Text

Forwards South Carolina Electric & Gas Co & South Carolina Public Svc Authority 1987 Annual Financial Repts
	ML20148G955
Person / Time
Site:	Summer
Issue date:	03/16/1988
From:	Nauman D; SOUTH CAROLINA ELECTRIC & GAS CO.
To:	; NRC OFFICE OF ADMINISTRATION & RESOURCES MANAGEMENT (ARM)
References
	NUDOCS 8803290274
	Download: ML20148G955 (1)
	v • d • e

{{#Wiki_filter:- _ - 10CFR50.71 gggna Electric & Gas Company a n g g g29218 Nuciear operations scuan . am, m., March 16, 1988 Document Control Desk U.S. Nuclear Regulatory Commission Washington, DC 20555

Subject:

Virgil C. Summer Nuclear Station Docket No. 50/395 Operating License No. NPF-12 1987 Annual Financial Reports Gentlemen: Pursuant to 10CFR50.71(b), enclosed are ten (10) copies each of South Carolina Electric and Gas Company's 1987 Annual Financial Report and South Carolina Public Service Authority's 1987 Annual Financial Report. ) Very truly yours, $ hnab A

0. A. Nauman MDB: DAN: led Enclosures pc:

J. G. Connelly, Jr./0. W. Dixon, Jr./T. C. Nichols, Jr. E. C. Roberts i W. A. Williams, Jr. J. C. Snelson J. N. Grace G. O. Percival J. J. Hayes R. L. Prevatte General Managers J. B. Knotts, Jr. C. A. Price M. D. Blue R. B. Clary NSRC W. R. Higgins RTS (RG870005) R. M. Campbell, Jr. NPCF K. E. Nodland Files (801.06, 818.02) !R A Q L -

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_____._.__.s.. l( V 'M< jj .c l' \\ l f I 3 ,i . CONTE lNiS;[ S. [.. l L -[ ' I f 't s \\ a tjl f f t e r1 l Financial & OperatingHighlights 3 -l ", f, y Letterto Stockbriders 4 5 )

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Profile 6 65 Maximizing Opportunities .] South Carolina Electric & Gas Company 8 e South Carolina Pipeline Corporation 22 V 1 OtherSubsidiaryActivities 24 ( d Directors & Officers - SCANA Corporation 26 Y i1 )j Officers ofPrincipalSubsidiaries 27 (l; 1 Financials mb ManagementReport 29 Opinion ofIndependent Certified Public Accountants 29 v I ConsolidatedFinancialSta!ements 30 y@iE. ! Notes to Consolidated Financial Statements 36 i( L CommonStockInformation 43 Management's Discussion & Analysis of Financial Condition & Results of Operation 44 { SelectedFinancialData 46 i InvestorInformation 48 ( ' $ f y( 4 ( d [6 e o L r a [o %4 i I k t ra/A, l w [ p. ,j o e 0 1 a Lr

l FIN A N CI A L O P E R A TIN G H I G H'l l 0 H T S 3 % Increase 1987 1986 (Decrease) (htillions of Dollars except statistics and per shareamounts) Financial TotalOperating Revenues 5 1,116.0 5 1,102.0 1.3 TotalOperating Expenses 5 911.6 5 903.3 0.9 Earnings Available forCommon Stock 5 128.9 5 122.2 5.6 Earnings Per Share of Common Stock 5 3.20 5 3.03 5.6 Dividends Declared Per Share of Common Stock 5 2.32 5 2.24 3.6 Book Value Per Share of Common Stock (Year-End) 5 21.63 5 20.77 4.1 hiarket Price Per Share of Common Stock (Year-End) 5 28.50 5 36.625 (22.2) Common Stockholders' Equity (Year End) 5 871.6 5 836.9 4.1 Common Stock Outstanding (Thousands; Year-End) 40,296 40,296 Construction Expenditures 5 173.3 5 144.2 20.2 Gross Utility Plant 5 3,099.9 5 2,959.5 4.7 Electric Operations Ek'ctric Operating Revenues 5 806.b 5 809.5 (0.3) Sales (Million KWH) 14,314 13,704 4.5 Customers (Year-End) 417,778 406,511 2.8 Genera ting Ca pability - Net MW (Year-End) 3,890 3,890 Territorial Peak Demand-Net MW 2,943 2,853 3.2 Gas Operations Gas Operating Revenues 5 306.0 5 289.4 5.7 Sales (Thousand Therms) 734,145 671,881 9.3 Customers (Year-End) 195,338 192,941 1.2 Transit Operations Transit Operating Revenues 5 3.2 5 3.1 3.2 Revenue Passengers Canied (Thousands) 8,668 8,699 (.4) {F PER COMMON SHARE. GARNINGS*AND'DIVIDENDSP9 f~(RETURN ON COMMON EQUITY"] i E' CAPITAL 3fRUC113RE"", ~m 3a j (billions of dellen)! d . M, M tent possible, helping develop utility subsidiaries will con-the economy within our utili-tinue to follow those strategies ties' franchised service area, which keep our prices compet-February 24,1988 1

e V Es M Yb$lN$$$$k&N5Y$55iNE$lNNi!ANY: 5 OuiA&IbiStobUildon. W l0f$6 & i ( IbeSeeleheadvankkjes TheSky's TheLimit q{ L SOUhNinahaS!0&M -: A pr file f South Carolina is easy enough with the help of a few I 50menlUmIS0nOUTSide. statistics: Itis a proud state kuted on the southem Atlantic coast of ,G - '~

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$f$[i$na lian ts r L ggggggg,f.jgg[ggg, 50,000 voung people will reach the a e of 18 every year through the end E Sands 0ll0UtiSlS000f(lOOUr o thisdecade.'. Between 1970 t - ~ and 1986, thepopulationincreased ' m0UntainhideawayS, beach />L by 31.99c, making South Carolina l i N80d ClNOS60Cb the second fastest growing statein the Southeast.. Rou hly 5M of

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the peoplelivein an ur uiarea. Reading, WritingAndArithmetic j More than half of the ple work Theim rtance of having a ~ Un/M9/S/60satebeoognglead. in retailjobs..Sout rolina bettereducat workforce cannot be ranked 14 thin the nationin the understated. A fundamentally i e/SinemeR)ing8eldSolleChn0/- creation of new jobs in the latest Inc. sound and successfuleducational magazine ratings.. State and kw system is essentialif South Carolina - @Open/ngM0/M cal taxes are among the lowest in the is to capitalize on economicoppor-bggjmmggjgfggfg[gfg7g;Ang. nation.. The work stoppage rate tunitiesin the years ahead. has been thelowestin the country S ~ The hi h schoolgraduation yet, mud 10lfleSlale' eCO. formostof the pastquartercentury rateis twice w atit was 10 years ago. ) . Construction costs are among The numberof college graduatesis i n0MCandhumanp0lenba/TP- ' thelowestin the nation.. More also up considerably. State-sup-MainSUnM than 150 of the Fortune 500 compa-ported technical scliools are tuming nies have offices or lantsin the out and placing skilled workersin ) state.. More tha half of the peo-record numbers,and the state of AlSCAN4 Corpora #0n,. i le age 25 and over hold high school South Carolina is committing more OUfg08//Sk)he()SOU#1Ca/0 egrees.. Thirteen rcent of the money and resources toimproveits t people over age 25 ho college Yublicschoolsvstem than ever linama2miZeeWfyOppOflUnity degrees. fore. L andreaEzeenetypOtendal.We GR '~ wantabetterwayOlliteforOUr 'cvSt0merS,andnewanthe i . state'sbus\\nesSeSandinduS- .5= f'~ Af 7 irieStogrows0hatnecan &4 - V growwiedem. %} ,l l f ee

...,. u, w =. c., g.- vwng w,m p m,y,+ve. x-38.: Q.g%.Q.D,MfGQQg,MbihnlMzQQgtiwim f. a.h.Gj e ; :.. ] DemandForJobsIntensifying . T As success greets our efforts to upgrade the educationallevels of jJ y.9 .U the people, more and bettei jobs will g be needed. South Carolina has fared ? wellin years past attracting newin- ~ ~; dustry and 1987 was no different. Once'again, SCE&G took a leader-m ship rolein this recmitment. iP N1 ore than 20,000 new man-ufacturing jobs were announced in the state dunng the year,and capital investments amounted to $2.3 bil-lion. About $1.3 billion, or 57%, will occur in SCANA's service area. Examples of companies that HasteningEconomicDevelopment ple visit the state each yearand have moved to South Carolina in the Corporate gifts play a rolein spend about S3.5 billion. last yearand a half readlikea who's hastening econonde growth as well, Oneof thebiggestdrawsis whoinindustry: NiackTmcks. and twoin particular are expected to Spoleto USA, Charleston's interna-Dana Corporation. He Allied Divi-pay big dividends to the state's tional arts festival, which annually sion of Grumman Corporation. economy in fu'.ure years. SCE&G brings more than 150,000 sisitors to Just asimpressaeis the donatedmuch of theland and the famous port city. growth being experienced by com-buildings for the University of South Riverbanks Zooin Colum-panies which arnved earlier.' Alich-Carolina's Swearingen Engineer-bia, one of the top 10 zoosin the clin Tire Corporation, with four ing Complex, which will boast a United States according to Panak major manufactunng facilities in the powerful new supercomputer that magazine, delights over a half million state, broke ground in Greenvillein willbeinstalled in 1988. A three-people each year. 1987 forits new North American year, $600,000 grant to Clemson t2ke N1urray covers 50,000 headquarters. Pirelliannounced University willbe used to stimulate acresin centralSouth Carolina and plans fora research and develop-projects r'ehted to energy and eco. powers one of SCE&G's hydr vlec-ment facility next toits fiber optic nomic development at Clemson's tricgenerating plants. Itis also cable manu'facturing plant outside new EmergingTechnology Devel-home to thousands of year-round Columbia. NCR Corporation un-opment and Niarketing Center, msidents and attracts 200,000 water-wiled its newest busmess com-sport enthusiasts annually. m., puter, which mpresented a S30 mil-A new attraction willbe s lioninvestmentinits West added in 1988 when the South Caro-Columbia plant. Robert Bosch Com-lina State h1useum opens. De pany,a subsidiary of the West Ger-building that willhouse the h1useum man automotive supplier, began a was the first electrically-powered four-vear, $170 million expansion of 33 textile millin the work'i. De elec- ~ its South Carolina plants. g tricity was produced at a hydrmlec-SCE&G's economicdevelop-4 tric plant that later treame part of ment team works with localand c SCE&G. state agencies to recruit new invest-What once were merely ment from around the world. How-promising opportunities havelv-ever, we also help prepare commu-come realities for many South nitiesin our own backyard for Beaches, Parks, Zoos AndMuseums Carolinians. Educationally, eco-presentations to prospective South Carolina, with historic nomically and technologically, the industries. Charleston, the hiyrtle Beach Grand stateis stronger today than ever be-Strand, Hilton Head Island and the fore and getting stronger. SCANA Blue Ridge Niountains, certainly is proud to be a part of this success doesn't need any help attractini; and excited about the challenges tourists. Afore (l'ian 36 nsilion peo. ahead.

.v F j [ 1 p e C l jA X t WZ l $ $ b.WO R T U N I T I T S. .i '$" k,~4 e hi i 6 s [ RecordElectricUsage Rate stabilityis one of the pri-f, SCE&G customers used re-marygoals and proudest accom-i cord amounts of electricityin 1987, plishments at SCE&G. InJuly 1987, i p-establishing three historical peaks in 400 megawa tts of electric generating l g a one-month period, with t e all-capability were rectored to the rate b time record demand of 2,943 mega-base without the need fora ratein-l watts (MW) occurring August 10. cmase. In December 1987, the S.C. k This series of records broke the pre-PublicSenice Commission (PSC)or-t i vious record of 2,853 MW set July 9, dered a $27.6 million, or3.77c, re-L i 1986. duction in retail electric rates. This I ) Systemwide sales rose 4.57c reduction reflected tax savings ex- [ Thehttus/SouthCarolina over the previous year, totaling 14.3 pected to be realized by SCE&G as a I Electricd GasCompanyrestson billion kilowatt-hours (KWH). Resi-result of the Tax Reform Act of1986, i dential sales were up 4.17c, commer-andaloweringof thecompany' sal- [ astrongfoundationo/ customer cial sales 5.17c and industrial sales lowed return on common equity i I satis /actionbackedbythetech. 4.27c. Wholesale and other electric from 14.257c to 13.257c effective Jan-sales increased 4.77c. uary 1,1988.The PSC had previously

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[ An increase of 2.87c over induced SCE&G's retail electric rates' [ managementolitstesources.Our 1986in ekrtric customers contrib-by $25 million, or37c,in February uted to the higher electric sales. 1987 to mflectlowerincome taxes t-h custometsdstockholdersW# SCE&G was serving 417,778 electric establishedin the Act. j. nottolerateless." customers at year-end. Distribution SinceMamh 1984,SCE&G's t IC.Nichols,./r., system projects were undertaken to msidential electric rates have fallen l Presidenta Chie/ Opera #ngO/#cer - meet the resultingload growth and 11.97c, while awrage annual resi-SouthCarolinaElectric& toimprove senice mliability. dential usage has risen 6.67c. GasCompany l: t _ !BarcodesmakemetersensityidentMnNrWsscanner phkhrecords e c .... ~.-. { G Q Codt, Q n Q Q Q s Q g & M _ _ u-i- f ELECTRIC CUSTOMERS ! ELECTRICTERRITORI5L PEAK' ] P2 CONSOLIDATED ELECTRICP O p (thousands; year-end) DEMAND L SALES l 4' c (megawatts) .j i l(billions of KWH),. .t t mum Renaentiai : uma industrial 'i i k MAN Cornmen:ial 6 Wholesale & ottwrU h'425 418y' 3.000 2.943 [ h,6.0 d o [ ] [ zd i m y, Ho 2em 12 3 i 1 i e 1 ) l 3 [ 600 i _' j [ 375 4 ~ 3 l 1 [

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g 0 e Efficient Generation Gets EWn Better counted for56% of thiscapacip;;and ductisity. Refurbishmentscontin-hydroelectric 20%;nudear15 m ued at five steam plants as part of the SCE&G continues toim-prose its already excellent record of oiland naturalgas9%. company's ongomglife extension program forextsting electric efficien in thegeneration of elec-MenancgMension generating facilities. tricity. T company's 1987 system heat rate for fossilplants was9,920 PrayamsBenMustomers Coalis SCE&G's primary InUKWH, marking the fifth con-SCE&G's superb record of generation fuel. Our fossilplants secutive year this important measure generatingeffidencycanbelinked bumed 4.6 million tons of coalin has im-to aggressnr programs to maintam 1987, a 24.1% increase from 1986. of generating effidency&Ibarr and upgrade existing generating Efforts to reduce the costs as-proved. In ElectricLight magazine'slatest annualsunty of plants and transmission and distri-sociated with coalhave paid offin thecountiy's100la. t irwestor-bution equipment. significant savings forourcus-owned utilities, SC had the Especially noteworthyis the tomers over thelast few years.The eighth best fossil heat rate for 1986. installation of a computerizeil delivered cost of coalhasdropped SCE&G has rankedin the survey's maintenance planningand sched-from $53.27a tonin 19M to$42.60a top 10 for the last five yean: and eight uling system at SCE&G's fossil ton at year-end 1987. SCE&G of thelastnine, plants. Although the pmject willnot achieved these savings by buying Totalsystem generationin be completed at allplants untilthe more coalatlower cost on the spot 1987 was 15.4 billion KWH, up 5.7% summerof1989, benefits arealready market and by renegotiatingseveral from 1986. That induded all electric-being realizedin tracking work long-term purchase and shipping ity produced by the A.M. Williams orders, scheciuling preventive contracts. Stationin Charleston, whichis maintenance and measuring pro-owned by anotherSCANA subsidi- [ hiisiggiijy~ MyidM"" - " ]- - - - @- - - - - S ary, South Carolina Generating [".. Company,Inc. The total generation mixin 1987was 74% coal,21% I ' ^"-' T~"MdREEM%-~ypWWM~[ " " ^ ~ - - ~ ~ nudearand 5% hydroelectric. The ak neratin capabil-itystoodat,890 IWaso anuary r REslomLRATENES ' mm --m -+ - - -~ ]n 3{ _ 9,,, pe p., gwg g 1,1988. Generation from coalac- ?D Jg F GENERATION FUEL MIX " '"P] k } (indudesGENCO) ~~ 1 s.o h inwaNuclear, WEBog & NaturalCas. ljl f N E-MC4J.~ WHydro..

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i 4 ' Y. l p. n i 1 Q y f'[ w A4 W Q'i ^ ( q[Hth,Jpdflesetzndbestjear0ntecadhjabasakmyasastw my 1, san m 8 _ andstartnotecordkjaaythnenant Ihis nasche namut- } choicesrwABetterWayOfUfe i1 M0/kittr5,IWffleAISSf0 itfdineS#ErTlWX1)USQ)cpsndy; f Customer senice means r;1 more than just providmga good !j b8806Wlk)Qi&rk/S$$POMadflep/MMPS6CnX Theddfeif product at a reasonable price. It also n1e MkM NMUJMN88 j t pl men n in-8* *a#985885 aa'naremeasseycmannues fjaualsjisg,agomd"E" c {: kgogypogply" 3; The majonty of our residen-domg thatin a number of ways. '~ [_ F ~j tial electric customers are billed at a E standard rate. But others with non- [. traditional lifestyles or those who are y' @. 4 willing to alter their electric usage ~' ~ patterns can saw with ourlow-use i and time-of-use rates. Residential i. ~ l customers who build or retrofit their j homes to meet stringent consena-tion standards can saw with a L' ' ]' e. mduced rate. l .j A time-of-use rate is also i available for businesses and indus-l \\ d) tries which shift their usage to off-3 4-peakhours. Acombinationof firm i t. j and interruptible rates offers attrac-a l l j tive savings to companies which allow SCE&C todiscontinue their [ I senice dunng peak situations. { TheHonora6hCmc#A Casp6si,X .j By encouragingconsena-tion and' ff-peak usage, SCE&G i _. Ce ernor j o l Sgste0(SouthCandna ll can delay the need for new generat-ing plants and maintain rate stabil-f l Li ity. But rates amn't the only options _l available. p 1 k i; j 1 [ { [ -j t a p 4 P l t p--...,,..m- [ f L Dtoring]967SCE&GcertfRedSN p y.,- _ _., _ _ I ._ N ss c~.

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Y ,,ll f 't i. )d tj g 1 + [ + e t A ~ " ' ' ' [ l e< ,i Marketing Programs Offer More Options I i SG&G's residential cus-g. i .i tomers who qualify can receive a re-0 } bate if they replace their old heatiny, l and cooling systems with more efh-1 cient appliances.SG&G also offers [i i a securitylighting program and an j t' ] easy payment plan where budget-minded customers art bilkd in s ] equalmonthlyinstallments. ,j Also, a new multi-faceted

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mercialand industrialcustomers. 4 Lightning arrestors and surge pro- [ s e-j tectors are available to better protect if f%Y/ - k home appliances from electrical h

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Tg'2Q j custom-designed back-up equip-j j .g ment toassurean uninterruptible g ;gn power source for sensitnt, cntical j 4 QC'.; 3 microprocessingequipment during i 1.... temporary semceintermptions or [ 1 extended outages. ( Rite Aid opened a new diskbution centerin Winnsboro in May )i b e i r 1987. The 277,000 square-foot facilityprovides service to i f RiteAidphannaciesinasix-statearea. 4 i ? [ ] 1 n l {; %= j

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t [ I ~ l V Heating and air condithiing dealers help their j customersqua!&forSCE8G' EnergyExtras s programs thatpronde Enancialincentives t: f"y' forunpronng theethciencyof Lwg-c) : h { majorhome apphances. L; re ,j l a [ (i i [ 9 j r# q v i i f h k O, j t. +n 1

V \\ g II M M P E N i M i N M $ d E LM~ sg, @a : - @ a;@ v ,. m f,4 '. + 7 Reaching out ToSeniorCitizens Q; & y [N { b; - ? 5&&G has developed a 4 number of corpx) rate soaal respxins!- .? N) bility pn> grams to help ma t the "" p 7 needs of the communita s we serve lhe purposes or the program varv. but the company s dedication to g each one is strong. ,r i One of the more successf ul 1 i programs is calkd Prog t1 %l ( A Rl A my _ i, dm i j voluntary donation program sup- .Wi [X tritd by nearly 2!) lh AI M'l NC Clls-h- tomers, l'R1iect 511 ARi{ pnivides lMM-f? '. " ' i - diralilnalklal assistanCt to the

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=- neniv dunng cnsis situations y.g lhese Illnds help qualitied people l'uv heating tuels to stav wami dur-Ing the winter and tti twiy for heat-f Ing njulpment repalr% l'R )}ni 5f l ARI got its start trom seed monev donated by R AN A stot k-hokiers in NST, community action agenCles distnbutni mort than 5217,m hn Progt silARI tunds to 1 W deserung tannhes a nd Individuals An irxTeased eniphasis is lung placal on meeting the spe-cita needs of our senior citi/ ens S In cooperation with the local 5[ ( ounal on Aging in L olumbia. the l ustt imer Assistance l A-[hlitment is [\\lrthl[\\lting in a piltit pRigram

tI?n$$t?$$ltl, Robots make up the majority of the work force at the Dana:

nome as,ts bv nurs1ng and rhar-Corporationplantlocatedin the' Carolina Research Park. The. mae, logy students trom the L niver-sitv ot south c aruhna a ill ensure lightly mannedrobotics fechnology manufactures front Wheel that main'ine is being taken ern and ix,ndaen are kept de' rop-drive systems for automotive applications. an 'l i gj. L ~

,1 \\,1 ',.)) i.' G i 1 16 t q 'l [ ~ summerstationGetsHighMarks a 4 'e SG&G receised good news i n si i ( ' 1 n le j v [ agency released its latest assessment 3 m- ' ~] of perfonnanceat the V.C. Summer j NuclearStation. i in aletter toSG&G, the NRC cummended the companv for [ ql its "high level of improvtsi perfomi- '( 9 ance" and "aggresswe manage-1 ment gusture towards nuclear d safety'identifiedin the report, i }- d which covervd the period January 1, 1 L i 1986 through July 31,1987. ? The NRCnoted that SG&G I 1967 Mack j had taken a number of steps toim-5 In [ pmw plant operatioits during that L Trucksopeneditsnew - m_

a time, including the establishment of t

i $60million Winnsboro a manasement review board to re-f i view allunplanned shutdowns of I . assemblyplant. Thefirst - 4 ) the ivactor. This review board's work I Customer-orderedtruCk S ' am-j resultedin a reduction of the num-tvr of unplanned shutdowns com-4 3 waspresentedtoSCEdG. ; : ' u - j l pared with an earlier perial. Thecompany received even m L threemonthslateron 2 - ~y i more good news when theInstitute ofNuclearPower3vrations 3 Novembe?10 dun. -ng j (iNeo) accredited e remaining pmgran1s at Summer fo"r tr i"i"[ wing all10 ofits train-l officialdedication Station. By i Ceremoniesforthestate-i ingprograms actredited, Sa&c i became use 24th utility totv granted o/ the-artIacility, j full membershipinINIUs h.ational i j Academy for NuclearTraining. ps j i I ? i l l i 4 j 3 i r i [ pm,. s,. ,m SummierSht#0peipc#icianscan ;m i ' _:W'J -. A43.rew lWN,A S 9- wer N* .g-+. e.'.

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-j x.: l: I Vt; RefuelingOutageASuccess SummerStation also success-y j fully completed its tidrd refueling, [tJ mainterunce and testingoutage dunng the spring. '1he most signifi-q ,f b cant activity dunng the three- .g.. 3 j month outageinmhrd the"shot l [ ~... i peening" of steam generator tubes, g nuking themless susceptible to y i ]J cracking. f. i zj Becauseof therefuelingout-j i r ,j 5 age, Summer Station's capacity fac-t 4,. torwas66.5% for1967.Thatwas + 4 .) down from the previous year's l [ c #- - [ 3 92.4% when the plant did not 1 undergo refueling, but stillbetter [ l than the nationalaverage for nu-k 1 dear units. Capacity factoris the ( j i 3 amount of electricity a generating j plant pnxtucescumpared to the [t , ~ j ated unintenuptaf year-round. 1 maximum it could produceif oper- [ I ^ } TransitSystemAllowedHigherFare i: NCRCorpora#0n'S - l SCE&G's fleet of108 buses j carried more than 8.7 million rew- [ gg nue passengersin 1987,about 4 ]3 t 31,700less tiun in 1986. I sputec the Tower l 1 SCE&G eontmuni to kse I l-32/800, waS unveiledin 1 money onits transit operationsin reduw costs.Tda;oing programs to 1987 despite on-t [ 4 1 l ~Februn]E7he. irevenue was s3.2 ~ l million, while operatinb> G ts re-e y n 1 ![ C0fMputerWasdeSA)ned, were $8.1 million. SCE 1 I deVek)pedand/SInan- -./j quired by franchise agreements with the aties of Clurleston and L s i B ufacturedattheNCR /v Columbia to provide public r transportation.

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} ?plantin WeStColutnbia. M' y c q): i in octotrr 19s7, SCE&G pe- ~ ' '. f j titioned the PSC foranincreasein p l [ \\r' the 25 cent base fare-the kmtst in I i-the countiv. In Dewmber 1987, the ISC appnivalanincreaw to 50 I [ { cents effectiwJanuary 1,1988. L J Although thisincrease will ? help raium transit kmses,it was dis-appointing that the requested in-i crease to$1 was not granted. o l SCE&G continues to seek the estalw ~# j lishment of publicly subsidized Re- .i gionalTransportation Authorities to i l [ } reduceits rolein providing public ) i transportation. f-e A I 2 l -.

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1 NaturalGasSalesStressed who replacetheirold electric water possible by utilizing a process called ThroughSalesforce, Marketing heaterswith more economicalgas "electrofusion," where electric cur. waterheaters, rentis used tobond the pipe. Thenumberofnaturalgas customersonSCE&G'ssystemin-TrainingEffortsImproveService Systemimprovements con-creased by 1.2% owr 1986 to195,177 ToGasCustomers muedin 1987as a $30 million p'"roj-t. W *P atyearend 1987.Totalretailsales SCE&GcxP3ndedits train-mamsand seniceconnectionsin wereup9.3% to300.2 million ndej therms Residential, commercial hn ram C mP etion. Propaneair plants m l that Nuires16dhoursofintensiw Columbiaand Charlestonwere re. and industrialsales rose 15.5%, 8.1% and 3.8%, respectively-trauung, h,as senicemen are now builtand theircapacitydoubled to g SOPC, bemg qualified to service all types of meet peaWay supply needs. t tionsunderwentacom etereor-householda liances. And tostay

"* **""" '** " I ganization during the llof1987as abreastofth itestin technol in keeping pace withimustments to part of a new strategy toincrease the meterin8and ressure N8" -

expand and tmprove the system,in P residentialsales along thecompa-LrOu (hIin n Nb sis ocon-June 1987, thecompany requested a i f-ny's 5,399-mile distribution system.

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8"* Iu'"' A specialsales force was d" d N' ' Ni$takin aR[ tageofnewtechnologyinobadvan-tember,the Kapprm, fom ed, trainedand challenged to identifyand meruit newcustomers. er

i!li "' '3'8%' "'*#5"'"""~

Thesales force, workingon a com' areasasitbecomesavailable. Com-missionbasis,willfocuson three Putersoftwareis makingit easier to mtumoncommon equh,eHec'aw linesnearthaCustomerswith as target grou irhomeswillbetofd identi cNu2Pment Problemsand December 1,1987. quickl find solutions. Fasteremer-aboutthemeritsof asappliances; gency repairs to plastic pipe are also anddevelopersan buildersin fast-growingancas where naturalgasis available willbeencouraged tom- ' }' ~ clude y,as appliances in their plans. ^7 } Additionally,in 1988,SCE&G be-r ~ j ganofferingrebates tocustomers 3*fl* ~' ,7 J5;M r er ~- Q .y

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L W*!! ;;.Ac L The new gas sales team is working closely s# buiders ard encouraging them to include gas apohances in the homes they cvastruct. ~ %y "'w

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Responds ToCompetition of gas and alknvs the mmpany flexi-I H,.Q;,( % /; g' ;-? ~ bilityin purchasing. .1.- South Camlina Pipeline Total naturalgas purrhased J.N 4). ' :3 y] Corporation (SCPC)is SCANA' sin-for resale,induding spot market t e, i. O( y/ 1:g trastate ruturalgas transmission rehases, totakd appnninutely [ a ?j.hC M.?j'dc subsidiary that serves resale and in-

n. 0 million htCFin 1987, up from 17-c q

I dustrialcustomersin allbut two of 65.4 million h1CFin 1986. The cost } -l3 y,.... .W.g ~yl South Carolina's 46 counties. Resale per h1CFdedined from $3.30in k me@h_ ["t

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.s i p4 customersindudecity and munty 1986 to$MNin 1987. 1 gas authesities and othergas utili-II ties. At wr-end 1987, SCPC was SatelliteMonitoring0fPipeline V "The restruchMmg of he naturalgas&] sening'opproxinutely 146 direct Passes Test , industlyWSouMh ' customers,induding SCP&G. During 1987, SCPCtreame Purchases of

PMneCO?porssonwieaaucsal I

nurket continued ton'as on the spotthe first gas transmission utility in L elp SCPC re-the nation to employ a satellite te- [ gag,nge.Tdcon6nue%Me_ j main cumpetitive with altemate fuel lemetering system for moritoring supphers in 1987. Total sales in-and controlhng the pipeline.The 'l creased bv 8.4% over 1986 to 72.4 wry snullaperture tenninal(VSA1) 1 [ exce#entsemceourcustomerS E hantcome/0eapectinanin. I million hfCE Industrialsales were system exceeded allexpectations I up by 4.6'7e while sales to resale cus-during extensiw testmgand is ex-l ueasinglyconpetidveenvironment-j tomersincreased by 101 The pected to tycome fully operatiorul ! weemigegggnge,- l amount of gas transported for resale during 1988. I Nar W j customers and end users rose lhe system willtvinstalkd [ gf j 32.4% compared to 1986, in two phases. Phase 1 invoh es the v

SoueMPMneCapora#en j S uthemNaturalGasCom-placement of 25 snull tenninals to L

.] pany(Southem)and Iransmnti-transmitinfomution about gas ml- .j nentalGas ihrline Corporation ume and flow from rrmote points j (Transco) provide SCPC's contract along SCPC's 1,657 miles of pipe-l gas tujuirements. The contract de-line. Phase 2 calls foran additional [ j mand ts 210,900 h1CF perday with 15 terminals tolvinstalkd. Southem and 29,300 N1CF per day Thefinandallvnefitsof this t c } ^ P" C'" !. CONSOLIDATEDNATURAL GAS SALES -J significant volumesof spot market to transmit thisinfomution across [ M Rnmienhal(millionsof therms) gas thatis transported byTransco kical telephonelines has tren y i M Industnal ' i and Southern on aninterruptible steadily increasing. llecause of its [( 7""'"wi.: - sain su acuw tusis. This arrangement assures fixed chsts, VSAT willquickly }uy m i ! SCPC customers of a reliable supply for itself. a oL e % I i '600 ~ ) t -? % !i* 5 i i b I e y nmm, m + w +--.s m e., -, p e+ v*- aw, ~~ ~ - + w,~~ I scpch tats,v~-seene eofasnermeAnah mm~.- ,i g---. ey - ~. 7 n. n r, u _. _ __ _ _._ ___ _ _ _ _ _ a '4 ~j I l r 4

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c. 4 ^' w ^ Constmction,RealEstate AggressiveMarketingPaysOff nss ressiw sales posture, based onqthay pnxitmts and excel-CompaniesActin ForSCANASoftware Pnmescuth, Inc., SCANA's SCANA Software Senices, lencein seniceis pmi-ioning construction and design subsidi-Inc. began aggressive nurketingof SCANA Sofhvare forcontinued ary, ended 1987on a successfulnote its products and senicesin 1987, growtiInuditiontoholdin great by signing a major contract as an and this effort is proving successful. prw.ise for the tuttw, this hi h-authorized builder for American During 1987, SCANA Soft-technoogyv nturehascontri vied BuildiagsCompany,oneof the ware signed contracts with sewral to the Mononacdewlopment of largest manufacturers of metal build-utilities for the sale of a Fleet Man-South Cnrolina througihbe creation ing systemsin the world. Contracts agement System, which allows com-of7:1newjobs awarded to Primesouth during 1987 panies to manage and analyze their included a new U.S. Post Officein equipment purcluses and ' uinte-MPXContinuesGronthStrategy n Charleston;a majoraddition to the nance activities more cost effee. Another high-tech s ibsidiary headquarters of a regional bank; sig-tively. In addition, SCANA Soft-a MPX Svstems, Inc., a prtr.ider of fiber optic' telecommunicrstions ser-nificant renewations at a county wanicontracted with a gas utility to hospital; a 145,000 square foot're-provide a customized Distribution l vice3-als had a poca yearin 1987 search and development facility; Construction Infomution System MPX aicreaseditymstmentin and an air cargobuilding for the to satisfy specific construction man. SoutlernMt,animeistatecanier Columbia Metropolitan Airport. agement requirements. Asa rSult that previde;telecommum, cations Primesouth achiewd profitability in of thisproject,SCANASef5va vwill seMees to Washingtory, ').C. and 1987, its first full year of operatio'n. havea new gas system to add toit's sewt weatheastern sta es, toa South Ca'rolina Real Estate product portfolio. 2t mterest e,of Demmber31, Development Company,Inc. SCANA Softwan: al:,o estab. N87. Equ% eansngs fr myl in-(SCRED) continued itsimuhr-lished an intemationaipresence or <ynt ar/ i tome fmm the der w tn ment during 1987in businesses during 1987. The Severn-T ent ues built and cperated by ranging from majorindustrialparks Water Authority of Birmingha T., j MI'x msJe a p'ostive contrib'uti v. to single-family residential dewlop-England signed a con het fora spe-l tn SCANA's earn'qMn 198,7. ments. SCRED completed a shop-cially adapted wision of thect'n-Plansarebeingr i Atoadupprox-stm' tion mfonnation system to imate4~/0 mues of fitkopticImes ping centerand a business parkin c Columbia, and an office butidingin meet its needsin the United in Sotith Carolint Charkston. Another office building Kingdom. is under constmetionin Chark ston. a-

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' 5 l(.G'Q A R hl.Clb RlP.O R $11 Q H l_, f i ' Directors Officers J.K. Addyt2 T. C. Nichols,Jr. John A. Wanen6 Ihsident Ihsident Quimunof theIkurtiand Addy Dodge,Inc. South Canhu Ekrtric& 01ief Euuttiw Offm laington, South Carolina GasCompany L ht. Gressette,Jr.7 W. B. Bookhart,Jr.3.3 W , Scuth Camlina Ihsilmt and Treasurer IW W. B. Bookhart Farms E. W. Pike'Jr'u Cathy B. Novinger Ihsi&'nt Senior Vice Prtsident Erw,S uthCandina ColonialDewlopment Company Administratim and J. B. Edwards, DMDu Beaufort, South Camluu Carmmental Affaus Ihsident W. B.Timmerman MedicalUniwrsityof SouthCanhu Hemy Ponder, Ph.D.2 3 Senior ViceIhsidentand Controller Ourkston, South Canhu Ihsi&mt Oif FinanculOffin L M. Gressette, Jr. FiskUniwrsity Ihsident Nashsille,Tennessw C.B hicFadden y SCANACorporation J. B. Rhodes Planningand CorporateSenices o Columbia, SouthCaroluu OsfEwcutimOfficer J. B. Guess,1I12 3 P Omer th t Vre Pnsilmt Intenul Audit Edisto Fanns V. C. Summer 15 Denmark, South Carolina Quimunof theIkurd Emeritus Barbara D. Blair B. A. Hagoodu SCANA Corporation h*M Prtsident Columba, South Caroliru Harriett hi. Gardner Wm. M. Bird and Co., Inc. E. C. Wall, Jr.u Assistant Secretary Ourkston, South Caroluu President J. E Hassell,Jr.u CanalIndustries,Inc. Retired Quimun and Corway,Smth Cartdina Gi4 Eunitiw Offrer John A. Warrent Ih'Strtss Concrete Company,Inc. Quirnun and Ourkston, SouthCaroluu Odef Evrutiw Offxtr W. H. Hippu SCANACorporationand Subsidiaries Ihsidentand OiiEwcutiw Offrer Columbia, Smth Cartuu The Liberty Corptration Grtymille', South Carthu EstorsEstl Avram Kronsbergu W.R.Bmce President K W. French HarTison & Company,Inc. E M. ILpp Ihiemberof ExecutnvComnuttee Gurkston, South Caroluu 1 H. Lumpkin 2Niemtvrof AuditCommittee A. C. Mustard E C. McMastert, 3 stember of Corporate Performance and J. E. Schachte,Jr. strategic rianning Cornnuttee unhRdmOmpany J B. th Ikh $[ nut 7tv anagem - Wumh m,Smb h h dmail(1-3-88) 5 hiember of Nudear mersight Comrruttee W. H. Tayky e Also Chairman and CEO of all subsidianes dmnMM) 7 Also Vky Chairman of all subsidiaries where heis not President "Secretary for all subsidiaries o-

0FFICERS QF PRINCIPAL SUBSIDIA* GS H South Caroline Electric & Gas Company South Carolina Pipeline Corporation T. C Nichols,Jr.' R D. Hazel h1ax Earwoodio Pmsidmtand Vre h ident Ibidmt ChiefOperatingOffker Itrsonneland Coqvrate O. W. Dixon Jr. Cmenicatims R. Af.Kightlinger VreIbident ExecutiwVrehident B. T. Horton,Jr. Supplyand Engmmg Operations VrePmsidentandTreasumr B.J. MacInnis C L Rye John Kinloch VreIbident SeniorVrePmsident Vre President Operations herDeliwryandTransportation Transitand Fleet Mainterture B. M. Smith,Jr. S. C Mchfeekin,Jr. Ed> IDC-SeniorVreIbident VreIbident E. H. Crews,Jr. Coqvrateand Customer Relations-Prtsider t Econome Dewlopment Northern Division J.M.\\Voods J. H. Young,Jr. D. C McNamara Vice President SeniorVrePmsident Vre President Customer Rela 6ons Marketing J. C. Chapman Vice Pmsident G.J. Bullwmkcl,Jr. D. A.Nauman VrePmsident Vrc Presidwt SouthCarolinaReelEstateD@iwit Customer Relations-Nuclear Optrations Swthem Disisim Company,Inc. E. C Robe ts V. R. Coward,Jr. VreIbidentandGeneralCounsel J. W. Wedding VrePmsident Ibident PatriciaT. Smith Support Senices Vre President A' H. Gibbes G. C Cruft, Jr. Punhasing md Regtilatory Affairs VrePmsident Vre Pmsidmt The and Distitiution W. E. Moore SCANA SoftwateServices,Inc. Engmmg Assistant Vre Pmsident Ibluction Engineering R. W. Sted. nan W. A.Darby Ibident VrePresident K. B. Marsh con & J. D. Gregg GasOperations Vre Prtsickmt J. G. Black,11 Operations Assistant Treasurer l

Also President of South Carohna Generating Cornpany, Inc., South Carchna Fuel Company, Inc.. and Candane, Inc.

18 Also Vre President of SCE&G and Presidemt of mmor pn pane subsidenes

_4. _; q3 fil 3Mwegungg.,_- 1.

e...- y 3.,,,7 73-g mm,3yvy,3..- 3 x..y v 3 (, p ny.y y,7 ... $ u tR #1N.5blEn T 1 2; ll. :.s }c a%L,12Wa26.W.-- 1 A. ., ; ; ; & LM.i e The Management of SCANA Corporation (the Com-and guidelines and is complemented by the sekttion, train-pany) is resp 3nsible for the preptration and integnty of the ing and dewkipnent of professional financial nunagers financial data included in the accompanying Consofidated and by a staff ofintemal auditors who conduct comprehen-Financial Statements. These statements have been prepared siw intenul audits. in conformity with generally acceptal accounting principles ne Ikurd of Directors pnwides owrsight for the prepa-as applicable. In situations that prewnt exact accounting ration of the financial statements thmugh its Audit Comnst-measurements, nunagement has used infomied }udgments tee, which is composed entirely of nonempk>yee dirwtors. and estinutes. Financialinformation presented elsewhere in The Audit Committee meets periodically with marugement this Annual Report is consistent with these financial and intemal auditors to review their actisities and resp >nsi-statements. bilities. He Audit Committee also meets pernfically with the De Company maintains and relies upon a system of Comptny's independent auditors, Dehntte Haskins & Sells. internal accounting controls designed to proside reasonable De intemal and independent auditors have free access to assurance that all transactions are properly recorded in the the Audit Committee to discuss intemal accounting control, tnxiks and records and that assets are protected against kiss or auditing and firuncial reporting matters. unau thorized use. ne degree of intenul accountin(- control / W - is based upon the determination of the optimum ba mce between the cost incurral in maintaining a system of inter-W B. Timmerman l nal controls and the benefits to be deriwd. 'Ihe system of Senior VeePresident I mtenul accounting controls is supported by written policies ChiefAnanoa/Of5cer h!;w[.U'[5 Ebb k [N b. M D f1% L Q % 193 % 2 T W 6 8 C 7k i iit 2 l .- ) J :fI JOY Deloitte Haskins-Sells Mue:ac.... SCANA CORPORATION: We haw examined the Consolidatai Balance Sheets In our opinion, such Consolidated Fmancial State-and Consolidated Statements of Capitalization of SCANA ments present fairly the consolidatai financial position of the Corporation and consolidatai subsidiaries ("Company") as of Company at December 31,1957 and 19S6 and the results of its December 31,1987 and 1986 and the relatal Consoli. lated operations and the c hanges in its financul position for each Statements of Income and Retainai Earnings and of Sources of the three years in the penod ended Decemtwr 31,1987, in of Funds for Gross Property Additions for each of the three confomuty with generally accepted accounting prindples ap-years in the period ended December 31,1987. Our examina-plied on a consistent tusis. tions were nude in accordance with generally accepted audit-ing standards and, accordingly, includai such tests of the (7/ accounting records and such other auditing procedures as we N

f considered necessary in the drcumstances FbyKW

~ c o n s o tic a r s a a r t a n.c t'. s n e s t e J? c- 'L.JD i December 31, 1987 1986 ASSETS meusandsofDouars) Utility Plant (Notes 1,2,3 and 4): Electric $ 2,574,138 $ 2,475,332 Cas 292,990 277,292 Trarrit 4,024 4,188 Common 37,102 23,622 Total 2,908,254 2,780,434 Less accumulated depreciation and amortization 797,752 722,996 Total 2,110,502 2,057,438 Construction workin prognss 95,013 92,379 Nuclear fuel, net of accumulated amortization 62,415 51,535 , Acquisition adjustment-gas, net of accumulated amortization 34,148 35,146 Utility Plant, Net 2,302,10s 2,236,498 Othcr Propertyand Imtstments: Nonutility property (substantially at cost) 40,789 30,331 Imtstments(Note 1) 29,076 19,213 TotalOther Propertyand Imtstments 69,865 49,544 Current Assets: Cash, temporary cash imestments and special deposits 22,195 10,913 Receivables 105,041 107,078 Imentories(ataverage cost): 1 Fuel (Note 3) 61,025 51,768 1 Materials and supplies 24,541 18,433 Prepayments 13,307 15,323 TotalCurrent Assets 226,109 206,515 Deferred Debits: Unamortized debt expense 6,790 5,474 Accumulated deferred income taxes (Notes 1 and 7) 17,843 11,208 Unamortized deferred retum on plant imestment (Notes 1 and 2) 40,335 36,395 Nudear plant decommissioning fund (Note 1) 7,238 5,128 Other 32,081 24,570 Total Deferred Debits 101,287 82,775 Total 5 2,702,369 5 2,575,332 See Nctes to Consoldated FalancalSu!ements.

Dewmber31, 1987 1986 1 CAPITALIZATION (See Consolida'ed Statements of Capitalization) (DxnamdsofDt&rs) Stockholders'Inwstment: Common Equity 5 871,620 $ 836,913 Preferred Stock (Not Subject to Purchase or Sinking Funds) 26,029 26,029 TotalStockholders'Inwstment 897,M9 862,942 Preferred Stock (Subject to Purchase or Sinking Funds) M,632 117,542 Long Term Debt, Net 886,993 745,451 TotalCapitalization 1,869,274 1,725,935 i LIABILITIES Cunent Liabilities: Short-term borrowings(Note 8) 21,565 80,576 l Current portion of long-term debt, net (Note 3) 24,719 21,930 Accounts payable 82,789 82,068 Customerdemsits 15,260 13,417 Taxesaccruec: 36,400 45,836 interest accrued 16,6M 12,147 i Dividendsdedared 25,621 25,966 Other 6,790 3,715 i TotalCurrent Liabilities l 229,828 285,655 Deferred Credits: Accumulated deferred inwstment tax credits (Notes 1 and 7) 117,177 119,766 Accumulated deferred income taxes (Notes 1 and 7) 416,700 388,789 Accumulated reserm for nudear plant decomnussioning (Note 1) 7,238 5,128 i Other 62,152 50,059 TotalDeferred Credits 603,267 563,742 Commitments and Contingencies (Note 9) Total 5 2,702,369 $ 2,575,332 See Notes v ConsoMatedFuncialStatements. 1 1 r, .I

~ [ .;4 6h$Whi.kMW4tl Y$lM.E Nl8' *l? [. -ll..' ?T ~ 1%MWC W 9tMWH W ORIMas.?.[.;; For theYears Ended December 31, 1987 1986 1985 msousandsofDdlars exayt pershareamounts) Operating Revenues (Notes l and 2): Electric $ 806,826 $ S09,488 $ 78'7,796 Gas 305,9M 289,429 318,856 Transit 3,212 3,119 3,689 TotalOperating Rem tues 1,115,972 1,102,036 1,110,341 Operating Expenses: Fuelusedinelectricgeneu n 227,877 216,076 229,249 Power purchased, net (12,486) (2,823) (8,821) Gas purchased for resale 222,319 215,928 246,760 Other operation 169,356 155,588 143,016 Maintenance 57,995 56,8M 60,836 Depreciation and amortization (Note 1) 92,583 90,627 86,899 ) Income taxes (Notes 1 and 7) 95,051 119,108 105,7&3 1 Other taxes 58,892 51,952 49,021 TotalOperating Expenses 911,587 903,320 912,743 Operatingincome 204,335 198,716 197,598 l Otherincome(Note 1): Allowance for aluity funds used dunny constmetion 2,063 1,2M 1,086 Deferred retum on plant imestment (Note 2) 6,063 12,450 12,881 Other income (loss), net of income taxes (1,731) (3,889) 1,7M TotalOtherincome 6,395 9,825 15,721 Income BeforeInterest Charges and Preferred Stock Dividends 210,760 208,M1 213,319 Interest Charges (Credits): Interest on long-temi debt, net 68,119 68,180 83,817 Otherinterest expense 5,155 5,771 1,789 Allowance for borrowed funds usal duringconstruction(Note 1) (1,796) (2,017) (2,388) TotalInterest Charges, Net 71,478 71,934 83,218 Preferred Stock Cash Dividends of Subsidiary (At stated rates) 10,437 14,443 16,M1 Net income 128,865 122,1M 113,5R) Retained Eamings at Beginning of Year 262,671 230,M9 202,988 Common Stock Cash Dividends Declared (Note 5) (93,487) (90,263) (87,010) Other Capital Stock Transactions, Net (929) 221 1,011 Retained Eamings at End of Year $ 297,120 $ 262,671 $ 'LV),M9 Eamings Available for Common Stock 5 128,365 5 122,1M $ 113,5M) Common Shares Outstanding (Thousands) 40,296 40,296 40,296 Eamings Per Share of Common Stock $3.20 $ 3.03 $2.82 See Notes to Consobdated Fn1naalStatements.

CONSOLIO ? EO STATEMENTS OF SOURCES OF FUNOS 33 FOR GMOSS PROPERTY A D OI TIO N S For the Years Ended December 31, 1987 1986 1985 SOURCES OFFUNDS (DammdsofDdlus) IntemallyGenerated: Netincome 5 128,865 $122,1M $ 113,560 Charges (credits) to income not requiring (providing) funds: Depmciationand amortization 92,583 90,627 86,899 Amortization of nuclearfuel 17,1 % 30,529 22,612 Defermdincome taxes, net 20,627 33,635 42,497 Deferredimestment taxcredits, net (2,589) (9,593) 821 Allowance for funds used during construction (3,859) (3,281) (3,474) Deferred retum on plantimestment (6,063) (12,450) (12,881) Other, net 1,9% 2,020 1,444 Fundsprovided from operations 248,7M 253,651 251,478 Deduct cash dividends dedared on common stock 93,487 90,263 87,(M0 IntemallyGenerated Funds, Net 155,267 163,3S8 1M,438 Extemal Financing: Mortgagebondssold 100,000 Pollutioncontrolbonds sold 4,365 1,100 5,500 Banknotesold 40,000 Increase (decrease) in fuel finandngs, net 13,938 (19,813) (8,256) Reductionoflong-term debt (13,001) (89,459) (44,966) Retimmentof preferred stock (32,910) (35,205) (4,275) Increase (decease)in short-term borrowings, net (59,011) 78,188 1,915 Funds from ExtemalFinancing 53,381 (65,189) (50,082) OtherSources(Uses): (Increase) decease in working capital, exduding short-term horrowings and current portion of long-term debt (19,199) 29,273 15,(M8 Other changes in noncunent balance sheet items, net (19,990) 13,424 (4,371) OtherSources(Uses) (39,189) 42,697 10,677 Funds forProperty Additions 169,459 140,896 125,033 Allowance for Funds Used During Construction 3,859 3,281 3,474 l Gross Property Additions 5 173,318 $ 144,177 $ 128,507 See Notes to Crsdk1ated FrundalStatemen's.

L km h i h SS$ mm--- \\ December 31, 19s? 1986 Common Equity (Note 5): (Thwmds (VIMlars) Common stock, no par value, authorized 75,000,000 shares, issued and outstanding; 1987 and 1986 40,2%,147 shares $374.500 $574,242 Retained eamings 297,120 262,671 Total Common Equity 871,620 47% 836,913 49 % South Carolina Electric & Gas Company: Cumulative Preferred Stock (Not Subject to Purchase or Sinking Funds): Shares Outstanding Redemption Price Ewntual Senes 19s? 1466 Current Th;ough Minimum $100 Par 8.40% 197,668 197,668 101.70 11-30-91 101.00 19,767 19,767 S50 Par 5 00 % 125,1M 125,2M 52.50 52.50 6.262 6,262 Total Preferred Stock (Not Subject to Purchase or Sinking Fands) 26.029 19 26,029 1% South Carolina Electric & Gas Company: Cumulative Preferred Stock (Subject to Purchase or Sinking Funds)(Note 6): $100 Par Value-Authonzed l,550,000 shares Shares Outstanding Redemption Price Eventual Senes 1987 1986 Current Through Minimum 7.709 108,000 113,894 101.00 101.00 10,S00 11,389 8 12 % 153,9 % 162,086 102.03 102.03 15,399 16,209 13.68 4 250,000 25,000 261,9s6 525,9M) $50 Par Value-Authonzed, 1987-1,716,086 shares-1956-1,728,766 shares Shares Outstanding Redemption Price Eventual Series 19c 1986 Current Through Mmimum 4.50% w,400 32,000 51.00 51.00 1,520 1,RO 4 60 % 12,su 14,3M 50.50 50.50 M2 717 4.W7c (A) 42,052 44,052 51.00 51.00 2,102 2,202 4 60% (B) 102,000 105,400 50.N) 50.50 5,100 5,270 5.125 % 80,000 81,000 51.00 51.00 4,000 4,050 6R)4 10sp] 112,000 50.50 50.50 5,440 5,KU 8R)1 240,000 300,000 50.50 1-30-85 50.00 12,000 15,000 8 72 % 315,125 365,400 53.00 12-31-88 50 R) 15,756 18,270 9.404 117.456 244,692 51.175 51.175 11,873 12,235 1,168,667 1,298,878 Total Preferred Stock (Subject to Purchase or Sinking Funds) M,632 5% 117,542 7% See Notes to ConsoMated FsnanaalStatements

M . i 'I. [bcember31, 1987 1986 Long-Term Debt (Notes 3 and 4): (Thousands ofDdlars) South Carolina Electric & Gas Company: First and Refunding Mortgage Bonds: Yearof Series Maturity 5-1/2% 1987 6,176 4-7,3 % 1988 10,000 10,000 10-1/2 % 1990 7,800 8,400 5% 1990 10,000 10,000 5% 1991 8,000 8,000 4-7.3% 1995 16,000 16,000 5.45% 1996 15,000 15,000 6% 1997 15,000 15,000 6-1/2% 1998 20,000 20,000 8% 1999 35,000 35,000 9-US% 1W9 15,000 15,000 8% 2001 35,000 35,000 7-l!4% 2002 30,000 30,000 9-1/8% 2006 50,000 50,000 8.40 % 2006 50,000 50,000 8-33% 2007 30,000 30,000 8.90 % 2008 30,000 30,000 10-l'8 % 2009 35,000 35,000 9-7.3 % 2009 50,000 50,000 12.15 % 2010 35,690 35,890 8-3/4% 2017 100,000 Pollution Control Facthries Rewnue Bonds: 4-1f2% Senes, due 1987 1,031 5.95% Senes, due 2003 7,220 7,285 Fairfield County Senes 1984, due 2014 (variable rate -5.0% through &31/88) 57,000 57,000 Richland County, due 2014 (variable rate - 5.0% through &31:38) 5,210 5,500 Fairfield County Series 1986, due 2014 (variable rate - 5.375% through &31/S8) 1,100 1,100 Colleton and Dorchester Counties Senes 1987, due 2014 (variable rate-5.375% through S3138) 1M Consolidated Mortgage Gold Bonds 5% Series, due 19W (noncallable) 949 949 Lease Obbgation,5-3/4%, due 1997 225 240 South Carohna Generating Company, Inc.: Berkekw County Pollution Control Facthties Revenue Bonds, due 2014 (variable rate-5.875% through 93038) 35,650 35,850 Bank Note, d ue 1990 (vanable rate-7.75% at 12/31/87) 75,500 78,500 South Carohna LNG Company,Inc.: 10-1/2% Series first Mortgage Bonds, d ue 1990 3,450 4,600 South Carohna Fuel Company, Inc.: Nuclear fuelliability 63,683 52,991 Fossil fuelliabili ' 20,129 17,083 South Carolina Pi 4ine Corporation: 6% Series A Fi t Mortgage Bonds, due 1988 675 1,319 South Carolina Real Estate bevelopment Company, Inc.: Notes, due 1987-lW1 (at various rates) 47 77 SCANA Corporation: Bank Note,8.32%, due 1989 40,000 Total 913,293 767,991 Less-long-term debt matunties, including sinkmg fund requirements 24,719 21,930 Unamortized discount 1,551 610 Total Long Term Debt M6,993 47% 745,451 43 % Total Capitalization $1,669,274 100% $1,725,935 100 % See Notes to ConsoMated FinanaalStatements.

A Lh hhhhhhhhkY k Y 1, Sumnuty of Significant Accounting Policies: mately $877 milhon. Accumulated depretiation assutated with SCE&G's share of Summer Station was apprmimately $110.1 mil-li n and 596.1 million as of December 31,1987 and 1986, respec-A. Organization and Principles of Consolidation tiwly. SCE&G's share of the direct expenses assocated with operat- . SCAN A Corporation (the Company), a South Carolma corpo-ing summer Statien is included in the Company's "Other ratwn, is a pubhc utihty holding company within the meaning of operation" and "Maintenance" expenses. the Public Utihty Ilolding Company Act of 1935, but is exempt from registration under such Act. D. Allowance for i unds Used During Construction ne accompanying Consolidated Financial Statements re-Allowa nce for funds used during construction ( AFC), a non-flect the consolidatwn of the accounts of the Company and its cash item, reflects the period cost of capital demted to plant under wholly +wned subsidiaries: constration. Eis accounting practice results in the indusion, as Regub!cd utihtres a component of construction cost (construction work in prog-South Carohna Ekttric & Gas Company (SCE&G) ress), of the costs of debt and equity capital dedicated to construc-South Carolina Generating Company, Inc. (GENCO) tion imestment. AFC will ultimately be included in rate ba se South Carohna FuelCompany,Inc. ' imrstment and depreciated as a component of plant cost in South Carohna Pipeline Corporation (Pipeline Corpora. establishing rates for utility senices. De Company's regulated tion) w hich wholly-owns South Carchna LNG Com. subsidiaries calculated AFC using the following owrall rates (com-pany, Inc. and Carolina Exploration Corporation puted on an after-tas basis): Non-regukted busimws CarolinaIfG Corporation iu? 19 % 1985 Carchna Propane Storage Corporation $CE&G w4% 63% 9.5% Carotane, Inc. GENCO s.3% 5.3 % 5.7% MPX Systems, Inc. hpelme Corporatwn m ti.tA 95% These rates do not exceed the madm um allowable rate as a Resources, Inc. calculated under FERC Order No. 561. Interest on nuclear fuel m, SCAN A Sof tware Semces, Inc. South Carchna Real Estate Development Company, Inc. Process (refinement, corwersion, enrichment and fabrication) ts Tiriah Corporatmn cap tahied at the actualinterest amount. Investments in an interstate tekrommunications camer i. Defcried Return on Plant Investment and in real estate, propane storage a nd trans mission joint ven-Commencing J uly 1,1987, as approwd by a July 1,1987 PSC tures are reported using the eqtuty method of accounting. Signifi-order, SCE&G ceased deferring ca rrying costs assoaated with 400 cant intercompany balances and transactions have been ehmi-MW of electnc generating capaaty presiously remowd from rate nated in consolidatwn. base and began amortizing the accumulated deferred carrying costs (appanimately $40 3 million at December 31,1987) on a ti. $> stem of Account' straight hne basis over a ten-year period (see Note 2A). Amortiza-De accountmg records of the Company's regulated subsidi-tion of deferred carrying costs, included in "Depreciatwn and aries are maintained in accordance with the uniform system of amorttiation", was approumately $2.1 million for 1987. accounts presenbed by the Fvderal Energy Regulatory Commis-SCE&G's deferred return on plant investment meets the cri-sion (FERC) and as adopted by Re Pubhc Senice Commission of tena for financial accounting recognition, as presenbed by the South Carohna (PSC). Financial Accounting Standards Board (FASB) Statement No. 92 E C. Utility Plant Utihty plant is stated substantially at original cost. De costs of I; Depreciation and Amortiration additions, renewals and betterments to utility plant, includ;ng Provisions for depreciation are recorded using the straight-direct labor, material and indirect charges for engineenng, su per- ! line method for finanaal reporting purposes and are based on the vision and an allowance for funds used dunng construction, are i estimated senice lives of the vanous classes of property. De com. added to utihty plant accounts. The original cost of utthty property posite weighted-awrage deprwiation rates wrre as follows: retired or otherwise disped of is removed from utthty plant ac-counts and generally charged. along with the cost of removal, k ss salvage, to accumulated deprecation. De costs of repairs, replace-1* 19

19 "

ments and renewals ofitems of property determined to beless (({Cg y y 34[ than a unit of property are charged to maintenance expense. , hpehne Corporation 14n 3 37 % 327% SCE&G, operator of the V C. Summer Nuclear Station (Sum-l Owrall 3m 33n 3 35% mer Station), and the South Carolina Pubbe Senice Authonty (a public corporation of the State of South Carohna) are }omt owners Nuclear fuel amorttiation, which is inciuded in "Fuel used in of Summer Station in the proportions of twt > thirds and one-third, ehrtnc generation" and is recowred throegh SCE&G's cost of fuel, respectnvly. ne parties share the operatmg costs and energy is remrded using the units-of-prodoction method. Provisions for output of the plant in these proportions. The total cost of the , amorttiation of nudear fu iindude amoants necessary to satisfy construction of Summer Station was approMmately $1.3 bilhon, or i obbgations to the United States Departraent of Energy under a about $1,461 per kilowatt, of w hich SCE&G's share was approu-l contract for disposal of spent nuclear fuel.

l i I i 1 He acquisition adjustment relating to the purchase of certain I. Pension Espense gas properties in 1982 is being amortized owr a forty year period The Compa ny has a noncontnbutory defined beneht plan using the straight-line method. covering substantially au employees. Benefits are based on years G. Nuclear Decommissioning of accredited senice and the employee's awrage annual earnings Decommissioning of Summer Station is projected to com-received dunng the last 3 years of employment. De Company's mence in the year 2014, and the expenditures (on a before-tax pobw has been to fund pension costs r.ccrued to the extent per-basis) related to SCE&G's share of decommissioning actisities are mitted by the appbcabie Federalincome tax regulations as deter-currently estimated to be approximately $211 million (in 2014 dol-mined by independent actuaries. lars). SCE&G is providing for estimated decommissioning costs The Company adopted FASB Statement No. 87, "Employers' owr the life of Summer Station and has established a resene for Accounting for Pensions", as of January 1,1987, which requires, this purpose. SCE&G is presently funding the reserve with among other things, the use of the profected unit credit actuarial amounts couected through electne rates (a pproximately $.8 million cost method for determtrung net periodic pension cost for finan-cial reporting purposes. De adoption of the new accounting annually, net of taxes), and intends for the fund, including camings, to provid< br au eventual decommissioning expendi' standard did not have a significant effect upon the Company's tures on an af ter-ta wasts. financial position or results of operations. he new standard was adopted prospectively, and accordingly, pension related disclo-H. Income Ta ses res for pnor years have not been restated. Total pension cost for ne Company and its subsidiaries file consolidated Federal 1987,1956 and 1985 was approximately $9.6 million, $10.4 million and State income tax retums. Income taxes are allocated to au dC#9'" F M -T sutxidiaries based on their contnbutions to consolidated taxable Net periodic pension aist, as determined by an m. depend-ent actuary in accordance with the provisions of Statement No. B ause tax laws and financialaccounting standards differ 87, f r the year ended December 31,1987, included the foDowing in their recogrution and measurement of economic events, differ-componmts: ences arise between (1) the amount of taxable income and re-ported pre-tax nnancial income for a yea r and (2) the tax bases of Year Ended December 31, 1C assets or ba$.hties and their reponed amounts in hnancial state-ausands of Mars) ments. Accordingly, the Company provides deferred income Senice cost-benents earned dunng the penod 5 or taxes for substanhally all timing differences, principauy acceler. Interest cost on pr 3ccted beneht obbgabon

14. N4 ated tax depreciat on', except for certain basis differencts arising

.d",*n""tbat n nNdeferral $U prior to 1982. Deferred income tax provisions are included in income currently with cortespondtng credits or charges to accu-Net penodic pension cost s v 4T mulated deferred income taxes. Investment tax credits are generauy deferred and amortized over the useful hves of the respective assets. De Tax Reform Act of He foBowing table sets forth the funded status of the plan, as 1956 (the Tax Act) ebminated the generation of any sigruncant l determined by an independent actuary, at December 31,1987: amount ofinwstment tax credits subsequent to December 31, 1955, except for credits relating to certain "transition property". Year Ended December 31. Ie in December 1987, the FASB issued Statement No. %, "Ac-U b s3"J"1 M d"' counting for Income Taxes", effective for fiscal years beginning ^N'd n)"t after December 15,19% This Statement requires the use of the at n sie w Nonvested beneht obhgabon S4 "bability method" w hereby a current or noncurrent deferred tax Accumulated bencht obhganon liability orasset would be recognized for deferred tax conse-1Y l3 quences of all temporary differences. Temporary differences in-Projected beneht obbganon 14 m Plan assets at fair value clude all existtng differences that will result in taxable or ded ucuble Ic K Plan assets less than prc:ected benent obhgabon dW amounts in future years. SpecificaDy, this Sta tement (1) requires that a deferred tax liabihty or asset be adjusted for the effeet of a i Unrecognized net transinon hahhty Unrecognized net gam ~ a x12 mn change in tax law or rates, (2) prohibits net-of-tax accounting and Pension asset thahbtd reporting, and (3) rquires recognition of a deferred tax liabthry for recogruied in Coniohdated Balance Sheets i nMh tax tenents that are flowed through to customers when temporary j dtfferences originate and for the equity component of AFC. he t Company must a pply Statement No. % no later than January I Re accumubted beneht obbganon is based on the plan's 1989 and does not anticipate a significant impact on net income. } teneht formulas without considenng expected future salary in-creases. The proWed beneht obbgation considers future salary he balance sheet will require certain reclasstfications to comply with the provisions of this Statement-increases, at an assumed annual rate of 5.5%. Both benefit obhga-(See Note 2 - Rate Ma tters and Management's Discussion tions were deteraaned using an annual discount rate of 8.0%. and Analysis of Financial Condition and Results of Operation ne expnted long term rate of retum on plan assets (pnmanly forafurtherdiscussionof theeffectsof theTax Act.) equity secunties and government bonds) and discount rate used in determining pension cost for 1987 were 8 0% and 7.5%, respectiwly. I ne unnwgnized net transition habthty represents the elfect ! of adophng Statement No. 87. Sush obhgation (appnnimately

=

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$23.9 million at January 1,1957), was calculated by taking the hon at J uly 1,1987) associated with 400 MW of eledne generating difference trtwten the fair value of plan assets and the prtyected capaaty previously removed by the PSC in its order dated Mart h 2, twnefit obligation. This liab hty is not recognized in the Compa-19M. The 1987 order also a pprtn ed SCE&G's proposal to include in rate base the assoaated accumulated def erred ca rrying cc4ts (a p-ny's consobdated fmancial statements, but is tring amortued as a component of pension cost on a straight hne basis over the aver-i proumately $42.5 milhon at July 1,198') and to trgin amortizing age remaining senice penod (19.6 years) of employees expeded to ' these costs over a ten-yea r penod commenong J uly 1,1987 (see Note 1 E). The July 1,1987 PSC order has tren apreak d by the l Consumer Advocate of South Carchna. Whde the ou receive benefits under the plan, except for approximately $7.5 nulhon of prior sers ice costs tring amortized over a steyear p-l l matter is uncertain, the Company tvlieves the probabi nai. The unamorttzed habihty was $21.8 mdlion at Decemtvr 31, significant change in the rate order is unhkely and accordingly, 1987. t3ased on the apphcation of accounting pnnaples in exist- ! has not recorded any provision for refunds. ence prior to the adoption of Statement No. 87, estimated accumu-

11. On Ja nua ry 15,1987, the PSC directed SCE&G to raiuce its lated plan trnehts, as determinui by an independent actuary.

retail electne rates a pproumately $25 milhon annually, or 3% due and actual plan net assets at January 1,19+, were as follows: to anticipated income tax savmgs assotiated with the Tax Act as reported in SCE&G's study tu sed on the results of operations f or the year ended December 11,1985. Rates implernentmg this raiuc- )anuarvi t* hon wm placed in cffect with the first t ilhng cnle in February tT h.a d wt M a m 1987-Actuanal present value of accumulated plan benetits. On July 15,1987, the PSC issued an order which required a vested 5 C53 heanng to tv held on Novemtvr 10,1987 to receive evidence on Nonvested 7, w4 w hether SCE&G's electnc retail rates could tv knvered as a result of Reurecu rner to lune tw3 45.471 { the Tax Act and also to review its camings. On Decem Total $133190 the PSC orderni a reduction, ef fectwe January 1,14M, of $27.6 Net assets autlaNe for tenehts $1 R 947 i mdhon annually, or 3.77. This reduction was pnmanly due to the { additional tax savings resulting from theTax Att and a change in The assumed rate of retum used in deternuning the actuanal i the method of recovery of muniapal franchise taxes. The order set present value of accumulatal plan benetits was 79. except for the retum on mmmon equity at 13 25%. assets dedicated to tund tenents for Retirees pnor to June 1953 C. On January 11,19% the South Carohna Supreme Court which are valued at 'lT. derued the State Consumer Admcate's appealof appnnimately SM In addition to pension benetits. the Company pnnades cer-milhon of the Marth 2,19M order of the PSC grantmg SCE&G tain health care and hfe insurance trnehts to actwe and retired appnnimately $132 6 mdlion annually in increased retad electnc employees. Such tenents are generally charged to expense when rates D. On Decemtvr 1,1987, the PSC issued an order granting daims and premiums are paid The costs of providmg such bene-i hts to retired employees are not signthcant. l SCE&G appnnimately M 3 mdhon of the Sn 7 milhon annual

increase in retad natural gas rates requested in an apphcation J. Res enue Recogmtion tded on June 5,1987. The order approved an allowed return on Customers' meters are read and bdh are rendered on a
common njuity of 12.751. The new rates, which will pnnade an monthly ente basis. Base revenue is recorded dunng the account-increase of approximately 3 8"r in annual retail natural gas reve-ing penod in w hich the meters are read.

nues, were placed into et'fect Decemtvr 1,1W7. Revenue attnbutable to gas costs (to the extent collectible E. In an order datui july 31,1987, the FERC afhnned an through adjustment dauses)is accrued and recorded in the month . Ad ministratnv law j ud ge's'deosion relating to GENCO's ftling of dunng w hich the customers' meters are read. j a cost of service formula rate for the sale of pmver and energy to ProK eted tuel costs for electne genera tion a re collected SCE&G, with certain modtheations to the appropnate rate of re-through the fuel component in retad electne rates, as estabhshed tu rn. A > a result of this order, GENCO has fded a revised rate by the PSC dunog semtannualiuel cost heanngs Any ditfer-s(hniule reflectmg the effects of this decision and has requested a ences between actual and pro cted fuel costs a re deferred and reheanng. The FERC has granted a reheanng, but no deasion has i induded w hen esttmatmg the fuel cost component dunng the tren rendered. The Company trheves that the outcome of the next semiannual fuel cost heanng. At December 31,1987, SCE&G pnuedings will not have a sigm6 cant ef fect on its results of had m er-colluted appnnimately $1.5 mdbon through the ek ctnc operations. f uel cla use com ponent, w hich is included in "Deferrni Credits - l F. On December 22,1987, the PSC issuni an order grantmg Other" ' SCE&G an increase m its transit rates in t oth Columbia and Charkston, $outh Camhna trom a f are of 5 25 to $M The new K.1)ebt Premiurn,lhwount and I spense rates were placed into ef feet on January 1,19M Long-term debt premium, dis (ount and expense are temg i amorttml as components of "Interest on long-term debt, net" l 1[mg.Termf)cbfl over the terms of the nwpective debt issues. cq3g.s annual tender Pollution Control Fachties Rewnue 2 RJtevatters:

Bonds (which do not indude the 5 451 senes, due 2t03) are se-

} cured by hke pnnapal amounts ofits f trst and Refundmg Mort-1 A. In an order datni J uly 1,19s7, the PR, approved SCE&G,,s e lends' January 30 lW7 rniuest to restore to its rate tee, ettectne Julv 1, i 1987, the net production mvestment (a pproximately $102.5 md-

[,: .a l N ~ GENCO's annual tenderIVJution Control Facibties Rewnue

5. Stockholders'investmenf(/ncluchgPreferredStockNut Bonds are secured by an irremcable ktter of credit expiring in Subject to Purchase orSinking Fundsk IW1 These annual tender Bonds bear interest at a rate, which wiu The chan es in "Common stock", without par value, during he set between 80% and 120% of an index rate based on one-year 1987,1986 an 1985 are summanzed as fouows:

yield evaluations af comparable ta-exempt obligations, or equal tc, 65% of one-year yield evaluations of U. S. Treasury Bonds at par, but, in any case, not more than 15% per annum. The interest rate is adjusted annuaUy, but may become fixed untd maturity. These Balance January 1,1985 Bonds also provide that the holders may require the Bonds to be other 40.2 % 147 5575,263 M3 purchased at par upon each annual adjustmeet of the interest rate Balance Dnemhr 31,1985 40.2 % 147 575 D or at the time the interest rate becomes fixed untu maturity. If the Bonds are tendered by the holuers, the Companyintends to reof-Balance December 31, m6 40,2 % 147 574,241 fer the Bonds to the public. Due to the irremcabIe letter of credit other 258 and provisions of the Bond Indentures, which permit the Com-Balance December n im 4a2 % 147 5s7000 pany to purchase '.he Bonds in lieu of redemption and rescu them, and to substitu te other security arrangements, the Bonds are clas-sfied as long-term debt. The Compans's empbyee stock benefit plans' trustm and The a nnual amoun ts of long-term debt matun ties, including agent for its Dividhnd Reinvestment and Stock Purchase Plan the amounts due under nuclear and fossa fuel agreements (see purchase previously issued and outstanding shares of the Compa-Note 4), and sinking fund requirements for the years 1988 ny's common stock in the open market. through 1992 are summarized a s follows: The Restated Articles ofincorporation of the Company do not 1 mit the dwidends that rnay be payable on its common stock. Year Amount Year Amount flowever, the Restated Articles ofIncorporation of SCE&G and the thwds of Nus) indentures underiytng certain ofits bond issues contain provi-19s8 5 24J19 1991 517,478 sions that limit the payment of cash dividends on common stock. 1989 54,129 1992 9,442 19 % 180,791 Accordingly,52S6.8 mdhon of consolidated retained eamings were not restricted as to payment of cash dividends on common Approdmately 59.2 milbon of the current portion of long-term stock at December 31,1987. debt for 1988 may be satisfied by either deposit and cancellation of Cash dividends on common stock were declared at an an-tends issued upon the basis of property additions or bond retire. nual rate per share of $2.32,52.24 and $2.16 for 1987,1986 and ment credits, or by deposit of cash with the Trustee. 1985, respntively. Substantially aU utdity plant and fuel inventories are pledged as collateral in connection'with long-term debt.

6. PreferredStock(SutiecitoPurchaseorSinkingFunds):

4. Fuelfinancings; The cau premium of the respectiw senes of preferred stock in Nuclear and fessil fuel inventories a re financed through the no case exceeds the amount of the annual dnidend. Retirements issuance of short-term commercial pa per. These short-term bor-under sinking fund requirements are at par values.

l rowing;s are supported by irrevocable bank lines of credit w hich At any time when dnidends have not been paid in fuu or expire m 1990. Accordingly, the amounts outstanding have been declared a'nd set apart for payment on au senes of preferred stock, mcluded in long-term debt. The bank Imes provide for maximum SCE&G may not redeem any shares of preferred stock (unless all amounts (575 milhon related to nuclear fuel and $25 million re-shares of preferred stock then outstandmg are redeemed) or pu r-lated to fossa fvelHhat may be outstanding at any time. chase or otherwise ecquire for value any shares of preferred stock At Daembei 31,1987, the amoe nt outstandmg for nuclear except in accordanw with an offer made to all holders of preferm! fuel was approunutely 563.9 milbon at a weighted average interest stock. SCE&G may not redeem any shares of preferred stock (un-rateof 8.05% and theamountoutstandingforfossilfuelwas less all shares of preferred stock then outstanding are redeemed) approximately $20.1 milhon at a weigh ted average interest rate of or purchase or otherwise acquire for value any shares of preferred 8.11 %. stock except out of monies set aside as purchase funds o sinking funds for one or rr. ore series of preferred stock, at any time when it is in default under the provisions of the purchase furki or sinking fund for any series of preferred stock. On May 29,1987, SCE&G's Board of Directors called for the redemption of all the issued and outstandmg shares of that cum-pany's 13 SS% Series,5100 par value, cumulative preferred stock. On July 1,1987, au 250,000 shares outstanding wrre redeemed at a price of 106.18%.

i l [ t r lhe aggregate annual amounts of purchase fund or sinking Total income taxes dif fer from amc,unts com puted by apply-fund requirements for preferred stock for the ye&rs 1988 through ing the statutory Federalincome tax rate of 40% for 1987 and 46% 1992 are summarized as follows: for 1986 and 1985 to pre-tax income as follows: Year Amount Year Amount 1987 1986 1985 (Thouwds o/Ddkrs) (Thouwds of Nkrs) 1988 $ 5.948 1991 $2.515 Netincome $12e,865 $122,164 $113,560 199 515 Totalincome tas espense: 990 Charged to operating espenses 95,031 119,108 105,783 Charged to otherincome 195 (2,261) 5,271 The cha nges in "Preferred Stock (Subject to Purchase or Sink-i preferred stock dividends in.437 14,443 16.541 ing Funds)" duting 1987,1986 and 1985 are summarized as 1 Total pre-tax income $234,54s $253,454 $241,155 follow 5: Income taxes on abow at statu-Number Thousands tory Federalincome tas rate $ 93,81) $116,589 $110,931 of Shares of Dollars increases (decrea ses) attnbutable to: i Balance January 1,1985 2,246,186 $156,789 n n d og Shares Redeemed: nuclear fueh (525) (1,053) (707) $100 par value (20,550) (2,055) Deferred return on plantin-50 par value (44,408) (2.220) vestment, net of Balance December 31,1985 2,181,228 152,514 amortiution 11,575) (5.727) (5.925) Shares Redeemed: Depreciation differences 620 5,309 5,325 i $100 par value (343,070) (34.307) Amortiution ofimestment tas 50 par value (13,300) (665) creditt ($,410) (8.107) (6,065) State income taxes (lessl'ederal t Balance December 31,19% 1,824,556 117,542 income tas ch) 8,630 8,220 7,503 Shares Redeemed: Other dtf ferences, net (13) 1,616 (8) $100 par value (263.994) (26,399) 50 par 5alue (130.2111 1e.$11) Totalincome tav spense $ 95,246 $116,647 $111,054 Balante December 31,1937 1.4V).65) $ 84,632 "Total provision for deferred taxes, net" results from t: ming differences in recognitien of the following items: 7gg Totalincome tax expense for 1987,1986 and 1985 is as follows: 1987 1986 1985 (Thuds of Ddkrs) g 39g 39g Charged to espenses: (Thouwds of fbfkrs; Accelerated depreewtion and amortiution $31343 $40,367 546,0M Current income tases: Deferred fueltevenue t2, Nil (4.616) (801) Federal $%,650 $ 82.637 $ 57,650 Other, net (8.5751 (2,116) (2.786) State 10,117 9.845 8,64 7 Foreign (177) 674 Total provision for deferred inceme taxes net $20.627 $33.635 $42,497 Totalcurrent tases 76.%7 92.305 67,04L Deferred tases, net: Federal 16361 28.257 37,289 The Internal Rewnue Service has examined the consolidated State 4.2% 5.378 5.20H Federal income ta returns of the Company through 19M and has Totaldeferred tases 20.627 33,635 42.497 closed all years through 1980. A final report har been receiwd for 1981 and all i< sues resched. In addition, a final report for 1982 Imestment tas credits. Defencd 2.621 (1,4A6) 6,M7 through 19M has been received and allissues resched, except Amornationof amounts those pertaining to the deductilslity of certain nuclear liabihty deferred (credit) (5,410) (8.107) (6,Cb5) insurance premiums. The Company does not anticipate any sig-Other 241 500 694 nificant effect on its results of operacon of financial position Totalinwstment tas credits (2.34 to (9,CN3) 1,516 resulting from the resolution of these issues. At December 31,1987, the cumulative net amount of income Totalincome tax cyvnse $95.246 $116,647 $111.054 ta tinung differences on which deferred taes have nw ceen provided totaled approximately $95 milhon. (See Note lH.)

m b3 mwv3nbi iNRj/us i' M Q fJCO M b f.<.;dk M T3dy$,D, Midi:f.khhhhgfM . ww .w+- -~- . w nw m.. v.r .b. Shorf TennBonowings: B. Nuclear Insurance The Company pays fees to banks as cornpensation for its The Price-Anderson Indemnification Act (the Act) which lines of credit. Dank loans are for 270 days or less. Details oflines of credit and short-term borrowings at December 31,1987,1986 deals with SCE&G's public liability for a nudear incident, expired and 1985 and for the years then ended are as follows: on August 1,1987. In late July 1987, Congress extended the pro-tection provided by the Act until new legislation is passed. The Act currently limits the liability for third-party daims to $720 mil-Deum&r3L lion perincident. The Act provides that allowners of nudear 1987 1986 1985 reactors may be liable for u p to $5 million per reactor owned for cach nuclea'rincident oteurring at any reactorin the United (Dollars in Milhons) States with a limit of two assessments per year (a retroactive pre-Lines of credit at year-ena 5 m2 $133.2 $87.9 mjum). SCE&G's maximum assessment, based on its two-thirds Short-term borrowing - luding ownership of Summer Station, would be approximately $6.7 mil-commercia' paper)dunng the year; hon per year. Maximuni outstanding 5133.1 $111.2 $ 4.5 Proposed legislation is currently pending in the House of Average outstanding 5 39.1 $ 45.7 $ 1.1 Weighted daily average interest rates: Representatives and Senate. One proposed version wvuld raise the liability limit for third-party claims associated with any nudear Credit lines 7.07 7 7.40% 8.53 % incident to $7 billion. Under this proposal, each reactor licensee nuclear m. @ dent occurring at any reactor in the United States, or u p to $63 million per reactor owned for each Short gs outstanding at

'Y a

yea r-e..d ~. o Credit lines 5 2 25 5 2.25 $ 2.25 Provided that not more than $10 million of this liability would be Weighted awrageinterest rate 8 ~61 6.25 % 8.57 % assessed per year. SCE&G's maximum assessment, based on its Commercialpaper 5 19.2 $ 78.2 two-thirds ownership of Summer Station, would be approximately Weighted averageinterest rate 5 Wi 6.67% M2 million per incident, but not more than $6.7 million per year. SCE&G is unable to predict what action Congress might ultimately

9. CommitmentsandContingencies:

take regarding the Act and what effect such action might have on SCE&G's potentialliability. A. Leases SCE&G currently maintains policies with Nudear Electric In-SCE&G leases certain equipment, office fumiture and an surance Limited (NEIL)and American NudearInsurers (ANI) office building under long-term operating leases with lease terms prcviding combined property and decontamination insurance (exduding various renewal options) expiring in 1996,1991 and coverage of $895 million for any losses in excess of $500 million 20@, respatiwly. pursuant to existing primary cmtrages (with AN1) on Summer Total rent expense was a pproximately $5.1 million, M.4 mil-Station. SCE&G pays annual premiums and, in addition, could tion, and $5.0 million for 1987,1986 and 1985, respwtiwly. be assessed a retroactive premium not to exceed 7% times its an-Fu ture minimum rental payments as of December 31,1987 are nual premium, in the event of property damage loss to any nu-as follows: dear generating facilities covered by NElL Based on the current annual premium, this retroactive premium would be approxi-mately $5.3 million. Year Amount Year Amount To the extt.it that insurable claims for property damage, decon-(Thmnds of Ddlars) tamination, repair and replacement and other costs and ex-1988 $4,989 1991 5 5,820 penses arising from a nudear incident at Summer Station would 1989 6.918 1992 5 060 exceed the policy limits ofinsurance, or to the extent such insur-IWO 7,124 1993-2009 112,320 ance becomes unavailable in the future, and to the exten t that SCE&G's rates would not recowr the cost of aiw purchased re-placement power, SCE&G will retain the risk d tw m a self-insurer. SCE&G h as no reason to anticipate a serious nudear incident at Summer Station. If such an incident were to occur, it could have a materially adverseimpact on the Company's financial position. 1 l

h -] %_ a; y <7, ] f J M i M @ ;! N Q $ $ fl % 3 M. s V ] g_t)$$W Lm2 ~ {((Tyi & J-1 u u -- %. m.a.n ,m m 19 %

10. SegmentofBusinessInformation:

1:lectric Gas Tr. asit Total Segment information at December 31,1987,1986 and 1985 and for the years then ended is as follows: (Theawids et Ddlars) Operatmg revenues $ 809,4A8 $289,429 $ 3,119 $1,102.036 llectric Gas Transit Total I# "S M#""' escluding deprecation Ghausands o/ Dollar" and amortization 544 A 7 261,712 6,914 812,693 Operating resenues 5 $06,826 5305,934 5 3,212 $1,115,972 Deprtuation and l amortiration 80,825 9,557 245 90,627 Opera'.ing es penses, enduding depredation Total operating, es penses 624,892 271,269 7,159 903,320 and a mortization 539 p>4 271,644 7,756 619,004 Operating income (loss) $ IM,596 $ 18,160 $(4,NO) 198,716 Depreciation and amorti ation A2,7% 9,519 3n6 92,5M Add - Chher irwme, net 9,825 s '#" ] '" lot al o pe rating eipenses 622,362 281,163 tt062 %),587 pref r st dividends , 3 Operating income 0ow) 5 I M,464 $ 24,771 5(4,S50) 204,M5 Net income $ 122,lM Add - Other income, net 6,395 Cap tal espenditures: 1 ess - Interest tharges ,1,47I, Identifiable $ 110,249 $ 20,981 $ 247 5 131,477 - Preferred stock dmdends 10.43 Net income 5 128,865 Utilized for overall Com pany operatwns 12,700 Total $ 144,177 C.a pital es pendit u res; identifiable 5 146,281 5 21.034 5 333 5 167,645 Identthable asset s at l December 31,1986: t:tilized f or os erall L.ompa ny operations 5,670 Utihty plar.t, net $ 1,988,769 $214,299 $ 1,778 $2,204,N6 Iotal 5 173,318 Inventones 62,930 6,M 5 320 70,(N5 Identifiable assets at Total $2,051,699 $221,144 $ 2,098 2,274,941 December 31,1997-Assets utihzed for os erall Company operations 300,391 Utility plani, net 52,039,752 5225,503 5 1,78) 52,267,039 Insenturies 74.9 7 6,859 374 82,210 Total assets $2,575,332 Iotal 52,114,729 5232,362 5 2,157 2,349,248 Assets utilized for oserall Compans operations 353,121 Electnc Gas Transit Total t otal asset s 52,702,369 (Thawih ef Wlars) Operating revenues $ 787,796 $318,856 $ 3.689 $1,110,341 Operating espenses, esduding depreciation and amortization 528,~73 289,868 7,203 825,N4 Depreciatmn and amortization 77,658 9,033 208 86,899 Total operatmg espenses 606,431 298M01 7,411 912,743 Operatmg income (loss) $ 181,365 $ 19,955 $(3,722) 197,598 Add - Other irume, net 15,721 l ess - Interest charges 83,218 - Preferred stock dividends 16,541 Net income $ 113,560 Ca pital espenditures: Identifiable $ 97,525 $ 24,091 $ te( $ 122,225 Utihred for oserallCompany operations 6,282 Total 5 128,507 Uentihable assets at Decemt. r 31,1985: Utihty plant, net $1,958,372 $203,0M) $ 2,159 $2.193,591 Inwntones 51,356 7,337 298 58,991 Total $2,039,728 $210,397 5 2,457 2,252,582 Assets utihred for overall Company operations 291,117 Total assets $2,543,699

.y., y _n r.,c_m.g.; y. .., ~.., x. e /. r. .n.; .. L % i 2. Mi - !!.'MG iis.Li. %p1%lniQiG%OANNd!l.A6W.,M;.w3ixy....~ Ni. 11, QuadedyFinancialData(Unaudded): 1997 lirst Second Third fourth Quarter Quarter Quarter Quarter Annual Total operating reven ues (OtM $309,294 $158,146 $2%,061 $252.471 $1,115,972 Operating income 1000s 57,007 42,978 68,039 36,361 204,385 Net income q0001 40,9 3 23,873 47,537 16,477 128,865 f arnings per share of common stock as reported 1.02 .59 1.18 .41 3.20 1%6 hrst Senind Third Fourth Quarter Quarter Quarter Quart 7 Armual Total operaung rewnues (00t1) $301,445 M47,363 $239,857 $263,321 $1,102,036 Operahng irwome (010) 56.010 40,546 62,920 39,240 198.716 Net income (000) 34,M3 23.922 41,942 21,957 122,164 Earnings per share of common stock as reported .85 .59 1.04 .55 3 03 A Nke U SS$ $$5.NWA$$$ W 1987 1986 4th 3rd 2nd 1st 4th 3rd 2nd 1st Qtr. Qtr. Qtr. Otr. Qtr. Qtr. Qtr.

Qtr, Price Range:(a) liigh 33 34-1'2 35 1/8 40 39-7/8 42 7/8 36-3'4 33-1/4 lav 26-1/2 30-5 8 30-7/8 34-3'8 36 M 1/2 31-1/4 27-1/8 Dividends Per Share:

1987 A mount Date Declared Date Paid Iirst Quarter $.58 January 28,19S7 April 1,1987 Second Quarter .58 April 22,1987 July 1,1957 Third Quarter .58 August 26,1987 October 1,1987 Fourth Quarter .58 October 28,1^87 january 1,1988 1986 Amount Date Declared Date Paid First Quarter $.56 January 22,1986 Apnl1,1986 Second Quarter .56 April 23,1986 July 1,1986 Third Quarter .56 July 23,1986 October 1,1986 ftiurth Quarter ,56 October 22,1986 January 1,1987 December 31, 19S7 1986 Number of common shares outstanding 40,296,147 40,296,147 Number of common stockholders of record 49,932 51,738 The pnncipal market for SCANA common stock is the New York Stock Exchange (stock symbol-SCG). (a) As reported on the New York Stock Exchange Composite Listing.

L/ quid /lyAndCJp/fB/ReSOUTCeS tions, reguiation ana iesisiation, rates of k>aa growth, em4ron-he capital needs of the Company arise primarily from the mental protection standards and the cost and availability of i capital requirements of SCE&G's operations and construction capital. program. Because rates for regulated services are based on histori. SCE&G present!y has in effcct a shelf registration statement cal cost amounts, to the extent inflation occurs a nd rates are not under which it can issue an additional $100 million of First and 1 appropnately adjusted on a timely basis, the Company's regulated Refunding Mortgage Ibads. Whether additional securities will be subsidiaries may not recowr allcosts of providing services. Rere. sold and the timing and amount of such sales will depend primar-fore, the Company's future financialposition and results of opera. ily upon market conditions and other factors. twns could be impacted by future inflationary trends. For information relating to operations of the Compa ny's sub-he ability of the Company's regulated subsidiaries to replace sidiaries see pages 8 through 25. existing plant investment, as well as to expand to meet futun' ReSultSOfO efal/0DS demand, will depend u pon its ahhty to attract the necessary P financial ca pital on reasonable terms. De abibty to attract such Earnings and Dividends capital will, in turn, depend upon the regulated subsidiaries' abil-Eamings per share of common stock, the percent increase ity to obtain adequate and timely rate relief. (decrease) from the previous year and the rate of retum camed on Dunng 1987, the PSC issued orders requiring SCE&G to re-common equity for the years 1985 through 1987 were as follows: 1 duce its retail electric rates to reflect income tax savings associated Mc 1986 1985 with the Tax Act (see Note 2B of Notes to Consolidated Financial Earnmgs per share $120 $3 03 $2.82 Statements). De tax savings result from a ruf uction in the Federal Percent mcrease (decrease)in 1 corporate income tax rate from 46% to ML effective July 1,1987. earnings per share 5.6% 7.4% (7.5% ) Because the Company is fu'ly normalized with respect to invest. Return earned on common eqmty (yea r-end) 14 r, 14.6 % 14.1 % ment tax credit and tax depreciation, the Company does not anticipate a significant effect on its results of operations or finan-Eamings per share increased from 1986 pnmarily as a result of cial positwn, but intemal cash flow will be reduced in future years higher sales of electric energy and natural gas and a reduction in pnmanly due to the repeal of the im estment tax credit retroactne preferred stock dividends associated with early redemptions of to Ja nuary 1,1986, and the lengt'iening of depreciable lives for preferred stock issues (see Note 6 of Notes to Consolidated Finan-certam utdity property. He impact of this reduction wdl depend cial Statements). The increase in camings per share for 1986 re-upon the level of construction expenditures in future years. In sulted primarily from his;her electric energy sales related to the 1986 addition, the mclusion of unbilled revenues and contnbutwns summer heat waw, lower interest charges and reduced dividend in aid of construction m current taxable income, the treatment of requirements on preferred stock. certain expenses which now must be capitahzed for tax purposes AFC is a utility accounting practice whereby a portion of the and other provtuonsin the Tax Act could further restrict cash flow cost of both equity and borrowec. unds used to finance construc-in 1988 and subsequent years. tion (which is shown on the balance sheet as construction work Continued growth in the Company's nonutihty operations, n progress)is capitalized. Both the equity and the debt portions of along with future econonuc expansmn throughout the utility ser-AFC, are noncash items of nonoperating inc ame which haw the vice terntory, could have a positive impact on total Company effect ofincreasing reported net income. AFC represented ap-eanungs. proximately 3% of Eamings Available for Common Stockin 1987, De primary cash requirements for 1987 were, and as esti-19S6 and 1985. mated for 1988 are, as follows: During the period March 19M through June 1987, the Com-1988 9 97 pa ny recorded carrying costs (including equity retum) associated (TheuwJs of DoHars) with the production investment, net of accumulated depreciation, Construction es nditures, excluding relating to 400 MW of electric generating capacity remowd from 'fn t n m"I $17M77 n s used dunng rate ba se. Total deferred carrying costs, a noncash item included mlm under "Other Income" as Deferred return on plant investment" c Nuclear fuel expenditures 10,931 27 122 Matunng obhgatons redemptmns and represent approximately 5% 10% and 11% of Eamings Available sinkmg and purchase fund for Common Stock for the yea rs 1987,1986 and 1985, respectively. requirements 21,466 m4,922 Commencing July 1,1987, the Company ceased deferring carry-Totat $205.074 527us1 ing costs and began amortizing the accumulated deferred carry-ing costs over a ten-year period. (See Notes 1E and 2A of Notes to During 1987, approximately 56.6 + of total cash requirements Consolidated FinancialStatements.) were provided from intemal sources as compared to 57.3% in In February 1988, the Company's Board of Directors raised the 19S6. External funds for 1987 were rovided through the issuance quarterly cash dividend on common stock to 60 cents per share of $100 million principal amount o First and Refunding Mort-from 58 cents per sha re. The increase, effective with the dividend gage Bonds,84 4% Series due February 1,2017, the sale of %365 pavable on Apnl1,1988, raised theindicated annualdividend million in tavexempt annual tender Pollution Control Factbties rat'e to $2.40 per s. hare, up from $2.32. De Company has increased Revenue Bonds due 2014 and a 5-*0 milhon Bank Note due 1989. the dividend rate viits common stock in 35 of the last 36 years. He Company antxipates that 1988 cash requirements will be met primanly through intemally generated funds, short term bor-rowmgs and the sale of commeraal paper. Actual 198S cunstruc-tion md nuclear fuelexpenditures may vary from the estimates set forth abow due to factors such as inflation and economic condi-

$$h?b {' 2 Nhh)fOU'I'lhNh &WWh&hf& &h[Q Operating Niargins The increases in gas operating margms are primarily the re-Electric operating margins for 1987,1986 and 1985 were as sult ofincreases in customers and decatherm (DT) sales of nat ural follows: gas as presented in the following table: 1987 1986 1985 Increase (Decrease) From Prior Year (Mdhons of DollarsJ Customers Volume (DT) Electric operatmg revenues $ws $809.5 5787.8 Classification 1987 1986 1987 1986 Less Fuel used tn electnegeneration 227.9 216.1 229.2 Res dential 1,791 1,442 1,466,477 487,447 - Power purchased, net i12.51 (2.8, (8.8) Commercial 586 532 768,576 207,888 Total 5591.4 5596 2 5567.4 Industnal 12 (35) 2,030,800 (2,353,490) Sale for resale 8 1,910,% s 4,124,761 The 1987 operating margin remained relatively unchanged Total 2,397 1,939 6.226,4 is 2,466,606 from 19c6 because sales associated with increased kilowatt hour consumption were offset by reduced retail electric rates placed in The increase in Gas purchased for resale in 1987 reflects in-effect in February 1987. (See Note 2B of Notes to Consolidated creased customer demand for natural gas. The decrease for 1986 Financial Statements.) The increase in the 1986 operating margin reflects reductions in the cost of gas purchased from the Compa-resulted primanly from increased kilowatt-hour consumption by ny's suppliers. residential and commercial customers. Such increase was la rgely due to the addition of res;dential (3.1 %)and commercial (4.4%) Other Operating Espenses customers. Increases (decreases) in other operating expenses, m.cluding increases (decreases) in electric customers and megawatt-taxes, are presented in the fouowing table: hour ( Af WH) sales volume by classes of customers are presented in increase (Decrease) the following table: Fmm Pnor Year Classification Increase (Decrease) From Pnor Year 1987 1986 g Customers Volume (MWH) Other operation and maintenance 5 14.9 $ 8.6 Classification 1"7 1956 1987 1986 Depreoation and amortizad.m 2.0 3.7 Residential 8.936 10,584 181,840 434,4M Income tases (24.D 13.3 Commeraal 2,2% 2,092 184,359 233,748 Other tases 6.9 2.9 Industrial (32) (17) 156,217 31,9 % Total 5 (.3) 528.5 Sale for resale (1) 50,524 (59,688) Other 67 43 7,0n 22,765 Total 11.267 12,701 609,975 663.245 Other operation and maintenance expenses for 1987 in-creased primarily because of additional operatmg expenses for The increase m Fuel used in electric generation expense for outside professior al sersices relating to the refueling at Summer 1987 was due primanly to additional fossil fuel requirements (at Station. The increase in 1986 was la rgely due to the settiement of unit costs higher than nuclear generation) associated with in. certain claims relating to injuries and damages and moderate creased electric generation resulting from an overall increase in increases in other administratiw and general expenses. Increases customer demand and the scheduled refueling of V C. Summer in Depreciation and amortization expense for 1987 and 1986 re-Nuclear Station from hiarch 6 through June 7,1%7. The decrease flect additions to plant in service and the amortization of deferred for 1986 was primanly attributable to a reduction in the average cost carrying costs beginning July 1,1987 (see Note 1 E of Notes to of fuel bumed ($1.45 and $1.63 per million URJ in 1986 and 1985, Consolidated Financial Statements). The increase for 1987 was respectively), primanly attnbutable to nudea r fuel. Power pur. pa rtially offset by the effect of lower electric depreciation rates be-chased, net decreased for 1987 largely due to greater demand for ginning July 1,1987. The decrease in Income tax expense for 1987 electricity by other utilities and increased for 1986 primanly be. results primarily from a red uction in the Federal corporate income cause of lower demand for electricity by other utihties. tax rate effective July 1,1987 and lower pre-tax income resulting As a result of unusuauy hot weather and an increase in the from a reduction in retail electric rates. The increase in 1986 was numberof electriccustomers, the Company set a series of peak largely due to an increase in ; re-tax income. Increases in Other demand records during the summer of 1987, with the highest peak taxes for 1987 and 1986 primanly reflect additional property taxes. of 2,943 NfW occurring on August 10,1987, the previous year's record of 2,853 NfW having been set on July 9,1986. Interest Charges Gas operating nurgins for 1987,1986 ' nd 1985 were as Interest on long term debt decreased $.1 million in 1987 and a follows: $15.6 million in 1986 compared to the respective previous years, lhe decreases in 1987 and 1986 resulted from the early redemption 1"; 1986 1985 _ of $60 million principal amount of the 15-1/2% Guaranteed Notes i (M@ons of Donars) of South Carolina Electric & Gas Finance, N.V in April 1986. The Gas operating revenues 5306.0 5289.4 $318.9 decrease for 1987 was offset by interest associated with the issua nce I. css Gas purchawd for resale 222 3 215 9 246.8 of $100 miUion principal amount of 8-3/4 % Series First and Re-Total 5 M.7 5 73.5 5 72.1 funding hfortgage Bonds in February 1987. Other interest expense decreased 5.6 million in 1987 and increased $4.0 million in 1986 compared to the respectiw presious yea rs. These changes reflect the decrease and increase, respec-tively, in short-term borrowings from the previous year. 1

G SELECTED F I N A N C I A L' OATA For theYears Ended December 31, 1987 1986 1985 1984 1983 1982 1977 Statementof tncomeData fThousands of Douars except statistics arut per shareamounts) Operating Revenues: Electric $ 806,826 $ 809,488 $ 787,796.$ 746,745 $634,127 $574,113 SM1,9M Cas 305,934 289,429 318,856 378,491 337,282 266,389 78,405 Transit 3,212 3,119 3,689 3,178 3,242 2,603 2,023 TotalOperating Revenues 1,115,972 1,102,036 1,110,341 1,128,414 974,651 M3,105 425,392 Oprating Expenses: Fuelusedin electricgeneration 227,877 216,076 229,249 223,768 260,381 214,617 155,132 Gas purchased for resale 222,319 215,928 246,760 289,212 277,091 220,502 51,321 Other operation and maintenance 214,865 209,629 195,031 187,448 135,374 147,840 50,144 Depreciation and amortization 92,583 90,627 86,899 74,914 45,000 43,406 30,339 Taxes 153,943 171,060 154,801 153,776 106,932 77,033 66,6M TotalOperating Expenses 911,587 903,320 912,743 929,118 824,778 703,3 % 353,620 OperatingIncome 241,385 198,716 197,598 199,296 149,873 139,M7 71,772 Total OtherIncome 6,395 9,825 15,721 17,647 11,571 5,230 25,566 l Income BeforeInterestCharges and { Preferred Stock Dividends 210,780 208,M1 213,319 216,943 161,444 144,937 97,338 TotalInterest Charges, Net 7:,478 71,934 83,218 78,248 57,506 57,121 39,003 Preferred StockCash Dividends of Subsidiary . 10,437 14,443 16,541 16,877 17,186 16,371 10,653 Net income $ 128,865 $ 122,lM $ 113,560 $ 121,818 $ 86,752 $ 71,445 $ 47,682 Common Shares Outstanding (Thousands) 40,296 40,296 40,296 39.900 37,844 34,387 19,833 Earnings PerShareof Common Stock $3.20 $3.03 $2.82 $3.05 $2.29 $2.08 $2.40 Dividends Declared Per Share of Common Stock $2.31 $2.24 $2.16 $2.05 $2.00 $1.92 $1.% Percent of 0peratingincome(Loss) 13eforeincomeTaxes: Electric 91 93 92 87 93 98 94 Cas 12 9 10 15 10 5 8 Transit (3) (2) (2) (2) (3) (3) (2)

t. 1 December 31, 1987 1986 1985 19&1 1983 1982 1977 Balance Sheet Data (husands of Ddiars except statistics and p r shareamounts) Gross utdity Plant $3,099,860 $2,959,494 $2,859,117 $2,7M,809 $2,509,581 $2,411,479 $1,489,111 Total Assets $2,702,369 $2,575,332 $2,543,699 $2,499,694 $2,358,134 $2,202,755 $1,361,222 Common Equity $ 871,620 $ 836,913 $ 806,155 $ 778,231 $ 709,908 $ 659,135 $ 366,813 Preferred StockSubject to Purchase orSinking Fund Requirements 84,632 117,M2 152,514 156,789 160,604 163,619 109,794 Preferred Stock Nnt Subject to Purchase or Sinking Fund Requirements 26,029 26.029 26,262 26,262 26,262 26,262 26,262 leng-Term Debt, Net 886,993 745,451 785,021 893,950 789,216 8M,844 585,307 TotalCapitalization 51,869,274 $1,725,935 $1,769,952 $1,855,252 $1,685,990 $1,703,860 $1,088,176 Common Shares Outstanding (Year End)(Thousands) 40,296 40,296 40,296 40,296 38,728 36,526 20,359 Ucok Value PerShare of Common Stock O' ear End) $21.63 $20.57 $20.01 $19.31 $18.33 $18.05 $18.02 Other Statistics Electric: Customers O' ear-End) 417,778 406,511 393,810 378,960 366,424 356,709 320,476 Sales tMillion KWil) 14,314 13,704 13,011 12,590 12,063 11,490 11,155 Residential: Awrage annual use per customer (KWFi) 12,988 12.821 11,992 12,061 12,009 11,712 12,146 Averageannual rate perKWii 5.0724 $.0759 $.0774 $.0757 5.0M2 $.0637 S.0412 GeneratingCapability NesMW (Year-End) 3,690 3,890 3,959 3,959 3,359 3,359 2,852 Territorial Peak Demand -Net MW 2,943 2.853 2,703 2,5% 2,700 2,463 2,216 Gas: Customers O' ear-End) 195,338 192,941 191,002 189,M4 187,638 186,320 161,850 Sales (Thousandlherms) 734,145 671,881 M7,215 737,059 671,429 590,257 468,786 Residential: Averageannualuse per customer (therms) 627 M8 524 618 610 570 7M Averageannual rate per therm 5.68 5.68 $.67 5.69 $.65 $.56 $.26 Transit: NumberofCoaches los 117 122 123 112 104 Revenue Passengers Carried (Thousands) 8,668 8,699 9,032 9,658 9,744 10,720 8,971 l l l \\

% m5N$ $ $ hk?b h$ $$$ $ $ b b Y ?$hbhhbbhbb Corporate Ileadquarters Stockholder Inquiries Bond Trustee and Paying Agent Palmetto Center Questionsconcernmgdisidend SCE6G Firstand RefundingMortgage 1426 Main Stmet accounts or related stockholder matters Borufs: Columbia, SC should be directedin writing to the Manufacturers HanoverTrust Telephone:(803)748-3000 Stockholder Records Department (0M) Company at the Company's maihngaddress. Corporate Tmst Department 10th Floor Mailm.g Address 600 Fifth Awnue SCANA Corporation Auditors New York' NY 10020 Columbia, SC 29218 Deloitte Haskins & Sells Certified Public Accountants Investor Communications Common and Preferred Stock Listm.gs 1426 Main Street, Suite 820 Interimreportsprovidin updated he common stock of SCANA Corpora-Columbia, SC 29201 finandalinformationan Company tionislisted and traded on the New news are sent to stockholders following York Stock Exchange. De ticker symbol Recordkeep.mg and Paym.g Agents the close of the first, second and third is SCG.De corporate name SCANA is Common Stock: huarters. AcopyofSCANA's Annual used m newspaperstocklistings. SCANACo ration ne 5% series cumulatim preferred stock Stockholder rds Department (0%) St{rt on Form 10-K(as filed with the tiesand ExchangeComnussion) of SCE&Gisalsolisted and traded on Columbia, SC29218 th? New York Stock Exchange.3 and the Statistical Supplement to the SCE6C PnfenrdStock-1987 Annual Report am aw.slable to fs g bCr p ~ Papa South Carolina NationalBank stockholders and,others without charge SecuritiesTransferSenices Inquinesconcenungactisities of Dividend Payment Dates 101 Greystone Boulevard SCANA Corporationand requestsfor Quarterly dividendsoncommon stock Columbia, SC 29226 publications should be addressed to the are normally able on the first dayof im estor Relations Department (0M) at January, Ap, ulyandOctoberto Trainfe Agents the Company's maihngaddress. C NationalBank Anal 's Contact th rt the pa t date SecuritiesTransfa Senrices H.Jo Winn, HI Dividends on SCE&Gs preferred stock 101Greystone Boulevard Manager-Imtstor Relations are caid quarterly on the same dates as Columbia, SC 29226 Telephone:(803)7483240 thelumnwn stock dividends. Manufacturers HanoverTrust Imestors' Association Company For infonnation about this organiza-Dividend Reimvstment Plan Stock Transfer Department - 8th Floor tion's activities, write to Assodation of SCANA offers a Dividend Reimest-450 West 33rd Street SCANAImestors c/oMr. Paul ment and Stock Puichase Plan toits New York, NY 10001 Quattlebaum, Jr., 63 East Bay Street, common stockholders of reconi. A bro-churt, Authorization Ibnn and retum SCE6GPrefinniStock: Charleston, SC 2%01 emtlope are automatically mailed to all South Carolina NationalBank new stockholders. For further informa. SecuritiesTransferSenices tion or for questions about your rein-101 Greystone Boulevard gg3j,ppggg, wstment account, write to the Stock. Columbia, SC 29226 agem ,mm,7m holder Records Department (OM) at the ne Chase Manhattan Bank, N.A. pudass o( ary svetaxit veers to Ayase&y Company's mailingaddress. StockTransfer De ent .wus. PO. Box 469, Was gton Bridge Station New York, NY 10033

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a I*,lilClllClal Summary Since Santee Ox)per was created in SOURCE 0FINCOME 193 i, a net amount of 52,1 i3.035,0(x) imai ),ur iuc has been invested in its production, - ~. A N transmission, distribution, and general s. e m c-sx7 24:5u 42 os - -- 7 e r-s sin n so 27 sn 'N p ant facilities. These capital additions _ 7_ _--- - - s N %o,, s 32 n zw so 3n ~ 3 -k have been financed through reinvested cr.,s..a s so m m io ia -. L - um s <4 2n as, a sis -- ;- - {,' mnie iwoam of tlectric revenue e. c~ m i 24 m 744 4 iss '~ o., s... c. n.u. s s u2 4s4 1 i2s - - - A4 lx>nds and notes, lease contracts, and a federal grant in-aid of 531,138,(xn cw e m n,,, s a u4 2is ous _ _ _ _ _ - u-o. i ws te ons __ l Santee Q)oper's net earnings lxtfore taxes since the first power was gener- "di" 19'2'"'"I5'37' *'*

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/ - DISTRI8ilTION OFINCOME ._ 'x ments in lieu of taxes have been made imai 3,u, nc 7 i ./ \\ t() t!)e state ()f 5()ull) Car () lina t()laling F,el 6 PM.s is Peeer l'a i 952 CS) 3601s g g gg, ) l g kwe'e.1 1146 4'4 6'c 23 GX Otert+ce & M.e *e wice $ 9' 694 Cs4 98 'es ..---+--- - .n w ir. rw,, -q,_ _. - -. mumcipalities within our service -a i sn 227 r 2 ,m ___-.'v territory totaling 516,653,fo). The re-Ae.***"'tsr4 Of CeOf $ TJ 6(4 4 71 6 11 s ~~ ~7 maining net earnings of 5392,037,000 P., , e n sw i 2 m os o.e __-]_ have been reinvested in the Authority. s~ om..., i iso m e3w Revenue lxinds totaling 3,19i,899,000 have been issued since the creation of Santec Cooper. Series li lx >nds w hit h w cre originally issued in AVERAGE RESIDENTIAL CONSUMP110N & COST 19 i9,1971,1976, and 1981 have been G mmgo es tM\\ll> l}.s advance refunded and defeased. Also, ,ne m .= se ,c u ir me M' ponions of the 1980 Series A,1981 Santee,86 / /. 59/ " " """" " "umammene Series A & C,1982 Series A & 15, 1982 CooI3er.87 /J.19,. ref.unding, and 1985 ref.unding have gg '86 xom been advance refunded and defcased. National a=========================== '87 o m, All ref.unding lx>nds had an outstand-ing balance of S1,399,-13 n,txx) at the time: they were refunded. Principal payments ! Om ide / Mt 7/s /1' x, on all lx)nd issues, including the issues j reftinded, total $83.860,000. Otttstanding 2 00 4 00 e cio e IMMMEMN Sa ntee,86 o me lx)nds as of June 30,1987 totaled l Cooper,87 o s"Jc"""""u 51,998,105,lxx). The average annual i gg interest cost on these lx>nds is 6.7 '86 mc National perc ent. enemmesmemmus '87 ml/c Asof. lune 30,1987, general improve-ment funds amounted to $76,070,719 in addition to debt reserve, debt service, interest, and special funds which totaled 5269,757,000. l l

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/ Corpomte Statistics Fiscal Year 6/30/87 6/30/88 6/30/85 6/30/84 6/30/83 6/30/82 6/30/81 6/30/80 6/30/79 6/30/78 Total Utaty Piantmet includsg nuciear fuel (at year end) (g thousands of dollars) _ 1,727.848 1 745 892 1.773,788 1.779.161 1.670.571 1.467.710 1.205.200 950.628 759.839 577.936 Bonded indebtedness (at year end) (m thousands of donars) 1.998.105 1.938 230 1 919.750 1.788 750 1.796.545 1.735.850 1.261.420 990.100 917.690 810.190 Operatng Revenues On thousands of corfars) Res4 ental 52.433 46 529 41.414 35.572 28 098 27.121 21.949 17.639 15 255 14.585 Ccmmercial 50.998 46.709 39 268 32 665 28 853 28.145 22.452 18 835 16 822 15.530 houstrial 139.207 139 68, 152 %9 132 833 124.015 131.189 99 551 40.417 35.131 26.672 Matary 18.221 18 000 15 649 13 978 12.893 12.487 9.225 6 954 6.567 6.330 Municgal 1.675 1.575 1 254 1.029 955 704 587 546 526 WMesa'e 212.891 198 826 177.906 140 211 126.104 105 994 90 971 65 99) 59 975 54.101 M.scetaneous 4.634 3 463 2.261 1.986 1.716 1.840 1 494 1 364 1.401 1.236 Total 480.059 455 000 430 622 358.699 322 708 307.731 246 346 151.793 135 697 118 980 Operation & Ma,ntenance Engenses Charged to Operatons On thousands of donars) 273 646 260 955 259 233 236 389 218 976 226 320 187.890 109 997 103 928 88.144 Payments n L+ e Taxes Charged to Operatons On thousands of dotarse 2.390 2.176 1 920 1.750 981 565 966 928 726 658 Payments to the State Charged to Remvested Earmngs 0n thousands of oonars) 2.003 1.901 1.700 1.600 1500 1 400 1 300 1.300 1.200 1.201 _c Net Operatng Revenues Avvable for Debt Semce On thousands of donars) 229.564 219.072 195 899 136.186 118.230 94.219 66 503 46.732 35.958 33.750 Remvested Eammgs' (m thousands of ov. ;I 40 290 30.106 45 948 50 515 41.057 53 131 29 40 21 406 10 791 5.516 Debt Serue Coverage f spans on Bonds 1.56 1 47 1 61 1 83 1 69 2 18 1 90 2 41 2 12 2 30 Pnonty Obb;ation & Frpanam Bonds 1 54 1 46 1 59 1 78 1 25 2 07 1 79 2 14 1 88 1 98 Kdonatthour Sa'es On thousands) Resdent al 804.154 720.438 672.865 646 467 559 929 541.522 536.461 472.495 443.186 446.247 Comarctal 892.123 812.520 738.430 688,748 595 724 569 474 549.737 511.726 506.243 489 4S7 Mdustr al 4.716.882 4 557 796 4 501.626 4232.90 3 940 370 4 Gs9.632 3.952.408 1.890.415 1.788.087 1.441,494 UAtan/ 440.978 443 064 405 802 392.309 373.403 350.127 343.258 306.582 316.537 323.763 Mon.cical 28.651 30 500 29.571 25.448 20.236 17.841 17.572 17.506 16.966 16.670 Wesa e 4.729.540 4 214 322 3 878.087 3.798 454 3.422.275 3.351.363 3.470 042 3 099.574 2.681.781 2.843 955 Total 11.612.328 10 778.640 10.226.381 9.784.420 8 911 937 8.879 984 8 869.478 6.298 298 5.952.800 5.561.566 Number of Customers (at year end) Res>dentia! 67,435 63 895 59 755 55 610 50.255 46.310 43 462 40 053 38.058 35.590 Commercial 14.210 13.733 13 553 11.601 10.583 10.129 9.754 9 236 6 859 8.466 indssinal 27 26 26 26 25 25 25 24 21 20 M Ltay 3 3 3 3 3 3 3 3 3 3 Mumcmal 305 372 342 329 300 224 216 212 207 197 Wasa e 3 3 3 3 3 3 3 3 3 3 Tota! 81.983 78 032 73 682 67 572 61.169 56.694 53 463 49 531 47.151 44.279 Res4 ental Statstcs (awerage) K.loaa'thour ConsumptorvCustomer 12.195 t 1591 11.696 12.240 11 708 12.093 12 875 12.151 12 097 13.174 Centsvon a*50ur 6 52 6 46 6 15 5 50 5 02 5 01 4 09 3 73 3 44 3 27 Genera $ng Capab t@ (year end (megana"s) 2.780 ' 759 2.764 2.764 2 265 1 965 1.965 1.736 1.456 1.400 e Poaer Reprements and SWy Alcaa"nours in moons) Generaton-Hydro 519 413 485 628 694 522 414 824 680 702 Steam 9.455 8.472 8.442 7.287 7.840 8.492 8 620 5800 5 343 5.238 Combuston Tee 1 2 18 31 10 6 38 Nuc! eat 1.744 1.871 1 516 1931 494 7ctal 11.718 10.756 10 444 9 848 9 028 9.032 9 065 6 634 6.029 5.978 Purchases Net ide'c*ange. Etc 327 353 227 355 333 380 371 193 429 95 ( Teta! 12.045 11.109 10 671 10 203 9 361 9.412 9.436 6 827 6 458 6 073 Calendar Year 1986 1985 1984 1983 1982 1981 1980 1979 1978 1977 Territonal Feat Loads (meganans) 2.123 2.006 1.824 1.810 1.685 1.754 1.554 1.352 1.231 1.161 hesied ea n.ngs reccee n atow and on pages 43. 4 i. at 42 reeect rewnue avaaatae to mee santee coccers Bond hoerve and Resovon rwrewe t/

l l l l l l Table of Contents l l l l Financial Sumnury. .. i Economic Development. .20 l Corporate 5tatistics. .. ii Flood Control. .22 Comparative liighlights. 3 .N1osquito Abatement. .22 .\\lission. 3 Water Quality.\\lanagement. . 22 Chaimun and President's 1.etter. .4 Aquaculture. . 23 Energy Sales. .6 i forticulture . 23 Dist nbution.. Propeny.\\la nagement. . 23 Energy.\\lanagement. .9 Program for Emplovce Generation and Load Growth. .10 Panicipation.. . 25 Nudcar Power. .10 Ilunun Resources. .25 l System Planning. .10 Occupational.lealth. . 26 Engineering and Construction Training and Development. . 26 .\\lanagement. .I1 Safety . 26 Perfornunce and Environmenta! Corporate Forecasting. Itates, Sen ices. .I1 and Statistics. .27 Generation and Transmission .\\lanagement Information 5ystems.. .28 System. .I1 Treasury. 30 l Production Operations. .12 Schedule of lionds outstanding. 31 Power Generating 5tations. .14 Schedule of Refunded lionds.. . 34 Power Supply .17 Applications of Revenue. .35 i Design Engineering. .18 Financial Statements. 36 General Construction. .18 Auditor's Report. 37 l Transmission Operations. .19 Iloard of Directors, Advisory lloard, Project.\\lanagement. .19 and.\\lanagement. .llack Cover Reliability. .19 Corporate Communications. .19 i ) I 1 n i i

\\ 1 ' Conifxtritit'e caer: Sunrise on South /-[igh[igh/S Camlinat coastal plain. A new day - and new nscam w a .co m directions for Santee w costeem e 8i9so 78000 sm Cooper, South Camlinat AwrageAnma state-owned public power ResdentJ Comumphon - Outwatthoum 12 195 11 591 52,. res0urce. "New / ~ 3,,3,e %,, x.; Directions"is the theme cents pei khm.m,* ' 6.52 6 46 0 93 of this report,ind!Cating %vom5 pssomus s s'. Santee Coopert historic opeup newnue 2 .eossincome... s505 oss 799 9816r 205 4 85 commitments to service I-aoapeani' - ' ~ and stewardship and to an . Expenses mims 787 5326 895138 4 34 expanding mie in helping Gross Expenses s4W 005176 S477 (>G 80g 10 D e he amlc ~?oneoeducions /,318 us, s1800 297 inzf future of the Palmetto cM m be A= red State. Members of Santeo %. Future Rewnue $ 28 920 650 $ MKO %3 3 80 Energy Smes. Coopert management amepvannoursi- 'n 612 rs io 78 w

73 -

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power costs to our three will continue to generate in partnership with the largest industrial custom-the power for the co-ops State Department of Parks, ers. Alumax of South to sen e these industries. Recreation, and Tourism, Carolina. Georgetown This legislation redefined began development of the Steel, and.\\lacalloy the economic develop-Old Santec Canal State Corporation. As a result, ment roles of both Santee Park. Visitors will be able all three firms returned to Cooper and the co-ops to wander through the full production and and marked the beginning natural environment of employment. of a new era of coopera-liiggin Swamp and see a The number of retail tion between Santee section of the historical customers sen ed in-Cooper, Central, and its 15 waterway constructed in creased 5.1 percent to member co-ops. A joint 1796 as the first canal in 81,950 during the fiscal economic development this country connecting year. Energy use by program to incorporate two major river systems. wholesale cum:omers the new legittion, inte-Design of the park is com-increased by 12.2 pucent, grated communications plete, and construction use by retail customers and marketing, and a will begin in the near increased 10.3 percent, shared energy conserva-future. and industrial use grew tion program are the be-New directions, new 3.5 percent. ginnings of a new alliance goals, and continued suc-While load growth was between Santee Cooper cess in service to our cus-responsible for a 6 percent and the cooperatives. tomers, our bondholders, rise in revenues over tast This reatfirms Santee and the people of the state year, electric operating ex-Cooper's commitment to will be the pnmary mis-penses increased only 1 its mission of supporting sion of Santee Cooper dur-percent. And this year's economic development ing the coming year. advance refunding of and job creation efforts in bond issues caused a 54.8 the state. /. million reduction in inter-Also this year, another W4 est charges. This saving new direction for the com-Dwight A. Holder i helped to produce rein-pany was established with g,gf,.,,iair ytl>e mm/ vested camings of 510.3 the passage oflegislation million on gross revenues authorizing Santee Cooper of 5505.3 million. to enter the w holesale wa-g/ d d.7/ M Although legislation ter supply business, selling W liiam C. Mewher was passed this year potable water from the President and whit h resuiued our right lake system to entities in U " O " "'" 4 CCF to serve new industrial five counties. customers locating in For the recreational areas assigned to Central's benefit of the people of electric cooperatives, we our state, Santee Cooper, 5

M The average cost per previous year. The ENERGY SALES kilowarthour for Santee average cost of power to O>oper residential custom-industrial customers was At the end of the fiscal ers was 6.52 cents,.9 2.95 cents per kilowatt-y ear, Santee Cooper was percent higher than the hour,3.9 percent less than serving 81,950 residenti l, previous year, but 12 the previous year and 37 commercial, and other percent lower than the percent lower than the retail customers located national average. national average. A signifi-in lierkeley, llorry, and The average cost of cant portion of this de-Georgetow n counties. power for Santee O>oper crease resulted from the This was an increase of commercial customers was temporary r,ite relief 3,950 or 5.1 percent over 5.72 cents per kilowatt-provided to Santee the presious year. Of this hour, down.5 percent Cooper's three 1.irgest increase, 3.5 iO w cre from 1986 and 20 percent industrial customers, all residential and ilO wcre low.T than the national suffering f rom a deptessed commercial. This com-average. metals market. pares with grow th in 1986 ladustrial sales were Sales to U S. Air l'orce i of 1,1 to residential and a.717 gigawarthours, up bases at Cha.iston and 210 commercial. 3.5 percent over the Sales to these retail customers w cre 1.725 gigawanhours, up 10.3 ENERGY SALES [x*rcent over the previous j,. j ). j g year. This compares to last year's growth in Industrial 4,716.882 40 62% - - [_ -_N energy sales of 8.5 per-Commercial rJ92.123 7.68 % f ~'wd cen(, Residential 804.154 6 92% 'lhe average annual Siihtary 440.978 3 80% a:#' ~ consumption of electricity Stunicipals 28.651 0.25% hy Santee Ow)per resi-Wholesale 4.729.540 40.73 % { dential customera in-creased to 12,195 kilo-watthours,5.2 percent more than the previous IU "'I k "' l

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year and 31.5 lx rt ent Industrial 4.557.796 42 29% / greater than the national Commercial 812.520 7 54 % / average. Residential 720,438 6 68 % ~Db _ ~7 5filitary 443.064 4.11% .F p hlunkipals 30.500 0 28 % y { Wholesale 4.214,322 39 10 % I l b

Alyrtle Beach and to the last year's total of 78,000, located in Alyrtle lleach. Charleston Naval Station for an increase of 5.1 per-To improve the system, decreased.5 percent from cent. Energy sales for the gather planning data, and +o gigawaahours to 441 year totaled 1,725 gigawatt-increase customer service gigawatthours. hours with revenue of reliability in the division, a Sales through Central 5105,106,599. distribution Supervisory Eledric Power Cmpera-The llorry-Georgetown Control and Data Acquisi-tive, Inc. to its 15 member Division serves the Grand lion (SCADA) system was co-ops increased 12.5 Strand resort area, a top purchased. A master work-percent to 4,589 gigawatt-vacation spot, which station and 9 remote termi-hours. Central is 5antee boasts more than 13 mil-nal units were received for Cooper's largest single lion visitors annually, over the SCADA system, which customer. The electric 50AW) guest rooms, more will monitor and control cooperatives distribute developed campsites than distribution and transmis-power to more than any other area, 40 cham-sion substations. 300,000 customers in.$5 pionship golf courses, and The distribution map-counties of the state. 20 additional courses to be ping system completed the Sales to the munici-wmpleted within five computer-based digitized palities of flamberg and years. mapping of 13 substations Georgetown increased This division provided and their feeders for in-

' percent.

new service to 1,633 single < reased economic load family homes,2,206 con-flow and more efficient dominium units,1,193 delivery of service. c.,_ DISTRIBUTION townhouse and apartment A new 4,125 square units, five mobile home foot retail office, located in Santee Cooper pro-subdivisions, five hotels, North Alyttle lleach, was vided distribution and re-four shopping centers, and completed. The facility in-tail services to 81,950 cus-212 other commercial cus-cludes customer services tomers in the counties of tomers. Service was also and offices for engineers Berkeley, liony, and completed to a new sur-and energy management Georgetown, compared to face water treatment plant representatives. In the llerkeley District. underground service was provided to an apartment FUEL. GENERATING COST /KWH complex, a fast-food (Cents / A W11) fY 87 restaurant, a new mini-summe matimummmmus mall, and a small shopping cml ime MWM' center. Oil. Noere> aummme NudeJr.... U Ss'( i 7

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Joe C. Nom 1an PowerCompanies Will be programs began, approxi-among the lastindustries ENERGY mately $1 miUion has been MANAGEMENT loaned. In this Country to be i Approximately 80 1 Challenged by the "Worid The Grxxi Cents schmals and 50,000 00000my." It haS already Program, a national plan students and teachers in sh0Wnitsimpactin subtle f r energy-efficient, au-Hony, Geget w n. and electric residences, was lierkeley counties were Ways.Th0se Of uS in the introduced to new home supplied with audio / visual business Who help our buyers. Energy.\\lanage-and printed energy educa. CuSt0merS beC0me more ment presented the pro-tion materials. To promote

^

" NI " " " " " " " "" energy-effiClent Will be I velopers, contractors, en-company s educational the leadersin theindustlY gineers, and architects and resources, teacher confer-in the neXt decade. worked with them on re-ences were held in all Customer sensitivity, pm. quima cmwiruction stan-thme counties. dards. Construction of Santee Cooper and l ductivity, and efficiency housmg units using Go(x! k> cal electric cooperatives ) must be the foltes that Cents guidelines began in co-sponsored a NEED (Na-drive us, and Santee Green Park, a condomin-tional Energy Education ' "

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f""f "#F} "" #"I " *I"*""" Co0 peris alfBady m0Ving f a patio home community, that featured energy-I0rWard With prDgramS both k>cated in Slynle I related activities. like the "Good Cents" neach. Energy slanagement ) energy-effiClent home. To pn>nmte energy-coordinated educational efficient mobile homes, seminars on cost efficiency Santee Cooper adopted a for heat pump contractors, l N rigid Good Cents Alobile architects, builders, ) iiw Imiderit. Ilome Program, developers, realtors, com mercial ojemtir"is Good Cents low-inter-financial institutions, civic est residential loans for groups, and company ) energy-efficient home employees. improvements were Santee Cooper re-5326,467.68, including ceived the American 5251,1%.69 for installation Public Power Association of new elettric heat (APPA) Energy Innovator pumps. Twenty-six fossil Awards for an APPA-fuel and 46 electric resis-funded Demonstration of tance heating systems Energy Efficient Develop-were converted to heat ments project. The project pumps. Since Santee uses a computer program Cooper's low interest loan to analyze data from resi-9 n

I 1 dential multi-channel, 6 For FY 87, the Summer solid-state meters for rate NUCLEAR POWER Nuclear Station generated design and marketing over 1.7 billion kilowatt-research. The Virgil C. Summer hours of eledricity for San. Energy audits were Nuclear Station, an 885-tee Cooper customers, or provided for more than megawatt nuclear plant approximately 15 percent 450 residential customers jointly owned with South of the company's and 85 commercial cus-Carolina Electric & Gas electricity sales. tomers. Company, achieved a ca-load calculations and pacity factor of over 92 SYSTEM PLANNIPE tnermal design analyses percent in calendar year for sizing electric heating 1986, making it one of the As part of System and cooling systems were top nuclear perfonners in Planning's growth, training provided for more than the l'nited States. Santee and technical instmetion 480 residential customers Cooper owns one-third of manuals were written and and 68 commercial this nuclear unit. a PEP committee was or-customers In 51 arch, the plant un-ganized to ensure contin-m derwent its third refueling ued coordination between GENERATIONAND outage. In FY 87, until this System Planning and

i. DAD GROWTH scheduled outage, the Power Supply Planning.

Santee L.ooper facih.- plant achieved an avail-Improving system relia-ties, mcluding one-third ability of 9K4 percent and bility, planning activities ( a capacity factor of 93 were completed on a new ownersh.ip of the \\,.C. percent. three-way m, terconnection Summer Nuclear Station, The 1987 refueling out-between Santee Cooper, generated 11,718A36 net age was one of the most Savannah Electric and megawanhours of electric-extensive yet undertaken Power Company, and ity this year, an increase of by the Summer Nuclear Georgia Power Company, i 8.9 percent over last year. / Station. In addition to the including a 500-230 kV \\ Of the total power gen-actual refueling. the out-West Alcintosh Station and crated,80.7 percent was produced using coal,14.9 age allowed for many a new 230 kV power hne i modifications and from the Illuffton-flilton percent by nuclear, and extensive maintenance IIcad area to AlcIntosh. I 4.4 percent by hydroelec. l work. Inspections and pre. Two major new substa-tric. The percentage of nu-i ventive measures were tions were planned foi the ( clear power generation also taken on the unit's florry-Georgetown area-decreased because of the three steam generators to Red Illuff 230 kV Station in three-month outage for ensure a greater effective llorry County and Camp-reloading fuel. Peak lifetime. The next refuel-field 230 kV Station in hourly demand for the { ing outage is scheduled Georgetown County. year matched that re-for the fall of 1988. corded last year - 2,123 megawatthours. 10 4

6 tion fire detection system Also, a new supervisory ENGINEERING AND modifications, permanent system was installed to en-CONSTRUCTION turbine building east wall, able control room person-MANAGEMENT and yard equipment nel to remotely operate At Cross Station, the building. auxiliary equipment, in-boiler supplier modified linit No. 4 atJefferies cluding two Santee River the boiler to meet the con-Station was modernized pumping stations, the tractual guarantee for effi-by equipping the two holding pond pumping ciency. Arbitration pro-1,500 horsepower induced station, and the cooling ceedings with the flue gas draft fan motors with vari-tower fans and equipment. desulfurization system able speed drive (VSD) The State General As-supplier ended, and a set-units to resolve a fan vi-sembly passed legislation tiement of $4.78 million bration problem and lower authorizing Santee Cooper was received. This money electric power consump-to enter the wholesale wa-is being used to install tion. Ilased on the success ter supply business and necessary equipment im-of this project and poten-sell potable water from the provements for satisfac-tial power savings, motors lake system to entities in tory performance. at other stations will be llerke'ey, Charleston, Also at Cross, several equipped with V5D's. Dorchester, Orangeburg, improvement projects At Winyah Station, the and Clarendon counties. were completed, including boiler manufacturer in-Following the 1986 pre-electronic as-received stalled a radiant reheater liminary feasibility study, a coalscale, coal pulveriza-section to improve boiler more detailed engineering perfomiance of linit No. 2. study and cost estimate was completed in June for developing water rates for use in negotiations with potential wholes.de cus-tomers. PERFORMANCEAND ENVIRONMENTAL SERVICES tie ach The Performance Group conducted themlo-dynamic tests on eight l GENERATION AND coal-fired generating units, TRANSMISSION SYSTEM turbine enthalpy tests on c l arleston three units, load control tests on two units, and various station comp,nent on Head tests on equipment such land 11 1 L

R0bert V. Tanner as ccx) ling towers and gations, and Spill Preven-lDCreaSed efficiency, boilers. The test results are tion Control and Counter-inn 0Vation, and reS0urce used to document heat measure plans. devel0pment are the r0ad rates, improve unit effi-ciency, predict unit main. Signs marking the new tenance requirements, de. PRODUCTION directions for Santee OPERATIONS termine which units are I C00 pert Production the most economical to During this fiscal year, Department. Improved ) operate, and calculate pre-the average unit availability cise costs for generating of Santee Cooper's gener-heat rates, m0re efficient j electricity. ating stations was much USe Of Station power, and j Environmental Services higher than the national m0dification Of Our provided technical assis-average. Winyah Station's l tance to the generating Una No. I led with 89.1 generating equipmentWill stations and other divi-percent availability, 5. 60 help US impr0Ve perior-sions of Santec Cooper on percent better than the pa^ Inance and SaVe milli 00S regularians for hazardous tional average. Of d0llars. Devel00 ment Of and non hazardous waste, %..myah Station also i acid rain, surface water, won the Pn> duction Op-a regi0nalWater treatment ] ground water, under-erations Goals Program facility Will help Our five-i ground storage tanks. annual award, with an im-County area meetits community right to-know, proved heat rate 3.75 per-needS forWaterWell1010 air quality, and PClis, as-cent over the previous suring compliance with year. Greater plant effi-the neXt Century. state and federal environ-ciency saved $3.400,000 in mental regulations. fuel costs. Grainger Station To manage the activi-set a safety record report-g l ^ ties required by these en-ing no accidents for the [, h vironmental regulations, year. , p g,y several programs were Jefferies StationN Unit /w/uaion i begun, such as a PCil No.1 Santee Cooper's old-management plan, liest est steam unit, which dates $1anagement Practices from 1953, had a major plans, Waste Oil incinera-planned steam generator tion, Solvent and Paint outage to replace the Waste Hecycling, Solid and superheater tubes and liatardous Waste Tracking keep it ready for any re-plan, Underground Stor-quired operation. age Tank program, Permit Annual inspections Tracking system, Ground w cre performed on all Water Alonitoring pro-units to prepare them to gram, liiomonitonng and meet the summer load re-Alacrointertebrate investi-quirements. l 12 l

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Poit>e1-Ge>ieiating Stations M M M ^ Jefferies Hydro Santee Spillway Jefferies Steam Generating Station Generating Unit Generating Station s, locaron. Pinopoks. SC L ocaton Pinevde. SC Locahon Pino$xWs. SC 4 Fuel Type H foeiectnc fuel Type Hydroe'ectnc Fuel Type n_-. Generanng Camraty Generating CapaMW h #:Oi _ _y [ 128 megawatts 2 megawatts NO Y 0*"*?* f f h[*[,$ { Constructen Cost Construct'on Cost \\ $ 58 6 rndion i $458 per 6 w $ 04 meon 3 }) Began Comnwc at Operaten 1942 Began Comnwaa1Creraten 1950 ia (,,,,,uc,o, (,,, FY I967 Generaten FY t 987 Generaten Un:ts t & 2 $ 15 7 muon 1 198 rnithon kwh iO 1 m e on keh $171 per kw r Un s &S y-l FuelConsumpton FY I987. none FuelConsumpton FY I987 nort y$ 54 8 mahon ! FvelCost FY 1987 none fuel Cost F Y 1987. none l Began Comme pat eat n-y Nnoranon co:Jper Anh none Generaton costpor Anh none Unds 1 & 2 1954 Pnnem * *Nrer Jetier es Hydro P"nce?/ Feature 8 Hrdro un't *Th Units 3 & 4 1970 8 has four tuone prators which smart tu t>ne generator was instared FY 1987 Gerwaton, r were intt'ai units for tna Santee Coo. to generate lower using the requ. red Umts 1 & 2 - none fl a per Hydro E ecinc anc Navgation discharge of 515 c's into Santee Units 3 & 4 13 bAon kwh I System in 1642. Powerhouse is no. River Unit is operated remotely from

l ca'ed at base of Lake Mourtrie, w*th Je*tenes Steam Generating Staton

'*# C0"3"'"P'*" ' I Y '987-water level 75 feet above Tail Race Sp**c./ 's used in utity's Mood con Units 1 & 2 none l

U" 3 8 d ' Canal Sing'e hft lock provces boat trolprcyram to re; eases of aver passage betwoon Cooper R ver and down Santeo R ver b4 7 M0 '0"' 0' CO*' g SaNeo Cooper lakes Water source FuelCost - F Y f 937 is cumulation of nvers and streams Units 1 & 2 $519 74 dra ning 15.000 square mae Santee Units 3 & 4 $ 24 978 517 04 River Baon Watershed. wh.cn es. /. gg,, tends througr) the central and upper pg 3 g 7, y part of the state into western North COmbusllon Turbines Carohna un,ts 3 & 4. i 985 cenis s . 4 - e Locaton Haon Head Island. SC Pnnegu/ Features Jeffenes Steam - d i Fvet Type Od Un4ts 1 and 2 are al fired turt>ne T q. 9*"*'^''""""******'**' - ' * 'g I ~

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Generating SIation Uni 2 20 mega. cts j Le.aton' Con *an SC U"'t 3 57 rnNawaas standby bavs and for peak k>ad gen-3 - p y* 9 ,,aten Units 3 and 4 were initiaay E: Fuel Type Coai Construcron Cost od feed and later converted to coal to Unit 1 $ 2 7 meon i tue advantage of the more eco. GenerJPng CapatMty g93$perkg nom,c fvyt e Un<ts 1 & 2 170 megaratts Un<t 2 - $ 2 2 maon / Cort *truct>on, ost $110 por kn j s 29 7 eocn / $172 per k* Un.13 $ 9 8 m&on / Began Commerc<a/ Opercen 1966 e lk a1 Comnwc,a!Qwaren Q py yyg 334 5 mAon kah l fuelConsunvcon FY rps? Un.13 19 79 139 572 tons of coat FY 1937 Generaton 164 000 ke Fuel Cost F Y 1987 $5 624.762 54 ( ,ng,,, p y 9g, Generanon cost per h a h 12I.173 garv>s FuelCost FY 1937 $109 007 24 Pnnc<m' fea!vres Gra nger Steam 9,ng,,,, (g Gentwat'ng Staten was cons!'ucted f.Fa 468 cents by and is owned by Centra! [ W;t < Po*er Cooperat ve inc *1n funds PDAC'N/ Features Hlton Head recewyed tniough a Rarai t w, Aca Comtut on Tvt>nes me's added to f4n Admitbatraton hoaq Ihe plan is system to assist in meet.ng grow <ry opera'ed and ma nta acd by Samee pean load demand part=cularty on Cooper. wh<h is man'ng pa ments m0't 50uth*m *ad O' Santr'a r on the long term RE A loan When the Cooper s Pansm,$90n system Unis loan is pM! o't SaNee Cooper

H a'so Prov4e 97 mega Acts of backup ma nta.n ownersNp of the staton eme'gr+ncy gene aton for the bamer WJN! resor1 comrn nJy,f it should u

be cut o9 t'om t's ma n;arvj power supp'y by a hurf<ane or otNr seve's weat%r Ii / n 1

l 6 i Winyah Steam Myrtle Beach Cross Steam p Generating Station Combustion Turbines Generating Station Locaten-Georgetown. SC Locaten: Mytte Beach, SC Locaten: Cross, SC fue' Type: Coat Fuel Type: Od Fuel T;pe-Craf Gene ateg Capabaty: Units 1,2,3. Generatmg CapaMty: Generabng CapaMty: & 4 270 megawa'ts each Units 1 & 2 20 megawa s 520 megawatts Constructen Cost-U*'t* 3 S * ' "O **9 * * *"' Constructon Cost: i) nit 1 $ E2 4 mAon / Unit 5 30 megawa'ts 5 W 3 WW / $ 699 w w $231 per kw Constrxton Cost: Began CommercalOpeaton.1984 Unit 2 $ 73 2 mAon / Units 1 & 2 $ 2 9 mdhorv l $271 per kw $145 per kw FY f 987 Generation: 3.1 t>Gon k A Unit 3 $ 118 0 moon / Un ts 3 & 4 $ 4 5 muon Fuel Consumption FY 1987. $437 per kw $113 per k* 1.mm tes of coal Un414 $ 110.7 rnihon / Un<t 5 $ 2 7 meory g, $410 per kn $90 per kn FuelCost FY f 967:$59.364.908 69 Began commercal Operation: Began commercat Cperation: Generaton cost pers ah: Unit 1 1975 Units 1 & 2 1962 1.903 cents 5 976 has the largest sing!e unit in Santee 4 FY f 967 Generaten none C<nper's generating system. H is FY 1987 Generatco: located between Lakes Manon and Fuct o sumpton W 1967 Movitne. A unque feature is the ad-Unit 1 16 boon kwh 18.311 ga%ns of od n,ng Aquaculture Center with a Umt 2 931.9 moon kwh Unat 3 692 5 r%on kwh FuelCost FY 1987. $13 941.71 two-and-one-had acre greenhouse Unit 4 1.5 bson kwh g,,,,,,cn costper k wh none we operates,mg real heat Vom te staMn s coo g cycle. FuelConsumpton FY f 987 "'? YY7 Umt 1 - 606.076 tons of coal

1. I"'#8 I

M! coms* Wu wem maw to . g "T', Un<t 2 402.107 tons of coal w met ma % peak de. unit 3 288.170 tons of coa, ~- on a?o"ng St. Stephen Hydro Unit 4 609 398 tons of coal rn p FuelCost FY 1987: Grand Strand resort area Units a'e Generating Statlon Unit 1 $28.128.956 88 present'y used for peak bad genera-Locason: St. Stephen. SC Unit 2 - $ 4498.36139 tion. Unit 3 - $13.368.274 26 Fuel Type: Hydroelectnc Unit 4 - $28.052.944 66 Generatmp CapaMtp:84 megawa'ts t Generaten cost per k wh A ^ Constracten Cost $ 63.7 moon i una s 1.795 cents Summer Nuclear $ 750 per kw Unit 2 - 1865 cents Un413 - 1930 cents Genepting Station Bega, Commec,alOperaton:1985 Unit 4 1877 cents locahon: Jenkansene. SC FY f 937Generaten: ) Pnnopa/ Features W<nyah is Santee fuel Type Nsciear 310.7 moon kah i Cooper s largest generating station. Generating CapaMy FuelConsumpton FY 1987. none OYE 295 wa'ts(11of 885 FuelCost FY f 987.NA j e - e n eg ? I ns ng constructen costs. and f astest Generaton costper Awh:NA g o*rj penod of remand and ewgy Constructen Cost. greath in compary's htstory $336 0 mAon i $1.120 per kw PnncpalFeatures St. Stecreq Power Plant was consbed and is B^7an Commeroa/ Operate 1983 ma,ntained by the V $. Army Corps FY 1987 Generaten; of Eng-neert 7s pet of the Coccer 17 t>Lon kwh Haer Rwwpon protect.11 is oper-WY FuelCost FY f 987-from ee ene gy control center in $10.023 000 Moncks Corner. The Rednerson Generat:on cost per k wh:.57$ ents Pro,ect nas desgn6J to reduce the

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l Robert E. Rainear "Quality is Job One"is ginia Power Company-to POWER SUPPLY exchange current system } the Fbrd borrowed infonnauon emy hour. In-I Commitment that best The Supervisory Con. fonnation exchanged on desC.ibesthe direction of trol and Data Acquisition this VACAR NET System f lowered Costs and (SCADA) system, used to includes energy for sale or ""*" 'lY 8"d*r i"fo"" P"*h" Pri 4""t'* improved service sought tien from and operate sub-transactions in progress, by Engineering and stations and generating generating unit status, and Operations. Computer-stations, was expanded to computer-recommended f aided standards and include on-line load now transactions. studimo pmdict dw ef. Sanwe Coope enwwd des gns, innovative and h fect of planned switching into a contractual agree- ) Cost-Cutting ConstNClion operations. ment for energy sales to techniques, improved A computerized lake Florida Power & Light l maintenance pmCedures, ruanagenwnt program C(unpany. The first transac-l 'vas introduced to help tion took place during a i and Computerized power make lake management seven day period in stay, contml and dispatching decisions. with a maximum hourly meth0ds will help us weather conditions are demand or 300 stw and a ldt'd dir'l '" 'rans-total energy transfer of Y accomplish these goals. former and transmission 50,400 megawatthours for j Thmugh employee partiCl-line capabilities and lake 941 >0a petion, We Will Continue to conditions. Therefore, as System Control pur-identify the areas where part of the SCADA system, chased 111,143 megawatt-C0sts Can most effectively tor wind speed, w ind di. interconnected utilities in be lowered. rection, temperature, and n17 to displace higher-rainfall were installed at cost generation for a sav-various subcations. ings of $3 43.000. Also, g gg A separate computer 229,260 megawatthours of ized system became op-power were sold to the in-th e en % / cia. / ngmcenriq a ojerario,n crational, allowing. < stem terconnected utilities for a control personnel at a!! total of 54.705,000 VACAR companies-- 5an. A PEP committee was tee Cooper, Carolina organized to include l Power & 1.ight Company, Power Supply Planning. l South Carolina Electric & l l Gas Company, Duke l Power Company, and Vir-l l t i7

M width through the use of Federal funding was DESIGN an existing right-of-way obtained to correct seismic 5 ENGINEERIE met aesthetic and environ-load deficiencies in the Design Engineenng mental requirements of West Pinopolis and Nonh completed key projetts routing the line along U.S. Santee Dams. important to system relia-liighway 17 As an alternative to re-bility. Design work was in addition, on April 1, building the Nonh Santee completed on the a 69 kV transmission line Dam and Spillway, a Com-Illuffton-Atcintosh project, tap, approximately 10 prehensive Emergency Ac-a major tie with Georgia miles long, was energized tion Plan for Dam Failure Power Company and to serve Union Carbide's was tested in February. Savannah Electric and Kershaw County plant. State and county emer-Power Company. The The entire project was gency preparedness agen-project includes a 500-230 completed in 15 months, cies panicipated with San-kV substation in Georgia meeting tight schedule tee Cooper, and officials and a 25-mile 230 kV requirements, from the FERC observed transmiwion line. % ithin Also. survey work was the exercise, fise years Santee Cooper completed on the Santee The emergency plan will realize a 51 i million Cooper Project lioundary included installation of a sasings in construction as required by the Federal 15-siren waming system, co.ts when the 51cintosh Energy Regulatory extending 25 miles down-substation is sold to Geor-Commission (FERC) for stream of the Santee Dam gia Power Company. This relicensing in the Santee River Fk>od project required routing a liasin. In addition, tailwater 230 kV bundled conductor M monitoring devices at the transmission line through GENERAL Nonh Santee Dam w ere dense swamps, over a ma. CONSTRUCTION installed to alen residents jor riser, and acrow state Santee Cooper's 42 and Santee Cooper's lines. Construction (on-miles of dams and dikes Energy Control Center in tracts w cre awarded to and it< % mile-long navi. the i vent of a dam failure. meet an energization date gation channel were main-Residents in the Good plain of,lanuary 1,19M tainal by work forces in received tone alert radios Also, route selection General Construction who to be activated by the Na-was completed on the removed floatage and re-tional Weather Sers ce in Campfield Pawleys Island paired the structures, chan-an emergency. All ems c-115 kV line. This project nel markers, and buoys. gency systems were in-also had unusual design The Federal Energv Regu-stalled in less than six features, including a gas-latory Commission (FERC) months, and the test was i filled, pipe-type subma-reponed that the project is judged a success. The ac-rine cable routed under in excellent condition for ceptance of this alternative, t he Int racoastal Waterway. normal static loads and is over rebuilding the Nonh Use oflong span design w cil-nuintained. Santee Dam, w ill ensure and reduced right-of-way long-tenu savings esti-m

l mated lx tween $500 mil-South Carolina Electric & I lion and $1 billion. PROJECT Gas Company at liushy General Construction MANAGEMENT Park, North Charleston, St. also provide (t Paring. The Project 51anage-George, Stateeba, Colum-grading, site p, aration, ment division of Engineer-bia, and the Summer Nu-foundation and carpentry ing and Operations pro-clear Station; with South-work, and maintained roads vided project engineering, eastern Power Administra-and drainages for Santee budget control, construe. tion, Duke Power Com-Cooper's 52 subdivisions. tion management, and ma-pany, and the Southern terial coordination for % Company at Clark Hill; and projects in the 10-year con-with Carolina Power & TRANSMISSION struction budget. These Light Company at Darling-OPERATIONS projects, totaling over 5210 ton, IIemingway, K.ings-51 ore than 11 billion million, involve new con-tree, Lugoff, and Robinson, kilowatthours of electricity struction and upgrading of were delivered to about system substations and 382h00 customers either transmission lines. CORPORATE COMMUNICATIONS I du.cctly or m. directly Slajor projects in which through Santee Cooper's Project 51anagement Santee Cooper received transmission system. This shared responsibility were national recognition for its consists of 3,372 miles of service to the Union Car-1986 Annual Report in the line and 58 substations and bide air reduction plant in form of the Walter C. 51a-switching stations with Camden, the 51cintosh tie son Award presented by voltages ranging from with Georgia Pow er Com-the American Society of l 34,000 to 230,000 volts. pany and Savannah Elec-Personnel Administration. 1 Power was supplied to tric and Power Company, it was presented for the about 82,000 retail cus-and the 115 kV transmis-most outstanding por-tomers, two municipalities, sion line from Campfield to trayal of human relations three military installations, Pawleys Island. values in an annual re-27 large industrial cus-port " The report was also } tomers, and about 300,000 judged first place in an-RELIABluTY customers served by 15 of nual competitions spon-the state's 20 electric coop-To improve system re-sored by the American cratives through 221 deliv-liability, Santee Cooper Public Power Association i [ ery points. maintains interconnections and the Advertising Fed-l Recent transmission sys-with other electric uilities, eration of Charleston. 7 tem additions include nine including the Southeastern Electronic communica-new cooperative delivery Power Administration and tion between employees points and eight tap lines. the Southern Company at was introduced with The 69 kV line supplying the R.ll. Russell Dam; with power to the new Union Carbide air reduction plant was energized April 1. 19 I

W. Andrew Burke NEW5LINE, an on line Cooper's service territory. A m0re pr0ductive l new s service w hich The first of these, the At-approach to eC000ml0 de-piovides updated infonna-lantic Gateway llusiness & Vel 0pmentwill result from tion to more than 100 em-Indu try Park, located in ployees with computer Conway, was developed a new alliance Of C00pera- ] tenninals. jointly with llorry County tion between Santee l "An invitation to Char-and ready for announce-Cooper and Central leston7 a multi image pro-ment at the end of the 6s-duc tion, was pnxluced by cal year. An agreement Electric P0wer C00pera-Corporate Communica-was also received from the tiVe and itS 15-member I tions for the Convention first industrial firm com-CO-ops. Our eff0rt will be and Visitors llureau of the mitted to locate on part of more eff0Clive in helping Charleston Trident Cham-the 272-acre site. ber of Commerte. As a Additional market re. Creale j0bS and Stimu-result. the Chamber pre-search and targeted adver-lating 80000mic grDWth, sented Santee Cooper with lising were established as b0th in the areas Served the Golden Pineapple major features of the new Award for outstanding marketing program. by Santee COOperand the suppon of tourism in June, Governor electric C00peratiVBS and Campbell signed into law thr0 ugh 0ut S0uth M llill S (66, w hic h limited ECONOMIC Santee Cooper's ability to DEVEl.0PMENT sen e new industrial cus-As part of a corporate tomers to the areas of as-t hange of functions, the signed service terntory in hgM I:conomic Development flerkeley, Ilorry, and t 'lt d l'n %lelli. Division was renamed the Georgetown Counties. g,, pen,,y, .\\larketing Dis ision. In-Suppon of statewide crea,ed priority was di-industrial growth was pro-rected to industrial reten-vided through participa-tion and expansion. tion in the south Carohna A new program was Coordinating Council for begun for the des clop-1:conomic Development, ment and management of 1:fforts w cre expanded to ) a eries ofindustrial parks work with and support the located within santee electne cooperatives in 35 of the state's M counties.

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in the mosquito control '~ FLOOD CONITiOL program, nmre than WATER QUAUTY Spilling was required 10.Mm acres ofland and MANAGEMENT for a total of M days dur. water were treated. Lop. The 50 water quality ing Marc h, with an pice clearing and ditc h monitoring stations lo-average spill of 26.639 cu. nuintenance, draining, cated throughout the lake bic feet per second (cfs)' and filling were conducted system w ere sampled on a This was pa,t of Santee on nu>re than 100 acres to regular basis. Stations C,ooper's flood control reduce breeding sites. liio. were monitored monthly program to nuintain logical control with the for physical, chemical, and 1 proper elevations of the mosquito fish, cianibusia i biological conditions, and lakes and to reduc e flood. <tjutts, and the lu(terial 18,050 analyses were con-s ing of the low er Santee spore suspension of /facil-ducted during the year in

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{ used m. all suitable areas. f M0SQUITO ABATEMENT PEAK OEMAND (MW) cd,dr hia , yore tgun g.g) w ,w iw no m vi c meg entomological ins lw iions '77 g _ _ were conducted in the '78 Q fis e-county area around '79 $__ the Santee Cooper lakes to '80 collect data for mosquito '81

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Two surface water agints, were harvested subdivisions, commercial drainages flowing to Lake and supplied to the Alos-lots, gratis leases to public Starion from the GSX Haz-quito Abatement Section and quasi-public agencies, ardous Material Land Dis-for mosquito larvae con-and various miscellaneous posal l'acility near Pine-trol throughout the Santee leases for public recrea-wood, S C. were also Cooper system. tional facilities. Revenues sampled as pan of an on-Generic research to collected from these leases going study. A tracer dye produce triploid grass carp totaled $623,316 during study was conducted in fish for biological aquatic last year. Propeny Alan-Lake Atarion adjacent to plant management contin-agement personnel pro-the GSX site to document ued throughout the year. vided routine maintenance water flow patterns, travel The triploid were and repairs for 17 public times, and dilution rates of spawned using hydrostatic boat launching ramps and contaminants which may pressure chamber shock parking areas under lease enter 1.ake Atarion from of fertilized eggs. to the South Carolina the GSX facility. Wilditfe and Atarine Re-Aquatic plant control sources Depanment. was conducted on 3,750 HORTICULTURE santee Cooper, coordi-6 acres of noxious aquatic A tile drainage system nating with the S. C. De-vegetation. EPA-approved was installed underneath partment of Parks, Recrea-herbicides were applied the greenhouse growing tion & Tourism, began by helicopter, airboat, and beds for irnproved drain-work on the Old Santee truck-mount spray units. age and production. The Canal State Park.This 220-Of the $562.500 program greenhouse roofs were acre historic and environ-cost, $505,250 was funded covered with four-mil mental park is located by the S. C. Aquatic Plant double poly material to near Santee Ccx>per's L 51anagement Council and replace worn and wind-headquaners, adjacent to the U. S. Army Corps of damaged roofs. Stony lamding Plantation Engineers. Revenue from horticul-in tierkeley County. The ture for the year totaled site includes the lower l AQUACULTURE $53,464. ponion of the Santee Ca-l nal, the first major over-About 450,000 77/apia m land construction of its t PROPERTY fish were cultured at San. tee Cooper's aquaculture ggg kind in the United States. The park is projected to be hatchery at Winyah Station The Property Atanage-completed and open in in Georgetown. Most were ment Division adminis-g g 39g3_ y stocked in the Winyah Sta-tered approximately 4.250 A total of 18,899 acres tion cooling reservoir for leases around the 152,688-of prime wildlife and wa-g weed control mainte-acre Santee Cooper lakes. terfowl habitat were ) nance. More than 250,000 These include recreational leased to the S. C. Wildlife { mosquito fish, Gambusia lots in Santee Cooper sub-and Marine Resources De-divisions, marginal lots ad-partment on a gratis basis jacent to privately-owned l 1

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F. Eugene Williams W0fidng m0re Cl0sclywith for use as pan of the implement, with annual Our elected and 90vern. state's Wildlife Manage-costs of $320.39 and an-ment Program. Reforesta-nual savings of $8,021.18. mentalOfficials at all tion programs resulted m. This mcludes eight of the levels will help us sig-815.000 genetically im-total 10 projects com-nificantlyimpr0Ve the proved pine seedlings pleted for IT 87 and rep-hei"8 P "*"d " I'1%

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l quality and dimensions Of acres of Santee Cooper back period of 23 months. sefVice10 Dur Cusl0mers, lands. Approximately PEP established em-the Communities Where 4,100 acres of fowst were playee introductory train-contn>l-burned to reduce ing courses. Introduction we serve, and the people wildfire hazards, improve to Employee involvement, Of S0uth Carolina. As a aesthetics and wildlife Introduction to Problem Vital BC000mic and energy habitat, and control unde-Solving, and introduction resource belonging t0 the sirable species. one to Panicipative Manage-pe0ple Of this state, Our h""d*d AftY '"il"' I R*~ "*"* " "P ""'"d li""i"8 h breaks were constructed and communication skills, mdimp0M Commil-or maintained around team building, group I mentis 10 respond m0re young pine plantations to problem solving, leader-4 effBCliVely10 their needs, protect them from wild-ship style, and effective 1 fires. Revenues from the meeting management. sale of forest pnxlucts and g. agricultural leases totaled HUMAN more than $260.000. RESOURCES k rice Nedent, During the year, ap-Gor ernmentalagmn PROGRAM FOR EMPl.0YEE proximately 125 employ-PARTICIPATION ws panicipated in He hh Maintenance Organiza-N.ineteen groups in the tions, and over 40 percent company's Program for I of employees were en-E.mployee Participation rolled in the deferred com-(PEP), a program designed P"" " P"8'" * ' "" to improve efficiency,

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"I were staned in IT 87, ces advanced to new re-bringing the total number sponsibilities through the I of active groups company-I P" 8 wide to 29. This represents or by natural progression. 220 emplovees, a lh. per-The company hired 118 cent increase over last fis-new employees. This five cal yean percent growth increased L,ompleted projects i total employment to 1,559. l averaged $15,014.79 to Sixty-one temporary em-n (

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1 l award from the American South Carolina occupa-tions without a disabling Public Power Association tional Safety Council. injury in 1986, was earned ( APPA) for 2,992,275 man-Grainger Generating Sta-by 82 crews and sections. hours worked with an in-tion, Darlington Area safe Senice Awards were cident rate of.73. The Transmis ion, and Orange-presented to 137 employ-company competes annu-burg Area Transmission ces, Safe Driving Awards ally with other APPA received Awardsof Merit to 134 drivers of company member utilities operating from Santee Cooper vehicles, and thrve em-more than two million for completing 1986 with-playees joined various man-hours. Nineteca out a recordable injury. safety clubs that recognize 1 units earned safety awards The President's safety workers who avoid injury from the National Safety Award, for crew and sec-by wearing protective de-Council, and 17 earned tion safety while operating vices or equipment. Six l safety awards from the under hazardous condi-employees were recog-1 l nized for outstanding lead-RATE COMPARIS0N FY 87 ership in units operating n m n u w,ui,a a avae o m for la or more years with-0 20 40 80 80 100 920 mm out a disabling injury. scattle $ 11 M Memphis n.ou, ""s"J"'""" CORPORATE FORECASTING santee cax>per ao s.9 RATES, & STAT'ISTICS am mmmm-m-mmmmmmmmme Los Angeles J 74 49 mumme ammmmmmmmam A new residential rate Manu 577C monummmmmmem-structure, including a stan-n>uvon 5 n> >> mammmmmmmmmensumune dard residential rate and a chwago sm us mammmmmmmmmmmmmmmmmmmmmmmmmmmun discounted all-electric rate tuvon s w.o.4 mummmmmmmmmmmmmmme for year-round residential l Philadelphu 5115 of I mummmummmmmuummmmmmmum customers. went into effect New York 5/s/ 40 November 1,1986. The new rates more accurately l l RATES (CENTS /KWH) roect com>f*niw l o-,yuns uun osaan ruw <,,, the 3am,,al Aaraw w hile producing the same i i e 3 7 revenues. Santee Ox>per o s2 Residential Also, Santee u>oper Natiottd Average 741 adapted the national resi-E dential Good Cents pro-Mntw Qx>per s 72 ( Commercial gram w hich includes an National Average 7 is i 1 Santee Gxiper 2 05 Industrial National Average 4 n 27 L

Kenneth R. F0rd incentive rate for custom. N0 rate increases during ers with all-electric, en. MANAGEMENT atleaSt the next three ergy-emeient cood Cents INFORMATION SYSTEMS fiscal years.The Finance homes. A new 20-year load Department will m0ve forecast was developed. It Technical Support 10 Ward aCC0mpliShing this included an appliance Technical Support pro-maj0r 90althrough up-saturation survey of Santee vided training, hardware Cooper's residential cus-installation, and software grading and fine-tuning tomers and an industrial support for 200 users of Santee Co0 pert bud-survey to detemiine their Office Automation and geting, forBCaSting, and future electrical needs. provided the same ser-f.inancial planning The forecast will be used vices, in addition to data for planning purposes, in-base management, for us. systems. Employees will cluding the need for future ers of a new relational USe totallyintegrated generation. data base system. W0rkStations t0 increase Santee Cooper won the More than 60 new per-American Public Power sonal computer work-performance and Association's National En-stations were added, and efficiencythrough end-ergy innovator Award for hardware, software, and user C0mputing. Prepara-developing a software training were provided for tionS are underway for package called ELMA more than 140 users of (Electric Load Data and mainframe-integrated per. additional advance re-Management Analysis) sonal computers. Techni-fundingS, and the w hich provides Dexible cal Support also began intmduction Of a $500 and comprehensive data publishing a monthly mini b0nd pmgram will management and analysis useis newsletter. f ofload and end-use sur-All operating system all0W more Santee l vey projects. software on the two main-CO0per empl0yees and Santee Cooper began frame computers was up-CuS!0merS10 inV0St in the billing all municipal, coop-graded to improve users' erative, and large indus-access to both computers.

C0mpany, trial customers on a calen-Telecommunications hard-dar month basis. This ware and new software process fits calendar were installed to improve month energy sales to remote network manage-monthly operation records ment.

I{inam e f ice l'nule"I-which are used in cost-of-Systems and sersice studies and rate Programming design. Systems and Program-ming completed a large variety of application pro- .w

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l jects. This included the ar-sulted in present value sav-savings of approximately eas of inventory control ings of $35,893,(KK) and $53.883JXK). This was one and accounting. materials gross savings of over of the first refundings is-control, propeny manage- $99,662,000 sued by a major entity to ment, occupational health. The second refunding he sold by competitive bid, l retail outdoor lighting, and issue was the 1987 Refund-rather than by negotiation. meter reading. ing Series A in the principal The two issues com-1 Other applications co-amount of $192.660,000, bined produce an average ordinated by Systems and which resulted in a present annual savings of approxi-Programming concerned value savings of mately 513 million. meter testing. Rediversion 519.34000 and a gross Project correspondence, employee savings bond TOTAL PEAK DEMAND FORECAST (MW) purchasing, and payroll Gd uta his vtY W c %Y Wt

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tax reponing. munnammm '99 ss,4 Also, the payroll, pur-mummmme '98 2 a> i chasing, and retail bilhng mem-mmm m-mm-a- '97 2.# r systems were upgraded. numammmmmmmmmmmmmmme '96 2 W Data Center '95 / 4si E Peripheral equipment, in- '94 h cluding more disk storage '93 E and a new controller to '92 s ne impros e communication ' 91 h,,,,,,,,,,- '90 s <ii with remote locations. was ,,,,,,n,, '89 added to the mainframe '88 2 181 computer system. Ihgh-gangsmagummmmmses speed.long and short range '87,2,im,,,,,,,,m m, - - - modems were added to TOTAL ENERGY FORECASE(GWH) transnnt data. cau t,, n,,, ,,,....,.., u., o ammmmmmmmmmmme ammmmmmmmmmesumuummmesem ,99 isses TREASURY ..y========= = momens amminemmmann Two successful refund- '97 " '" ing bond issues occurred '96 mesame ammmmmmme - amm '95 / / m dunng the fiscal year. ese eeeen,,,sn e,,en,,n,,,n, '8 4 '# # The first refunding is-m,,,,, '93 i i <>.0 sue - the largest Electric numm-mmmmmmmmmm, -.mmmm. '9211 so < System l'.xpansion Res e-m -.mmmm.m - seum ------ '91 si

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'90 ii a n Cooper - w as ihe 1986 maamme - -m-amme--mem '8 9 s i 'ex Refunding Series C and D mumm-mmamens - - - - - memamm-in the principal amount of ammmmmmmmmmmmm-memammame ' ] '8811 s'i '87 ii w 5335,630jKu This re-mammmmmmmmmmmmmmmmmmmmume 30

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a k e . ts qfjune 30.19M 7 i lin busculds) l Maturity 19501ssue 19671ssue 1973 Refunding issue 19731ssue 19741ssue 1977 Refunding issue 19771ssue Ig781ssue Date July 1 lat. Rate Amt. Int. RWe Amt. Int. Rate Amt. Int. Rate Amt. lat. Rate Amt. Int, Rate Amt. Int. Rate Amt. If t. Rate Amt. IN7 2 70 300 4 10 685* $ 00 %5 5 20 1.185 6 00 1 250 4 90 3.120 4'la 490 4 80 1.070 l 1933 2 70 310 4 10 715' 5 00 1 010 5 20 1 250 6 00 1.325 5 00 3.280 4 60 515 4.90 1.125 1939 2 70 480 4 10 575' 5 00 1.060 5't. 1.315 6 10 1.405 510 3 450 4 70 540 5 30 1.200 iMO 2 70 1 900 4 10 420' 5'/. 1.380 6 20 1 505 5 20 3.620 4 B0 570 5 05 1.155 1991 2 70 1 950 4 10 440' 5 30 1.455 6'/. 1.590 5 30 3 830 4 90 590 5'10 1.220 1992 2 70 2 005 'O 455' 5 40 1.530 6 30 1.695 5 40 4.035 5 00 625 5 15 1.285 ) 1993 2 70 2 060 i0 430' 5 40 1 615 6 30 1 795 5'l, 4 260 5 10 660 5 20 1.355 1994 4 10 2 605' 5% 1.700* 6 40 1.910 5 60 4 430 5 20 720 5 /. 1.440 i 1995 4 10 2120' 5% 1 795' 6 40 2.035 565 4.710 5 30 785 5 30 1.515 1996 4 10 2.845* 5% 1.900* 6 40 2.155 5 70 4 995 5 40 830 5 35 1 585 2 295 5 70 5 265 5 45 890 5 40 1.6'O 1997 4 10 2 975' 5% 2.010' 6'/3 1998 4 10 3.105* 5% 2.125' 6'la 2 435 5't. 5.590' 5't, 935 5 40 1.760 ) 1999 4 10 3 245' 5% 2 245' 6 */, 2.590 5 . 5915' 5'/, 1 005 5 70 1.850* 1 2000 4 10 3395* 5% 2.375' 6% 2.750' 5 'l. 6 275' 5 55 1.065 5 70 1 940' 2001 4 10 3545' 5% 2.510* 6% 2.920' 5'/. 6665' 5 60 1.130 5.70 2.045' 2002 4 10 3 705* 5% 2 655' 6% 3.110' 5't. 7.050' 5 60 1 220 5 70 2.145' l 2003 4 10 33'0' 5% 2 810' 6% 3 295' 6 00 7490* 5% 1 295* 5 70 2.260* 2004 4 10 4 045' 5% 2.9'0' 6% 3 505' 6 00 7950' 5% 1.380' 5 70 2.380' 2005 4 10 4 230' 5% 3140' 6% 3 730' 6 00 8 450' 5% 1460' 5 70 2.500* 2006 4 10 4 420' 5% 3325' 6% 3 950' 6 00 89'0' 5% 1.570* 5 70 2 630' 2007 5% 3.515' 6% 4 205' 6 00 9 400' 5% 1195* 5 70 7.385* 2008 5% 3 715' 6% 4.470' 6 00 9 950' 5% 1.945' 5 70 7.845' 2009 5% 3930' 6% 4 745' 6 00 10 565* 5% 2.080* 57 8.330' 2010 5% 4.155' 6% 5045' 6 00 11 210' 5% 2 225' 57 BB45' 2011 5% 11.520' 6% 5 350' 6 00 4 980* 5% 2.180* 57 9.390' 2012 5% 12.180' 6% 5 695* 6 00 5.315' 5% 2.300* 5 '/. 9 980' 2013 5% 12 B80' 6% 6.045' 6 00 5625' 5% 2 500' 5 '/. 10590* 2014 6% 20045' 6 00 6 010' 5% 2 640' 5 'i. 11 250' 2015 6 00 9 515' 5% 21 065* 5 '. 11 950* 20i6 6 00 112B5' 5% 21 235' O. 12 553' 2017 5% 34 550' 57 13.190' 2018 5 '!. 50.600* 2019 2020 2021 2022 Tctal Outsmg 9 005 43 475 3 035 93185 102 845 193 255 112.820 196 040 Brds Redeemed to 6-30-87 6 295 3 125 9 015 6 815 6.155 21.895 2.180 3.960 Bonds ReAnced to 6-30 57 0 0 0 0 0 0 0 0 Ong ralissue 15 300 51.600 12 050 100 000 109 000 215.150 115 000 200 000 ' Tem Bonds See Scredde of ReQnded Bonds fo%ng = _ _ _ _ _ _ - ,,r_.- y _y. __,,,-.m. ,.__.-_,y. ,,.,e%. n-y.,-,.g,wwww

4 muts CA%D $IqlH dT M M k ipertwre Car 4 'g78 issue If7tA issee 19MAlssue IH1A lasse 1HICissue 1982AItsee IM25 Issue 1M2 Refunding issue IMS Refsasing Isses

t. Mate Amt.

Int. Rate Amt. lat. Rate Amt. lat. Rate Amt. Int. Rate AmL Int Rate Amt int. Rate Amt. Int. Rate Amt. Int. Rate Amt. 4~ 1 070 5 55 1.065 8 90 87 5 780 680 10 % 785 10 00 1.465 10 00 655 7% 435 6% 435 4 1.125 5 60 1.105 9 00 950 8 00 760 11 00 865 10 % 1 595 10 % 740 7% 470 6% 460 0 1 200 5 70 1.150 9 10 1,035 8 15 845 11 % 965 11 00 1.735 10 % 835 7% 505 700 490 'S 1.155 5% 1.195 9 20 1.130 8 30 940 11 % 1.070 11 % 1.905 10 % 940 8 00 545 7% 525 0 1.220 5 85 1 240 9% 1.235 8 45 1.050 11 % 1,185 11 % 2.105 11 00 1.060 8 20 585 7% $65 '5 1 285 590 1300 9 30 1350 8 60 1,165 11 % 1.195 8 40 635 7% 605 .9 1 355 5 95 1360 9 40 1.475 8% 1.295 8 60 690 8 00 650 1.440 6 00 1,425 9 45 1.615 8 90 1.435 8% 750 8 20 705 to 1.515 6 05 1.490 9% 1.765 9 00 1 600 9% 815' 840 765 15 1585 6 10 1.565 9 80 1.930' 9 15 1.775 9% 890* 8 60 825 s0 1 670 6 20 1.645 9 80 2.120' 9 30 1.970 9% -975* 8 80 900 10 1760 6 30 1.72 5 9 80 2330' 9% 2.190* 9% 1.070* 9 00 1.060 'O 1850' 6 35 1.815 9 80 2.560' 9% 2.430' 9% 1.165' 9 05 1.160 70 1 940' 6 40 1,915 9 80 2.810' 9% 2.700* 9% 1.275' 9 10 1.150 70 2 045' 6 45 2.025 9 80 3085* 9% 2.995* 9% 1395* 10 2.145' 6% 2.135 9 80 3 385' 9% 8 000* 9% 1.525' N 2 260* 6% 2.260 .7 2 380' 6% 2 390* 10 2 500* 6% 2 540' 9% 5.000* 70 2.630' 6% 2.695* 70 7385* 6% 2.865* 'O 7.845' 6% 3 010* 8.330' 6% .,,160 ' 'e 8 845' 6% 3335' 9 390* 6% 3525* 9 960* 6% 1720* 4 10.5C0* 6% 3925' h 11 250' 6% 4,140' l 11.950' 6% 43'0* e 4 12 555' 6% 4 610' r. 11100* 6% 48M* , 5a600* 6% 5.135' 6". 25 550' Dope % E8032 /0183-n \\ 196.040 106 255 29 650 31830 4 870 8.805 5.425 13.725 15 295 3 960 1 745 2.625 1.170 710 1.375 565 0 410 0 0 42.725 42.000 144 420 154 820 159 010 280.275 160.510 200 000 110 000 75 000 75 000 15a000 165.000 165 000 294.000 176 215 k 3 1 ...,_. _ _ d __ _ _

e Schedade of Refunded Bonds ^s one m. w ( lin 7bottsivids) t Series 1980 issue 1981AIssue 19818 Issue 1981Cissue 1982A Issue 19828 Issue 1982 Ref.lssue 1985 Ret Issu Call Date July 1,1990 July 1.1991 July 1,1991 July 1.1991 July 1,1991 July 1.1992 July 1,1992 July 1,1995 Original Matunty Data lat. Rate Amt. Int. Rate Amt. Int. Rate Amt. Int. Rate Amt. Int. Rate Amt. Int. Rale Amt. Int. Rate Amt. Int. Rate Am 1967 1988 1989 1990 1991 1992 12.00 1.315 12 00 2 335 j 1993 12 % 1,470 1230 2.590 11 60 1345 l 1994 12h 1.635 12 60 2.895 11 90 1.515 l 1995 11 00 3.090 12 10 1.815 1996 11 10 4.000 12 20 2.040 1997 11 20 4.220 12 30 2.295 1998 11 30 4.590 1999 11 40 5.090 2000 11 % 12.010 2001 13 % 20 000' 2002 2003 13 % 20 000* 2004 2005 12 % 40000* 2006 l 2007 2008 2009 2010 10 ; 42 725' 2011 2012 9 60 37235' 2013 9% 28 000* 2014 2015 10 00 20.000* 2016 2017 2018 20 0 2020 10 % 42.000* 12 00 89000* 2021 10 % 50 000* 13 % 100 000* 2022 14 ; 127.000* 13 00 110 000* 9 70 243 040' 9h 160 51< Ea; he seres 42.725 42.000 200.000 144.420 154 820 159 010 2B0275 160 51( 'Te%nes i

j l 1985 Iseve 1985A Refunding issue 1906A&0 Refunding issue 1906C 4 D Refunding issue 1987A Refunding issue Total Accruing Intel Principal laterest Debt 4 Int. Rate Amt. Int. Rate Amt. Int. Rete Amt. Metunts Service lat. Rete Amt. Int. Rete Arnt. 6% 13.500 5% 320 3% 715 29 995 144 449 i74.444 6% 11500 6% 335 4% 760 390 785 31.855 136385 168 240 -710 11500 6% 360 5 00 795 430 805 31045 134.299 167344 740 13300 700 380 5% 830 4 60 850 34360 132.047 166.407 7.70 11500 7% 410 6% 1,890 540 875 4.80 880 37455 129655 167310 8 00 13.500 7% 440 700 1665 5 60 925 5 00 930 39340 126.959 166 299 8 20 13.500 7% 470 715 7380 5.80 975 5 90 975 40.995 124.236 165 231 8 40 13500 8 00 510 730 7290 6 00 1.030 5 90 1.025 42.740 121393 164.133 8 70 13.500 8 20 2.425 740 6380 6.20 1.095 5 90 1.080 44R5 118.340 163.015 8 40 2.030 7% 7345 6 40 1.160 5W 1,140 31270 11 1 072 148.342 8 60 2390 760 7.995 6 60 1.235 6 00 1.205 35540 112A07 148.347 8 70 4.980 770 5.925 6.70 1320 6.10 1.280 37A30 110 351 148.181 8% 5405 780 6365 680 1.400 6% 1350 40.500 107466 148 166 780 11200 6 90 1.505 640 1,435 43.790 104.761 f48551 9 00 11.020' 790 835 700 1.605 6% 2A75 44450 101.651 146 301 9 00 6.090' 790 900 705 1.715 6% 4.280 47.915 98380 14E295 9 00 15390' 8 00 4.695 710 3.510 6 60 4.575 51.450 94.849 146.299 8 00 5.070 710 4.920 6% 20390 55 000 91.195 146.195 8 00 5.475 710 5.265 6% 16.795 58585 87.637 146.222 8 00 5.910 7 20 5.625 6% 2.350 41,445 83 712 125157 8 10 6390 7 20 6.000 6% 2325 44.080 81.077 125157 8.10 6.905 700 f415' 6% 2.715* 4650 78.189 121159 8 00 7465' 700 6250' 6% 2.925* $0050 71120 125.170 8 00 8.060' 700 7310' 6% 3.140' 53.325 71339 125 164 8 00 10.480' 700 6.025' 6% 3380' 56.830 68 338 125 168 8 00 11.315' 700 64T ~ 6% 3.625' 60.560 64 604 125 164 8 00 12 230' 730 6 8,. 6 90 3880* 64 545 60421 121166 i 9 20 6.74 5' 8 00 2.095* 730 7.915' 6 90 4.150' 64 990 56 352 121.342 I 9 20 7.70 0' 8 00 2.260' 730 8.145' 6 90 4.465' 69 470 51.889 121359 8 00 2.445' 730 20.430' 6 90 4.785' 77345 47312 124 657 8 00 2.625' 730 21 875' 6 90 E160' 82300 42 342 124 642 8 00 2.850' 730 23 425' 6 90 5375' 87385 37.081 124.666 9 20 29320' 8 00 1740' 730 25.0BO' 6 90 6.030' 89.920 31.433 121353 9 20 39 725' 730 23N5' 730 27.005' 6 90 6.520' 96.925 24 414 121339 9 20 41.200* 730 56.985* 6 90 7040' 105 225 16.681 121 906 i 6% 62325' 700 61.025* 123350 8 245 1313 95 i i 121.500 177545 195.955 335 630 192.660 1.999105 3.091.381 5.089.486 + i i f 13300 0 0 0 0 83 540 i 0 0 0 0 0 983 760 13i000 177845 195.955 335 630 192.660 3 065 405

=.._. APPUCATIONS OF REVENUE lbars EndedJune 30,1987 and 1986 1987 1986 Tota 10perating Revenues S 480,059,055 $ 455.000.175 Operating Expenses: Operation Production 204,600,163 195,057.706 Purchased and interchanged Power - Net 2,698,075 (213379) Transmission 1,821,495 1,991.478 Distnbution 2,300,421 2,158,299 Customer Accounts (172,250) 1,849 974 Sa!es 317,427 283.845 Administratrve and General 28,692,720 25.231.152 Maintenance 33,388,056 34.596.425 Total Operation and Maintenance Expenses 273,646,107 260.955.500 Sums in Lieu of Taxes 2,389,663 2,176,137 Total Operat:ng Expenses 276,035,770 263.131,637 Net Operating Revenues 204,023,285 191.868.538 Otner income 24,996,744 26.687,030 Revenue Ava:lable for Debt Service and Other Purposes 229,020,029 218.555.568 Total Debt Service 154,236,930 150.910 358 Lease Payments to Central 5,465.308 5.466375 Pnncipal and interest on Other Obhgabons 25,038.097 23.759,265 Balance a'ter Debt Service, Lease Payments. and Other Obhgations 44,279,694 38 419.570 Payments to the State of South Carchna 2,003,036 1,900.012 Payment to the Special Reserve Fund - nel 1,459.116 1.392.865 Mandatory 8% AHocation for Capital improvements 26,761,366 26.057,714 Revenue Available for Operabog Requirements $ 14,056,176 9.068.979 (1) This surnmary has been prepared from the financial statements and other data of the Authonty and has not been examined by the independent auditors This summary presents the net revenues available to the Revenue Fund 'or purposes such as providing for increases in working cap;ta! requirements It d,!fers from the State-menl uf Reinvested Earnings ri that a represents cash transactons on debt service and, accordingiy excludes non-cas*i ttems such as depreciabon, allowance for funds used dunng construction and amortcation of cebt discount and expense. M

. = e r p y; g 2 t .f Y' g fillu)lCicl/ f L L ~ . SIGlelllell/S n ^ .. s. 6 s. South Carolina Y w. Public Service Authority ~ Ascal Year 1987 e s, gs / 5 1 v ..p 1 F . -i ' ~ 1" ~ - - E 7 t_ .s',- -y,4 g ~ ^ I 4 4 y.. 9 F .'e (* 4 E E o E n -. e m j' l t ', ' d' = t' -q ,f. . ~ - ( v a.1 W '$ \\ % ~ F 7*. g , - t h w. w e.. r. ~ ,,s y h,' ^ ~ = = .'^ i 'g = ,4 e- ~ + 7

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Report of hidependent Certified Pitblic Accountants The Advisory Board and Board of Directors South Carolina Public Service Authority p Columbla, South Carolina We have examined the balance sheets - of the South Carolina Public Service Authority as of June 30,1987.and 1986, and the related statements of reinvested earnings, accumulated Cdrnings reinvested in the business, and changes in financial position for each of the three years in the period ended June 30,1987. Our examina-tions were made in accordance with generally accepted auditing standards and, accordingly, included such tests of the accounting records and such other auditing procedures as we con-sidered necessary in the circum-stances. In our' opinion, the financial state-ments referred to above present fairly the financial position of the South Carolina Public Service Authority as of June 30,1987 and 1986, and the results of its operations and changes in its financial position for each of the three years in the period ended June 30,1987, in conformity with generally accepted accounting prin-ciples applied on a consistent basis. 4 Coopers & Lybrand Columbia, South Carolina August 28,1987 37

Balan30 Shoots South Carolina Public Service Authority June 30,1987 and 1986 Assets 1987 1986 (Thousands) Utility Plant - At Cost: Electric plant in service $ 2,050,086 $ 2,018,545 Construction work in progress 72,415 57,232 Total 2,122,501 2,075,777 Less accumulated depreciation 415,187 352,252 Electric plant - net 1,707,314_ 1,723,525 Nuclear fuel - net 20,534 22,366 Utility plant - net 1,727,848 1,745,891 Other Physical Property (Net of Accumulated Depreclation) 379 390 Cash and Investments Held by Trustee 345,828 335,364 Current Assets: Cash and investments held by trustee 34,775 33,125 Accounts receivable, less allowance for doubtful accounts of $844,000 in 1987 and $3,619,000 in 1986 53,899 51,967 Accrued Interest receivable 3,961 1,683 inventories, at average cost: Fuel (coal and 011) 29,762 41,100 Materials and supplies 6,142 5,911 Prepaid expenses 2,440 2,024 Total current assets 130,979 135,810 Deferred Debits: Unamortized debt expense 18,676 22,045 Unamortized loss on refunded debt 230,137 154,666 Costs to be recovered from future revenue 197,347 168,426 Other 3,296 2,727 Total deferred debits 449,456 347,864 Total $ 2,654,490 $ 2,565,319 Thi accompanying notes are an integral part of the financial statements, 3X

Liabilities and Capitalization 1987 1986 - (Thousands) Longterm Debt: Priority Obligations S 60,515 62,385 Electric System Expansion Revenue Bonds 1,816,090 1,740,845 4 Subtotal 1,876,605 1,803,230 Electric Revenue Bonds - 121,500 135,000 ( Capitalized lease obligations 71,755-74,538 Other 0 543 Total long term debt 2,069,860 2,013,311 Less: Reacquired debt 2,220 2,880 Unamortized debt discount and premium - net 27,271 18,387 Long term debt - not 2,040,369 1,992,044 Actrued Interest on Longterm Debt 71,113 71,819 Construction Fund Liabilities - Accounts Payable 1,737 6,632 - Other Non current Liabilities 6,303 4,410 s urrent Llabilities: Commercial paper 50,000 50,000 Accounts payable 28,695 22,819 Customer deposits 4,690 4,435 Accrued sums in lleu of taxes 1,146 1,076 Other 7,21 2 6,935 Total current liabilities 91,743 85,265 Commitments and Contingencies Deferred Credits: Unamortized gain on reacquired debt 406 833 Nuclear fuel settlement 16,344 16,128 Total deferred credits 16,750 16,961 C pital Contributions - U.S. Government Grants 34,438 34,438 Accumulated Earnings Reinvested in the Business 392,037 353,750 Total $ 2,654,490 $ 2,565,319 39

Statomonts of Accumulotcd Earnings Reinvested in the Business South Carolina Public Service Authority Years Ended June 30,1987,1986 and 1985 1987 1986 1985 (Thousands) Accumulated earnings reinvested in the business - beginning of year $ 353,750 $ 325,545 $ 281,297 R: invested earnings for the year 40,290 30,106 45,948 '27,245 Total 394,040 355,651 Distribution to the State of South Carolina (See note below) 2,003 1,901 1,700 Accumulated earnings reinvested in the business - end of year $ 392,037 $ 353,750 $ 325,545 Note: The distribution to the State of South Carolina is determined utilizing a calcula-tion formula required under the Indenture which is based essentially on operating cash flow and mandatory reserve re-quirements. Such calculation varies substantially from reinvested earnings for the year principally due to costs to be recovered from futu 9 revenue and work-ing capital requirements. Tha accompanying notes are an integLI part of the financial statements. 40

Statemonts of Rainvastad Earnings South Carolina Public Service Authority Years Ended June 30,1987,1986 and 1985 1987 1986 1985 (Thousands) Operating Revenues: Sales of ettetricity $ 475,425 $ 451,537 $ 428,361 Other operating revenues 4,634 3,463 2,261 Total operating revenues 480,059 455,000 430,622 Operating Expenses: Operation expense: Production 204,600 195,058 203,383 Purchased and interchanged power - net 2,698 (213) (4,371) Transmission 1,8 21 1,991 1,842 Distribution 2,300 2,158 1,665 Customer accounts (172) 1,850 1,826 Sales 318 284 162 Administrative and general 28,693 25,231 23,533 Maintenance expense 33,388 34,596 31,193 Total operation and maintenance expense 273,646 260,955 259,233 Depreciation 65,033 63,764 61,640 Sums in lieu of taxes 2,390 2,176 1,920 Total operating expenses 341,069 326,895 322,793 Operating income 138,990 128,105 107,829 Olber income: Interest income: Other funds 25,178 26,833 26,0f3 Borrowed funds 284 5,459 16,583 Other income (expense) - net (181) (146) (125) Total other income 25,281 32,146 42,517 Subtotal 164,271 160,25 150,346 Interest Charge:: Interest on long term debt 144,190 150,224 159,634 Other 9,030 5,983 8,205 Total interest charges 153,220 156,207 167,839 l Subtotal 11,0 51 4,044 (17,493) ~ C:sts to be recovered from future revenue 28,921 27,863 67,207 Other deductions - net (31 8) 1,801 3,766 R: Invested Eamings $ 40,290 30,106 $ 45,948 Th3 accompanying notes are an integral part of the financial statements. 41

Statcments of Changes in Financial Position South Carolina Public Service Authority Ye:rs Ended June 30,1987,1986 and 1985 1987 1986 1985 (Thousands) Funds Provided By: Operations: Reinvested earnings 40,290 30,106 $ 45,948 Charges (credits) to reinvested earnings not providing or requiring funds: Depreciation 65,033 63,764 61,640 Amortization of debt discount and expense 2,408 2,181 2,483 Amortization of gain or loss on reacquired debt - net 4,061 1,220 (146) Costs to bo recovered from future reverue (28,921) (27,863) (67,207) Total from operations 82,871 69,516 42,718 Sale of bonds / notes 528,290 195,955 489,060 Nuclear fuel settlement 21 7 173 479 Increase (decrease) other nel 1,984 (1,370) 21 Total funds provided 613,362 264,274 532,278 Funds Applied To: Increase in utility plant 46,978 35,857 56,256 Retirement of long term debt 468,958 177,475 493,268 Increase (decrease) in cash and investments 10,465 41,779 (112,494) Decrease (increase) in Interest on long term debt 705 (6,167) 10,529 Increase (decrease) in unamortized debt discount and expense 7,924 50 (1,770) Decrease in construction fund liabilities 4,895 7,606 4,05', Pr'ncipal payments - capitalized lease obligations 2,784 2,716 2,64S Distribution to the State of South Carolina 2,003 1,901 1,700 Increase in unamortized loss on refunded debt 79,959 28,237 56,460 ~ Total funds applied 624,671 239,454 510,645 increase (Decrease) in Working Capital $ (11,309) $ (25,180) 21,633 Increase (Decrease) in Working Capital by Component: Cash and investments held by trustee 1,650 (2,563) 9,740 Accounts receivable, less allowance for doubtful accounts 1,932 11,877 9,908 Accrued interest receivable 2,278 (1,100) 372 Inventories (11,10/) (9,993) 9,050 Other current assets 416 617 (193) Accounts payable (5,876) 5,393 (6,201) Customer deposits (255) (735) (809) Accrued sums in lieu of taxes (70) (57) (154) (25,000) Commercial paper Other current liabilities (277) (3,529) (80) ~ Increase (Decrease) in Working Capital $ (11,309) $ (25,180) 21,633 -. - - - ~ _. Tro accompanying notes are an integral part of tu financtal statements. - ~. -.

Nstes-ta Financial Statements Thh resulte in timing differences recLnlzed as costs to be recovered from future revenue. coinponents of mst to N mmmed kom future menn foHows: June 30,1987 1987 1986 1985 (Thousands) Note 1 - Summary of Significant Costs to be recovered Accounting Policies: from future revent.e: ~ Excess of A - System of Accounts - The accounting depreciation records of the Authority are maintained substantially over debt service.. $ 28,921 $ 27,863 $ 41,159 l In accordance with the Uniform System of Accounts Funded interest costs l przscribed by the Federal Emrgy Regulatory afte In-service Commission (FtiRC). date. 26,048 B - Utility Plant Capitalization and Maintenance Total $28,921 $27,863 $67,207 - Additions to plant are recorded at cost, which includes material, labor, overhead, and interest capitalized during construction. The costs of repairs and minor replacements are charged to appropriate operating and maintenance expense. The costs of renewals and betterments are capitalized. The original Note 3 - Cash and Investments held by Trustee: cost of utility plant retired and the cost of removal less salvage are charged to accumulated Unexpended funds from the sale of expansion depreciation, bonds, debt service funds, other special funds and C - Depreciation - Depreciation is computed on cash and securities are held and maintained by a straight line basis over the estimated useful lives of trustees and their use restricted in accordance with the vanous classes of the plant. Annual depreclation applicable provisions of various trust indentures, provisions, expressed as a percent of average bond resolutions, lease agreements, and the depreciable utility plant in service, was approximately Enabling Act included in the South Carolina law. 3.3% for each of the three years in the period ended Such funds consist principally of investments in June 30,1987. government securities carried at amortized cost. D - Revenue Recognition - Substantially all CASH - The carrying amount of the Authority's wholesale and Industrial revenues are billed and deposits were $100,211,000 and $103,605,000 at H recorded at the end of each month. Revenues from June 30,1987 and 1986, respectively. Bank balances retail customers are recognized on a monthly cycle were $26,181,000 and $17,449,000 at June 30,1987 basis. Fuel costs are reflected in operating expenses and 1986, respectively. Bank balances are covered J as consumed. by federal depository Insurance or by collateral held E - Capitallzation of Interest During Osnstruction in the pledging bank's trust department. The - Interest capitalized during construction is the net Authority's deposits included $90,327,000 at June cost of borrowed funds used during construction. 30,1987 and $91,018,000 at June 30,1986 for bond F - Amortization - Unamortized debt discount, principal and interest payments due on July 1,1987 premium and expense are amortized to income over and 1986, respectively,and may exceed federal the terms of the related debt issues. Unamortized depository insurance limits. esins or losses on refunded debt are amortized to INVESTMENTS - Trust indentures and resolu-Income as impacted through the rate-making process, tions authorize the Authoilty to invest in obligations gene ally over the terms of the new debt issues, of the U.S. Treasury, agencies, and instrumen-I talities, and certificates of deposit. The Authority's ] Investments consist solely of U.S. Govemment securities and certificates of deposit. lhe market Note 2 - Costs to be Recovered from Future value of all investments exceeded the carrying value Revenue: by approximately $5,000,000 and $10,000,000 at June J 30,1987 and 1986, respectively. l The Authority has fully adopted the provisions of The Authority's investments are cateoortzed Financial Accounting Standards Board Statement No, below to give an indication of the level ~of risk ) 71 (SFAS No. 71), which prescribes the accounting assumed by the entity at yect-end. Category 1 1 principles to be followed by entitles subject to cer*ain includes only U. S. Governmec,t securities which are j types of regulation. The most significant impact on registered and held by trust agents in the!r name. i the Au;hority was to acognize timing differences Category 2 includes insured certificatos of depo?'t between costs as defined in the rate-making process which are held by trust agents in the Authority's I and costs detstrmined in accordance with generaHy name. 1 cceepted accounting principles. The Authority's rates i tre established based upon debt service and operating fund requirements. Depreciation is not 1 considered in the cost of service calculation, c i

~ 1987 1986 INVESTMENTS INVESTMENTS CATEGORY CATEGORY CATEGORY CATEGORY 1 2 CASH. TOTAL 1 2 CASH TOTAL (Thousands) - Unexpended Funds 19828 Bonds (Cross '84) $ 18,720 $ (167) $ 18,553 General Irnprove. rnent Funds 74,682 /00 689 76,071 45,021 19 45,040 Debt SeMee and spedal indentured Bonds Interest Fund 1,191 1,191 1,232 1,232 Bond Fund 1,957 1,957 1,877 1,877 Debt service 8,806 1 8,807 8,814 3 8,817 Expansion Bonds interest Fund 14,545 14,545 12,260 12,260 Bond Fund 65,073 65,078 65,331 ' 65,331 Debt service 136,025 47 136,072 135,634 5,778 .141,412 subordinated Bonds Interest Fund 13,500 13,500 13,500 13,500 Bond Fund 4,624 4,624 5,029 5,029 Debt service 2,023 2,975 47 5,o45 5,027 5 5.032 Other special Funds 23,555 (4,617) 18,938 20,267 (2,986) 17,281 Total $245,091 $3,675 $ 97,062 $345,828 $233,483 $0 $101,881 $335,364 Revenue Fund $ 25,522 $ 3,148 $ ' 28,670 $ 26,771 $ 1,717 $ 28,488 Special Reserve Fund 6,104 1 6,105 4,630 7 4,637 Total $ 31,626 0 $ 3,149 $ 34,775 $ 31,401 - SO $ 1,724 $ 33,125 the estimated decommissioning costs over the remain-Note 4 - Summer Nuclear Station: Ing life of the facility. These costs are being recovered through the Authority's rates. The estimated decom-The Authority and South Carolina Electric and Gas missioning costs are periodically reviewed and (SCE&G) are parties to a joint ownership agreement adjustmente secorded as appropriate. providing that the Authority and SCE&G shall own the The supp er under the original uranium supply Summer Nuclear Station with undivided interest of contract bre. ached the contract in 1975 due to uranium 33%% and 66%%, respectively. SCE&G is solely market conditions. SCE&G initiated action seeking responsible for the operation, maintenance, and specific performance of the contract provisions, and a decommissioning of the Summer Nuclear Station, and final settlement was reached and approved by all the Authority is obligated to pay its ownership share parties in April 1980. By terms of the order approving of all costs relating thereto. At June 30,1987 and the settlement, the court imposed confidentiality upon 1986, the plant accounts included approximately the details of the settlement. The Authority has $420,070,000 and $425,900,000, respectively, represent-received approximately $10,243,000 in cash as partial ing the Authority's investment, including capitalized settlement of the lawsuit. Additionally, the agreement interest, in the Summer Nuclear Station. provides for delivery of some uranium, long-term Nuclear fuel costs are being amortized based on deliveries of equipment and services (including conver. energy expended which includes a component for slon and fuel fabrication) at a discount. estimated disposal costs of spent nuclear fuel. These. Amounts received due to the breach of contract amortizations are included in fuel expense and are have been included in deferred credits and will be recovered through the Authority's rates. Decommis-applied as a reduction of uranium fuel costs. This is sioning costs (costs to take the plant out of service in consistent w!th SCE&G's treatment pursuant to an the future) for the Summer Nuclear Station are order from the South Carolina Public Service Commis-estimated to be $314 million, for the Authority's % sion. The cost of nuclear fuel purchased has been ownership, based on a 30 year useful life with reduced by approximately $4,000,000, decommissioning expected to commence in the year 2013. The Authority accrues for its share of 44

Note 5 - Longterm Debt Outstanding: June 30 1967 1986 (Thousands) Priority Obligations: Electric Revenue Bonds, % ries of 1950, bearing interest at 2.70% and due 1987 to 1993 9,005 9,295 Electric Revenue Bonds, Series of 1967, bearing interest at 4.10% and due 1987 and 2006 43,475 49,135 Electric Revenue Bonds, Refunding Series of 1973, bearing interest at 5% ar:d due 1987 to 1989 3,035 3,955 ~ 60,515 62,385 Total Priority Obligations Electric System Expansion Revenue Bonds: 1973 Series, bearing interest from 57)% to 5.75% and due 1987 to 1993 and 2013 93,185 94,315 1974 Series, bearing interest from i 6% to 6.75% and due 1987 to 1999 and 2014 102,845 104,015 l 1977 Refunding Series, bearing interest from 4.90% to 6% and due 1987 to 1997 and 2002 and 2016 193,255 196,230 1977 Series, bearing interest from 4.50% to 5.75% and due 1987 to 2002 and 2017 112,820 113,290-1978 Series, bearing interest from 4.80% to 5.875% and due 1987 to 1998 and 2008 and 2018 196,040 197,055 1979 Series A, bearing interest from 5.55% to 6.875% and duo 1987 to 2003 and 2009 and 2019 106,255 107,280

1980 Series A, bearing interest from 8.90%

to 9.80% and due 1987 to 1995 and 2002 29,650 30,450

1981 Series A, bearing interest from 7.80%

to 9.75% and due 1987 to 1997 and 2002 31,820 32,445

1981 Series C, bearing interest from 10.75%

to 11.75% and due 1987 to 1991 4,870 5,580 l

1982 Series A, bearing interest from 10%

l to 11.75% and due 1987 to 1991 8,805 10,180

1982 Series B, bearing interest from 10%

to 11.25% and due 1987 to 1992 5,425 5,990

1982 Refunding Series, bearing irsterest from 7.25% to 9.375%

and due 1987 to 1994 and 2002 13,725 294,000

1985 Refunding Series, bearing interest from 625% to 9.375% and due 1987 to 2000 and 2005 ~

15,295 176,215 1985A Refunding Series, bearing interest from 5.75% to 920% and due 1987 to 1999 and 2003 and 2021 177,845 177,845 1986 A&B Refunding Series, bearing interest from 6.75% to 8.10% and due 1991 to 2008 and 2019 and 2020 195,955 195,955 1986 G&D Refunding Series, bearing interest from 47 % to 7.30% and dus 1988 to 2007 and 2012 and 2021 and 202 335,630 1987 A Refunding Series, bearing interest from 325% to 7% and due 1987 to 2007 and 2012 and 2021 and 2022 192,660. Total Electric System Expansion Revenue Bonds 1,816,090 1,740,845 Electric Revenue Bonds,1985 Series, bearing interest from 625% to 8.70% and due 1987 to 1995 121,500 135,000 Capitalized Subordinated Lease Contracts, payable 1987 to 2015 71,755 74,538 543 Other Total Long-Term Debt $2,069,860 .$2,013,311

See schedule below for refunded debt.

45

Tha Authority refunds and defeases debt primarily approximately 10.5%. The net proceeds of the bonds, as a means of reducing debt service, thereby post. $189 million (after $2.9 million payment of $4.1 nillion poning or reducing future electric rate adjustrnents. In in underwriting fees and original issue discount) plus fiscal year 1967, the Authority issued $528 million in an additional. 2.9 million were used.to purchase U.S. Electric System Expansion Bonds to advance refund Govemment securities. The securities have been certain maturities of the 1982 and 1985 Refunding placed in an irrevocable trust to provide for all future Series Bonds (the original bonds) aggregating $441 debt service payments on the original bonds. As a million. The new bonds bear an average interest rate result, the onginal bonds are considered defeased and of approximately 6.9%. The original bonds averaged the liability for those bonds has been removed from approximately 9.6%. The net proceeds'of the bonds, the Authority's accounts. $509 miliion (after payment of $5.8 million and $102 Although the advance refunding resulted in an-million in underwriting fees and original issue accounting loss of approximately $81 m!!!!an and discount) plus an additione $3.8 mition were used to $28 million in 1987 and 1986, respectively, the purchase U.S. Govemmant securities. In fiscal year Authority was able to reduce its total debt servica 1986, the Authority issued $196 million in Elec,tric over the next 36 years by approximate ly $164 million System Expansion Bonds to advance refund cedain in 1987 and $28 million in 1986 and to obtaa an maturities of the 1980,1981, and 1982 (the original economic gain (tf's difference between the present bonds) aggregating $167 million. The new bonds bear values of the debt service payments on the o'd and - an average intemst rate of approximately 7.9%. The the new debt) of approximately $56 million in 1987 original bonds averaged and $14 million in 1986. Amounts outstanding, original loss on refunding, and the unamortized loss et June 30,1987 follows: Refunded Refunding Refunded Amount Original Unamortized issue Bonds Outstanding Loss Loss (Thousands) 1977 Refunding 1971 and 1976 Series 0 $ 11,244 7,423 $139,000 of the 1981 Series B 1985A Refunding and $ 40,000 of the 1282 Series r; 179,000 27,853 24,680 Cash Defeasance $ 20,000 of the 1982 Series A 20,000 2,763 2,579 1986 A&B Reb.nding $ 42,725 of the 19Cr' Series A $ 42,000 of the 3eries A $ 61,000 of the Series B $ 4,420 of the 19t,. Series C $ 7,820 of the 1982 Series A $ 9,010 of the 1982 Series B 166,975 28,812 29,402 1986 C&D Refunding 1982 Refunding Serios ($100,000 of the 1981 Series C and $127,000 of the 1982 Series A) 507,365 110,372 109,524 1987A Refunding 1985 Refunding Series ($150,000 of the 1982 Series B) 310,510 60,029 56,529 Total $ 1,183,850 $ 241,073 $ 230,137 The Authority's tend indentures provide for certain additiona! parity expansion bonds if, among other restrictions, the most significant of which are: things, the Authority's Consulting Engineer certifies The Authority covenants to establish rates and that net revenues (as defined) In each succeeding charges adequate to provide revenues sufficient, fiscal year after the date on which such additional among other things, to pay debt service when due on bonds are sold to and including the later of (a) the the poority obligations and expansion bonds, to make third succeeding full fiscal year after such date or required payments when due into the lease fund and the first full fiscal year after the estimated date of(b) the capital improvement fund, and to pay the costs of commercial operation of any power plant to pay the operation and mal'.tenance of the Authority's electric cost of construction of which additional expansion system and all necessary repairs, replacements, and bonds have been, are being, or are.then authorized to renewals thereof. be issued, shall be at least equal to the sum of the The Authority is presently required to pay annually amounts required in such fiscal year for (i) debt. Into its capitel improvement fund an amount which, service on the priority obligations and the expansion together with the amounts deposited therein in the bonds then outstanding, being issued, or authorized two preceding fiscal years, is at least equal to 8% of but not yet issued, (ii) payments into the lease fund, the Authority's gross revenues (as defined) in the three and (iii) payments into the capital improvement fund. preceding fiscal years. The Authority may issue 46.

Maturities of electric revenue bonds, priority obils Pcs Dee generating station subjcct to obtaining financ-gations and expansion bonds during the years ending Ing guaranteed by REA. June 30,1988 through 1292, are as follows-Future minimum lease payments on Central leases, at June 30,1987, were: Electric Priority Reenue Obligations & Years ending June 30: Amount Bonds Expcasion Bonds Total (Thousands) NSW 1988 $ 5,402 June 30,1988 $ 13,500 $ 16,495 $ 29,965 1989 5,345 June 30,19% 13,500 18,355 31,866 1990 5,258 June 30,19D 13,500 19,545 33,045 June T,1%1 13,500 20,8 % 34,3m Thereafter 80,436 June 30,1T2 13,500 24,155 37,665 Total minimum iease payments 106,957 Total s 67,500 s m,410 $ 188,910 Less, amounts representing interest 35,202 Balance at June 30,1987 $ 71,755 Note 6 - Commercial Paper: Note 8 - Commitments and Contingencies: The Board of Directors authorized the issuance of i l commercial paper not to exceed $50,000,000. The Based on a May 1985 load forecast, the Board paper will be issued for valid corporate purposes with deferred indefinitely the construction of the second a term not to exceed 270 days at an annual interest unit at the Cross Generating Station. In conjunction rate not to exceed 9.5%. As of June 30,1987 and with this deferral, $3,766,000 of contract cancellation 1986, the effective interest rate on outstanding borrow-charges were incurred and charged to reinvested ings was 4.47% and 4.17%, respectively. During 1987 eamings for 1985. and 1986 the average effective interest rate was 4.18% During 1982, FERC notified the Authority that the and 4.72%, the average amount outstanding was Pinopolis West Dam and the North Santee Dam, $50,000,000 and $43,829,000 and the average maturity which form a part of the Authority's electric utility was 44 and 43 days, respectively. system, possessed marginal seicmic stability under At June 30,1987, the Authority had a Revolving applicable design earthquake criteria. FERC indicated Credit Agreement with various lenders of $50,000,000. that remedial measures should be underteken by the This Agreement is used to suppoq the Authority's Authority to provide an increased level of seismic issuance of commercial paper. Under the Agreement stability. The Authority engaged an engineering firm to the Authority % required to pay a fee equal to 1/8 of perform studies and planning to determine the extent 1% on the tt ".a line of credit, plus 1/8 of 1% on the and cost of work necessary to correct the design average principal amount of the paper outstanding. weaknesses. The initial engineering study has been No loans were outstanding under the Agreement at completed and submitted to FERC for its review. June 30,1987. Until FERC has completed its review on the proposed modifications to the Pinopolis West Dam Nota 7 - Contracts with Central and the proposed remedial measures to be undertaken Electric Power Cooperative, inc; by the Authonty on the North Santee Dam, it is not possib!e to estimate the extent of work necessary to correct the design weaknesses. Based on the facts as The Authority has lease contracts with Central Electric Power Cooperative, Inc., covering a steam they currently exist, management believes that any cost incurred by the Authority related to the dams electnc generating plant, transmission facilities, and would not materially affect the financial position of various other facilitics. The lease terms range from the Authority' eight to twenty-eight years. Quarterly lease payments are based on a sum equal to the interest on and principal of Centrars indebtedness to the Rural Electri-Note 9 - Retirement Plan: fication Administration for funds borrowed to construct the above mentioned facilities. The Authority has an Substantially all Authority fulltime employees partici-option to purchase the leased properties at any time pate in the South Carolina Retirement System during the period of the lease agreement for a sum ("System"), a multiple-employer public employee retire-equal to Central's indebtedness remaining outstanding ment system. The payroll for employees covered by on the property involved at the time the option is the system for the years ended June 30,1987,1986 exercised or to return the properties at the termination and 1985 was $42,4&t,000, $38,898,000 and $35,675,000, of the lease. The Aathority plans to exercise each and respectively. every option to acauire ownership of such facilities Employees who retire at or after age 65 or have 30 prior to expiratior. of the leases. Power supply and years of service are entitled to a retirement benefit, transmission sevices are provided to Central in payable monthiy for life equal to 1.25 percent of the accordance wi'.n the Power System Coordination and first $4,800 of thek final average salary and 1.65 Integration Agreement dated January 19,1981. This percent of the final acoge amount in excess of agreement also provides that each party will have an $4,800. Final average salary is the employee's average option to share ownership of future generating salary over the twelve highest consecutive quarters. facilities to be constructed by the other. Central has Benefits fully vest on reaching 5 years of service. advised the Authority that it will exercise its option to , Vested employees may retire at or after 60 and own 45% of the second unit at Cross and the receive reduced retirement 47

' benefits. The System also provides death and disabil-Ity benefits. Benefits are established by State statute. Employees are requir9d by State statute to contribute 4 percent of the first $4,800 salary and 6 percent of salary greater than $4,800. The Authority is required by the same statute to contribute 7 per-cent of total payroll. The contribution requirement for the years ended June 30.1987,1986, and 1985 was $3,098,000, $2,837,000 and $2,602,000 from the Authority and $2,386,000, $2,178,000 and $1,993,000 from employees. An actuarial valuation is perfomwd for the System cnnually. At the most recent valuation date, June 30, 1906, the present value of prospective benefits payable for retired and active members was approximately $8.1 - billion and exceeded the amortized cost of assets of-the System by approximately $3.9 billion. The present value of prospective benefits yable is a measure of' the present value of pension nefits, adjusted for the . f.ffects of projected salary increases, estimated to be payable in the future as a result of employee service to date. The measure, which is an actuarial present vilue of credited benefits, is intended to help users assess the System funding status on a going <:oncem basis, assess progress made in accumulating suffi-cient assets to pay benefits when due, and make J comparisons among public employee retirement systems. The System does not make separate measurements of assets and benefits payable for individual employers. The Authorities 1987 contribution represented approximately two percent of the total contribution to the System. Note 10 - Major Customers: Sales to the Authority's two major customers for the years ended June 30, were: 1967 1906 1985 (Thousands) - Central Electric Power Cooperative, Inc. $ 207,000 $ 193,000 $ 173,000 Alumax of South Carolina, Inc. $ 69,000 $ 68,000 $ 86,000 48

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'W.;pjp MM.^P['y) .t 4 = t %.1f-9.:. q$.p qy q,, ;.. John T. Campbell T. Travis Medhrk ' s a 5 5ccretary of State Attornev General ' F 4 ") r FORADDm0NAL 9 4 INFORMATION CONTACT: ^ L.r - a y / y ' N' Jerry L Stafford ,) 5 l)irector, Corimrate k '-? Conimunications -4 A. b? Ihk j. [?., :. One Riverwuod I) rive .~ ?h h'; ,I g.[' '.g

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hkinagement William C. Slescher Ilill 51cCallJr. CHANGES IN President and Chier Group stanager THE BOARD Executive officer Production Oper.uions There were three W. Andrew flurke Robert F. Petracca Vice President Group 5 tanager changes in Santee Ox)per's Starketing Property M Transportation Board of Directors during the past fiscal year. W.E. Kenneth R. Ford Joseph P. Thomas (Ilill) DeLoach was Vice President Group 5 tanager Finance Planning and Energy appointed to fill the Control unexpired tenn ofJ I. Joe C. Norman Washington III. Ile Vice President Ronald II. Ilolmes represents the Second Con. Commercial Operations Manager iluman Resources gressional District, consist-4 Robert E Linear ing of I.exington, Richland, Vice President Patrick D. Quinn llamberg, Orangeburg. and Engineering & Operations Slanager Calhoun counties. Design Engineering Robert V. Tanner DeLoach was an executive Vice President flyron C. Rodgers Jr. assistant to fonner Gover-Production alanager nor Richard Riley and is Engineering and presidentfowner of F; Eugeng Williams Construction Slanagement \\ ice President DeLowe Corporation-Governmental Affairs Jerry L Stafford Alben Clinton Gossett Jr. Dircctor was appointed to represent Curtis L Williamson Corporate D on cePm ent G mnm & adons the Fourth Congressional Horry-Georgeton n District, composed of njvision Spa nanburg. Greenville, and I?nion Counties lie Charles 11. McGlothlin Jr. ( General Counsel replaces J. Thomas G rier. Gossett is owner and John E. llishop operator of Gossett Controller Concrete Pipe Company in II. Roderick Murthison Greenville. JohnnieJoseph Treasurer Young of Georgetown was appointed by Governor Emily llrown n;wate.%cwtary Carroll Campbell to represent Georgetown Albert iloyt Jr. County, replacing 51arvin Group 51anager Thomas. Young is presi-Transmission Operadons dent and one of the founders of Inw Country forest Products, Inc. (

l Board of Directors

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.d e s d - ';[ Y. Q% ~~ ingsw { ". ; h ... -. wt f y; / ?> .~. Ihsight A. Ilolder Walter T. Cox Ilarokl.\\t Robertson Roben 1) liennett l'ickens and llilton ife.Rl Clemson Walterluro Columbu Charrnun 1st Vhe Cluirnun 2nd Yk e Chairnun l'ormer l'let tne Representing 4rd Representing ist C, x,perain e ICxet utn e Ci ingressu inal 1)istrn t C< >ngressional lbt ra t U..

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r 'a ',. F,. O E 3.'- 4 - 't .s/ ~' h; ^ W.E 1)cl. oat h Albert C Gossett George W JonesJr. _lohn i:.\\liles C< ilumbu G reens ille 1.on s sumter Representing 2nd Representing rh Representing llorry County Reprewnt ng ith I i Congres sional I bt nt t Congressi< >nal I hstrict C< >ngressional t hstnt t j r_ y :. nw i y ,;,,x ),.; - j.);. - Q_. 8 l i t gene l' Oln er llenry it Ra kenbaker .\\lanin St Thornas \\1ons ks Corner sununert on Georgetow n Reprt senting lleikeleV Cd >unty Nepre g nting hgh Representjng Georgc[g >w n I Congressn >nal I hstra t Counts

l l t i l I Public PoiJer Ounted by the People ofSouth Carolina 4 Santee Cooper o m-1 2 m_1. ,,,& onex 29161 0398 ) l L-}}

ML20148G955

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