancial posiuon or results of operations. Peoples was merget. method for financial reporting purposes and are based on the estimated into SCANA and its assets are operated by SCE&G. A subsidiary of sernce lives of the various classes of property (see Note 2BL The com. Peoples, Supertane Gas Company, a propane supph,er, was acqm, red in posite weighted average depreciation rates were as follows: the transaction and is a subsidiary of the Company. Imestments in joint ventures in real estate are reported using the i, y g equity method of accounting. Signincant intercompany balances and transactions have been eliminated in consolidation. IL S) stem of Accounts Q, Pipeline Corporation Q ] 2.56*. 2.M % [2 2,6% The accounting records of the Company's regulated subsidiaries watew 2m 3.2n 3.2n are maintained in accordance with the tiniform System of Accounts pre' Nuclear fuel amortization, which is included in " Fuel used in elec-scribed by the Federal Energy Regulatory Commission (FERC) and as tric generation" and is reemered through the fuel cost component of adopted by The Public Service Commission of South Carolina (PSC). SCE&G's rates,is recorded using the units of production method.
= C. Culity Plant Prmisions for amortitation of nuclear fuel include amounts necessary to satisfy obligations to the United States Department of Energy under a
- Utility plant is stated substantially at original cost. The costs of euract for disposal of spent nuclear ftml.
additions, renewals and betterments to utility plant, including direct The acquisition adju3tment relating to the purchase of certain gas labor, material and indirect charges for engineermg, superusion and an properties in 1982 is being amortlied m er a 40-year period using the allowance for funds used during construction, are added to utility plant straight line method, accounts. The original cost of utili'v property retired or otherwise dis-posed ofis removed from utility pla'nt accounts and generally charged, G, Nuclear Decommissioning along with the cost of remmal, less salvage, to accu ulated degecia' On January 3,1990 the Nuclear Regidatory Commission (NRC) tion. The costs of repairs, replacements and renewals ofitems of prop' approved SCE&G's request for an extension ofits operating license for erty determined to be less than a unit of property are charged to Summer Station. Decommissioning of Summer Station is presently pro-maintenance expense. SCE&G, operator of the V C. Summer Nuclear Station (Summer jected to commence in the year 2022. The expenditures (on a before tax basis) related to SCE&G's snare of decommissioning activities are cur. Station) and the South Carolina Public Service Authority (a body corpo-rently estimated to be approximately $337 mlHion On 2022 dollars, rate and politic of the State of South Carolina) are joint owners of assuming a 5% annual rate of innation), SCE&G is providing for estiniat-Summer Station in the proportions of two thirds and one third, respec-ed decommissioning costs ofits share of Summer Station over the life of thely. The parties share the operating costs and energy output of th" Sumn.er Station and has established a reserve for this purpose. SCE&G plant in these proportions. Each party, howeser, provides its own is presently funding the reserve with amounts wilected through electric
' financing. Plant in service related to SCE&G's poruon of Summer Station rates (approximateh $1.1 million annually for 1990,1989 and 1988, not
- was approximately $907 milhon and $901 milhon at December 31,1990 of taxes), and intends for the fund, inch. ding earnings, to provide for all and 1989, respectively. Accumulated depreciation associated with esentual decommissioning expenditures on an after tax basis.
SCE&G s share of Summer Station was approximately $223.4 million and 28
.- - .- -. .. _ - , - - - - - - ~ _ - . -. The NHC has published Anal reguiations on decommissioning of The following table sets forth the funded status of the plan, as nuclear facilities. These regulations address decoromissioning planning determined by an independent actuar), at December 31,1990 and 1989. needs, timing. funding methods, and environmental resiew requirements and required licensed electric utilities to subntil a decommissioning plan irar I nded December 31. FWo 19s9 by July 1990 certifying financial assurance for deconimissioning costs rf housands o/Dollarsi in 1990 SCfAG established a trust fund which is maintained by an inde- Actuarial Present Value of Henent Obligations:
)ested benent obligauon $17A9s7 $169,472 pendent trustee and complies with the financial assurance requirements of the NRC rule, The assets of the trust fund were approximately $5.2 Nonwsted twnent obligation om- 3.777 million at December 31,1990 and were recorded in " Nuclear plant Accumulated tu nent obligation I N2.379 173.249 decommissioning funu* in " Deferred liebib? Projected twnent obligation 2 M 433 213.79u Man awts at fahatue 22W 22Am
- 11. Income Tases The Company and its subsidiaries Die consolidated i ederal and , U"""j,'c"j,'q$nNt p obYgatYon i6331 12.516 State income tat returns, Income lates are allocated to all subsidiaries t nrecognlied nel trusition hability 15.45s 17.542 based on their contributions to consolidated tatable income- t nrecognlied prior senice costs 12,981 .10446 Hecause tat laws and Gnancial accounting standards differ in their t nrecognised ne,tgain (2x.wll 144M61 recognition and measurement of economic esents, differences arise Pension liability recognl/ed in between (1) the amount of tasable income and reported pretax Gnancial (onsolidated Italance sheets 5 - 6 751 5 -13.9s21 income for a year and W the tax bases of assets or liabilities and their reported amounts in the Enancial statements. Accordingly, the Compan) The accumulated benent obligation is based on the plan's benent
_ provides deferred income tases for substantially all timing differences, formulas without considering espected future salary increases. The fol-principally accelerated tax depreciation, except for certain basis differ- lowing table sets forth the assumptions used in the amounts shown ences artsing prior to 1981 Deferred income tax provisions are includ- above, ed in income currently with ccrresponding credits or charges to p,yo i9g i9,og accumulated deferred income taxes' Annual divount rate used to lmestment tax credits were generally deferred and are be.ing determine benefit obligations MM MM Mr% amorti/ed mer the deprectable hves of the respective assets- bpected long term rate of return
. In December 1987 the Financial Accounting Standards Board on plan assets Aos an 8%
IFASillissued Statement No. 96 " Accounting for Income Taxes." This Diwount rate uwd in determining Statement requires the use of the " liability method" whereby a deferred pension rust am Mn 8M tax liability or asset would be recognited for deferred las consequences Assumed annual rate of future salar) increaws for pmjnted lawnt of all temporary dilTerences The Statement (1) requires that a deferred *
- tax liability or asset be adjusted for the effect of a change in tax law or OhK"U "
- rates,(2) prohibits net of tax accounting and reporting, and Q requires In 1989 the Company completed an early retirement incenthe pro-recognition of a deferred tax liability for tas benefits that are houed gram which increased pension liabilit) by $15 million This amount is through to customers when temporary differences originate and for the being amortiled over eight years 'he merage remaining service life of equity component of AFC. The Company does not antbipate that appli- the employees participating in the program.
cation of this Statement will have a significant impact on results of oper- In addition to pension benents, the Company provides certain
. ations. The balance sheet will nquire certain reclassifications to comply health care, supplemental retirement and life insurance benefits to with the provisions of this Staten:ent. The requirements of the active and retired employees, Currently, such benents are generally Statement must be adopted by the Co npany no later than January 1, chargetl to expense when claims and premiums are paid. The annual
' 1992. The FASil is currently considering changes that could include a costs of providing such benents to retired employees are not significant.
delay in the Statement's effecthe date. In December 1990 the FAS11 issued Statement No.106
- Employer's
- Accounting for Postretirement Benefits Other Than Pensions? The
- 1. Pension h. pen e . Statement requires that the cost of postretirement bene 0Ls other than The Company has a noncontributor) denned benefit pension plan pensions be accrued during the 3 ears the employees render the senice emering substantially all employees. Benents are based on years of necessary to be el;gible for the applicable benefits. Although the accredited service and the employce's average annual base earnings Company has not yet determined the impact of this Statement,it could received during the last three years of employment. The Company's pol- result in signincandy greater expense being recognized for prmision of ic) has been to fund pension costs accrued to the extent permitted by the these benefits. The Co i." < exeects that the increased benents applicable Federal income tax regulations as determined by an indepen4 expense will either be , wt currently through rates or that a regu-dent actuary. latory asset will be recoraed to renect amounts to be reemered through Net periodic pension cost, as determined by an independent actu- rates in the future as the costs are paid, therefore, this Statement should for the years ended December 31.1990,1989 and 19S8 included not have a signincant impact on the Company's financial position or ary,following the componentsE d Apnations. The requirements will be effecthe for fiscal) ears beginning after December 15,1992.
irar inded December 31, two
'"?" , "
19s9 19 % (Thousamis of Dollars! Senke cost benefits earned Customers' meters are read and bills are rendered on a monthly
. during the perhd 5 5M6 5 5.233 1 5.n27 cycle basis. Ilase revenue is recorded during the accounting period in interest cost on projecte i benent obugation 17,239 16.347 14.920 which the meters are read.
Adjetments: Fuel costs for electric generation are collected through the fuel emnponent in retail electric rates The fuel component contained in of t n deferral 0 ) electric rates is established by the PSC during semiannual fuel cost hear-Net perlmlic pension tot $ 7Mi 5 10.147 5 9,13s 29
ings. Any difference between actual fuel cost and that contained in the annual increase in SCE&G's wholesale electric rate. On January 5,1990 fuel component is deferred and included w hen determining the fuel cost SCL&G filed with the FEHC for approval to reduce its u holesale electric component during the next semiannual fuel cost hearing. At December rate to correspond with the retail electric rate reduction pursuant to the 31/1990 SCISG had mercollected, through the electric fuel clause com- July 3,1989 PSC order (See Note 2B.1 An intervenor, howeser, protest-ponent, approximately $6.7 million, which is included in " Deferred ed the method of this reduction, ahhough not the amount. In May 1990 Credits Other." At December 31,1989 SCE&G had undercollected . the FEHC denied the intenenor's petition. In August 1990 the inter-approximately $9.0 million which is included in
- Deferred Debits Other." venor appealed its case to the U.S. Court of Appeals, w here it is currently Customers subject to the gas cost adjustment clause are billed awaiting action.
based on a fixed cost of gas determined by the PSC during semiannual D. On November 28,1989 the PSC granted SCI:&G an increase in gas cost recovery hearings. Any difference between actual gas cost and firm retail natural gas rates that are designed to increase t.nnual res-that contained in the ra'es is deferred and included when establishing enues by $10.1 million. This represents approximately 89.5% of gas costs dur.'ng the next semiannual gas cost recmcry hearing. At SCE&G's request for an increase of approximately $11.3 million. In its December 31,1990 and 1989, SCE&G had undercollected approximately order the PSC authorvi a 1215% return on common equity. The new
$1.5 million and $6.3 million, respectively, through the gas cost recmcry rates became effective on November 30,1989. On January 8,1990 the procedure, which are included in " Deferred Debits Other." PSC denied the Consumer Advocate's petition for reconsideration and rehearing of the gas rate order. On February 12,1990 the Consumer K. Debt Premium. Discount and Expense - Advocate appealed the decision to the Circuit Court, The case is still I.ong term debt premium, discount and expense are being amor- pendmg action by the Circuit Court. While the outcome of this matter is l _ tired as components of *lnterest on long term debt, net
- o er the terms uncertain, the Company be!! eves the probability of any significant l1 of the respective debt issues. change in the rate order is unlikely.
E. On August 8,1990 the PSCissued an order approving changes
' l Statements of Cash Flows in Pipeline Corporation's gas rate design for sales for resale service, cf.
The Company considers temporary cash in estments having origi- fccthe November 1,1990. Pipeline Corporation requested the changes nal maturities of three months or less to be cash equhalents: Tem. in compliance with a settlement agreement with the Consumer Advocate parary cash Amestments are generally in the form of commercial paper, in prior rate proceedings. The order upheld the *value of senice"
- certificates of deposit, and repurchase agreements. method of regulation for it< direct industrial senice and gave final approval for the annual reduction.In rate resenues of $300.000 for -
R Rnlassifications wholesale customers. The rate reduction had been temporarily enacted Certain amounts from prior years haw been reclassified to con. in late spring pending final PSC apprual. form with the 1990 presentation, F. In Niay 1989 the PSC approsed a volumetric and direct billing
., method for Pipeline Co poration to recover take or pay costs incurred
.. Rafe Matters from its interstate pipeline suppliers pursuant to FERC apprmed final A. The Company sustained significant damage to its electric trans. and nonappealable settlements. At December 31,1990 and 1989 mission, distribution and other facilities as a result of flurricane llugo on approximately $26.3 million and $27 A million, respoetively, of accrued September 2122,1989. Total costs attributed to the replacement and interest and direct bidings to Pipeline Corporation from its suppliers repair of damaged plant were approximately $56 million. Of this remain to be recovered from Pipeline Corporation's customers and are amount $13A million is being recovered through insurance and an addi. included in *Dderred Debits Other." The Consumer Advocate and two tional $19.3 millior, rasociated with capital expenditures was included in other intervenors appealed to the Circuit Court the PSC's order regard-
' Utility Plant
- in 1989 For electric costs not capitalized or covered by ing the pass through of these costs, A stay of parts of the PSC order was insurance ($22 million), SCE&G received an order from the PSC on requested until the appeals are heard. On February 22,1990 the Circuit February 6,1990 approving tht offset in the 1989 Consolidated Court granted the stay, and Pipeline Corporation ceased collecting take-Statement ofincome of $13.8 million of storm related costs, after income . or. pay amounts from its customers pending a final decision on the mat-tax benefits of $3.2 million through the application of credits carried on ter. The appeals of the Consumer Advocate and the two other its books as a result of a 1980 settlement of certain litigation. The intervenors have been consolidated and the hearing is expected to be remaining nonelectric storm costs of $1.3 million were included in 1989 held in the first quarter of 1991. The Company belieses that any change operating expenses. The treatment prescribed by the PSC did not in the P5C order as a result of these appeals would only affect the timing require any rate increase for SCE&G's customers. of the recovery by Pipeline Corporation of the costs-B. On July 3,1989 the PSC granted SCE&G approximately $21.9 . SCE&G, as a customer of Pipeline Corporation, has been billed for million of a requested $27.2 million annualincrease in retail electric its proportionate share of take or pay costs and is recovering such costs revenues. The PSC order granted an allowed return on common equity from its customers through purchased gas adjustment prmisions in its of 13.251 On January 3,1990 the NRC extended Summer Station's rates. .
operating license from March 21 - 2011 to August 6,2022 (see Note IG), G. As a result of a Petition Rt questing investigation filed by inter.
- and in compliance with the July 3,1939 PSC order, SCE&G subsequently venors during the 1989 electric rate case (see Note 28), the PSC issued reduced its retail electric rates by approximately $7,7 million to reflect an Order Granting investigation on April 12,1939. The imestigation lower depreciation expense resulting from the extension of the plant's relates to the propriety of rmancial relationships between SCE&G and its license. The etiect of such reduction is to decrease the additional annual afliiiates. The Company belines that the outcome of this investigation revenues allowed in the July 3,1989 order from $21.9 million to $14.2 will have no material effect on its operations.
million, or an annuallnerease of 1.9% Consequendy, there will be no it. In an order dated July 1,1987, the PSC approved SCL&G's
- effect on future net income as a result of the January adjustments. The January 30,1937 request to restore to its rate base, effective July 1, l Consumer Advocate has appealed the electric rate order to the South 1987, the net production investment (approximately $102.5 million at l Carolina Circuit Court (Circuit Courn. While the outcome of this matter July 1,1987) associated with 400 MW of electric generating capacity
' is uncertain, the Company belieses that any significant change in the previously removed by the PSC in its order dated March 2,1M4. The rate order is unlikely. 1987 order also apprmed SCL&G's proposal to include in rate base the i Cc Effective July 3,1939 the FERC approved an $393.000 or 2.9% associated accumulated deferred carrying costs (approximately $42.5 30 4
" - - " ' " ... . - , . , , m, , ..... .
million at July 1,1957) and to begin amortizing these costs over a ten- the pledge oflike amotnts of SCC &G's Iirst and Befunding Mortgage year period commencing July 1,1957. The July 1,1987 order was Bonds,20% Series duc lanuary 14,1992 and I ebruar) 4,1992, respec-appealed by the Consumer Adwcate to the South Carolina Supreme tiwly. Proceeds of the b. nk loans totaling $70 million were used to Court, which heard the case in March 1989, On May 30,1989 the South reduce short term debt an 1 for general corporate purposes The pro-Carolina Supreme Court issued an order remanding the case to the PSC ceeds of the bank loans tota?ng $75 million were used to refund a $75 for factual finding on the prudence of the derating of 69 MW of SCC &G's million loan due Fchruary 1. D91 and accordingly, such amount is total production capacity and the effen,if any, of the deratings on included in long term debt. depreciation and carrying cost issues. Pursuant to the South Carolins in January 1991 the Compa1y issued bank notes totaling $%0 mil-Supreme Court's directhe on remand, the PSC issued an order reaffirm- tion due January 15,1992. The literest rate is determined quarterly ing its decisior, and stating its firdings and conclusions concerning the and is based upon the three mon h ljBOB rate plus 35 basis points. The 69 MW rerating issue. The Consumer Advocate has appealed the order proceeds of the bank notes were used to refund $70 million in bank to the Circuit Court and the appeal has been consolidated with the notes due January 15,1991 aeJ for general corporate purposes and j appeal of the electric rate order described in Note 2B abuse. The case is accordingly, $70 million is uiuded in long term debt. still pending action by the Circuit Court. While the outcome of this mat- Substantially all u'.Wty plant and fuelimentories are pledged as ter is uncertain, the Company belieses that any significant change in the collateral in connectic1 with long term debt. PSC's order issued on remand is unlikely. ggg , J. Gain on Sale ofInrestment: Nuclear and fossil fuel insentories are financed through the On August 14,1990 MCI Communications Corporation acquired all issuance of short term commercial paper. These short term borrowings outstandinphares of Telecom* USA common stock for ensh of $42 per are supported by irrewcable bank lines of credit which expire in 1993. share. Through its in estment in Telecom Partners, MPX Systems,Inc. Accordingly, the amounts outstanding hase been included in long term (a wholly owned subsidiary of the Companylowned approximately 3.3 debt. The bank lines provide for maximum amounts ($75 million related million shares of Telecom. USA common stock at the date of acquisition. to nuclear fuel and $25 million related to fossil fuell that may be out-The gain from the sale of the stock. net ofincome taxes,is approximate- standmg at any time. ty $46.1 million or $1,13 per share of SCANA common stock and was At December 31,1990 the amount outstanding for nuclear fuel was reported in the third quarter of 1990. approximately 543 0 million at a weighted average interest rate of 5 05% and the amount outstanding for fossil fuel w as approximately 4 l.ong Term Debt $23 6 mill.an at a weighted aserage interest rate of 8 05%. At December SCCML annual tender "ollution Control Facilities Reienue Bonds 31,1989 the amount outstanding for nuclear fuel was approximately (which do not IFluue the 5.9a% Series, due 2003) are secured by like $60.5 million at a weighted aserage interest rate of 8.54% and the principal amounts of its I irst and Refunding Mortgage Bonds. t mount outstanding for fossil fuel w as approximately $16.6 million at a GENCO's annual tender Polh, tion Control Faciliues Revenue Bonds weighted average interest rate of 8 59%. are secured by an irrevocable letter of credit expiring in 1991. These annual tender Bonds bear mterest at a rate, not to exceed & Stockholders Investment (Incladin7 vreferredStock 15% per annum,(1) set between 80% and 120% of an index rate based Xot Subj,ect to Purchase or Sinking l undsk on one year yield esaluations of comparable tax cxempt obligatiens, or lhe changes in "Cornmon Stock." without par s alue, during 1990, (2) equal to 65% of one-year yield es aluations of U. S. Treasury Bonds at 1989 and 1958 are summarized as follows: par. The interest rate is adjusted annually but may become fixed until maturity. These Bonds also provide that the holders may require the hmber Thousands Bonds to be purchased at par upon each annual adjustment of the inter- or nan s or Donars est rate or at the time the interest rate becomes lhed until maturity. If Balance January 1,1988 40,2 %,147 $574,500 the Bonds are tendered by the holders, the Company Intends to reof'er Other 72 the Bonds to the public. Due to the prmisions of the Bond Indentures. Balante twember 31,1984 40.2 % 147 574.572 which permit the Company to purchase the Bonds in lieu of redemption Other els9) and resell them and to substitute other security arrangemen s, the Bilance December 31. m9 40.2st 47 573.5s3 SCE&G Bonds are classilled as long-term debt. Immaterial acquhiuon 5 % o29 6u The annual amounts oflong term debt maturities. Including the Other 1.017 amounts due under nuclear and fossil fuel agreements (see Note 51. and Balance December 31. Im 40M2.176 $375.251 sinking fund requirements for the years 1991 through 199a are summa-rized as follows: The Company's employee stock benefit plans' trustee and agent for its Dividend Rein estment and Stock Purchase Plan purchase presiously Year Amount ) ear Amount issued and outstanding shares of the Company's common stock in the (Thousands ofDo(Iars/ open market 1 711 5 67,168 1994 513.263 f he Restated Articles of Incorporation of the Company do not limit 17)2 234.844 1995 11.280 84,896 the dividends that may be payable on its common stock. Iloweser, the e)93 Restated Articles of Incorporation of SCL&G and the Indenture underiv-Approximately $9.4 million of the current poru.on oflong term debt ing certain of its bond issues contain provisions that may limit the pay'- for 1991 may be satisfied by either deposit and cancellation ment of;conds of cash disidends on common stock in addition, with respect to issued upon the basis of property additions or bond retirement credits, bidroelectric projects, the Federal Power Act may require the dppropri-or oy deposit of cash with the Trustee. aiion of a portion of the earnings therefrom. At December 31,1990 Subsequent to December 31,1990, SU&G arranged for bank loans approximatch $7.2 million of retained earnings were restricted as to due January 14,1992 and February 4,1992 in the principal amounts of payment of cish dividends on common stock.
$70 million and $75 million, respectively. The interest rates on the loans Cash dividends on common stock w fre declared at an annual rate are determined perimlically and are based upon the LIBOR rate for the per share of $2.52. 52 46 and $2 40 for 1990,19S9 and 19% respec-term selected by SG&G plus 30 basis points. The loans are secured by tisely.
31
7 Preferred Stork (Subject to Purchase of Sinking hunish Current income lues for 1989 noted ahme renects approximately nGon oNnane tax benents related to storm damage costs which The call premium of the respecthe series of preferred stock in no are included as a reductmn in maintenance expense in the tonsohdated
- case exceeds the amount of the annualdividend. Retirements under StatanentuNnconu$ee Note 2A) sinkingAt amfund requirements time when dividends asearenot been al bmr paidsinalues, full or declared lotal income lates differ from amounts computed by applying the statutory I ederal income in rate of 34% to preta income as follows:
and set apart for pay ment on all series of preferred stock, SCE&G may not redeem any snares of preferred stock (unless all shares of preferred stock then outstanding are redeemedi or purchase or otherwise acquire
"" "# U" for value any shares of preferred stock etcept in accordance with an (7hoamduftfullars/
offer made to all holders of preferred stock. SCl&G may not redeem an) Net income 5 n t.603 5122,625 5120J46 shares of preferred stock (unless all shares of preferred stock then out- Totallncome m npense: standing are redeemed) or purchase or otherwise acquire for value ans Charged to operaung npenses 77,392 65,535 69,030 shares of preferred stock (except out of monies set aside as purchase ' Charged to other turon't 30,N10 (3,013) (1,402) funds or sinking funds for one or more series of preferred stock) at any Tat hem of storm damage costs - (8,2r4 - Preferred stock dividends 6,911 7,263 8,014 time when it is in default under the provisions of the purchase fund or sinking fund for an) series of preferred stock. lqal pretas income ,296J16 5 B4,210 $ Pm,3 AM The aggregate annual amounts of purchase fund or sinking fund requirements for preferred stock for the years 1991 through 1995 are inome tamn abme at statutor) summari/ed as follows: lederalincome in rate $100.883 5 62.631 5 66,772 Increases (decreawi sitributable to: lear Amount Year Amount Allowance for funL used during (Thousands o/Dollarsi construction (neluding nuclear fuell (555) (746) (619) 1991 51,756 1994 52,515 Deferred return on plant insestment, 1992 2.434 1995 2,515 net of amordeation 1,444 1,444 1,444 1993 2,515 Depreciation differences 2,028 2.370 (859) . Amortitation oflmestment tat i The changes in " Preferred Stock (Subject to Purchase or Sinking credia (3J64) (4486) (5,220) Fund 3)" during 1990,1989 and 1988 are summarized as follows: Amordiada oflitigation settlement-related credits U7 (4,686) - Number Thousands State income ines Uess i ederal of shares of bollan income ta elTect) 9.851 5,411 7,071 Italance January 1,1988 1,430,653 584,6P* enallamme tu Dowback at Shares Redeemed: hinner rates than statutor) (3 n43! (3,353) (2,387) Other differences, net 759 ($341 (1,461) 5100 par value (7,390) (739)
$50 par salue (132,980) (6,6491 lotalincome tappense $103,202 5 54,322 5 67,624
. Salance December 31,195M l.290,283 77,244 Shares Redeemed:
" Total deferred tues" results from timing differences in recogni- l 5100 par salue (5,692) (569) '
550 par ialue tion of We folloWng hem' (172J32) (3,637) Balance December 31.1989 .l.111,859 _ 68,033 F)90 1989 1988 Shares Redeemed: 5100 par salue (9.913) rylip (Thousands ofluollarst
$50 par value (31J45) 12.587) gg Italance December 31. PPJO 1.050,201 564,460 Accelerated depreciadon and amordeation 526363 523,802 530,354 S.//lf0meTHICS: Deferred fuel acrounting . (7,674) 4.387 3.950
' ' (
Totalincome tax expense for 1990,1989 and 1988 is as follows: (fcNllng (3',$) (517f; Take or pay contracts (1,8171 8,024 - PN0 1949 19MF Nuclear steam system maln'enance (42) (1,089) 4,409 fThousands ofDollars) Other, net 105 i 244 (l,0siI Current income tues; - Total deferred taies 5 6.002 534339 532,246
.Iederal 5 92M8 $21,810 $33,630 State 13.356 2,034 5,297 At December 31,1990 the cumulative net amount ofincome tu fotal current tues 105,964 23,844 38,927 Delerred taxes, net:
tim ng dilTerences on which deferred taes hase not been prosided FedMal 4,442 23,595 L taled approximately $70 million (see Note Ilit 26.829 State 1,520 6,164 5.417 The Internal Revenue benice has examined and closed consolidal-Total deferred tue$ 6.002 34J59 32,246 ed Federalincome tax returns of the Company through 1986 and is cur-tmestms nt in credits: rently conducting an examination of the 1987 and 1988 returns The Deferred - 405 1.675 issues contained in the preliminary Revenue Agent's Report are not Amortitation of amounts Mpected to hase a signi0 cant impact on the earnings or financial posi. deferred (credi0 (3J64) (4.686) (5,220) tion of the (:ompany. Other - . _ , , Totalinsestment tn eredits (3J64) 14.2411 (3,545)~ Totalincome tax espense Slos 202 534,322 ' $67,628 32
. x .
under chil 10C0 for the Nuclear $leam Supply $3 stem's %idet ib3 steam
- 9. Short Terin llorrottings; ne o upphed h heslinghouse to Summer Station that were The Compans pays fees to banks as compensation br its hnes of Wn n, wo man an usa a e mmNaN ahe%
credit. Commerclid paper borrov.ings are for 270 dass i r less. Details among other things, that at the tune the contract for the Nuclear Steam oflines of credit and short term borrowings at Deceniher 31,1990.1959 upW @nn was negouated and signed in the early 1970s, and at and 19SA and for the >rars then ended are as follows: times thereafter, Westinghouse knew, or reckh ssly disregarded informa-tion in its possession, that the steam generators would he susceptible to p,yo pg9 iqss co on a I a wo ra w ora na aa n llbollun its tidimns) and present the steam generators from reaching their intended 40-) ear i l37.5 $ M3 $90.2 design life. SCihG seeks a judgment that Westinghouw is obligated to tlnes of credit at ) ear end correct the defects in the steam generators at no cost to SCIML and for ShorMerm burrowings Oncluding commerchu paper) during the ) ear: actual and punitiw damages and treble damages in an amount to be Masimum outstanding itR3 $1133 $%M determined Anetage outstanding $101.2 5 44.6 $15 6
%eighted ancrage dady interest ratew Il. SCyment ofISUS5nPSS Il{Urtnallun:
Segment information at December 31,1990.1959 and 1985 and mi rr al paper x% 7 for the years then ended is as follm: tinwrured promiwor) note - K#r% M M9*. Short term tmtrowings outstanding at 1990 ~ scar end. llectric has handt Imai Itank hians 52n -
$ 2.25 heighted anerage interest rate k6n - h.Sh (Umumnds efliollant
""#""*"' " U i ht ti rage Interest rate Prk n 0%
Otwraung npenses,
$300 l n* curedauraite
%cightn jrominor) note interest rate - -
Myr%-
"OE"8 *P*d"D k09,164 and amortisatino 3303Ik 25n.246 k.500 Depreciation and
- 10. C.ommitments antil,onlingencies: umarugauon sus; g23,; 223 9pm Iotal operaun npenws 03Do3 2hud7 U23 907 2h5 A Nuclear insurance "P"" U " U"*"" """'
- 2"' "
- 2* * '* """
The Price Anderson indemnification Act which deals with $CIMPs public liabihty for a nuclear incident, currently establishes the liabibts " limit for third party claims associated with any nuclear incident at $b billion. I ach reactor licensee is currently liable for up to $66.2 million
"'r' swkr["
((nmernwd dnidend, 6.91I per reactor owned for each nuclear incident occurring at any reactor in y g,, 3gg-- the United States, provided that not more than $10 million of the liability per reactor would be assessed per year. SClRTs maximum assess' ment, based on its two thirds ownership of Summer Station, would be
@M mmhra 5 39J36 i st $ 224A M idenunable 5 1x1S41
=-
approximatel) $44 million per incident, but not more than $6 7 million I "'"d I"' ""'"" l"* P"") "P"'"'I""' 4 *24 S $&G current l) maintains policies (for itself and on behalf of the $ 22e IM^t PSAl with Nuclear Electric insurance lJmited INEll.1 and American s Nuclear Insurers ( ANil prosiding combined property and du ontamina- a is at tion insurance emerage of $1.125 billion for any losses in exress of $50n 3d",ntin, million pursuant to existing primary coserages (with ANil on Summer t ulity plant. net 22 N J" $30.213 $1,207 Eino.200 Station. SCl Mi pays annual premiums and,in addition, could be inwntories 9uo7 W2 4e 102J47 assessed a retroactive premium not to exceed 71/2 times its annual pre- led R3w. s m tsi siJ03 un9% mium in the ewnt of property damage loss to any nuclear genenting facilities cowred by NEIL Based on the current annual premium, this 4"es uared fa osn u umpany opnau.ons mmo re;roactiw premium would be approximately $5.1 million. MIRS I"tM a*b To the extent that insurable claims for property damage, decon-tamination, repair and replacement and other costs and expenses aris-ing from a nuclear incident at Summer Station exceed the policy limits of insurance, or to the extent such insurance becomes unavailable in the future, and to the extent that SCl%Gs rates would not recowr the cost of any purchased replacement power, SCE&G will retain the risk of loss as a self-insurer, SCE&G bas no reason to anticipate a serious n< clear incident at Summer Station. If such an incident were to occur,it could haw a materially adwrse impact on the Company's financial position. B. litigation SCl%G, acting far itself and The South Carolina Pubhc Senice Authority (as co owners of the MS MW Summer Stationi liled an action against Westinghouse Electric Corporadon (bestinghousel on March 22, 1990 in the U1 District Court for South Carolina seeking damages for negligence, breach of contract, fraud, unfair trade practices and claims 33
l
- l l
\* 12. Quarterly nnandalData (l!naudited): i I;lectric (.as Transit Total (7housands ofDouars) 1mu Operating resenues 5 822.112 $297,069 5 4.102 $1,123,243 hru scrand T hird lourth Operating expenses, 9"'t'r D" Net 9"N'r cuaner Annul excluding depreciadon loishiperaung and a'aortliadon 538,002 260,974 8,k27 807A03 rnenun um 52s? 41s 5260,55i s mo2s 5277.2o4 si In222 Depreciation and operating amorttiation 90,2%6 11,655 355 102.2 % income urm h.sm 41134 79.113 41,2(c 225.9:,7 1otal operadng etpenses 628,288 272,629 9.1N2 910,099 Net lamm em 31782 2e<9N ItR9tiH 19.976 181.60'1
$ 24.440 $ (5,040) 213,lM ""
Operating inrome lloss) $ 193,824 ", Add - Other income, net 7.125 e reponi-(* .k4 1,7 2.W " o 43 4 44 ef fred a ditidends 7. lne a gain on tale ohnntinent. nd ohnnune tam, of amnimauly
$46 I million, or $113 penhare Isee Note 3t Net income $ 122,625 (2i(Mution related to the arquhition of Propin bec Note 1) b refketed in entiret) in the (4pital expendituret tw9 ldentillable $ 154,356 $ 22.012 $ 142 $ 176,510 first second T hird tourth Ltillied for cierall('.empany operations 5,033 totM operating Total $ 181,545 rewnues(OtxH $285,M14 $232,549 $3m),319 52M4Mt $1,123.2N3 Operating income HuxH 55,mri 44.n23 69,076 4 i 021 211184 idettifiable asets ai IWember 31,1989: Net income unx)) 33,wl 21,tus 4143o 22,2s2 122,625 l'Ulity plant, net - $2,149.226 $249,062 $ 1,421 $2,399,709 f.arnine per share Insentaries 77,333 7,182 - 450 84,985 of ummon itork A$ MPorted .M4 .52 1.13 .55 3 04 Total $2.226,579 $256,244 $ 1.871 2,484,694 Assets utilized for onerall Gmpany operations 499,813 Total aucts ~ $2,9x4,507 1948 Electric Gas Transit Total (Thousands ofDouarsb Operaung resenues 5 787,956 $291,308 $ 4,0h0 $1,083,324 Operating expenses, excluding depreciation and amortization 515,081 257,500 8,684 781,265 lbpreciation and amortliation 86,162 10,843 3M 97,389 Total operating expenses 601,243 268,343 9,068 878,654
( $ 186,713 $ 22,%5 $ (5,008) 204,670 grating income (lossi Add - Other income, net 4,147 Less-Interest charges 80,057
- Preferred stock disidends 8,014 het locome $ 120,746 Capital espenditures:
Identinable $ 148,599 5 26.027 5 230 $ 174,856 Otllited for oterall Company operations 8.034 Total $ 182,890 ldentifiable assets at December 31,19%
. Utility plant, net $2,098,361 $239.861 $ 1,631 $2,339,833 Inventorh's 73,629 7,285 440 81,354 Total $2,171,990 $247,146 5 2,071 2,421,207 Asets utilized for overall Corepany operadons 466,072 Total meets $2,887,279 34
- - . - - ter - - Management's Discussion & Analysis of Financial Condition & Ilesults of Operations lj uIdity y And CapitalllrSources The Compan) ha. 4n elTect a shelf registration for the issuance um umMo ume an agmate M mEon in un*cuW nu@und The capital needs i term debt securities If any sales of these securities are consummated, requirements ofs SC,IEof the operations and ComI>an) construction arise program Primarli) Herause from the cap tal We proceeds may be used to fund addttional business activities in non-rates for regulated services are based on historical cost amounts, to the u'iht) subsidiaries, to reduce short term debt incurred in connection extent inflation occurs and rates are not appropriately adjusted on a therewith or for general corporate purposes in addition, Sch&G has in timely basis, the Company s regulated subsidiaries mas not recover the erect a delf reg stration statement under which it can issue $300 mil-costs of providing services. Therefore, the Company s future financial I on of First and Refunding Mortgage Honds which may be used to position and results of operauons could be mipacted by future innation- refund debt or for other corporate purposes. ary trends - SC Ws first mortgage bond indenture contains provisions pro-As a resuh of continuing customer growth, the Company belieses hibiting the issuance of additional bonds unless net earnings (a3 therein added electnc generating capacio will be necessarj during the next fiv" denned) for 12 consecutive months out of the 15 months prior to the years Althout,h the source of this additional generating capacity has not month ofissuance is at least twice the annualinterest requirements on been determined, the current strategy is to install gas turbinas to meet all bonds to be outstanding (" Bond Ratio *). The issuance of additional increases in peak loads. In 1991 a 93 m;gawatt gas and oil 4 ired tur- bonds is further restricted to m additional principal amount ($344 mil-bine is expected to twcame operational. I bese units base the lowest cap- I on at June 1,1990) equal to 60% of unfunded net property additions, Ital cost to install and will support customer needs while the Compan) bonds issued on the basis of cash en deposit with the Trustee and bonds assesses the sources and timing of additional capacity including bas"
, inued on the basis of retirements of bonds. For the 12 months ended load generation. December 31,1990 the Hond Ratio was 3R The pro forma bond ratio the ability of the Company,s regulated subsidiaries to replace for such period after giving elTect to the issuance of a $70 million
~
existing plant investment, as well as to expand to meet future demand, promissor) note in January 1991, the refunding of a $75 million promis-will depend upon their ability to attract the necessary tinancial capital sor) note in February 1991 and the potentialissuance i fm purposes on reasonable terms t he ability to attract such capital will,in turn, other 16n refunding)of $300 million of bonds pursuant to an effecthe depend upon the regulated subsidianes ability to obtain adequate and shelf registration statement. at an assumed interest rate of 10%, is 2.30. tirnely rate relief. SCE&G's Restated Articles ofincorporation prohibit issuance of addition-On August 14,1990 MCI Communications Corporation (ML,I) al shares of preferred stock without consent of the preferred stockhold-acquired all outstandin shares of TelecomaUSA common stock for cash ,73,gs,. n,,,,. nim's Wefined therelM for the I? consecutive of $42 per sharCinrougn e mesuoem in leteroidanners, ML\ months immediately preceihng the month of issuance is at Irast one and Systems, Inc. (a wholly oww subsidiary of the Company) owned one half times the aggregate of allinterest charges and preferred stock approximately 3,3 million shares of Telecom USA common stock at th" dividend requirements ("Proferred Stock Ratio *). For the 12 months date of acquisition. Cash receimi from the sale, tiet of income taxes, w as ended December 31,1990 the Preferred Stock Ratio was 2.80. After giv-approximately $107,7 million, of wh!:h approximately $45.5 million , nas ing effect to the issuance of $70 million and refunding of the $75 milimn _ been invested in natural gas properties- to the promissory notes referred to ahose and the issuance of $50 mil-The estimated primary cash requirements for 1991, excluding lion in preferred stock expected to be registered in 1991 at an assumed requirements for fuelliabiliues and short term borrowings, and the dhidend rate of 10%, the Preferred Stock Ratio is 2.47. actual primary rash requirements for 1990 are as follows: Without the consent of at least a majority of the totahoting power 1591 E of 5t'IMs peieired swei SC1G run ut iam cason,t a4 at-(nouands ofl>ollars cured indebtedness if, after such issue or assumption, the total principal Property additions and construction expenditures, amount of all such unsecurcd indebtedness would exceed 10% of the excluding allowance for funds used during aggregate principal amount of all of SCE&G's secured indebtedness and construction (AFC) 5224,542 5217,276 capital and surplus, provided, howeser, that no such consent shall be Nuclear fuel expenditures 17,439 7,297 required to enter into agreements for payment of principal, interest and Mituring obligauens, redemptions and premium for securities issued for pollution control purposes. sinking and purchase fund nyulrements 59,5 4 35343 Pursuant to Section 204 of the Federal Power Act, SCl%G and
, Total 5301,547 $2fA516 GENCO must file an apphcation with the FERC for the authority to issue short term indebtedness in amounts exceeding 5% of the par value of Approximately 84.8% of total cash requirements (including dhi- each of their outstanding securities The FERC has authorited SCE&G to dends) was provided from Internal sources in 1990 as compared to issue up to $160 million of unsecured promissory notes or commercial 59.7% in 1989, To supplement internally genersted funds the Company paper with maturity dates of 12 months or less but not later than incurred additional short term indebtedness. December 31,1993. GENCO has not filed an application.
Subsequent to December 31,1990, SCE&G arranged for bank loans The Company and its subsidiaries have available to them funds due January 14,1992 and February 4,1992 in the principal amounts of from unused lines of credit of $137.5 million.
$70 million and $75 million. respectively. The interest rates on the loans The Company anticipates that its 1991 cash requirements will be are determined periodically and are based upon the IJBOR rate for the met primarily through Internally generated funds, funds available term selected by SCE&G plus 30 basis points The loans are secured by through the sale of commercial paper and the sales of additional securi-the pledge oflike amounts of SCE&G's First and Refunding Mortgage ties and the incurrence of additional short term and long term indebted.
Bonds,20% Series due January 14,1992 and February 4,1992, respee- ness. Whether additional securities will be sold and the timing and tively. Proceeds of the bank loans totaling $70 million were used to amount of such sales will depend upon market conditions and other fac-reduce short term debt and for generalcorporate purposes.The pro- tors. Actual 1991 construction and nuclear fuel expenditures may vary ceeds of the bank loans totaling $75 million were used to refund a $75 from the estimates set forth ahme due to factors such as inflation and million loan due February 1,1991. economic conditions, regulation and legislation, rat s ofload growth, In January 1991 the Company issued bank notes totaling $s0 mil- environmental protection standards and the crst and availability of capi-tion due January 15,1992. The inDrest rate is determined quarterly and tal. is based upon the three-month I.lBOR rate plus 35 basis points. The pro- The Clean Air Act Amendments of 1990 require electric utilities to ceeds of the bank notes were used to refund $70 million in bank notes substantially reduce emissions of sulfur dioxide and nitrogen oxide by duc January 15,1991 and for general corporate purposes. the year 2000. These requirements are being phased h over two peri. 35
ods. The first phase has a compliance date of January 1,1995 and the 1990 19s9 191 second, January 1,2000. The Compary meets all requirements of Phase I arnings perihare 54 44 $3M $3.00 , I and therefore will not hase to implement changes until compliance Perrent inerense (decrease) in earnings l with Phase Il requirements is necessary. The Company may reduce sul- per share 46. t '. t3% (6.39 l fur dioxide emissions through the burning of gas or lo'wer sulfur coal, geturn earned on common equit3 hear end) it1% 13.4*. 13.5 % the addidon of scrubbers to coal nred generating units and the installa- Earnings per share and return on common equity increased in tion ofin duct chemicalinjection. l.ow nitrogen oxide burners will be 100 from 1959 primarily as a result of the sale of the Company's imest- i installed to reduce nitrogen mide emissions. The Cempan) will be warb me nt in TelecomeA to MCI on August 14,1990 hee IJquidity and l Ing on a detailed compliance >lan that must he filed with and approved Cr pital Resources for related discussion). The gain, net of tat from the by the Emironmental Protecton Agency by 1995. The Company current- ute of the stock owned by MPX Sptems. Inc. was approximatel) $46.1
~
ly estimates that the implementation of Phase 11 would require capital million, or $1.13 per share of SCAM common stock. The 1990 increases expenditures of $200 million to $400 million and annual operation and were ako due to increases in electric and gas margins, the clTocts of maintenance expenser of $55 million. which more than offset increases in other operating expenses, Earnings The steam generator tubes at V. C. Summer Nuclear Station per share and return on common equity increased in 1989 from 1958 (Summer Station) supplied by Westinghouse Electric Corporation primarily as a result of increased electrie and gas margins which were 1 (Westinghouse) have experienced primary side stress corrosion cracking pa-dally ofhet by hi l (SCC). which causes deterioration and degradation of the tubes. interest' charges? gher other operation and maintenan Although SCE&G has taken steps to mitigate SCC, SCE&G has not been Allow ance for funds used during construction (AFC)is a utility able lo arrest SCC in tho tubes and the decline of Summer Station's rated accounting prartice whereby a portion of the cost of both equity and hor-steam pressure from its original rating due to tube plugging and tube towed funds used to Anance construction (w hich is show n on the bal. ; sleesing. In order to maintain the economic output of Summer Station, ance sheet as construction work in progress) is capitalized. Both the SCE&G will be required to replace the steam generators at the scheduled equity and the debt portions of AFC are non(ash items of nonoperating refueling outage in 1996, substantially prior to the end of their intended inconie which hase the effect ofincreasing reported net income, AFC 40-year senke life. SCE&G estimates that it could cost as much as represented approximately X of net income in 1990 and 5% in 1989 approximately $100 million, including AFC and replacement pimer and 1985. costs, to replace SCE&Es two thirds share of the steam grnerators- In 1990 the Company's lloard of Directors raiseo the quarterly cash .. StTSO, rWrg fer Wf d Tha Sed Cvn! ira P@ lwr ice divUcn f ,r cown ned m m cents por shne from 615 cont < per Authority, as co owners of Summer Station, filed an action against share The increase, elfecthe with the dividend payable on April 1. Westinghouse on March 22,1990 ln the U. S. District Court for South 1990, raised tne indicated annual dividend rate to $2.52 per share from Carolina seeking damages for negligence, breach of contract, fraud. $2.46. The Company has increased the divulend rate on its common unfair trade practices, and claims under chil RICO for the Nuclear stock in 37 of the last 35 years. Steam Supply System's Model D 3 steam generators supplied b'y Westinghouse to Summer Station that were defecthe in design. work-Opnadng Margins manship and materials. The complaint alleges, among other things, that Electric margins for 1990,1989 and 198S were as follows: at the time the contract for the Nuclear Steam Supply System was nego- 1990 1939 1"8 tlated and signed in the early 1970s, and at times thereafter. Westing. titinions ofMars) house knew, or recklessly disregarded information m its possession. tnat uettric resenues is.s $s2tt 98s.o the steam generators would be susceptible to SCC that would cause dete- Im Fuel used in electric generation 2016 224.0 2243 rioration and degradation and prevent the steam generators from reath. Purchased and interrhange Poker. net 1.0 12.0) (6.4)
- ing their Intended 40 year design life. SCL&G seeks a judgment that
- Westinghouse is obligated to correct the defects in the steam generators stargin 562L2 521 SM1 at no cost to SCE&G, and for actual and punithe damages and trebir damagu in an amount to be determined.
The 1990 electric margin increased from 19S9 due to the retail in December 1990 the FASB issued Statement No.106. mployer.s Accounting for Postretirement llenents Other electric rate lacrease placed into effect July 3.1989 (See Note 2B of This Than Penmons.,h,. Notes to Consolidated Financial Statementh and residential and com. Statement requires that the coct of postretirement benelits other than mercial kilowatt hour (KW10 sales increases resulting from customer pensions be accrued during the years the employees render the service growth and from increased customer usage due to warmer weather dur-necessary to be eligible for the applicable benefits. Although the ng 1990. The 19S9 electric margin increased from 1988 primarily due Company has not yet determined the impact of this Statement,it could to higher retail electric rates placed inta effect on July 3,19S9. in-result in sigmficantly greater expense bemg recognized for prmiston of creased KWii sales as a result of the increase in the number of electric these benefits. The Company expects that the increased benents expense customers and increased average customer usage due to warmer rum-will either be recovered currently through rates or that a regulatory h5 asset will be recorded to reneet amounts to be recovered through rates *]ncreas s (decreases)in electric customers and megawatt hour in the future as the costs are paid; therefore, this Statement should not (MWill sales solume by classes of customers are presented in the follow-hase a significant impact nn the Company s nnancial position or results of operations. The requirements will be elTective for fiscal) ears begin- inEdie" ning after December 15,1992. Increase (Decrease) From Prior Year The Company expects that it has or can oh"Un adequate sources of customers \ olume omin
; nnancing to meet its cash requirements in the long term. classincation im 1989 !?m 19s9 Ilesults Of0perations iie~sidential 9.545 6.487 2MM7 128.866 Commercial 1391 t.4rkl 24*>M27 202,831 Farnings and Dhidend$ ladustrial 9 (2) (76.90 0 38,722 Earnings per share of common stock, the percent increase (decrease) from the previous year and the rate of return earned on com-ale for Resale M 13
]
- w. o240 mon equity for the years 1988 through 1990 were as follows: mal L912 427.9 %
36-
Summer weather combined with an increase in the number of elec. Other Operating bpenses tric customers resulted in an all time pcak demand record of 3,222 MW TW W rew in 1990 from 1959 in other operation and mainte-on August 29,1990, The previous year,s record of 3.144 MW was set on nance npenses is primarily a result of distribuuon system maintenance and increnws In demand side management program costs. Other opera-s rgins for 1990' 19s9 and 19M were as follows- tion and maintenance npenses increased in 1959 primarily due to costs pm pw3 j9u
- related to damages cauwd b) llurricane llugo and sesere summer lilillions of t)ollars' storms and increnwd npen es related to Summer Station outages The i Gas tegenues 5292 4 5297.1 $291.3 depreciation and amortl/ation decrease for 1990 rellects the Nuclear iess : Gan purchawd for resale 191.5 212.1 209.3 Itegulaton Commission's extension on Januan 3,1990 of Summer
_ Maryin 5100 9 5 kio 5 82.0 Station's operating license from March 21,20l3 to August 6,2022 While there is no effect on net inco.ne bee Note 211 of Notes to The 1990 gas margin increased from 1989 primarily due to the firm Consolidated i Inancial Statements), the licenw ntension requires that retail gas rate increase placed into elTect Nowmber 30,1989 bec Note the Company lengthen the period met which the plant is depreciated. 2D of Notes to Consohdated linancial Statements), increased margins on thus lowering the depreciation amounts for each period. The increase in industrial interruptible sab s as a result of higher costs for alternath e depreciation and amortization npense for 1989 reflects additions to fuels and a decline in natural gas unit costs, and increased revenues plant in wnice. The increaw in income taws for 1990 is associated with resulting from inereased wlumes of gas transported for others. The higher income, income tu expense decreased for 1989 as a resuh of the effects of these changes offset a dechne in customer usage, resulting from tas hopacts of ofhetting storm damage costs with litigation settlement-unusually mild weather during the winter months. The gas margin for related credits as apprmed by the P5C bee Note 2A of Notes to 1989 increased from 19sS primarily due in an increase in the number of Consohdated f inancial Statements). Other taws increved for 1990 and customers and higher awrage use per industrial customer. Residential 1989 primarily due to higher property laws caused by increased millage and commercial classes had lower dekatherm sales despite increases in rates and property additions. numbers of customers because of warmer weather in the first quarter of (me w G~ ar p 1939, Changes in customers and dekatherm (DT) sales of na. ural gtts laterest on long term debt remained relathel) unchanged for 1990 are presented in the following table; increa* mecreaselIrom Prior Year compared to 19s9 and increased approximately $11.1 million in 1959 neAner. % ae m D r P M l ' 4V " l'N k *l"wvdvp&nli'e y W R
$75 milhon bank loan obtained in January 1989, the Company's $70 mil-tlassificadon two 19s9 ino 19s9 hon bank note sold in January 1989 and higher interest rates.
flesidenual 13,t94 3,770 N9.530s H57Ao7) " Other interest npense increased $2.3 million in 1990 primarily Commercial 1.e4 496 IlM2.62N (1.162.972) 77 4,8 t h,612 3,398,221 due to increawd sales of commercial paper partially ofbet b) a decrease Indastrial (M) m - 14.ns2A771 1.923,030 in related interest rates Other interest expense decreased $1,1 million sale for Resale (276.4m 3.7tn472 in 1989 compared to 1958 primarily as a result oflower short term bor-Iotal 15.160 rowings and a decrease in interest expense related to refunds to whole-sale customers. Common Stock Information---m==-==----
!WO 1959 4th 3rd 2nd 1st 4th 3rd 2nd ist (ftr. Qtr. Qtr. Otr. Qtr. Qtr. Qtr. Qtr.
Price Rangeda) lligh 355/M 33 3/4 33 3/4 353/4 35 3/4 35 t/2 31 7/8 313/4 1.ow 30 3/4 30 1/4 311/4 31515 32 1/4 32 3/4 30 29 5/8 Dhidends Per Share: Amount Date Declared Date Paid _17H) First Quarter 543 Februan 28. ITM) April 1,17i0 Second Quarter 13 April 25:lYM) July 1,1990
' third Qua ter 13 August 22.1990 October 1,1990 13 October 24. IPN) January 1.199I Fourth Quarter 1989 Amount Date Declared Dcte Pald First Quarter $415 February 22,1959 April 1,1989 Second Quarter 415 April 26,1989 July 1,1989
.615 August 23,1989 October 1,1989 Third Quarter
.615 October 25,19s9 January 1,19'M)
Fourth Quarter l'eM) 19s9 Number of common shares outstanding 40.M2,176 40,296.147 Number of common stockholders of record 44.104 45450 The principal mauet for SCANA common stock is the New York Stock Exchange. The ticker s)mbol uwd is SCG. The corporate name SCAN A is used i in newspaper stock listings. (a) As reported on the New York Stock Exchange Composite Ihting. 37
mm - mm .m - -mm Selected Financial Data i or the Years Ended liecember 31, 1990 19s9 19sk 1987 19s6 19s5 1980 Statement ofIncome Data (7housands ofIlollars e.rcept statistics and per share amounts) Operating flewnues: llectrie $ 836,809 $ 822.112 $ 787,9.16 $ 806,826 5 809,4ss $ 787,796 $470J65 Gas 292,380 297,069 291,30s 305,934 289,429 3tS,h56 157,643 Transit 4,033 4,102 4,060 3,212 3.119 3,689 2,338 Total 0perating flesenues 1,133.222 1,123,283 1,083,324 1,115,972 1,102,036 1,110.341 630J46 Operating 13penws: fuel used in cirttric generation 208.59.i 224,035 224,278 227,877 216,076 229,249 204,948 Gas purchased for resale 191,526 212,112 209,344 222.319 215,928 246J60 121,642 Other operation and maintenance 267,340 247,440 222,3 % 214,865 209 429 193,031 101,130 Depreciatlo.i and amortl/atlea 97,801 102,296 97,389 92,583 90,627 86,899 36,822 Taws 14?,003 124,216 125,247 153,943 171,060 154,804 73,356 Total Operating thpenses 907,265 910,099 878,654 911,587 903,320 912J43 537,89% Operating income 225,957 213,t k4 204,670 204,385 198,716 197,598 92,848 lotal 0ther income 54,874 7.125 4,147 6,395 9,825 15,721 18,898 income Before Interest Charges and Preferred Stock !)itidenas 280,831 220,5G9 20 U 17 210JSG 20s.541 2!3,319 111J46 Totalinterest Charges, \et 92,317 90,421 80,057 71,478 71,934 83,218 48,046 Preferred Stock Cash Dhidends of Subsidiary 6,911 7,263 8,014 10,437 14.443 16,541 12,949 Net income $ 181,603 $ 122,625 $ 120J46 $ 128,865 5 122,164 $ 113,560 $ 50J51 Weighted Anerage Number of Common Shares 0utstanding (Thousands) 40,882 40,2 % 40,296 40.2 % 40,296 40,296 25,14N Eernings Per Share of Common Stock $4.44 $3.04 $3.00 $3.20 $3.03 $2.82 $2.02 Dividends Declared Per Share of Common Stock $2.52 - $2.46 $2.40 $2.32 $2.24 $2,16 $1J4 Percent of Operating income (Ims) Before income Taws: Electric 89 91 90 91 93 92 95 Gas l> 12 13 12 9 10 8 Transit (3) (31 (3) (:D (2) (2) (3) 38
lierember 31, 1990 19s9 19 % 19s7 19s6 1935 19so Italance Sheet Data (thousands ofliollars except statistics and per share amounts)
- l'tility Plant, Net $2,549J63 $2,444,27h $2,3 A4,633 $2,313,996 $2.24%,657 $2,221,070 $1.597,793 Total Assels $3.144,936 $2,9h4,507 $2.K87,279 $2.714,257 $2,547,491 $2,550,627 $1.hlo,hss _
Common t. quit) $ 1,003,877 $ 918,235 5 k95J27 $ A71,620 $ 836,913 $ 806,155 5 4 % I58 Preferred $tock SuhPrt to Purchase or Sinking i und lleqJtements 64,460 68,035 77.244 A4,632 117,542 152,514 144,649 Preferred Stock Not Subject to Purchase or Sinking i und flequirements 26,027 26,027 26,029 26,029 26,029 26,262 26,262 long/lerm Debt, Net 93%,933 1,003,972 h85,679 M96,963 757,340 791,539 129.245 _lotal Capitalliation $2,033,297 $2,016,272 $ 1,N A4,679 1,879,244 1,737,824 $1,776,470 $1,396,314 Common Shares Outstanding (Year l'ndi flhousands)
. 40.hx2 40.2 % 40,2 % 40,2 % 40,296 40.2% 26,261 llook Value Per Share of Common Stock (Year l.nds $24.56 $22,79 $22.23 $21,63 $20 77 $20.01 $1h.51 Other Statistics 1:lectrie:
Distomers (Year l'.ndl 446,514 435,001 427,0x9 417,778 406,511 393,M10 344,588 Sales (Million K%Ill 15,385 14,x8,i 14,457 14,314 i3,704 13,u41 11,809 llesidential: Aterage annual use per customer (K%)l) 13,330 12,891 12,805 12,9sa 12,821 11,992 12,5s0 Asernge annual rate per K%)l $ 9?c7 $ 09N $291 $.0724 3.0759 3,0774 5,0499 Generating Capabilit) Net MW (Year 1 nd) 3,891 3,891 3,M91 3,890 3,S90 3,959 3,359 Territorial Peak Demand Net M% 3,222 3,144 3,021 2,943 2,833 2,703 2,289 Cas: Customers (Year End) 220,817 205,657 201,399 195,338 192,941 191,002 166,470 Sales flhousand Therm.s) 711,821 714,585 677,5s0 734,145 671,881 647,215 506,52s Ilesidential: Aserage annual use per customer (Therms) 496 575 617 62, a48 524 682 Aserage annual rate per therm $17 5.69 $.70 $,68 $.68 $.67 $.44 Transit: Number of Coaches 109 113 139 14 ~) 153 175 135 llesenue Passengers Carried (Thousands) 6JSs 6,430 6J23 h,665 N,699 9,032 10,357 39
numemm wmwsaxwwxweamiruz Investor Information Notice of innual Meeting Disidend Beimestment Plan $UWG Preferred Stock: The 1991 intuml tireting of Through the Plan, SCAN A offers its South Carolina National Bank mcAholder3 o/SC4 Y l forporation mill common stockholders of record a con- Securities Transfer Senices Room 101 be heldin Cohanbia. Af on Hednnday senient and economical method for 101 Greystone Bouhaard AprilN The meeting milicunrene at purchasing additional shares of the Columbia, SC 29226 10 ' ' a m. in the Ra!!romn of the Company's common stock. A brochure Odumbia Marriott Hotel,1200 #cmpton describing the Plan and enrollment The Chase Manhattan Bank. N.A. Street. froxies rill be mailed to stocA. information may be obtained by writing Stock Transfer Department holders in March. Stockholders teho are the Secretarial and Shareholder P0. Box 469 Washington Bridge Station unable to attend the Amua!Meetmp Senices Department (054) at the New York, NY 10033 should return their pmries promptly by Company's mailing address. mud Bond Trustee and Pa)ing Agent Stockholder inquiries $E&G First and Reftmdmg Corporate lleadquarters Communications concerning stock Mortgage Ronds: Palmetto Center transfer requirements, rep!acement of Menufacturers llanmer Trust Compan) 1426 Main Street lost or stolen stock certificates, dividend Corporate Trust Department 15th lloor Columbia, SC 29201 pa)ments (including replacement oflost 450 West 33rd Street Telephone: IS03174 4 3000 or stolen dhidend checks), direct New Turk, NY 10001 deposit of dividends, changes of MaUing Address address, elimination of duplicate mail- Imestor Communications SCANA Corporation ings, or other questions about your Interim reports prmiding summary Columbia, SC 292i8 stock account should be directed in unancial statements and Company news writing to the Secretarial and Share- are sent to stockholders following the Common and Preferred Stock 1.istings hoider Senices Department (0541 at the close of the first, second and third quar-Tite ecmcoua,ck of SCANA Campan)'s mailing address. ters. A copy of SCANA's Annual Report Corporation is listed and traded on the on Form 10 K his Gled with the New York Swk Exchange and has Auditors Securities and Exchange Commission)
- unlisted trading prhileges on the Deloitte & Touche and the Statistical Supplement to the Boston, Cincinnati, Midwest, Pacific and Certified Pubbe Accountants 1990 Annual Report are asailable with.
Philadelphia exchange 3. The trading 1426 Main street Suite S20 out charge. Inquiries concerning actni-s)mbolis SCG The corporate name Columbia, SC 29201 ties of SCANA Corporation and its sub-SCANA is used in newspaper stock list- sidiaries and requests for publications ings. The Si series cumulathe pre Recordkeeping and Pa)ing Agents should be addressed to the Investor ferred stock of South Carolina Electric & Common Stock: Relations Department (054) at the Gas Company (SCE&G), SCANA's pcinci- SCANA Corporation Company's mailing address. pal subsidiar), is also listed and traded Secretarial and on the New York Stock Erhange. The Shareholder Senices Department (054) Imestor fontact trading symbolis SAC Pr; the newspa- Columbia, SC 2921S H. John % inn, til per listing is SCrE pf. SCE&G's other Manager imestor Relations preferred stock series are not aethely SE&G Preferred S:ock: Telephoneds03) 748 3240 traded and market prices are not pub- South Carolina National Bank lished. Securities Transfer Senices Room 101 Insestors' Association 101 Greystone Boulevard Forinformation about this organi-Disidend Payment Dates Columbia. SC 29226 zation's aethities, write to: Quarterly dhidends on SCANA's Association of SCANA Imestors common stock are normally payable an Transfer Agents c/o Mr. Paul Quattlebaum, Jr. the first day of January. April, July and Common Stock: 22 Broughton Road October to stockholders of record on the South Carolina National Bank Charleston, SC 29407 10th day of the month preceding the Securities Transfer Senices Room 101 payment date. Dividends on SCE&G's 101 Gre) stone Boulevard pieferred stock are paid quarterly on Columbia, SC 29226 tue same dates as the common stock This report is issued solelyfor the dhidends. Manufacturers llanmer Trust Compan) purpm.e of pn; riding information. It is not Stock Transter Department 15th Floor intendedf r usein connection with any 450 West 33rd Street sale or purchase of. or any sohcitation of New York, NY 1000l ofers to buy or sell, any securaies. 40
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