ML20150C684
| ML20150C684 | |
| Person / Time | |
|---|---|
| Site: | Summer  |
| Issue date: | 12/31/1987 |
| From: | Warren J SCANA CORP. |
| To: | |
| Shared Package | |
| ML20148A797 | List: |
| References | |
| NUDOCS 8803210169 | |
| Download: ML20150C684 (51) | |
Text
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South Carolina Electric & Gas Company 8 . South Carolina Pipeline Corporation 22 _R. . .j . .' '..' .'.I.~ .
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lh FIN A N CI A li & ^ O P E R A TIN G H I G H t I G 'H T 6 ' ' 3 . l l
% increase 1987 19S6 (Decrease) tMillions of Dollars
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. Financial TotalOperating Revenues $ 1,116,0 $ 1,102.0 1.3 i
TotalOperating Expenses $ 911.6 $ 903.3 0.9 I Earnings Available forCommon Stock $ 12f,.9 $ 122.2 5.6 Earnings Per Shareof Common Stock $ 3.20 $ 3.03 5.6 l . Dividends Declared Per Share of Common Stock $ 2.32 $ 2.24 3.6 ) Book %lue Per Share of Common Stock (Year-End) $ 21.63 $ 20.77 4.1 Market Price Per Share of Common Stock (Year End) $ 28.50 $ 36.625 (22.2) Common Stockholders' Equity (Year End) $ 871.6 $ 836.9 4.1 i I CommonStockOutstarding(Thousands; Year End) 40,296 40,296 - [ Construction Expenditures 5 173.3 $ 144.2 20.2 Gross Utihty Plant $ 3,099.9 $ 2,959.5 4.7 .i ' Electric Operations
) ElectricOperating Revenues S 806.8 $ 809.5 (0.3J
, Sales (Million KWH) 14,31J O,/lM 4.5 417,778 406,511 2.8 ] Customers O' ear-End) 3,890 1 Generating Capability - Net MW (Year-End) 3,890 -
. Territorial Peak Demand- Net MW 2,943 2,853 3.2 Gas Operations Gas Operating Rnenues $ 306.0 $ 289.4 5.7 Sales (Thousand Therms) 734,145 671,881 9.3
) L Customers (Year-End) Transit Operations 195,338 192,941 1.2 Transit Operating Revenues $ 3.2 5 3.1 3.2 Revenue Passengers Carried ('lhousands) 8,668 8,699 (.4)
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We are pleased to pres- from our own generation, Cost containment and cost ent this annual report which and all our plants functioned reduction is the focus of c. sec- ( outlines the successes of well during this period of and major strategy, which has SCANA Corporation during heavy demand. Over the past had the most direct effect on the past year. It is very gratify- few years, SCE&G has made current electric rates. Aggres- - ing to note that most of the significant expenditures to sive renegotiation of coal sup-significant achievements dur-ing 1987 resulted from our employees' diligent imple-extend the usefullife of our existing fossil and hydro power plants. Although this ply contracts and purchase of spot market coal, decreases in -{ corporate tax rates, redemp- ! mentation of long range strat- program is not complete, it is tions of high cost bonds and egies over the past few years, already paying dividends in preferred stock together with Earnings per common improved reliability during efforts by all employees to re-share were $3.20, an increase high load conditions. duce the' growth rate of non- , of 5.6% over the $3.03 earned The V.C. Summer Nu- fuel operating and mainte-in 1986. Earnings for both clear Station continued its nance expenses have resulted years reflect record electric history of superior operations, in significant rate reductions. t customer usage as a result of receiving very high marks in Finally, a strategy addressing record heat waves. We esti- its various inspections and l operational excellence fosters / mate the abnormal summer reviews, and getting full ac- superior performance as typi-weather contributed approxi- ) creditation of its training pro- fied by the record of V.C. Sum- ' mately 21e per share in 1987 grams from the Institute of mer Nuclear Station. These and approximately 23e per Nuclear Power Operations, strategies have been success-share in 1986. The plant was taken out of ful in making SCE&G's rates On February 24,1988, service for a scheduled refuel- among the lowest in the the Board of Directors author- ing in March 1987. The next southeast for investor-owned ized an increase in the indi- scheduled outage for refueling utilities. Since March 1984, cated annual dividend from is in the fall of 1988. Since the SCE&G's residential retail
$2.32 to $2.40 per common plant began commercial oper- electric rates have declined share. The new dividend rate ation in 1984, it has achieved from $76.91 per 1,000 kilowatt will be reflected in the quarterly a capacity factor of 70%, as hours (kwh) to $67.72 per dividends to be paid April 1, compared to an industry aver- 1,000 kwh, a decrease of 1988 to holders of record age capacity factor of 61%. 11.9%. We believe that March 10,1988. For the past few years, SCE&G's customer base will South Carolina Electric SCE&G has aggressively pur- continue to grow approxi- & Gas Company, our princi- sued several strategies to im- mately 3% annually over the -
pal subsidiary, met several sig- prove its competitive position. next few years, and that the nificant challenges during One major strategy imple- combination of our marketing the past year. The abnormall ments a renewed marketing emphasis and hard-won com-hot summer established sev y program. Its major features in- petitive position will permit us eral records for peak demand clude new choices in rates, to maximize the potential on our system, with the new information about price-value from such growth. record set on August 10,1987, relationships of our products, South Carolina Pipe-when the peak was 2,943 meg- primarily provided t arough line Corporation completed awatts, an increase of 3.2% our Energy Info Centers, and another successful year. Total over the prior year's peak set significant improvements in system throughput increased July 9. These peaks were met our levels of customer service. 9.4%, to 78.8 million deka-l
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therms. South Carolina Pipe- i - ], line Corporation continued ; - b- j i
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the price of competitive en- l .~ q l ergy supplies. Unfortunately, i" g l the outlook for natural gas J l sales during the next few years is uncertain. After sev- &Ah HEMA l eral years of diminished explo- ; : Chairmanand: H President j ration activity and partial de- ' Chie/Execu#veOfficer i regulation, the industry is - J l struggling to cope with over- ' ' j t hanging costs of past contrac-tual relationships in a signifi- Because SCANA had no sub- itive, while we market our l cantly different, very stantive experience wPh such products and services to an competitive marketplace. a program, our first invest- expanding customer base. We South Carolina Pipeline Cor- ments have been purposely will expand our diversifica-poration has skillfully taken small. The total investment in tion activities to augment our advantage of opportunities these ventures was less than utility earnings. created by these changes. We $55 million at December 31, Tne results of opera-believe it will continue to be 1987. We are continuing to tions for the past two years i successful as the industry expand this part of the busi- have been excellent. Cer-l adapts to a deregulated ness, but it will be a few more tainly, weather patterns and a environment. years before net income from strong local and national
- While we are striving to diversification makes a sub- economy have been major fac-improve the operating results stantial contribution to con- tors in our achievements.
in our principa subsidiaries, solidated net income. However, the determined ef-we recognize that they are We believe the future forts of all of our employees to regulated and there is a limit prospects for SCANA are ex- provide excellent customer to the growth in earnings cellent. As you will see in the service, to control our costs of which can occur based on succeeding pages of this re- operation and to expand the their operations. Your man- port, the economic progress of Company's business oppor-agement decided several years our service area is moving tunities really are the founda-ago to begin a selective diver- rapidly toward higher skill em- tions of our recent successes. sification program with the ployment and further indus-l t objective of having this pro- trial development. SCANA ph - ( gram provide additional earn- intends to capitalize on this Gj l i ings growth while, to the ex- growth in several ways. Our g e h j tent possible, helping develop the economy within our utili-utility subsidiaries will con-tinue to follow those strategies f'
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l l ties' franchised service area. which keep our prices compu- Febmary 24,1988 I t
- _ _ _ _ _ - _ - _ _ _ _ _ _ _ . _ , - - - - - - - - - . - . - . . - _ . . _ . - . . . , . , , - - . - - - , - _ . , . - . ~ , _ _ - . . . - . . - _ - _
g q r s , L I 3: LKKMdWL Mf I = J:~ J .L . [ Oundatmstobudd0n.~ l ( Opp 0ttuni6es(Orktaking. 1 Ibesearetheadvantages TheSky's TheUmit , ft N j l S0uthCardinahastoolerAnd A pmme of South Carolina is easy enough with the help of a few
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i 20Gentum/S000(YSide. statistics: It is a proud state hacated . on the southem Atlantic coast of > 'U j ,Greatereabas00na/Opporturi- the United States with a population i [ 5 of approximately 3.5 million . The
' 66$a/eBVadsdetodfy# Min' '
median ageis 23. . More than ) eerbe/ Ore.HundedSO/ku, WWy ungpe plewillreach the ' age of f8 everyyear through the end L f Sands 0lt00dS/S#00fto0Ur of thisdecade'. . Between 1970 and 1986, thepopulation increased l
' M0untainhideaWayS,Dedre- by 31.9%, makmg South Carolinc.
the second fastest
- rowing statein 80flS80dAES N M..6M the Southeast . .hou hl l
, yg g g ggggggggng; the peoplelivein an ur$n;y5f7c ama. ofReading, WritingAndArithmetic i
More than half of the people work Theimportance of havinga un/Wysibesarebe00rting/egd. in mtail jobs . . South Carolina better educated workform cannot tv ranked 14th in the nationin the understated. Afundamentally e/Sinemerg/ngheldS0lldn0/-- creation of new jobs in the latest bic. sound and successfuleducational magazine ratings . . State and kw system is essential if South Carolina Op@%dO0fSol f0 f mise cal taxes are among the lowest in the is to capitalize on economic oppor-I bothlmmediateandfulWe.Andc nation . . The work stoppage rate tunitiesin the years ahead. has been thelowest in thecountry The high schoolgraduation l ye(mfKh0ftheState'S800 . for most of the past quartercentu'ry rateis twice whatit was 10 years ago. i
. Constmetion costs are among The numberof college gractuatesis nOfDCandhumanpolen6a/re- the lowest in the nation . . More also up cmsiderably. State-sup-than 150 of the Fortune 500compa- ported technicalschools are tuming i EONSUOW- nies haw offices or plantsin the out and placing skilled workersin I
Af$CAA[ACgypgygg state. . More than half of the peo- record numbers, and the state of J pie age 25 and over hold high school South Carolina is committing more Ourp0a//StohepSouthCarp. degrees . . Thirteen percentof the money and resources toimproveits i
' people overage 25 hold college 3ublic schoolsystem than ever i
linamaXimile8Wfy0pp0flunity degrees. {xfore. andrealizeewypotendal.We f l " wantabetterwayoffilehrour . cust0mem,andwewantthe .~ state'sbusineSsesandindus- .
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DemandForJobsIntensifying ,, As successgreets our effods ?,!$ . . ggf. V c( - to upgrade the educationallevels of .' .
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the people, moreand better jobs will ."%-
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be needed. South Carolina has fared x> .. wellin years past attracting newin-dustry and 1987 was noditferent. 7 Q. Once again, SCE&G took aleader- , s - ship rolein this recmitment. - x >
' 'c - More than 20,000 new man-ufactunngjobs were announced in the state dunng the year,and capital imestments amounted to $2.3 bil-tion. About $1.3 billion, or 57%, will occurin SCANA's service area.
Examples of companies that HasteningEconomicDevelopment ple visit the state each yearand have m wed to South Carolina in the Corporate gifts play a rolein spend about 53.5 billion. last yearand a half readlikea who's hastening economicgrowth as well, Oneof the biggest drawsis whoinindustiv:MackTmcks. and twoin particular are expected to Spoleto USA, Charleston'sintema-Dana Corporation. 'The Allied Divi- pay big dividends to the state's tional arts festival, which annually sion of Grumman Corporation. economyin future years. SCE&G brings more than 150,000 visitors to Just asimpressneis the donatedmuchof tlielandand the fannus pod city. growth being experienced by com- buildings for the University of South Riverbanks'Zooin Colum-panies which arnved earlier.'Mich- Carolina's Swearingen Engineer- bia, one of the top 10 zoosin the clin Tire Corporation, with four ing Complex, which willboast a United States according to Parde major manufacturing facilities in the powerful new supen omputer that magazine, delights over a half million state, broke gmund in Gn'emille in willbeinstalled in 1988. A three- people each year. 1987 forits new North American year, $600,000 grant to Clem ,on Lake Murrav covers 50,000 headquarters. Pirelliannounced University will tv used to stimulate acresin centralSouth Carolina and p'ans for a research and develop- projects related to energy and eco- powers one of SCE&G's hydroelec-ment facility next toits fiberoptic nomic dewlopment at demson's tric generating plants. Itis also cable manufacturing plant outside new EmergingTechnology Dewl- home to thousands of year-round Columbia. NCR Corporation un- opment and MarketingCenter. residents and attracts 200,000 water-veiled its newest busmess com- ' sport enthusiasts annually. puter, which represented a $30 mil- . A new attraction willLv lioninvestmentin its West : added in 1988 when the South Caro-Columbia plant. Robed Bosch Com- .
. lina State Museum opens.The pany, a subsidiary of the West Ger- j -
building that willhouse the Museum man automotive supplier, began a , was the first electrically-powered four-vear, $170 milhon expansion of 3 textile millin the worlii.Bie elec-its So'uth Carolina plants. q 1 tricity was produced at a hydmelec-SCE&G's economic develop- a tric plant thatlater became part of ment team works withlocaland q # T -- '~ SCE&G. state agendes to recruit newinvest- . .
. What once were merely ment from around the world. How- ., , _ t promisingopportunities haw be-ever, we also help prepan> commu- come realities for many South nitiesin our own backyard for Beaches, Parks, Zoos AndMuseums Carolinia.is. Educationally, eco-presentations to prospective South Carolina, with historic nomicallyand technologically, the industries. Charleston, the Mutle Beach Grand stateis stronger today than ever be-I Strand, Hilton Head Island and the foreand getting stronger.SCANA I Blue RidgeMountains,certainly is proud to bea part of this success l doesn't need any help attractinj and excited about the challenges
! tourists. More than 36 million peo. ahead.
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[ ] a o i J M A;X 1 M l_Z I N[G,, O P P D RJ U N_ I T I E S ' _ m . i e x1 s FecordElectricUsage Rate stabilityis one of the pri-E . 1 SCE&G customers used re- mary goals and proudest accom-
- 1 cord amounts of electricityin 1987, plishmentsat SCE&G. In July 1987, i P .
y j establishing three historical peaks in 400 megawatts of electric generating I ' i j a one-month period, with the all- capability were restored to the rate l [ time mcord demand of 2,943 mega-
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, ; watts (MW)octuning August 10.
base without the need for a ratein-crease. In December 1987, the S.C.
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his series of nxurds broke the pre- Public Senice Commission (ISC)or-1 7# vious record of 2,853 MW setJuly 9, den'd a $27.6 million, or 3.77c, re- i E J 1986. dection in retail electric rates. His . ' h
- N*l Systemwide sales mse 4.5%
reduction reflected tax savings ex-F Thefuture0/SouthCarohna over the previous year, totaling 14.3 pected tobe realized by SCE&G as a
-} i Electdc& GasCompanyrestson , billion kilowatt-hours (KWH). Resi- result of the Tax Reform Act of 1986,
, dential sales were up 4.1%, commer- and a loweringof the company's al-
[ astrmg/mndatimo/mstomer cialsales 5.1% and industrialsales lowed retum on common equity '
- h. satisfactionbackedbytheisch. l 4.27c. Wholesale and other electric from 14.25% to 13.25% effectiveJan-O sales increased 4.7%. uary 1,1988.The PSC had pmviously pnicallycompetentandssnd Anincrease of 2.8% osvr reduced SCE&G's retail electric rates
!r managemento/itsresources.Out 1986in ekttric customers contrib- by $25 million, or37c,in Febmary
- i. uted to the higherelectric sales. 1987 to reflectlowerincome taxes
[ mstomersandstockholderm7I , SCE&G was sening417,778 electric establishedin the Act.
! nottolerateless." customers at year-end. Distribution Since March 1984, SCE&G's ,
IC. Nichols, .lf, system projects were undertaken to residen;ial electric rates have fallen [ President & Chie/ Opera #ngOf6cer , meet the resultingload growth and 11.9%, w hile average annual resi- i SouthCarolinaElectric& toimprove service reliability. dential usage has nsen 6.6%. L< GasCompany. . g -... . _ . m- . ..s ., - - , ., ._.m,, y_ 3,
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Efficient Generation Gets Even Better counted for567- of this capacity; ductivity. Refurbishmentscontin-SCE&G continues toim- hydroelectric 20%;nudear 15%;and ued at five steam plants as part of the proveits almady excellent record of oiland naturalgas9%. company's on-gomglife extension in the generation of elec- program forexisting electric MaintenanceShe efficienhecompanf's1987 tricity. heat rate for fossilp ants was9,920 system ProgramsBene#tCustomers generating fadlities. CoalisSCE&G's primary BTU /KWH, markmg the fifth con- SCE&G'ssuperb record of generation fuel.Our fossilplants secutive year this important measure generatingeffidency can belinked bumed 4.6 million tons of coalin of generating efficiency hasim. to aggressive programs to maintam 1987, a 24.1% increase from 1986. 1 proved. In ElatricLight & Paarr and upgrade existinggenerating Efforts to reduce the costsas- . magazine'slatest annualsuntyof plants and transmission and distri- sociated with coal have paid offin the country's 100 largest imestor- tution equipment. significant savings for ourcus- ! owned utilities, SCE&G had the Espedally noteworthyis the tomers over thelast few years.De i eighth best fossil heat rate for 1986. installation of a computerized deliveredcostofcoalhasdrop si SCE&G has rankedin the survey's maintenance planning and sched- from S53.27a tonin 1984 to$4 .60a top 10 for the last five years and eight uling system at SCE&G's fossil ton at year-end 1987. SU&C of thelast nine, plants. Although the project will not achieved these savmgsby buying Totalsystem generationin be completed at all plarts until the more coalatlowercost on the spot 1987 was 15.4 billion KWH, up 5.7% summerof 1989, benefitsare already market and by renegotiating sewral from 1986.Datinduded allelectric- being realizedin tracking work long-term purchase and shipping ity produced by the A.M. Williams orders, scheduling preventive contracts. ; Stationin Charleston, whichis maintenance and measuring pro- < owned by anotherSCANA subsidi-ary, South Carolina Generating Company,Inc. De totalgeneration [ ~"'""" ~ ~gggiggapiildNiniipiindkNdhipil #E"" [" - - -- - -- mixin 1987 was 74% coal,21% nudearand 5% hydroelectric. , {" " ' -[ ~ "" 7 ~ mis [8 Mcient M- M 5 ihip M M [
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De peakgenerating capabil-ity stood at 3,890 MWas of January 1,1988. Generation from coalac-
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j [> , WS8S#Dng)Serh80(MC80k18 { . soonomy %enbyedNse0mdbestparainadhjabannelon ) ( jilld&1&l#Tl91800fdN&NH$tnWW U$SHSdMNSITX$'N ChokesforABetterWay01Ufe MolMIX)ffleM8StolMMSIWng;dg@ a J Customer service means i more tlun just pnwidmga good i hMSXfSMOSd88Xffl9pfbdPaXlk EleAdf8/S m product at a reasoruble prim. It als) MNMN#3d80lMMMN881 l 1Ir$ t i IN$ r it-(0 satgantpoefenymemaanymumes ' ' '" G tyug gcg"," g ng g ha(Ottp69h" d ung tiut in a nomtvrof ways. ,
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,1he majority of our residen- - 1 f Sj tial ekttric nistomens a re billal at a standard rate. Ilut others with non- )
[I I traditiorul lifestyles or those who are 1 [ . 4 '9 willing to alter their electric usage Jutterns can saw with ourlow-use I' ' and time-of use rates. l(esidential I ' customers who build or retrofit their l [ _ homes to meet stringent a>nserva- ; [ tion standards can snv with a ' ii , - nxtuwd rate. ! L - A time 4>f-use rate is also :
! 3 available for businesses and indus- j
. j tries which shift their usage to off-q[ t \
- j peakhours. Acumbirutionof finn -
f' j ;j and interruptible rates offers attrac- l tive swings tocompank s which L allow SCI AG to di.,cuntinue their serviw durin);;rak situations. t
- j; TheHonorallipCaml#A Casgidle4 h. .j E lly encouragingconserva- i
[ . h ] tionandoff peakusage,SCIWG i Sgggyo( Q Cgngna l can delay the need for new generat-
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[ g , , ity. Ilut rates aren't the only options i l . ;; .
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I .J;y W l l., ; .f.d tomers SCE&G's residential cus-1 N whoqualify can receive a m-
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$ 7 . . c . .
.t i p[{' Q- -"f,1 k j;p.;.y,b S7.4 - . j mercialand industrialcustomers.
Lightning anestors and surge pro- [ V'. y [ ' ' ] y.<j . { - a. w
' ' . 'f f tectors are available to better protect i
[ .- ,, % .; . c;r , ' : g ',#7. homeappliances fmm electncil l [ J' - : '1_ T;' 7;. ggs A,h, y ,,,c j.. damage. Commercialand industrial i'
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g : i , J D 7 %[- [-j custom-designed back-up equip-ment to assure an unintenuptible , [ .. :_ a p g .g. w "-k d & *M wersource for sensitive, critical l t f r========'P. ;iggi.f pg. n - ..
~
q j microprocessingequipment dun.ng temporary semce mterruptwns or
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. i extended outages. l i- : Rite Aidopeneda new distribution centerin Winnsboro in May I
.c.
. . .#.::s ~g q, 3r..
w i 1987. The 277,000 squaie-foot facilityprovides service to i 3if P~..' :; l
'RiteAidphatmaciesinasix-statebNa.
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i i y customersquahtyforSCE8G's Energy 5tras [c- programs thatprovide finaxialincentives l L
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forimprovirgthe ethciencyof majorhomeappliances. i l i .
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SCE&G hasdevel a l J .^ .e4 4 ~ + '. ] j i' numberof corporate soci msponsi-bility ms to help meet the [ . ( $4 e
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[ - [hig . .. g . . .. ; 1 need e commumties we serw. ; " 571' ",. ' .g '
~ ' ~ l The urposesof the vary, h' <
(l .
\ ( {
but e company's d cation to ? -
- 1 -I cach oneis strong. : f- 1 Oneof themoresuccessful I
~
-l et M N programsis called Project SHARE. A ' ,fsE 3 voluntary donation program su h s e < 4/- i g[u 7 ported by nearl ' 20,000 SC cus-3
! ,3. 4.! . . " : .
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)i {b g, , Q[y tomers, Project HARE provides L
4 V 3. l- IM -g. J' j;
' direct finandalassistance to the 3 .
9 y' g :q E- - 1 [! ~ E . needydudn cdsissituations. _[ }
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- c. -; ..e 4 buy heating fue to stay wami dur-
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;y , y.% q ing the winter and to pay for heat- p ): g, ; ..,:[A..y."..,?.
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mg pment repairs. Project
-. wi . :
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1 SHA gotits start from seed ! ~, m ' " ? U >. c iFe ,, . ,, 1 2 money donated bvSCANA stock- '
. M; 5# r , -) # .f' . . ' .. - .: , e :'i d holders. In 1987, c'ommunity action 5 7 J. 1 T: '( ~Gt N @h 3 I agendes distnbuted mom than '
"(.._ ~ "
91 -y.l."s; .' .1.' ' M c M ' . -37 ,
$217,000in Project SHARE funds to i
- V '/ ' ' " ' #
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. M.D :' ".i" .A..." : . ?.' . . i 1,333 deserving families and ..
2 i e
.t E[-)7((jJ individuals. i T Anincreasedem hasisis -
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17 ., J J ; .? - f . * , Mj t - being placed on meetin the spe- 1. t , cific needs of our senior citizens. In cooperation with thelocal [
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?
I ;:/t( '- Councilon Agingin Columbia, the Nj i Customer Assistance Deparanentis -
. , .. ; D =. 3 j participatingin a pilot am * -" --
p~ j' l re$tlyWs$f $hos'pg"'* Robots make Up the mAfority of the nork force at the Dans ' ^ Home visits by nursing and ghar-
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maco Corporationplantlocatedin the Carolina Research Park. The I stuffents from th%mver- : ... .
~!
sityof _ th Carolina willensure , llghtly mannedrobotics technology manufactUfeS front Wheel i > thatmedicmeisbeingtaken mp- <
?
erlyand bandages are kept an. ' drive SyFlemS forautomotIVe appliCal@.S.
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SCE&G receiwd good news l [i ' .y I - v ( ' 3 from the Nudear Regulatory Com- ! l
& --c' - . .. mission (NRC)in 1987 when the agency released its latest assessment !
-m , m ,, - -
. q q of perfomunceat the V.C. Summer I
- r. '
n j Nudear Station. [ ' ,. - H In aletter toSCE&G, the i 1 NRCcommended the company for its"highlevelofimprowd perform-
']
[. j ance" and "aggressne manage- , ment postum towards nudear [ y
.; safety"identified in the mix)rt, i
l i
! j which covenxi the periodJanuary 1, 1986 through July 31,1987.
jg g7 p g N. ;j 'Ihe NRCnoted that SCE&G , p , 1 a bad taken a numberof steps toim-pmm plant operations during that [ l Trud(Sopened/lSneW A m 7 j , time,induding the establishment of j j
' $80million Winnsboro .
w a management reviewlxuni to re-
> q view allunplanned shutdownsof !
[ assemblygant. The#rst 1 the reactor.1his review board s work ) f am L] **""'d i" * "d"'ti " *f "' ""** y custom, er-orderedtruck - l
. f ber of unplanned shutdownscom-L waspresentedtoSCE&G ]j' ,
, pared with an earlier period.
i ~ o - J The company receiwd even < [ threemonthslateron . ' ~; '~" 4 more go(xi news when theInstitute l d of Nudear PowerOperations j- November 10durin9 1 (INPo)accmdited the mmaining i l fourtr ininh'programsatSummer o/#cialdedica#on' j Station. By havmg all10 ofits tram- , i ceremoniesforthestate- ] 1 ing programsaccredited, SCE&G ; [
. became the 24th utility to be > anted :
~ ofthe-artfacility. 1 fullmembershipin INPOs National !
P ! Academy for NuclearTraining. [ '
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~1 I 4#wrl: .. . m .a i w g , SummerStation also sucress-t' ~
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month outageinvohed the"shot l g " ' *. 4 h j3
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g ) .qg '5.6 % H. d-f peening'of steam generator tubes, i h( Q . r N ~ '. ~. y" ! ,. L., " making themless susceptible to J;# . l cracking. f Q.Q'g;. 1> !. f !
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p ifs f s 1 3 age, Summer Station's capacity fac-tor was 66.57c for 1987. 'Ihat was
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; N., . - ': r n 92Ec, when the plant did not '
F [VM(.i:.C ..) h,j GW .1 f !Q undergo refueling, but stillbetter l 3 f ; ,' ? ; No F ..O ,. A .: ya .- .. . than the nationalaverage for nu- ; f. A ,N P '
% cf. i clear units. Capacity factoris the
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; .31? .f.?(; amount of electridtya generating
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V TransitSystemAHowedHigherFate i [ NCRCorporation's- ;f 3: e' N.. W ;: p[2(:.]}* SCE&G's fleet af 108 buses canied mom than 8.7 million mve-l [ g g gtbygjpggg . ; o.
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nue passengersin 1987,about t .. . . . . Ij computer; the Tert m.
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money onits transit operationsin n; M- :- y. 4 g $. o 1907despite on-going programs to > g
$2/$ WJF.AVtvCdt/g[l .i. " .. a' ;W h
. .? b i Ngf7 ' mducecosts.Totalrevenue was $3.2
^
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.m &*- l. "'.*1 million. SC -* P " "" " P';
is re-V
; 4 : com.9uterwasdes1'9nedr ;. ,1-
. 1 wem $8 quimdby franchise agreements
[ IdeVelopedShd/Smans pWP . a Vfd(.., g ;. t .t
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t with the atiesof Charleston and 7 i MJ;;1 t .- . . - Columbia to provide public ! b :UlaCluredattheNCR- . L,. * ~. q . h, ' > l 2 transportation. H - 1[3 M[ , . . *?y fdl 1 j [ fplanl/n W6StColumbia ' , 4 In October 1987,SCE&G pe-titioned the PSC foran increasein j r [ A - f, Y ' 1 F the25centbase fare-thelowestin i
, kg.fd
< the country. In December 1987, the j [ .le <. g PSCapproved an increase to 50 t '
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Although thisincrease will ,
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[ appointing that the requested in- I ! I crease to $1 was not granted. p SCE&G continues to seek the estab-F [ lishment of publicly subsidized Re-gionalTransportation Authorities to [ , 3, reduceits rolein providing public Q , transportation. f[
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l I NaturalGasSalesStressed who mplace theirold electiicwater pssible by utilizing a process called ] ThroughSalesforce, Marketing heaters with moreeconomicalgas ekctrofusion," where ek'ctriccur- l The numberof naturalgas water heaters. rentis used tobond the pipe. i TrainingE//ons/mproveService Systemimprovements con- ! customers on SCE&G'ssystemin- . creased by1.2% over1986 to 195,177 ToGasCustomers tinued in 1987as a $30milhon p ul- i ect to mplace more than 600 miles of l atyearend 1987. Totalretailsales SCE&G cxPdnded its tram-mams and senice connectionsin i wem up9 3% to300 2 million th ' I fr n ers n 7. Unde a m d n 1in nearp ts that n quims 160 hous ofintensiw Colu nbiaand rleston were re- . 81% and 3 8%, respectiwl), g, g as g pe trainmg, gas semcemen are now being qualified to senice all types of built and theircapadtydoubled to meet Peak-da)a supp1y needs. tions underwent a complete reor- householdap liances. And tostay "***"""8""*"" ganization during the fauof1987as abreastof thebitestin tecimol in - - partof a new strategy toincrease ketpin pacewithinwstmentsto, the meteringand pressum reb - exPan andimpruvethesystem, m msidentialsales along thecompa-am June 1987, thecumpany nx{uested a 1 ny's 5,399-mile distnbution system. $ n f[turaigas,e g pc sts to con-5.7% inemasein naturalgas rates. l A spedalsales forte was formed, trained and challenged to d"'"# k"kc$i$ i taking advan- "
t
"[ !
iden and recruit new customers. tage of new technologyin other PP#* . ' The sa es force, workingon acom- " " ' "'*#* * #"' areas asit becomes available. Com- ""# "" "# ' mission basis, willfocus on thme puter softwareis makingit easier to mturnon common t m target grou ': Customers with 'as . i dentify t'quspment problemsand December 1,1987. yug,eM' ! lines near t ir homes willbe tofd quickly find solutions. Faster emer- , aboutthemeritsof asappliances; gency mpain toplastic pipearealso t 1 and developersan builders m fast-growingamas where naturalgasis .. .
. _ _ _ i '
availablewillbe encouraged toin- >.>
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clude gas appliances in tficir plans. ,fC-
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Additionally,in 1988, SCE-&G' be- .- ' gan offering rebates tocustomers ;~ ~
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'l ENeal Shoals OSummer E Fairfield Pumped Storage EE Parr McMeekinlEColumbia Canal Saludam ECoit Columbia g ateree EStevens Creek 5EUrquhart Aiken ELECTRCOPERA1XWS S SteamGenerstion C nadys 88 Charleston M nyssioGeneration wonamsmE HagoodE E IntemniCombuctionGeneratica Faber Place M b #UciekrGorwa$t BuOn 5
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,.. , .e:1., l.,. .i' Tirzah Propane
,.',' \ < R iik Hill
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' Supplier N
Columbia Myrtle Aiken Beach Orangeburg GASOPERADONS Liquefied Gas Transmissionlins Charleston yi,nt '"' ** Beaufort i
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$ South Carolina Pi 3eline Totalnaturalgas purthased
[ Corporation (SCPC)is NA s in- for resale, including spot nurket [w
.1 trastate naturalgas transmission purchases, totaled appmximately j subsidiary that sentsieschand in- 72.C :aillion htCFin 1987, up fmm ,
,, j dustiialcustomersin allbut two of 65.4 millic,n h1CFin 1986.The cost
,
- Lj South Carolina's 46 counties. Resale perhtCFdeclined from $3.30in ,
[; , Tj cus'omersinclude city and county 1986 to $3.09in 1987. 4 ! .i gas authorities and othergas utili- - n -- ties. At year-end 1987, SCPC was SatdlitehtoringWPipeline ((."7heteshCftsmgof thenakralgss[1 serving approximately 116 dimet Passes Test
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customers, including SCE&G. Purchases of During 1987, SCPC twame the first gas transmission utility in g PipelineCsfusiunacriazal - ; market continued tohas el SCPC on re-the spotthe nation to emplo > a satellite te- [ gggnpe, To mnQg jg,".j ; main competitive with a temate fuel lemeteringsystem ormonitoring r < suppliers m 1987. Total sales in- and contrcJmg the pipeline. The [ excellentsetdsotscusdorners crecsed bv 8.4% over1986 to 72.4 very smallaperture tenninal(VSAD i hascometoeapectinanin. - million hfCE Industrialsales were system exceeded allexpectations up by4.6% while sales to resalecus- dunn > extensiw testing and is ex-
![ creasml$coryeywenwonment. tomcc { incmased by 10%. De pectt to become fully operatiorul 11Wewekomethischa#enge " ;l amount of gas transported for msale during 1988.
[ . gpg customers and end-users rose ne system willbeinstalled
- j. '
32.4% compared to 1986. in two phases. Phase 1invohrs the ig g g &&f i g :, Southem NaturalGas Com-pany(Southem)and Transcunti-placement of 25 small tenninals to transmitinformation about gas vol- [ nentalGas Pipeline Corporation ume and flow from remote points t (Transco) provide SCICs contract alongSCPC's 1,657 miles of pipe-I, gas requimments. Le contract de- line. Phase 2 calls foran additional I ' mandis 210,900 h1CF perday with 15 terminals to beinstalled. Southem and 29,300 h1CF per day ne financialbenefitsof this [N CONSOLIDATEDNATURAL L ' GAS SALES with Transco. SCPC also purchases significant volumes of spot market system willbeimmediate.De cost to transmit thisinfome.uon across (millions of therms) - .. ;{ gas that is transported byTransco kxaltelephoneline,has been [BREE [ Rmknbl EEEEInduu M -. i and Southem on aninterruptible steadilyincreasing. Because ofits r cann=cui suEn sa., ra aci.". l basis.This arrangement assures fixed c6sts, VSAT willquickly pay f,g _g] SCPC customers of a reliable supply foritself. -
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ixstruction,RealEstate AggessiveMarketingPaysOff g;g , CapaniesActive ForSCANASoftware based onquafty p?v;ductsand exc Primesouth,Inc., SCANA's SCANA SoftwareSenices, lencein senice,is positioning constnvtionand design subsidi- Inc. bean aggressive marketingof SCANA Softwarv forcontinued ary, ended 1987ona successfulnote itsp uctsand senicesin 1987, growth,in addition to holdin t , by signing a majorcontract as an and this effort is proving successful. promise for the future, this hi - . authonzed builder for American During 1987, SCANA Sa't- technologyventure has cent ted Buildings Company,one of the war igned contracts with several to the economicdevelopment of largest manufacturers of metal build- utilities for the sale of a Fleet Man- South Camlina through the cmation ingsystemsin the world. Contracts agement System, which allows com- of 70newjobs.
~
awarded to Primesouth during 1%7 panies to manageand analyze their included a new U.S. Post Officein equipment purchasesand mainte- MPXContinuesGrowthSttstegy Charleston;a majoraddlion to the nanceactivities morecost effec- Another high-tech subsidiary-headquaiters of a regional bank; sig- tively. In addition, SCANA Soft- -MPX Systems, Inc., a pros.* der of nificant renovationsat a county ware contracted with a gas utility to fiber optic telecommunications ser-hospital;a 145,00C square foot to providea customized Distribution vices-also had a good yearin 1987. search and development facility; ConstructionInformation System MrXincreaseditsimustmentin and an aircargobuilding for th'e to sausfy specific construction man- SouthemNet,aninterstate carrier Columbia Metropolitan Airport. agentatrequirements. Asa result that provides telecommunications Primesouthachieved pn Stabilityin of this project, SCANA Software will services to Washington, D.C. and 1987,its first fullyearof oparatim havea new gas syskm toadd toits sesen southeastem states, toa South Carolina Real Ests.e product portfolio. 15% interestas of December 31, Development Company Inc. SCANA Softwarealsoestab. 1987. Equity earnings from thisin. (SCRED)continueditsin,vohe- lished anintemationalpresence ' vestment andincome from the fiber l ment during 1%7in busineses during 1987.He Sevem-Trent opticlines bui'+ and operated by ranging from major adustrial pek, Water Authorityof Birmingham, MPX madea positivecontribution to single-family revieM deve'c England signeu a contract fora s to SCANA's caminas in 1987. ments. ECREDo n.pleted a shop;cially adapted wrsion of theconpe-Plans are being nacie toadd approx-ping centerand ;b.isiness parkin stmetioninformation system to imately 70 mi' s of fiberoptic hnes Columbia, anc'an office butidingin meetits needsin the United in Sou'th Carotina. Charleston. A aotheroffice1 uilding Kingdom. is underconw.;ctionin Charleean. i e 1 1 h n Oc@ MNLisiiN@RMiiFiiEfE
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l SCdNA: C O R P O R A -T I O N . 1 LNiectors OMC0tB J. K. Addyu T. C Nichols,Jr. John A. Wanen* lhskmt th ukst Quimunof theihm!and Addy Do?7,Inc. StuthCanim am 01iefEuwtheOf&w laington, South Candina GasCompmy L M. Gressette,Jr.7 l W. B. Bookhart, Jr.u Cdumbia, South Cudina Ihukmt andTnnsurer I* . Cathy B. Novinger W. B. Bookhartliinns E. W. Pike, Jr.u mine, South Caniina thsident SeniorVnIhsident CdonialDewlopmentCompany Administratinand . J. B. Edwards, DMDo Ikaufort, South Canduu Gowmmental Affairs Ihsident W.B.Timme man MedkalUnimsityof SouthCudina Henry Ponder, Ph.D.u SeniorVreIhskmtand Contrdky Oakston, South Caroliru Ik ukot OsfFiruncialOffkw 1 L M. Gressette,Jr. I'isk Unimsity
% W ,Tenr m C B.McFadden Pn nient Vrelhsider.t SCANA Corporation J. B. Rhodes" Ctdumba, SouthCandiru 11anningand GrporateStwices ChiiEuwtiwOffkw J. B. Guess,Illu , yK, p,y,ggy, Omr Inttmul Audit Edisto Farms V. C Summeru ;
Denmark, South Candiru Quimunof theIkurd Emeritus Barbara D. Blair* , B. A. Hagoodu SCANACaporation bM ' Ihsident Cdumbia, South Carchna liarriett M. Ganiner Wm. M. Bird and Co.,Inc. E. C Wall, Jr.u Assistant Secetary l Ourkston,SouthCaniina Ih ukmt J. E Hassell,Jr.u CanalIndustrks,Inc. Retind Quimunand Conway, SouthCaroliru ChiefEuwtiwOffin John A. Wanent IhsStassConceteCompany,Inc. Quimun and Ourkston, South Candina QiiEuwtheOffkw W, }{, } {jppu SCANA CorporatkmandSulndwks lhskmtand Gif EuwtiwOffkw Cdunibia, Smth Cah TheLarityCorporation Gnymille', South Carobru MsM Avram Kronsbergu W. R. Bmce Ihsidmt K. W. French Ilamson & Cm 2 ' Inc., E M. Ilipp ihiemtvrof EmutzwCommittee Curleston, Sou Carolina J. ll. Lumpkin 2hiemtvrof Auditcommittee E C McMasterg- A.C Mustard 4temtvr of Corporate tyrformanw and
- J. E. Sdudite,Jr. strategic naarung Committee Ih @ mt A.M.WilliarnS
- hiemtvr of Imestment, C WinnsboroIbtndcumOxnpany hianageuent turkipmen2Asation and John C B. Smith mittee Wudwhmth Caniina drumf(1488) 4temtvr of Nuclear Owrsight Comnuttw i W II.Ia)if 6 AlsoChairmanand CEOof allsutwidunes 3 dtumi(2-hM8) 7 Alm Via Chairman of all sutwid. anes where heis not President
(
"Snretary for all sutNdunes l l
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F FiC E R S 0F 9RINCIPAL $ U B SIOI A R E G_ / ~ 2r SouthCamlineElectric& GasCompany South Caroline Pipeline Corporation T. C Nichols,Jr.' R. D. Hazel Max EarwuodS Pmsidentand VreIhsident Ihsient Q*f Optrating Offrer Rwmeland Ca GmnunMms }uate R. M. Fightlinger O. W. Dixon,Jr. VreIh stent EwcutiwVrelhsknt B. T. Horton, Jr. Supplyand Engineering Operations Vre PrtsientandTreasumr B. J. MacInrds C L. Rye John Kinloch VreIhsient
. SeniorVreIhsient VreIhskmt Optrations IberDeliwryandTransportation Transitand Fkrt hiaintenance B. M. Smith,Jr. S. C McAfeekin, Jr. Pri,wsouth,/m SeniorVreIhnlent VreIhukmt E. H. Crews, Jr.
Corporate and CustomerRelations- President Econome Mekipnnt ihn mision J. H. Young, Jr. J. M. Woods D. C McNamara Vice President Senior Vre President Vreih slent Customer Relations Marketing J. C Chapman Vice President G.J. Bullwinkel,Jr. D. A. Nauman Vrclhuient Vrelhsient Customer Relations- South Caroline RealEstate Dedopment NudearOptrations S "tl " " N isi n Company,/m E. C Roberts V. R. Coward,Jr. Vre PresidentandGeneralCounsel J. \V. \Veddin Vre President thsident Sp A m ces Patricia T. Smith Vre Pnsident A" H. Gibbes G. C Croft,Jr. Punhasingand Regulatory Affairs VreIMient vreth sint W. E. Moore Transnmonand Disetion SCANASoftwareServices,Inc. Asststar.1 Vrelhsident En-8 Pn- En-s n.wp W. A. Darby vreIhsient K. B. Marsh Gas Op' rations gg J. D. Gregg J. G. Black,11 VreIhsident Optratins AssistantTreasurer
' Also Preside of South Cartana Generating i Company, int . South Carolina fuel Company. Inc., and Caretane, Inc.
'8 Also Viw President of SCE&G and President of miru propane st.twidanes t
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M A N A G E'R E N T REPORT . 29 i The Management of SCANA Corporation (the Com- and guidelines and is complemented by the selection, train-ny) is responsible for the preparation and integrity of the ing and development of professional fuundal nunagers cial data induded in the r.ccompaming Consofidated and by a staff of intemal auditors who conduct comprehen-Financial Statements. These statements haw been prepamd siwintenulaudits. in conformity with generally accepted accounting pnnoples The Board of Dirtcors prusides owrsight for the pmpa-as applicable. In situations that prewnt exact anounting ration of the finandal statements through its Audit Conunit-measurements, nunagement has used informed judgments tee, which is composed entirely of nonempkwee directors. and estimates. Fuundal infomution presented elsewhere in 1he Audit Committee meets periodically with management this Annual Report is consistent with these financial and intenul auditors to review their actiiities c hrsponsi-statements. bilities. The Audit Committee also meets per.tJ,taliy with the l The Company maintains and relies upon a system of Company's independent auditors, Dek>itte haskins & Sells. / intemal accounting controls designed to pmvide rea.wnable The internal and independent auditors have free acwss to assuranw that all transactions are properly recorded in the the Audit Committee to discuss intenul accounting control, books and reconis and that assets are protected against loss or auditing and financial reportig matters. una uthorized use. The degree isbaseduponthedetenninationof of intemal theoptimumba accountinb' control nce / W~----- betwren the cost incurred in maintaining a sy stem of inter- W B. Timmemwn nal controls and the benefits to be deriwd. Ihe system of Senior VicePresident intenul accounting controls is supported by written polides gjgfgggg 1 0 sona2o Harkins+ Sells e . = s c;s' c.,,, 2,20, SCANA CORPORATION: We haw examined the Consolidated Balanw Shwts In our opinion, such Consolidated Financial State-and Consolidated Statements of Capitahzation of SCANA ments present fairly the consolidated financial pmition of the Corporation and consolidated subsidiaries ("Company") as of Company at December 31,1987 and 1986 and the results of its December 31,1987 and 19S6 and the related Consolidated operctions and the changes in its financial pmition for each Statements of Income and Retained Eamings and of Sources of the three years in the period ended December 31,1987, in of Funds for Gross Property Additions for each of the three conformity with generally accepted accounting p mciples ap-years in the period ended December 31,1987. Our examina- plied on a consistent bacis. tions were made in accordance with generally accepted audit-ing standards and, accordingly,induded such tests of the ; accounting records and such other auditing procedures as we 4/ f considered necessasy in the arcumstances. Ettruary8,1988 l
a 0 0 N S O L I O,A T E D BALANCP .S Il E E' T S ? , I l December 31, 1987 1986 I ASSLTS (ThnwidsofDchus) Utility Plant (Notes 1,2,3and 4): Electric $ 2,574,138 $ 2,475,332 Gas 292,990 277,292 Transit 4,024 4,188 Common 37,102 23,622 Total 2,908,2M 2,780,4M ' less accumulated depredation and amortization 797,752 722,996 Total 2,110,502 2,057,438 i Construction workin progress 95,013 92,379 i Nudear fuel, net of accumulated amortization 62,445 51,535 J Acquisitionadjustment-gas,netof accumulatedamortization 34,148 35,146 Utility Plant, Net 2,302,108 2,236,498 Otha Property and imestments: Nonutility property (substantially at cust) 40,789 30,331 Imtstments(Note 1) 29,076 19,213 TotalOther Pruperty and Inwstm. nts 69,865 49,M4 Current Assets: Cash, temporary cash imestments and special deposits 22,195 10,913 i Receivables 105,011 107,078 Imentories(at avemgecost): Fuel (Note 3) 61,025 M,768 Materials and supplies 24,M1 18,433 IWpayments 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,M3 11,208 Unamortized deferred retum on plant imestment (Notes 1 and 2) 40,335 36,395 Nudear plant decommissioning rund (Note 1) 7,238 5,128 Other 32,081 24,570 TotalDeferred Debits 101,287 82,775 Total 5 2,702,369 $ 2,575,332 l l 1 l l l Sx Notes lo Cmsddated Fmanas tatements. I l
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December 31, 1 %.7_ _. 1986 CAPITALIZATION (See Consolidated Statements of Capitalization) (UmnufsofDdLrrs) Stockholders' Investment Commc,n Equity 5 871,620 $ 836,913 Preferred Stock (Not Subject to Purchase or Sinking Funds) 26,029 26,029 TotalStockholders'Imtstment 897,619 862,942 Preferred Stock (Subject to Purchase or Sinking Funds) &i,632 117,542 fong-Tenn Debt, Net 886,993 745,451 TotalCapitalization 1,869,274 1,725,935 LIABILITIES Current Liabilities: Short-term borrowings(Note 8) 21,565 80,576 Current portion of long-tenn debt, net (Note 3) 24,719 21,930 Accounts payable 82,789 82,0h3 Customerdeposits 15,260 13,417 Taxesacaued 36,XO 45,836 Interest accrued 16,684 12,147 Dividends declared 25,621 25,966 Other 6,790 3,715 TotalCurn>nt Liabilities 229,828 285,655 Deferred Credits: Accumulated deierred investment tax credits (Notes 1 and 7) 117,177 119,766 Accumukted deferred income taxes (Notes 1 and 7) 416,700 388,789 Accumulated resene for nudear plant decomnussioning (Note 1) 7,238 5,128 Other 62,152 50,059 Total Deferred Credits 603,267 5 &3,742 Commitments and Contingencies (Note 9) - - Total $ 2,702,369 $ 2,575,332 sne,---isw-,s. f L L
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For the Yean; Ended December 31, 19o7 1986 1985 ClhousandsofDoHars emyt prsharcamow,ts) Operating Revenues (Notes 1 and 2): Electric $ 806,826 5 8(B,488 $ 787,7)6 Cas 305,911 289,429 318,856 Transit 3,212 3,119 3,689 TotalOperating Rewnues 1,115,972 1,102,0Yi 1.110,341 Operating Expenses: Fuelused in electricgeneration 227,877 216,076 229,249 Ibwer purchased, net (12,486) (2,823) (8,821) Gas purchased for resale 222,319 215,928 246,760 0+heroperation 169,336 155,588 143,016 Maintenance 57,995 56,8M 60,836 Depreciation and amortization (Note 1) 92,583 93,627 86,899 Income taxes (Notes 1 and 7) 95,051 119,108 105,783 Other taxes _ 58,892 51,952 49,021 TotalOperating Expenses 911,587 903 320 912,743 Operatingincome 2G1,385 __ 198,716 197,c98 OtherIncome(Note 1): Allowance for equity ftu eds used during construction 2,063 1,2M 1,086 Deferred tvtum on pk nt imestment (Note 2) 6,063 12,450 12,881 Other income (loss), net of income taxes (1,731) (3,889) 1,751 TotalOtherIncome 6,393 9,825 15,721 Income Be.%reInterest Charges and Preferred Stock Dividends 210,780 208,511 213,319 Interest Charges (Credits): Interest on long-xrm debt, net 68 119 68,id) 83,817 Otherinterest egense 5,155 5,771 1,789 Allowance for bonowed funds used during cons':ruction(Note 1) (l 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 16,511 - Net Income 128,S65 122,1M 113,5W Retained Earnings at Beginning of Year 262,671 230,519 202,988 Common Stock Cash Dividends Declared (Note 5) (93,487) (90,263) (87,010) Other Capital Stock Transactions, Net (929) 221 1,0 11 Retained Earnings at End of Year $ 297,120 $ 262,671 $ 2,X),519 Eamings Available for Common Stock $ 1?3,865 5 122,1M S 113,560 Common Shares Outstanding (Thousands) 40,2 % 40,296 40,296 Eamings Per Share of Common Stock _
$3.20 $ 3.03 $2.82 See Notes to Consoldated FouncsalStatements.
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1 For theYears Ended December 31, 1087 1986 1985 SOURCES OF FUNDS (DeusaruisofDollars) : Intemally Canerated: Netinconw $ 128,865 S122,1M $ 113,560 Charges (credits) to income not mquiring (prtwiding) funds: Depreciationand amortization 92,583 90,627 86,899-Amortizationofnudearfuel 17,1 % 30,529 22,e12 Deferralincome taxes, net 20,627 33,635 42,497 Deferredinwstment taxcnxiits, net (2,589) (9,593) 821 Allowance for funds used during construction (3,859) (3,281) (3,474) Deferred returnon plantinvestment (6,063) (12,450) (12,881) Other, net 1,991 2,020 1,444 Fundsprovided fromoperations 248,754 253,651 251,478 Deduct cash dividends declared on common stock 93,487 90.263 87,010 Internally Generated Funds, Net 155,267 163,388 1M,438 ExternalFm* ancing: Mortgagebondssold 100,000 - - Ibilution controlbondr sold 4,365 1,100 5,500 Bank notesold 40,000 - Increase (decrease) in fuel financings, net 13,938 (19,813) (8,256) Reduction oflong-term debt (13,001) (89,459) (44,066) Retirementof prefermd stock (32,910) (35,205) (1,275) Increo e(decease)inshort-termborrowings, net (59,011) 78,188 1,915 Fundsfrom ExternalFinancing 53,331 (65,189) (50,082) Other Sources (Uses): (Increase) decrease in working epital, exduding short-term borrowings and current portion of long-term debt (19,199) 29,273 15,018 Other changes in noncurrent balance sheet items net (19,990) 13,424 (4,371) OtherSources(Uses) (39,189) 42,697 10,677 Funds forProperty Additions iW459 140,896 125,033 Allowance for Funds Used During Construction 3,859 3,281 3,474 Gmss Property Additions 5 173,318 5144,177 $ 128,507 See Notes to Consdidated FrancialStatemen's. l l
i C O N S 0 k l.,0 A T E D S T A T E M E N 'T S OF C A P I T A l l Z A T,l O N l Derember31, 1987 1986 Common Equity (Note 5): GhousandsofDdlars) Common stock, no par value, authorized 75,000,000 shares, issued and outstanding; 1987 and 1986 40,296,147 shares $574,500 ~ $574,242 Retained earnings 297.120 262,671 TotalCommon Equity 871,620 47% 836,913 49% . i South Carolina Electric & Gas Company: Cumulative Preferred Stock (Not Subject to Purchase or Sinking Funds): Shares Outstanding Redemption Price j Ewntual Series los7 1986 Current Through hiinimum 5100 Par 8.40 % 197,668 197,668 104.70 11-30-91 101.00 19,767 19,767 550 Par - 5.00% 125.238 125,2M 52.50 - 52.50 6,262 6,262 Total Preferred Stock (Not Sub}ect to Purchase or Sinking Funds) 26,029 1% 26,02'5 1%_
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South Carolina Electric & Gas Company: Cumulative Preferred Stock (Subject to Purchase or Sinking Funds)(Note 6): 5100 Par Value - Authorized 1,550,000 shares Shares Outstanding , Redemption Price Ewntual Series as7 1986 Current Through Minimum , 7.70% 108,000 113,841 101.00 - 101.00 10,800 11,389 8.12 % 153,986 162,066 102.03 - 102.03 15,399 16,209 -l 13.88 % - 250,000 - - - - 25,000 i 261,986 525,980 j l 1
$50 Par Value - Authorized,1587- 1,716,086 shares; 1986-1,728,786 shares !
Shares Outstanding Redemption Price Ewntual . 1 Senes 1987 1986 Current Through hiinimum > 4.50 % 30,400 32,000 51.00 - 51.00 1,520 1,600 , 4.60 % 12,83s 14,3M A.9) - 50.50 642 717 4.60% (A) 42,052 44,052 51.00 - 51.00 2,102 2,202 ] 4.60% (B) 102,000 105,400 50.50 - 50 50 5,100 5,270 l 5.125 % 80,000 81,000 51.00 - 51.00 4,000 4,050 ' 6.00% 108.800 112,000 50.50 - 50.50 5,440 5,t<D 8.00 % 240,000 300,000 50.50 1-30-88 50.00 12,000 15,0t0 8.72 % 315,125 365,400 53.00 12-31-88 50.00 15,756 18,270 9.40 % _ 237,436 244,692 51.175 - 51.175 11,873 12,235 1,1tA,667 1,298.873 Total Preferred Stock (Subject to Purchase or Sinking Funds) M A12 5% 117,542 7% See Notes to ConsoMNed FawcalStatements.
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December 31, 1987 1986 Long-Term Debt (Notes 3 and 4): Uhousands yDArs) South Carolina Electric & Gas Company: First and Refunding Mortgage Bonds: YearJ Series Maturity 5 112 % 1987 - 6,176 4-7,8% 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 4-7,8% 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 9-1/8% 1999 15,000 15,000 8% 2001 35,000 35,000 71/4% 2002 30,000 30,000 9-1/8% 2006 50,000 50,000 8.40 % 2006 50,0(T: 50,000 8-33% 2007 30,000 30,000 8.90 % 2008 30,000 30,000 10 1/8% 2009 35,000 35,000 9-7,3% 2009 50,000 50,000 12.15 % 2010 35,890 35,890 8-3'4% 2017 100,000 - Pollution Control Facihties Rewnue Bonds: 4-1/2% Senes, due 1987 - 1,031 5.95% Series, due 2003 7,220 7,285 Fairfield County Series 1984, due 2014 (variable rate - 5.0% through &31/88) 57,000 57,000 Richland County, due 2014 (variable rate - 5.0% through &31/88) 5,210 5,500 Fairfield Cuty Series 1986, due 2014 (variable rate - 5.375% through &31/88) 1,100 1,100 Colleton and Dorchester Counties Series 1987, due 2014 (variable rate-5.375% through 831/88) 4,365 - Consolidated Mortgage Gold Bonds 5% Series, due 1999 (noncallable) 94G 949 Lease Obbgation,5-3'4%, due IW7 225 240 buth Carolina Generating, Company, Inc.: BerkeleyCounty fbilution Control Facihtes Rc anue Bonds, due 2014 (variable rate - 5.875% through 9/3038) 35,850 35,850 bank Note, due 1990(variable rate - 7.75% at 12/31/87) 75,500 78,500 South Carohna LNG Compny,Inc.: 101/2% Series First Mortgage Bonds, due 1990 3,450 4,600 South Carolina FuelCompany,Inc.: Nuclear fuelliabihty 63,883 52,991 Ibssil fuelliabili ' 20,129 17,083 South Carolina Pi line Corporation-6% Series A t Morteage Bonds, due 1988 675 1,319 South Carolina Real Estal D' ewlopment Company, Inc.: Notes, due 1%7-1991 (at various rates) 47 77 SCANA Corporation: Bank Note,8.32%, due 1989 40,000 - Total 913,293 767,991 l Less- Long-term debt matunties, including sinking fund requirements 24,719 21,930 ) Unamortized discount 1,581 610 Totalleng-Term Debt 886,993 47 % 745,451 43 % Tota 1 Capitalization $1,869,274 100 % 51,725,935 100 % See Notes to ConsoMatedFmanaalStatements.
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- f. Sumnwy of Significant Accounting Policies: mately 5877 minion. Accumulated depraiation associated with SCE&G's share of Summe Station was approximately $130.1 mil-lion and $% 1 million as of Decemtvr 31,1987 and 1% respec-A. Organization and Principles of Consolidation tively. SCE&G s share of the direct expenses assaiated with operat-
. SCAN A Corporation (the Company), a Sou th Carolina corpo-ing sammer Station is indudal in the Company's "Other ration, is a public utih ty holdmg company within the meaning of operation" and "Maintenance" expenses.
the Public Utdity lloidtng Company Ad of 1935, but is exempt from registration under such Act. D. Allowantc for Lunds Used DuringConstruction he acmmpanymg Consohdated Financial Statements re* Alkiwance for funds used during construction ( Al C), a non-ilect the consohdahon of the accounts of the Company and it* cash item, reflects the perial cost of capital devoted to plant under w houy-ownni sut sidiaries: construction. His accounting practice results in the indusion, as Repbted whht;rs a compment of mnstruction cost (construction work in prog-South Carolina Electnc & Gas Company (SCE&G) ress), of the costs of debt and n(uity capit 1 dedicated to construc-South Carohna Generating Company, Inc. (GENCO) tion inwstment. AFC will ultimately be induded in rate tuse South Carohna Fuel Company,Inc. investment and depraiated as a component of plant cost in South C,whna Pipeline Corporation (Pipehne Corpora. establishing rates for utihty senices. The Company's regulated tion) which wholly-owns South Ca rohna LNG Com- subsidia ries calculated AFC using the fouowing mvrall rates (com-pany, Inc. and Car ohna Exploration Corporation puted on an af ter-tax tusis): Non-reputed twmews Carolina LPG Corporation nn t986 19s3 Carolina Propane Storage Corporation SCF&G s.45 6.3% 9.5% Carotane, Inc. Gl.NCO sy; 53'4 57% MPX Systems, Inc. Pipehne Corporation s te, 86% 9.5% Pnmesouth, Inc. These rates do not exceed the nmimum allowable rate as SCAN A Capital Resources, Inc. SCANA Sof tware Sernces, Inc. calmlated under FERC Order No. 561. Interest on nuclear fuelin pmcess Refmement, comtrsiori, ennchment and fabrication)is South Caruhna Real Estate Dewlopment Compa ny, Inc. capitaltied at the actual interest amount. Tireah Corporation Investments in an interstate telecommunications carner L. Deferred Return on Plant Imestment and in real estate, propane storage and transmission joint wn- Commencing July 1,1987, as a pprowd by a July 1,1987 PSC tures are reported using the equity method of accounting. Signifi- order, SCE&G ceased deferring ca rrying costs associated with 400 cant intercompany tulances and transactions have been ehmi- MW of ek ctric generating capaaty prenously removni from rate nated in consolidation. tuse and tygan amortizing the accumulated deferred carrying costs (approximately $4L3 milhon at December 31,1987) on a B. System of Acmunt' straight-hne tusis owr a ten-year penod (see Note 2A). Amortira-The acrounting records of the Company's regulated subsidi- ti(m of deferral carrying costs,induded iri Depreciation and i ar6s are mamtained in accordance with the uruform system of amortiration", was approximately $2.1 million for 1987. accounts presenbed ty the Fnieral Energy Regulatory Commis- SCE&G's deferrni return on plant irwestment meets the cri-sion (i ERC) and as adooted by The Pubhc Senice Comnussion of tena for finanaal acmunting remgnition as presenbed by the South Carohna (PT) Finandal Accountmg Standards Ikurd (FASB) Statement No. 92
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C. Utility Plant Utihty plant is stated substarmally at onginal cost The costs of , I. Depreciation and Amortiration additions, renewals a nd letterments to utthty plant, including l Provisions for deprecation are recorded using the straight-direct labor, material and indirect (harges for ergineenng, super- I kne method for finanaal reporting purpmes and are tused on the vision and an anowance for funds iised during constnation, are estimatni senice hves of the various classes of property. The com-added to utthty pl. int aaounts. The ongmal cost of utihty property posite wrighted-awrage depreaahon tates were as follows: retirni or otherwise disposni of is removed from utihty plant ac-counts and generaDy charged, ak ng with the cost of removal, less salvage, to accumulated deprecation. The costs of repairs, replace- 1N I" l*8' ments and renewah.of items of property determined to be less SCI &G un 3 45"4 3 42 % than a unit of property are charged to maintenance expense. y,{,'Corporatmn 2N SCE&G, operator of the V L Summer Nudear Station (Sum- Overall m 3.3 n 3 35% mer Station), ar.d the South Carolina Pubhc Senice Authonty (a pubhc corporation of the State of South Carohna)are joint owners Nudear fuel amorttiation, w hich is induded la "Fuel used in of Summer Station in the proportions of two-thirds and one-third, ek ctnc generation" a nd is recowrn! tbrough SCE&G's cost of fuel, respectively. He parties share the operating costs and energy is recorded using the units-of.,wdu(tion method. Provisions for output of the plant in these proportions. The total cost of the amortuation of nudear fuelinduJe amounts newssary to satisfy construction of Summer Station was a ppnwimately $13 bilhon, or j obbgations to the Urutnl States Department of Energy under a atmut $1 A61 per kilowatt, of w hich SCI:&G's share was appnwi- , contract for disposal of spent nuclear fuel.
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, )- : 7-m .H 2. z . . .-- . .v.. n .. n o . - . '. . . n s-He acquisition adjustment relating to the purchase of certain I. Pension 13 pense gas properties in 1982 is being amortized over a forty->rar period using the straight-line methed. he Company has a noncuntnbutory defined benefit plan ctwenng substantially au employees. Benefits a re based on years G. Nuclear Decomm.issiomnq of accredited seniw and the employee's average annual earnings Decommissioning of Summer Station is proj.ected to com- rewiwd during the last 3 year s of employmen t. ne Company's mence in the year 2014, and the expenditures (on a before-ta' policy has been to fund pension costs accrued to the extent per-basis) related to SCE&G's share of decommissionmg actisities are niitted by the applicable federal income tax regulations as deter-currently estimated to be apprtnimately $211 milhon (in 2014 dol- mined byindependent actuaries.
lars). SCE&G is providing for estimated decommissiorung costs The Company adopted FASB Statement No. 87, "Employers' over the hfe of Summer Station and has established a resene for Accounttng for Pensions", as of January 1,1987, which requires, this purpose. SCE&G is presently funding the resent with among other things, the use of the projected unit credit actuanal amounts collecttd through electnc rates (a pproximately $ 8 minion cost method for determining net periodic pnsion cost for finan-annuaHy, net of taxes), and intends for the fund,includmg cial reportinf. purposes. He adoption of the new accounting camings, to provd 'or all eventual decommissioning expendi-standard di not have a sigruficant effect upon the Company's tures on an after-tawasis. f nancial pesition or results of operations. ne new standard was adoped prospective!y, and accordingly, pension related disck>-
- 11. Income Tases sums for prior years have not been restated. Total pension cost for The Company and its su bsidiaries file consolidated Federal 1987,1986 and 1985 was approximately $9.6 million, $10.4 milhon and Sta te income tax returns. Income taxes are alkicated to all and $8.3 million, respecuvely.
subsidianes based on their contnbutions to conschdated taxable Net periodic pension cost, as determined by an independ-ent actuary in accordance with the provisions of Statement No. ause tax laws and financial accounting standards ditfer 87, f r the year ended December 31,1987, included the foHowing in their recognition and measurement of economic even ts, differ- C '"P *'"'5 ences anse betwren (1) the amount of tuable income and re-ported pre-tn financialincome for a year and (2) the ta x bases of Year Ended December 31. IW assets or liabihhes and their reported amounts in finandal state-ments. Accordingly, the Company provides deferred income fThewsads ofIWes) Service wst.benchts earned dur ng the penod 5 Am7 i erences, principally acceler-tases for substantiauv all timing d'ff Interest cost on pro (ted benefit obhgabon 1434 cted tax depreciation', except for certain htsis differences arising '""$.'[g",*n$iratI >n " ' an$
*' deferral prior to 1982. Deferred income tax provisions are induded in income currently with correspondmg credits or charges to accu- Net renodic pension cost 5 9M1 mubted deferred income taxes.
Investment tn credits are generauy deferred and amortized over the usefullives of the respective assets. The Tn Reform Act of ne following table sets forth the funded status of the plan, as 19M (the Ta Act) eliminated the generation of any signihcant determined by an independent actuary, at Ikcember 31,1987. amount of tmestment tn cmhts subsequent to December 31, 1985, except for credits relating to certain ~ transition property" Y"3' Ended thember 3L 1N in December 1987, the FASB issued Statement No. 96, "Ac-IN* d5 PIIM"51 counting for income Taxes", ef fective for fiscal years beginning " after December 15,1988. This Statement requires the use of the
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Nonvested teneht obhgabon "habibty method" whenty a curren' or noncurrent deferred tas Accumalated beneht obhgation _E IWn liability or asset would be recognized for deferred tax conse . quences of all temporary differences. Temporary differences in. Pro cted benc6t obbgabon 14 m clude au existing differences that will result in taxable or ded uctible Phn assets at tur value le K amounts in future years. Specifically, this Statement (1) requires Plan assets less than p.wected beneht obbganon 117, m that a deferred ta habihty or asset be adjusted for the effect of a Unrecognized net transinon hahhty 21.4 2 Unrecognized net gam em change in ta bw or rates, (2) prohibits net-of-tax accounting and Pension asset (haNhtv) reporting, and (3) requires recognitien of a deferred tn liabihty for recogniird m Consohdated Balance Sheets 5 (tM 4 tax benehts that are flowed through *o customers when temporary differences originate and for the equity component of AFC. The Company must apply Statement No. % no later than January The accumulated benefit obhgation is based on the pbn's 1989 and does not anticipate a significant impact on net income. benefit formulas without considenng expated future salary in-The balance sheet will require certain reclasstfications to comply creases. De projected beneht obhgat on considers future salary with the provisions of this Statemert. increases, at an assumed annual rate of 5.5% . Both benefit obhga-Gee Note 2 - Rate Matters and Management's Discussion tions were determined using m annualdiscount rate of 8.0L and Analysisof FinancialCondition and Results of Operation The expected long-term rate of retum on plan assets (primanly equity securities and government bonds) and discount rate us'ed for a further discussion of the effects of the Tax Act.) in determining pension cest for 1987 were 8 0're and 7.54, respectively. The unrecognized net transinon liabihty reproents the c ifect of adopting Statement No 87. Such obhgation (appm>imately
J l l l 1 l 1 i l 29 million at Janua ry 1,1987), was calculated by taking the lion at July 1,1987) associated with 400 MW of electric generating ! difference betwren the fair value of plan assets and the projected capacity presiously remowd by the PSCin its order dated March 2, 1 benefit obligation. This liability is not recognized in the Compa- 19M. The 1987 order also approwd SCE&G's proposal to include in nyiconsolidawt financial statements, but is being amortized as a rate base the associated accumulated deferred carrying costs (ap- 1 component of pension cost on a straight-line basis over the awr- proximately 512.5 million at July 1,1987) and to begin amortizing i age remaining senice period (19.6 years) of emp,oyees expected to these costs owr a ten-year period commencing July 1,1987 (see receive benefits under the plan, except for apprmimately $7.5 Note I E). The July 1,1987 PSC order has been appealed by the , million of prior senice costs being amortized owr a six-year pe- Consumer Advocate of South Carolina. While the outcome of this i riod. The unamortized liability was $21.8 milhon at December 31, matter is uncertain, the Company believes the probabihty of any 1987, significant change in the rate order is unhkely and accordingly, Based on the application of accounting principles in exist- has not recorded any provision for refunds. ] ence pnor to the adoption of Statement No. 87 estimated accumu- B. On january 15,1987, the PSC directed SCE&G to reduce its j lated plan benefits, as determined by an independent actua ry, retail electric rates a ppnnimately 525 million annually, or 3%, due and actual plan net assets at January 1,1986, were as follows: to anticipated income tax savings assodated with the Tax Act as reported in SCE&G's study based on the results of operations for the year ended December 31,1935. Rates implementing this reduc- ; I'""Y 3 * - tion were placed in ef fect with the first bdling cyrle in February
~
gg Actuanal resent valueof l accumuSated plan benefits: On July 15,1987, the PSC issued an order which required a Vested 5 80.253 hearing to be held on Nowmber 10,1987 to receive esidence on i Nomested 7,3M whether SCE&G's electric retail rates could be k)wered as a result of l Retirees (Pnor to June 1983) 45.473 I the Tax Act and also to review its camings. On December 30,1987, Total sinmo the PSC ordered a reduction, effective January 1,1988, of $27.6 l Net assets available for benefits $134.947 million annually, or 3.7%. This reduction was primarily due to the additional tax savings resulting from the Tax Act and a change in The assumed rate of retum used in determining the actuarial the method of recowry of municipal franchise taxes. The order set l present value of accumulated plan benefits was 74; except for the retum on common equity at 13.25%. assets dedicated to fund benefits for Retirees pnor to June 1983 C. On January 11,1988, the South Carolina Supreme Court ; which are valued at 11% . denied the State Consumer Admcate's a - alof appnnimately $34 l In additior to pension benefits, the Company provides cer- millionof theMarch2,19Morderof the ' granting SCE&G i tain health care and life insurance benefits to active and retired a pproximately $132.6 million annually in increased retail electric l employ ees. Such kenefits are generally charged to expense when rates. claims and prentumwH4 The costs of prmiding such bene- D. On December 1,1987, the PSC issued an order granting j fits to retired emp.oyces are noQ nificant. SCE&G appruximately $4.3 million of the $6.7 million annual I increase in retail natural gas rates requested in an application : J. Revenue Recognitm.n filed on June 5,1987. The order appromi an alknved retum on : Customers' meters are read and bills are rendered on a common equity of 12.75% . The new rates, which will prmide an tronthly cycle basis Base rewnue is recorded dunng the account- increase of approximately 3.8% in annual retail natural gas reve-ing penod in which the meters are read. nues, were placed into elfect December 1,1987. Revenue attnbutable to gas costs (to the extent collectible E. In an order dated July 31,1987, the FERC affimed an . through adjustment clauses)is accrued and recorded in the cnonth Administrative law Judge's decision relating to CENCUs filing of during which the customers' meters are read. a cost of service formula rate for the sale of power and en ?rgy to Projected fuel coste for ekttric generation are collected SCE&G, with certain modifications to the appropriate ra e of re-through the fuel component in retail electric rates, as established tum. As a result of this order,GENCO hasided a revised rate by the PSC duririg semiannual fuel cost hearings. Any differ- schedule reflecting the effects of this decision and has m jucsted a ences between actual and propcted fuel costs are deferred an i rehearing The FERC has granted a rehearing, but no decision has included when estimating the fuel cost component during the been rendered.1he Company behews that the outcome of the next semiannual fuel cost hearing. At December 31,1987, SCI AG proceedings will not have a significant effect on il results of had owr-collected approximately $1.5 million through the electnc operations. fuel clause component, which is included in "Deferred Credits - F. On December 22,1987, the PSC issued an order granting I Other". SCE&G an increase in its transit rates in both Columbia and l Charleston, South Caruhna fr. .n a fare of 5.25 to $.50. The new K. Debt Premium, th.scount and Espense rates were placed into effect on January 1,1988. Long-term debt premium, discount and expense are being amortiicd as components of "Interest on long-term debt, net" 3. Long. Term Debt! owr the terms of the respective debt issues. SCE&G's annuai tender Pollution Control Facthries Revenue Bonds (which do not include the 5.95% series, duc 2003) are se-2.RateMatters: ! cured by hke principal amounts of its First and Refunding Mort-A. In an order dated July 1,1987, the PSC approved SCE&G's gage 130nds. January 30,1987 mjuest to restore to its rate base, ef fective July 1. 1987, the net pnxiuction inwstm ent (approxirnately S102.5 mil- . - - ~ . _ - - -_. . . - . - , - - - . . - , - - . , . . , . - - - -
l . ) ? f GENCO's annual tender PoUution Control Facilities Revenue 5. Stockholders'Innstment(IndudingPreferredStockNot i Bonds are secured by an .rrevocable letter of credit expiring in SubjecttoPurchaseorSdingFonds): These annual tender Bonds bear interest at a rate, which will Thechan s in Common stock", without par value, during ) 1987,19% an 1985are summarizedas foHows: ) he set between 80% and 120% of an index rate based on one-) var yield evaluations of comparable tax exempt obligaticns, or equal t 65% of one-year Number Thousands but, in any case, not moreyield thanevaluations 15% per annum.ofThe U.interest S. Treasury rate Bonds at par, of Shares of Dollars is adjusted annually, but may become fixed until maturity. These BalanceJanuary 1,1985 40,2 %,147 5575,263 Bonds also provide that the holders may require the Bonds to be other M3 purchased at par upon each annual adjustment of the interest rate Balance Decemter31,1985 40,296,147 575 Nb or at the time the interest rate becomes fixed until maturity. If the N d'M > Bonds are tendered by the holders, the Company intends to reof- Balan(e Decemtier 31,1986 ' 40,296,147 574,242 fer the Bonds to the ublic. Due to the irrevocable letter of credit Oth" 258 and provisions of th Bond Indentures, which permP the Com- BaIweDecemher31 ws7 40.296.14? ss74.soo pany to purchase the Bonds in lieu of redemption and reseu them, and to subsbtute other security arrangements, the Bonds are clas-sified aslong-term debt. The Com ny's employee stock benefit plans' trustee and
- The annual amounts of long term debt maturib.es, including agent for its D idend Reimestment and Stock Purchase Plan ;
l the amounts due under nuclear and fc,ssil fuel agreementt (see purchase previously issued and outstanding shares of the Compa-l Note 4), and sinkmg fund requirements for the years 1988 ny's common stock in the open market. ) through 1992 are summarized as follows: The Restated Articles ofIncorporation of the Company do not I Year limit the dividends that may be pavable on its common stock. Amount Year Amount flowewr, the Restated Articles of inwrporation of SCE&G and the ) iTwais of Donarsj 1%8 $ 24,719 indentures under!ying certain ofits bond issues contain provi- ' 1991 $17.478 sions that limit the payment of cash dividends on common stock. 1989 54,129 1992 9.442
- Im 180J91 Accordingly, $286.8 million of consohdated retained earnings were not restricted as to payment of cash dhidends on common l Apprournately $9.2 milhon of the current portion oflong term stock at December 31,1987.
) debt for 1983 may be satisfied by either de itand cancellation of Cash dniderds on common stock wre declared at an an-bonds issued upon the basis of prr perty a tions or bond retire. nual rate per share of $2.32, $2.24 and $2.16 for 1987,1986 and ment credits, or by deposit of cash with the Trustee. 1985, respectwely. Substantially all utihty plant and fuel inventories are pledged as collateral in connection with long-term debt. 6. MfenedStock(SubjecttoPurchaseorSinkingFunds):
- 4. Fue/Financings: The call prenium of the respective series of preferred etock in Nuclear and fossd. fuelinwntories are financed through the no case exceeds the amount of the annual dividend. Retirements issuance of short-term commercul paper. These short-term bor- under sinking fund rtquirements are at par values.
rowmgs are supported by irremeablebank lines of credit which At any time when dnidends have not been paid in full or expire in 1990. Accordingly, the amounts outstandig; haw been declared and set apart for payment on au series of preferred stock, ) SCE&G may not redeem any shares of preferred stock (unless aU mcluded in long-term debt. The bank lines provide for maumum )- ' amounts ($75 million retated to nuclear fuel and $25 million re- shares of prefened stock then outstandmg are redeemed) or pur-chase or otherwise acquire for value any shares of preferrtd stock lated to fossil fuel) that may be outstanding at any time. , At December 31,1987, the amount outstanding for nudear except in accordance with an offer made to all folders of preferred fuel was approumately $63.9 million at a weighted average tnterest stock. SCE&G may not redeem any shares of preferred stock (un- ', rate of 8.05% and the amount outstanding for fossd fuel was less all shares of preferred stock then outstanding are redeemed) approximately $20.1 million at a weighted average interest rate of or purchase or uberwise acquire for value any shares of preferred 8.11 % . stock except out of monies set aside as purchase funds or sinking > funds for one or more series of preferred stock, at any time when it ls in dafault under the provisions of the purchase fund or sinking fund ior any se ies of preferred stock. ) On May 24,1987, SCE&G's Board of Directors called for the redemption of all the issued and outstanding shares of that com-pany's 13.88% Series, $100 par value, cumulatwe preferred stock. ) On July 1,199, au 250,000 shares outstanding were redeemed at a price of 106.18 %.
" y ;;* p.pg 3 W.W p:trgge ~~av D.Mq $2EA;J$dhi p,qvypyyggj.T.y 5 3 :M a mW .V>g 7. .yg
.':M<keMMMM h.itVE Md' : s., + u, s i .M s .A... =xo The aggregate annual amounts of purchase fund or nnking Totalincome taxes differ from amounts computed by apply-fund requirements for preferred sttxk for the years 1958 through ing the statutory Rderalincome 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 1957 1956 1%5 (Thei.wnds 0f Mlars) (T%nds ef N!ars) 1958 5 5,948 1991 52,515 Net income 5128365 5122,164 5113,560 1989 9,270 1992 2,515 Totalincome tas espense: 1990 2,515 95,031 119,108 105,783 Charged to operating espenses Charged to otherincome 195 (2,261) 5,271 The changes in "Preferred Stock (Subject to Purchase or Sink- Preferred stock dwidends 10.417 14.443 16.541 ing Funds)" during 1987,19% and 1985 are summarized as Total pre-tas income 534.54s 5253,454 5241,155 follows-Inceme tases on above at statu. tory f ederat income tas rate 5 9 u 19 5116,589 5110,931 Number Thouunds of Shares of Dollars increases (decreases) attnbutable to.
^ '
Ba anceIan 5 2,246,186 5156,759 #h' e n nu ea (1, ( 07) 3100 par value (20 550) (2,055) l e Mum m pant in-50 par value (4 bas) (2,220) vestment, net of Bala nce [kcemt+r 31,1985 2,151.223 152,514 amortization (1,5751 (5,727) (5.925) Shares ikde, med Deprecianon differences 620 5,3W 5.325
$100 par value (343,070) (34,307) i Amortization of investment tas credits 6,410) (8,107) (6,065) 50 par value (l?,3io) (665) f State income tases tless Federal dance December M 1*^ IN4M9 !!7,s42 , 0 7,M3 mc me ax e ,
5 hares ReJeemeJ Other dif f erences, net (U 1,616 (8) Cel,W4) C 6,3991
- 5. WFar ulue Totalincome tas espense 5 9; 246 5116.847 5111,054 50 par ulue tim 21 a b,5;l) .
Balance Dect'm ber .11. In7 1,410 M1 $ MM2
' Total provision for deferred taxes, net" results from timing differenees in recognition of the folksing items:
- 7. Income Taxes:
Totalincome tax ex pense for 1987,19% and 1955 is as follows: I W 19x6 1985 (T%unds et (Mles) Charged to espenses: (Tbwnds ef Niars) Accelerated depreciahon and amorttiabon 531, m 540,367 546,084 Cu rent income tases- ,
$ 82,637 5 57,6R0 [kferred fuel revenue C.0411 (4,616) (801)
Federal SW l Other, net (2,116) 9,M S 8,687 v 5l (2.786) State 10 117 l Foreign .- (177) 674 l Totalpronuon for deferred i s income tasts net 5 o+27 533,635 542,497 Total curren t ta ses 78
- 7 92,305 67,041
[kferred tases, net: .
~
Federal 1e,w1 28,257 37,249 The internal Re%ue Service has examined the conschdated State 436 5.378 5.2tM , Rderalincome tax returns of the Company through 1931 and has Total def erred tases 20 C 33,635 42.49" I closed all years through 1980. A fmal report has been receiwd for ( 1951 ar4 all issues resohrd. In addWon, a final report for 1982 In estment tax cred ts: Deferred 2x1 (1,4s6) 6,M7 through 1931 has been recciwd and allissues rtwiwd, escept Amorttzation of amounts those pertaining to Jw deductibdity of certain nuclear habihty deferred (cred t) 6,41m (4,107) (6,065) insurance premiums. The Company does not anticipate any sig-Other 241 90 694 nifica nt effect on its results of operation or financtil position Total inwstment tas credits 0 .14 4 (9,(N3) 1,516 rcsultmg from the resolution of these issues.
$116,M7 $111,0M At December 31,19S7, the cumulative net amount of income I Totalincome tas espense M 2R
- I tax timmg dif ferences on w hic h deferred taxes have not been
! provided totaled apprtnimately 595 milbon.
(See Note 1H.) i
- 8. Short-TermBorrowings:
- n. NuclearInsurance The Company pays fees to banks as compensation forits lines of credit. Bank loa ns are for 270 days or less. Details of lines The Price-Anderson Indemnification Act (the Act) which 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 lateJuly 1987, Congress extended the pro-tection provided by the Act until new legislation is passed. The prce,,,&r ji, Act currently limits the liability for thirdpity claims to $720 mil-lioa per incident. The Act provides tha t au owners of nuclear tw 19 % 1ses reactors may be liable for up to $5 million per reactor owned for Mars MMm) each nudear incident occurring at any reactorin the United Lines of credit atyear end States with a limit of two assessments per year (a retroactive pre-5 90.2 $133 2 $67.9 mimb SCNs manmum assessment, based on its two-thirds Short termborrowings(including commercial paper)dunng theyear: ownership of Summer Station, would be approximately $6.7 mil-j Masimum outstanding lion peryear,
$113.1 $111.2 $ 4.5 j Average outstandmg Proposed legislation is currently pending in the House of
$ 39.1 $ 45.7 $ 1.1 Weighted daily average interest rates: Representatives and Senate. One proposed version would raise Credit tines 7.07 % the liability limit ior third party claims aswxiated with any nuclear 7.40% 8.53 %
Commercialpaper 6.65% 6.36 % ~ incident to $7 billion. Under this proposal, each reactor licensee Short. term borrowmgs outstanding at may be liable for up to $63 million per reactor owned for each r imes nudear incident occurring at an reactor in the United States, 5 2.25 $ 2.25 $ 2.25 Weighted awrageinterest rate 8.76 % provided that not more than $1 million of this liabdity would be 6.25 % 8.57% assessed per year. SCE&G's maximum assessment, based on its Commercial paper 5 19.2 5 78.2 - Weighted averageinterest rate 8.30 % 6.67% - two-thirds ownership of Summer Station, would be approumatel
$42 million per incident, but not more than $6.7 million per year. y SCE&G is unable to predict what action Congress might ultimately
- 9. CommitmentsandContingencies; A. Leases
&,^,'O 8,n$;$y*h."# "
SCE currently maintains policies with Nudear Electric In-1 SCE&G leases certain equipmem, office furruture and an surance limited (NEfL)and American NudearInsurers (ANI) office building under long-term opera ting leases with lease terms providing combined property and decontamination insurance (excluding various renewal options) expiring in 1996,1991 and coverage of $895 million for anylosses in excess of $500 million 2009, respectiwly. pursuant to existing primarycowrages (with ANI) on Summer Total rent expense was approumately $5.1 million, $4.4 mil- Station. SCE&G pays annual premiums and, in addition, could lion, and $5.0 million for 1987,1986 and 1985, respectiwly. be assessed a retroactive premium not to exceed 7% times its an-Future mirumum rental payments as of December 31,1987 are nual premium, in the ewnt of property danvy loss to any nu-as folbws: clear s;enerating facilities covered by h EIL Based on the current annual premium, this retroactive premium would be approxi-Year Amount Year matelY $5.3 million. Amount To t'he extent that insurable daims for property damage, decon-(Thoma ds ofDdiars) tamination, repair and replacement and other costs and ex-939 I penses arising from a nuclear incident at Summer Station would 1990 7,124 exceed the policy limits of insuranee, or to the extent such insur-1943-2009 112'320 ancebecomes unavailable in the future, and to the extent that SCE&Gs rates would not recowr the cost of any purchased re-placement power, SCE&G will retain the risk ofloss as a self-insurer. SCE&G has no reascr. to anticicute a serious nudear incident at Summer Station. If such an acident were to occur, it could have a materially adverse impact on the Company's financial position.
e 1486
- 10. SegmentofBusinessintbanation: Total acctric Cas Transit S3 gment information at Dtumtvr 31,1987,1% arsd 1(735 and for the years then ended is as follows:
(hwnds(Mm) Operating rewnues $ 809,438 $289,429 $ 3,119 $1,102,0% PC""' Ele < tric Gas Transit Total Of*'*I escludmg"S"deprecia' tion and amortinton 544,067 261,712 6,914 812,693 . chouunds of Douars) 5 806.826 $N)5,934 $ 3.212 ',1,115,972 Depresiation and Operating resenues 80,825 9,557 245 90,627 amortiution Operating es penses, 624.892 271,269 7,159 903,320 Totaloperating espenses culuding depreciation
- and amortintion 539,60< 271,644 7,756 819,004 Operatingincome(kws) $ IM,5% $ 18,160 $(4,040) 198,716 Depreciation and Add - Otfrr hwme, nd 9,825 82,758 t519 300 92,583 amortintion * ~ I" "
Total operating enpenws 622,362 291,h3 8,062 911.587 p '('(*
$ 154,464 $ 24,771 $(4,8vn 204,385 $EN Operating income doso N'hw 6,395 Add - Other income, net Cyitalpdm enti $ 110.2N $ N,W $ 20 $ 131,477 g Prele ds k dividends 1, 7 U tdized for overall Company operations 12,700
$ 123,g,,3 Net income _ Total $ 144,177 Capital cipenditures Identillable $ 146,281 $ 21,034 $ 313 $ 167,645 ldentifiable assets at
"N' 3I
- I" Utilised for os erall Company operations 5,670 $1,9N4,769 $214.299 $ 1,778 $2,204.846 Utihty plant, net
$ 173,318 Inventorses 62.930 6,845 320 70,m5 Total Total $2,051,699 $221,144 $2.0% 2,274,941 Identifiable awets at December 31,190 Aswts utdued for overall Company operatons 300,391 Utility plant, net $2,039,752 $223,503 $ 1,783 $2,267,038 $2,575.332 74,977 6,859 374 82,210 Total assets /
Inventories lotal !2,114,729 $232,362 $ 2.157 2,349,248 19MS Aswts utilind for overall Company operations 353,121 I:lectne Gas Transit Total Tot 41 aswts $2 "02.369 gg jpg Operahng revenues $ 787,79n $318.856 $ 3.689 $1,110,M t O lvrating eipenws, culudmg deprtuation and amortuat:on 528,773 239,668 7,203 825 M4 Depredaten and amor*uation 77,658 9,033 86,8W 2M _ Totaloperating espenses Nb,431 298,901 7,411 912.743 , Opermngincome(kss) $ IF1.365 $ 19,955 $(3,7221 197,598 Add - Otter irwme, net 15,721 I cw - Interest charges 83 218
- Prefes.W stock dividends 16 541 l
Net income $ ll3.5N) l _ Captalnpenditures: Identifiable $ 97,525 $ 24,091 $ NN $ 122.225
.m Utdued for overall Company operations 6.282 Total $ 128,507 w ._
Identifiable aswts at December 31, IW5: Utdary ptant, rwt $1,9M,372 $203,0fo $ 2.159 $A193,591 inventones 51.3 % 7,337 298 53,WI Total $2,0N,728 $210.397 $._2_,457 : 2,252,%82 Aswts utdued for owrall Corepany operations 291,11/ Totalaswts 12,443.699
)
e. II, QuarterlyFinancialData(Unaudied): IC First w ond Third fourth Quarter Quarter Quade Quarter Annuai Total operata rig revenues q000 $ 109,2*4 $2%5.146 1296 001 $252,471 $1.115.972 Operabag income (OLW 57,007 42,9 3 68.039 36,%1 204.385 Netincome (Ote 40.975 73,873 47.537 16.4 7 128,865 Earnirtgs per share of common sta k
, at reported 1.02 .59 1 15 .41 3.20 1956 hrst Secorx1 Third Fourth Quarter Qua ter Quarter Quarter Annual Totaloperating rewnues (tW) SW1.445 $247,3h3 $289.&57 $263,371 51,102.036 Operaung Lncerne (OLV) h010 40,546 62.920 39.24J 19R,716 Net tncome (OLO) 34.343 23,922 41.442 21.957 122,164 Earrungs Fvr share of common stock as reported .85 .59 1 04 .55 3 03 yg'{} j'[:' T[j.'N , ' f .'/] ggl gg ' ~
~, .-
1987 1986 4th 3rd 2nd 1st 4th 3rd 2nd 1st Qtr. Otr. Otr. Qtr. Qtr. Q+r. Qtr. Qtr. Price Range:(a) High 33 34-12 35-l'8 40 39-7.3 Low 26-1 2 DSS 42-7.8 36-3/4 33-1/4 478 34-3'8 36 M-lO Dividends Per Chare: 31 1/4 2713 1H7 Amount Date Declzred Iirst Quarter Date Paid 5.58 January 28,19$7 Second Quarter .58 April 1,1987 April 22,1987 July 1,1987 Ihird Quarter .58 August 26,1987
!ourth Quarter .58 October 1,1987 October 28,1987 I January 1,1988 i
1986 h _ Ammnt Date Declared First Quarter Date Paid ) 5.56 January 22, IRS 6 Second Quarter A ru 1,1986 L .56 Aprd 23,1986 Third Quarter .56 Ju y 1,1986 July 23,19S6 October 1,1986 Fourth Quirter .56 October 22,1986 January 1,1987 December 31, 1987 1986 Numtvr of common shares outstanding 40,2 % ,147 40,296.147 Number of common stockholders of rctord 49,932 51,738 The principal market for SCANA common stoc k is the New York Sta k Eu hange (stock symtvi SCG). (a) As reported on the New York Stock Exchange Comp wte Listin;;. 1
, , .i ii di
' ' " i
., g
.i i islation, rates of load growth, em iron-LiquidityAndCapita/ Resources tions, regulation and kyards and the cost and availability of mental protection stan The capital needs of the Company arise primarily from the C3P!taL (
capital requirements of SCE&Cs operations and construction SCE&G presently has m.effed a shelf registration statement program. Ikcause rates for regulated senices are based on histori. cal cost amounts, to the extent inflauon occurs and rates a re not under which it can issue an additional $100 milbon of First and Refunding Mertgage Bonds. Whether additional secunties will be appropnately adjusted on a timely basis, the Company's regulated sold and the timing and amount of such sales will depend primar-subsidianes may not reconer all costs of providing sen' ices. There. ' ily upon market conditions and other factors. fore, the Company's future finanaal position and results of opera. For m, formation relating to operations of the Company's sub-tions could be imhted by future infbtionary trends. . s diaries see pages 8 tbrough 25. The ability of the Company's regulated subsidiaries to replace existing plant imrstment, as well as to expand to meet future Results O/OPWationS demand, will depend upon its ahhty to attract the necessary financial capital on reasonable terms. The ahhty to attract such I amings and Dividends capital will, in turn, depend u pon the regulated subsidiaries' ahl- Eamings per share of common stock, the percent increase ity to obtain adequate and timely rate rehef. (decrease) from the presious year and the rate of retum camed on During 1987, the PSC issued orders requiring SCE&G to re- common equity for the years 1985 through 1987 were as follows: duce its retail electnc rates to retlect income tax savmgs assoaated y i99, Wa5 with tb Tax Act (see Note 2B of Notes to Consolidated Financial Earnings per share $120 $3.03 52.82 Statements). The tax savings result from a reduction in the Federal Percent increase (decrease)in corporate income tax rate from 46% to M , effectnv J uly 1,1987. earnings per share 5.tn 7.4% (~ .5% ) Return earned on common Ikcause the Company is fully normalized with respect to imrst. 14 " I46' I4'I' C4"Y (Y'-*"d ) ment tax credit and tax depreciation, the Company does not anticipate a significaat eff xt on its results of operations or ftaan- Eamings per share increased from 1986 primanly as a result of cial position, but internal cash flow will be reduced in future years hight r sales of electnc energy and natural gas and a reduction in primanly due to the repeal of the imrstment tax credit retroactive preferred stock dividends associated with early redemptions of to january 1,1986, and the lengthening of depreciable Ines for preferred stock issues (see Note 6 of Notes to donsobdated Fina n-certain utihty property. The impact of this reduction wi ll depend cial Statements). The increase in camings per share for 1986 re-upon the lewl of construction expenditures in future years. In sulted primanly frora higher electric energy sales related to the 19S6 addition, the inclusion of unhlled revenues and contnbutions summer heat wave, lower interest charges and reduced dividend in aid of construction in current taxable income, the treatment of requirements on preferred stock, i certain expenses which now must be capitahzed for tax purposes AFC is a utthty accountmg practice w hereby a portion of the and other provisions in the Tax Act could further restnct cash fknv cosWf Nth equity and bornnved funds 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 nonutthty operabons, in progress) is capitalized. Both tN equity a nd the debt portions of along with future nonomic expansion throughout the unhty ser- AFC, are noncash items of nonoperating inceme which haw the ! vice temtory, could have a posibw impact on total Company ca mmgs. ef fect of increasing reported net income. AFC represented ap s, proximately 3% of Eamings Available for Common Stakin ly The pnmary cash requirements for 1957 were, and as esti- 19S6 and 1985. mated for 19s8 are, as folkws: During the period March 1934 through June 1987, the Com-19N4 19s? pa ny recerded carrying costs (including equity retum) associated (Thou sisfs @tCars) with the praluction investment, net of accumulated depreciation, f Construction e nd2tures, esduding relating to 400 MW of electric generatmg capacity removat from i 5172,677 5142,337 rate base. Total def erred carrying costs, a noncash item included ) nY[nSki (A ) 27,u2 under "Other income ~ as "Deferred retum on plant im estment, 4 Nudear fuel egenditures 10.931 M3tunng obhganons. redempnons and represent approximately 5%,10% and 11% of Eamings Available unhing and purcha se f u nd f or Common Stock for the years 1987,1986 and 1955, respectively, requirements 21.466 164,922 Commencing July 1,1987, the Company ceased defernng carry-Total 5205m4 s274 "I inh costs and began amortiring the accumulated deferred carry-ing custs over a ten year period. (See Notes IE and 2A of Notes to Dunng 1987, appnmmately 56.6% of total cash requirements Consohdated FinanaalStatements.) were provided from intemal sources as compared to 57.3% in in February 1988, the Company's Board of Dtrators ratsed the 1986. Extemal funds for 1987 were prouded through the issuance quarterly cash Elividend on common stock to N) cents per share of $100 milhon pnnapal amount of First and Refundmg Mort- f rom 58 cents per share. The increase, ef f ective with the disidend gage Bonds,844% Senes due hbruary 1,2017, the sale of R365 payable on Apnl 1,1988. raised the indicated annual dhidend mdlion in tax-exempt annual tender Polluhon Control Faabties MMo $2.40 per share, u p from $2. 32. The Company has increased Rewnue Bonds duc 2014 and a 90 milbon Bank Note due 19% the dividend rate on its common stot k in 35 of the last 36 years. The company anhapates that 1988 cash requirements wul be met pnmanly through internally generated funds, short. term bor-rowings and the sale of comraeraal paper. Actual 1988 construc-hon and nuclear fuel expenditures may vary from the estimates set forth above d ue to factors suc h as intlation and economic condi-
l Eammi%rsiBiRyv MyVQRM G]Ni J FCr f . Operating Margins t
' Ekrtric operating margins for 1987,1% and 1985 were as he increases in gas operating margins are primanly the re-follows: sult o' increases in customers and decatherm (D T) sales of natural gas as presented in the following table:
Im 1986 1985 increase (Decrease) From Pnor Year (Mdims of Dhs) Customers Electnc operahng revenues ssoo s 5809.5 Volume (DT) 5787.8 Classihcahon Less - Fuel used in electne generahon 227.9 216.1 lw? 1986 1987 _ _ - Power purcha sed. net 229.2 1986 (12 O (2 8) (8 8) Residential 1,791 1,442 1,486,477 4A7,447 Total Swt.4 5596 2 Commeraal 5S6 532 7o8,576 207,MM 5%7.4 Industnal 12 (35) 2,080,500 Sale for resale (2,353,490) s - 1.910,5 % 4,124,761 he 1987 operating margin remained relatively unchanged Total 2. w 1,939 6.226.418 2,466m from 1986 because sales associated with increased kilowatt hour consumption were offset by reduced retail electric rates placed in effect in february 1987. (See Note 2B of Notes to Consobdated he increase in Gas purchased for resale in 1987 reflects in-Financial Statements.) ne increa se in the 1% operatmg margin creased customer demand for naturai gas. De decrease for 1986 resulted primanly from increased kilowatt-hour consumption by reflects reductions in the cost of gas purchased from the Compa-ny's supphers. residen tial and commercial customers. Such increase was I ~;ely Other Operating Expenses due to the customers. addinon of residential (3.1 % ) and commercial (4 A) Increa ses (decrea ses) in other opera ting expenses, including Increases (decreases)in electnc customers and megawatt. taxes, are presented in the following table: hour iMWH) sales volume by classes of customers are presented in the followmg table: IncreaseiDecrease) From Pnor Year Increase (Decreaa.e) From Pnor Year Classhcation 19c 1986 Customers Volume (MWH) Classihcahon ic? 19 % 19c Other operahon and maintenance 1986 Depreaahon and amortization 5 14.9 586 Residential s,936 10.5&4 181,44J 2.0 3.7 Commeraal 434,4M income tases 2,296 2,092 184,359 233,748 Other ta ses 124.1) 113 Industnal 832) (17) 6.9 2.9 186.217 31,956 Sale for resale 50,524 Total Other (1) (59.6M) 5 f.3) 528 5 67 .;3 7,0 M 22,765 Total n'2c 12,701 m es 663.245 Other operation and maintenance cipenses for 1987 in-creased primanly because of additional operating expenses for he increase in Fuel used in ek'ctric generation expense for 1987 was due pnmanly to additional fossil fuel requirements (at outside professional senices relating to the refueling at Su mmer unit costs higher than nudear eneration) associated with in. Station. ne increa se in 1986 was largely due to the settlement of certain claims relating to injur:es and damages and moderate creased electnc generation resiIlting from an overall increase in customer demand and the scheduled refueling of V C. Summer increases in other administratm and general expenses. Increases in Depreciation and amortizabon egense for 1987and 1986 re-Nuclear Station frem March 6 through June 7,1987. The decrease ilect addinons to plant in senice and the amortization of deferred for 1% was primanly attribu table to a reduction in the awrage costcarrying costs beginning July 1,1987 (see Note 1 E of Notes to of fuel bumed ($1.45 and $1.63 per million BRJ in 19S6 and 19S5, respectmly), pnmanly attnbu'able to nuclear fuel. Power pur. Conschdated Financial Statements). De increase for 1987 was chased, net decreased for 1987 largely due to greater demand for partially offset by the effect of lower electnc depreciation rates be-i electricity by other utthties and increased for 1986 primanly be, gmning July 1,1987. He decrease in income tax expense for 1987 cause of low'vr demand for ek ctricity by other utthties. results pnmanly from a red uction in the Federal corporate income As a result of unusually hot weather and an increase in the i tax rate effective July 1,1987 and lower pre-tax income resulting I , number of electric customers, the Company set a series of peak from a red uction in retail electric rates. De increase in 1986 was
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largely due to an increase in pre-ta x income. Increases in Other k demand records during the summer of 1987, with the highest peak of 2,943 MW occumng on August 10,1987, the previous year's taxes for 1987 and 1986 pnmanly reflec+. additional property taxes. record of 2,853 MW having bee. set on July 9,1986. Interest Cha rges Gas operating margins for 1987,1% and 1985 were as foijow3 Interest on long term debt decreased 5.1 million in 1987and
$15.6 milhon in 1986 compared to the respectwe previous years.
iM 19 % 1"5 De decreases in 1987 and 1986 resulted from the early redemption Ndhens et Dest of Sto milhon pnncipal amount of the 15-1/2% Guaranteed Notes Gaso rating revenues $106 0 of South Carohna Ek ctric & Gas Finance, N.V in Apnl 1986. He Less- .as purchned for resale 5289.4 5318.9 222 1 215 9 :46 8 Total decrease for 1%7 was offset bv interest associated with the issua 5m 5735 5721 of $100 milhon pnncipal amount of 844% Senes First and Re-funding Mortgage Bonds in Tvbruary 1987 Other interest expense decreased S 6 million in 1987 and increased $4 0 milhon in 1986 compared to the respective previous years. Rese changes reflect the decrease a nd increase, resper-tively, in short-term borrowings from the previaus year. M.A. - h*
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SELECTED F I N A N C I A L: DATA.
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I f i 1985 19S4 1983 1982 1977 Ibr theYears Ended December 31, 1987 1986 fThousandsof Ddlarsexcept statistksamtl ersharramounts) Statement of income Data Oprating Revenues: $6M,127 $574,113 $M4,9M
$ 806,826 5 8W,488 5 787,796 $ 746,745 Electric 318,856 378,491 337,282 266,389 78,405 305,934 289,429 Gas 3,689 3,178 3,2s2 2,M3 2,023 3,212 3,119 .
Transit 1,128,41 t 974,651 M3,105 425,392 1,115,972 1,102,036 1,110,M1 Tota 10perating Revenues Optating Expenses: 216,076 229,249 223,768 260,381 214,617 155,132 Fuelusedin electricgeneration 227,877 246,700 289,212 2~7,091 220,502 51,321 222,319 215,928 Gas purchased for resale 195,031 187,448 135,374 147,M0 %,144 214,865 209,629 Other operation and maintenance 45,000 43,406 30,339 Depreciation and amortization 92,583 90,627 %bH 74,914 66,6M 171,060 154,804 153,776 106,932 77,033 153,943 Taxes 912,743 929,118 824,778 703.398 353,620 911,587 903,320 TotalOperating Expenses 197,598 199,296 149,873 139,707 71,772 2M,3S5 198,716 OperatingIncome 15,721 17,647 11,571 5,230 25,566 6,395 9,825 TotalOtherincome 6 income BeroreInterest Charges and 161,444 144,937 97,338 210,780 208,541 21? 319 216,943 Preferred Stock Dwidends 83,218 78,248 57,506 57,121 39,003 71,478 71,9M TotalInterest Charges, Net Preferred StockCash Dividends of 16,541 16,877 17,186 16,371 10,653 10,437 14,443 Subsidiary
$ 86,752 $ 71,445 $ 47,682 Netincome
$ 128,865 $ 122,1M $ 113,560 $ 121,818 l
l 40,296 40,296 39,900 37,M4 M,387 19,833 Common Shares Outstanding (Thouunds) 40,296
$3.03 $2.82 $3.05 $2.29 $2.08 $2.40 Earnings PerShare of CommonStock $3.20 4
Dwidends Declared Per Share of Common $1.92 $1.56 52.32 $2.24 $2.16 $2.05 $2.00 Stock 3erctnt of Operatingincome(loss) g Before income Taxes- 93 98 94 I 91 93 92 87 Electric 10 5 8 12 9 10 15 Cas Transit W (2) (2) (2) (3) (3) (2)
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m m, z, e. G$Ns.h NA: h;i $$g ,y .s.x ,$ $y $ N , ,g m. ~ c- . . m7-- c ., bS$ ~'Abt$0YS ,:)h l::: . ivy: :
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Decemtvr31, 1937 1986 1985 1984 1983 1982 1977 Balance Sheet Data Gmss Ut hty Plant (Thouwds ef Douars except statistis ardper sharcamou nts)
$3,099,860 $2,959,494 $2,859,117 $2,7M,809 $2,509.581 $2,411,479 $1,489,111 To'.al Assets
$2,702,3e9 $2,575,332 $2,M3,699 $2,499,694 $2.358,134 $2,202,755 $1,361,222
, Common Equity Preferred Stock Subject to Purchase $ 571,620 $ 836,913 $ 806,155 5 778,251 5 7W,905 5 659,135 5 366,813 or Sinking Fund Requirements 84,632 117,M2 152,514 1%,789 160,604 163,619 IW,794 Preferred Stock Not Subject to Purchase orSinking Fund Requtrements 26,029 26.029 26,262 Long Term Debt, Net 26,262 26,262 26,262 26,262 5%,993 745,451 785,021 893,950 739,216 854,c44 585,307 TotalCapitalization
$1,5e9,274 $1,725,935 $1,769,952 $1,855,252 $1,M3,990 $1,703,860 $1,088,176 i
t i Common Shares Outstanding O' ear End)(lhousands) 40,296 40,296 40,290 40,2 % 3S,728 36,526 20,359 Book Value PerShareof Commnn Stock O' ear End) 521.63 $20.77 $20.01 $19.31 $18 33 $18 05 $18.02 Other Statistics Electrie. Customers 0' ear-End) 417, 7 8 406,511 393,810 378,960 366,424 356,709 320,476 Sales (Mtlhon KWil) 14,31 D,704 13,N1 Residentul: 12,500 12.063 11,400 11,155 Average annual use per customer (KWii) 12,%s 12.821 11.992 12,0t 1 Average annual rate 12,:39 11,712 12,146 per KW11 5.0724 5.0759 5.074 Generating Capabihty- Net MW 5.0757 5042 $0o37 $ N12 (Year-End) 3,590 I 3.690 3,959 3,959 3,359 3,3w Terntonal Peak Demand - Net MW 2,943 2,703 2.852 i Gis: 2.s53 2,546 2,700 2,463 2,216 ) Customers 0' ear End) 195,338 192,941 191,002 189,544 187,6 2 186,320 161,850 Sales (Thousand Therms) 734,145 671,M1 647,215 Residentul: 737,059 671,429 590,257 4M,Th6 a Awrage annual uw per customer (therms) 627 MS 524 y Average annual rate 618 610 5-'O 734 per therm Transit:
$ os 5M 5.67 5 69 5 65 $ 56 $.26 I
i Nt mber of Coaches los 117 122 123 Revenue Passengers 112 IN %
. Carned (Ihousands) 8, W 8,699 9,032 9 65A 9,744 10,720 8,971 4
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1 VESTOR I N F O R AC A T I
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l . 1 . 4 1 StockholderInquides Bond Tnistee and Paying Agent Corporate ficadquarters SCE6CFirstandRefundingMortgage PalmettoCenter Questionsconcenungdividend accounts or related stockholder matters Bonds: . 1426MainStmet Columbia, SC shouldbedirectedin writingtothe ManufacturersHanoserTmst d Stockholder Records Department (OM) Company .d Telephone:(803)748-3000 Mailing Address a m s dgdess. y ms W n W h , , (' SCANA Corporation Auditors New York,NY10020 Deloitte Hadins& Sells Columbia,SC29218 !, Certified Public Accountants investorCommunications Common and Preferred Stock 1.istings 1426 Main Street, Suite 820 Interimte prosidin pdated .< , Thec mmonstockofSCANACorpora. Columbia,SC29201 finanaal rmation , tionislistedand traded on the New ockholders York Stock Exchange. The ticker symbol Recordkeepingand Paytng Agents Common Stak: {[of f t, second and third is SCG.The corporatename SCANAis ers. A copy of SCANA's Annual ration used tn newspaper stocklisttngs. SCANA on Form 10-K(as filed with the The5% series cumulatise ferred stock Stockholder rds Department (0%) Secur tiesand Exchan8 Comnussion) ofSCE&Gisalsolisted traded on Columbia,SC29218 the NewYorkStockExchange.The and 1987 Annual theStatishSubplement available totothe I SACPr;the newspaper SCE6G Stat otherswithoutcharge. tick NationalBank stockholders South g,3ti 8i P-f SecuritiesTransferSenices concemingactisitiesof 101GreystoneBoulevard ACorporationand requests for Dividend Payment Dates ) ColumEa,SC29226 blications should be addressed to the Quarterlydividendsoncommon stock bleon thefirstdayof estorRelationsDepartment(0%)at ; are normall Transfer A ents yand Octoberto the Company's maihngaddress. i Jan Common S st of record on the10thdayof Anal st'sContact South Carolina NationalBank the month precedmg thepayment SecuritiesTransferSenices H.Jo Winn,III , ; date 101GreystoneBoulevard Manager ImestorRelations Dividends on SCE&G's preferred stock Columbia,SC2> 26 Tekphone:(803)7483240 , are paidquart onthe samedatesas ticcommon st dividends. M mufacturersHanoverTrust Imestors' Association Dividend Reimestment Plan St ransferDepartment 8thFloor n acts n to tionof SCANA offersa Dividend Reimest- 450 West 33rdStreet SCANAImestors,c/o Mr. Paul m(ntandStockPurchase Plan toits NewYork,NY10001 Quattlebaum,h,63EastBa Street' common stockholders of record. A bro- Chadeston,SC2%01 chure, Authorization Form and retum SCE6G Prefermf Stak: enwlope are automaticall mailed to all SouthCarohna NationalBank informa- Sectu;tiesTransferSenices I new stockholders. For tion or for questions about your rein. 101Greystone Boulevard g,ggu,ggg,, I wstmentaccount,wnte to the Stock. Columbia,SC 29226 maa nnamrenemchwerysWew - holder Records Department (0%) at the The Chase Manhattan Bank, N.A. Archaseo(waysorswofcaersmyasdmy } Corapany's maihngaddress. StockTransfer t searees PO. Box 469, Wa gtonBridge , Station NewYork,NY10033 4 s i s
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