RC-94-0080, 1994 Annual Financial Repts

1994 Annual Financial Repts

ML20082J940
Person / Time
Site:	Summer
Issue date:	12/31/1994
From:	Fowlkes R SOUTH CAROLINA ELECTRIC & GAS CO.
To:	NRC OFFICE OF INFORMATION RESOURCES MANAGEMENT (IRM)
References
RC-94-0080, RC-94-80, NUDOCS 9504190001
Download: ML20082J940 (92)

Text

-

S:uth Ctrolina Ebetric & Cza CompIny Virgil C. Summer Nuchar Station P. O. Box 88 Jenkinsville. SC 29065 (803)345-5209 Asems company March 31,1995 Refer to: RC-94-0080 Document Control Desk U. S. Nuclear Regulatory Commission Washington, DC 20555 Gentlemen:

Subject:

VIRGIL C. SUMMER NUCLEAR STATION DOCKET NO. 50/395 OPERATING LICENSE NO. NPF-12 1994 ANNUAL FINANCIAL REPORTS Pursuant to 10CFR50.71(b), enclosed are ten (10) copies each of South Carolina Electric

& Gas Company's 1994 Annual Financial Report and South Carolina Public Service Authority's 1994 Annual Financial Report.

Very truly yours, fW R. M. Fowlkes Manager, Nuclear Licensing &

Operating Experience D W R:es Enclosures c:

O. W. Dixon (w/o Enclosures)

R. R. Mahan (w/o Enclosures)

R. J. White (w/o Enclosures)

S. D. Ebneter S. Dembek NRC ResidentInspector J. B. Knotts Jr.

NSRC (w/oEnclosures)

Central File System (CFS)

RTS (ANN 2600)

(w/o Enclosures)

File (818.02-5) 95o419o001 941231 Oh PDR ADOCK 05000395 PDR I l NUCLEAR EXCELLENCE - A SUMMER TRADITION!

i

• I994 ANNUAL REPORT l

WE MUST OFFER s

I I

COMPETITIVE PRODLICTS s

y.......

AND BERVIGES AND DEL 4VEflfliEM r

IN WAYS TtlAT u

,i STOMijRS';

J.

7 EXCEED Cgl80NS I-

- - ) & _r,*.

.EXPESTA t

p

. y 4 :

=i..

s _

g.

.&s b

h,;

s..-

e 5

E..

1 ['. -

wc,N;, ',u. 4 [*$4hh.z

,} ',

4 y

~

g... y,y,,......

s

., p., f

~.,

e e j d 'f ' _ c' L

t' f

. gr:}j 1*

• y_

g a

pt s...$

O

> h e' '..,..

V.' ~

,.gr,,i r' -'

f.;* f,

~.s; k u. r

%*,.. T'

• &h '.*. ;'i )

.O

^

f:,,,

j, s

+*

.2,

+

x-Au.u. c ([I[ ' a # "

.?

~..

285 4. ?

il l

n. ?.,

.'..f j

s.

a

',,. N ;

. '*w.

c.4_ (et4.'

• j, s,h

~.

t ?

Y

Qj

.:. t : ogf f

.m r p. " 2.

y..

'y U

p.;q :,.

3

,.- b :

.y

. Y*k

. k l.c a

.'b w,:, f*"$wi*

2 m' n m

.w:

/

is,*;*

Y w

=~,

a..

h g

y

,g

. m'

g. ;

v

.3 p (.y

,,. g :..s a a

y

,7

.e

. <... ~.. n..,. ;. y,,3,

~7-~~--

g, v,

y > %....g.

& n. f'.

2

,r.

8, g.

. W* '

l %. f. ?

g ' 5 W)f T*

,.,,,l p

v.

r, i D *?

'~

^

/

1 2..

W e v:

L ? L'- 4 9 ' " "f

. y-nj jo q},

?

.L

/

1

. ; n. e.:.~

F

..Jis:A:g; ;g y)q g;

4fy

, ;,2 f

, L,.,

4,

.y

TABLE OF CONTENTS CHAIRMAN'S LETTER g

1994 HIGHLIGHTS B

DIRECTORS S

0FFICERS 9

FINANCIAL REVIEW 10 INVESTOR INFORMATION 33 s

E e

9

[p Th annual report was pnnted on nwyded paper

~

i l

i E

l i

1 l

l 1

I l

i l

ELECTI 1-s 500,000 T'

l k,

if 400,000

\\i k

d 300,000 j

~

l

)

j 200,000 j

r 100,000

f i

1 1

l I

-.. _ - _ -.- _ -.. ~.. - -. -,

>\\

,.+l

{$

• L,v9 UTILITY SERVICE AREA

wuh, i

\\

l 4, STEAM GENERATIONE.J A AE A C35:

j 'i sWAPLEfVleN"rAR.

Canadys

.i j

"^ES$N#"

~

McMeekin M'

1 4

I

-Q"Am..... k-.

Urquhart 4

cyggdij$f NORTH CAROLINA Wateree a

,f

,q g m,.+ T ROCK

- r Cope (under construction) de LL Williams

~a 4.

t

.. Np

] ll 4h?

~5%ml$NElv -:.+1 e-.

s

'i MGEEWsME H(ORD GENERATION -

Nb[h$MISNI" "eN"c$'AS$2 Co'umbia Canal

[)i s

L ppy yj G -

W"(ra.-

Fairfield Pumped Storage,,

FLORENCE

r. --

- - -Neal Shoals ~

~~

^" 7 l

UM Parr :

< Sq;,

1 SUMTER Saluda "V

i Stevens Creek l

l j' MYRTLE BEACH s

i'

~

i t

. GENERATIONY I"E RANG INTERNAL COMBUSTION.

~

u

~

i a

P

~

Burton ~ ~ - " -

j GEORGIA f Canadys.

i Coit.

l Fakr Place CHARL$STON ATLANTIC,

OCEAN Hagood

,.y 3.

/

Hardeeville '

W

. u.1

. Parr RI ii 7

E Cml GAS TRANSMISSION LINES,

Urquhart Williams

_...ca As senvece

.e 2.

j{.

AREA,

^'

jjO:~'

NUCLEAR GENERATION' jl Summer Station I'..

[,

c f 5. '.

f

,~L.

.s.

-;1

.yp >

s &

~

,t

-.c..

\\

. :4J,:~aa 1

is 250,000 20 000 i

/

200,000 J

15 800 i

.,]

150,000 10 400 100,000 1

~

5 50,000 i

e

FINANCIAL S. OPERATING HIGHLIGHTS

% Increase 1994 1993 (Decrease)

(Millions of dollars except statistics and per share amounts)

Earnings Per Weighted Average Share of Common Stock 3.19 3.72 (14.2)

, Dividends Declared Per Share of Common Stock 2.82 2.74 2.9 Book Value Per Share of Common Stock (Year-End)

$ 29.37 28.59 2.7 Market Price Per Share of Common Stock (Year-End)

$ 42.125 49.75 (15.3)

Common Stockholders' Equity (Year-End)

$ 1,410.4

$ 1,333.0 5.8 Common Stock Outstanding:

Weighted Average (Thousands) 47,381 45,203

-1.8 Year-End (Thousands) 48,018 46,619 3.0 TOTAL COMPANY Total Operating Revenues

$ 1,322.1

$ 1,264.2 4.6 l

Total Operating Expenses

$ 1,062.5

$ 1,018.9 4.3 Net Income

$ 151.2 168.0 (10.0)

Property Additions and Construction Expenditures

$ 561.1 526.0 6.7 Utility Plant, Net

$ 3,293.7

$ 3,004.1 9.6 ELECTRIC OPERATIONS Electric Operating Revenues 5 975.4 940.1 3.8 Electric Operating income

$ 232.2 222.0 4.6 Territorial Sak s (Million KWII) 16,838 16,880 (0.3)

Customers (Year-End) 476,412 468,874 1.6 Generating Capability - Net MW (Year-End) 3,876 3,864 0.3 Territorial Peak Demand - Net MW 3,444 3,557 (3.2)

GAS UTILITY OPERATIONS Gas Operating Revenues

$ 342.7 320.2 7.0 Gas Operating income 34.1 29.4 16.0 Sales (Thousand Therms) 778,105 717,417 8.5 Customers (Yea r-End) 238,613 234,736 1.7 l

UTILITY CUSTOMER PROFILE ELECTRIC NATURAL GAS During 1994 we added kilowatt-hours (KWil), a During 1994 we added sak s of natural gas totakd 7,538 net new customers, 0.3% decrease from 1993.

3,877 net new customen.,

778 million therms in 1994, raising the total ekctric Sak s to ultimate consumers bringing the consolidated an 8.57 increase over 140.

customer base by 1.6%

represented 939 of KWii natural gas customer base to Approximately 80% of to 476,412 at year-end. Terri-saks in 1994 while saks to 238,613 at year-end, a 1.70 consolidated therm sak s torial saks of ekctricity in whoksale customers increase over 1993. Residen-in 1994 were to ultimate 1994 totahd 16.8 billion accounted for 71 tial customers comprisc 90%

consumers while sak s to of theconsolidated naturalgas whoksale customers customer base. Consolidated accounted for 20'7<.

1 J

CHAIRMAN'S LETTER i

i Fellow Shareholders:

subsidiaries experienced Resources has been altered j

good financial to reflect the current j

i am pleased to provide performance in 1994.

conditions in the natural you with this year's In 1993 SCANA gas industry. As a result of, Annual Report of SCANA Petroleum Resources the federal deregulation l

Corporation. While earned $.25 per common of the natural gas industry, j

the Company made share, based on natural other structural changes significant progress in gas prices which averaged in the national regulatory j

many areas which will

$2.00 per dekatherm. As scheme and the emergence i

lead to enhanced com-you can see from the of an active futures i

petitiveness, continued chart below, natural gas trading market, natural I

growth and improved prices declined about 30%

gas is a commodity subject i

financial perfomiance, between March and to widely varying, cyclical i

our financial results December of 1994. Given pricelevels. Accordingly, for 1994 did not meet that the cost of our our near-term operating y

our expectations.

reserves is fixed at the strategy is based on the

]

Earnings for 1994 were time of their development assumption that natural j

$3.19 per common share, and that the costs of gas prices will fluctuate 1

SCE&G ENJOYED down $.53 from the record production are very stable, around the levels

$3.72 earned in 1993.

the decline in gas prices currently seen in the i

The primary reason for caused SCAN A Petroleum futures market, and that i

MANY SIGNIFICANT the dahne(numd Raource to lose $.14 prices will be volatile.

j at SCANA Petroleum per share. In addition,it During January 1995 j

Resources, Inc., our incurred a write-down we substantially reduced i

OPERATIONAL subsidi ry which aphm of $20 mHHon, or S.2(> pa the p(mibiHty of wrhe-for and produces oil and share,in the third quarter downs to the carrying j

natural gas. South Carolina related to a reevaluation values of the 210 billion Electric & Gas Company, of reserves.

cubic feet of natural gas 3

l SUCCESSES DURING South Carolina Pipeline The operating strategy reserves on our balance Corporation and our other for SCANA Petroleum sheet. These write-downs i

i THE PAST YEAR.

4 l

WELLHEAD NATURAL GAS PRICES l$!DF KATHERMI 4

1 A,

sa.so gg,aa y

}

i j

$1.50 l

Q d

$1.00

+

9

\\

2 1

i l

CDUllNU Dl LRt f D A 4 4 n on w l

." );g i

j B,500 y

B,500 j

d g

2 8-c,ccc 2

2,000

)

g d

M j

1,500 1,500 1

$i

3 k

j-1,000 g

1,000 e

a f

1 n

j q

g soo 4_

soo yJ of la

-NORMAL

-NORMAL j

NOTE: A " degree-day" measures the extent to whnch the average daily temperature is Irlow (heating) or ahnr icoohng) an assumed Imse of 657.

j would have been required shareholder value has but 107c below last year.

j becauseof thelowgas been preserved while, at Obviously, this caused 1

prices. We sold forward the same time, we have sales to msidential ekctric i

approximately 607c of the positioned this subsidiary customers to be down 61 existing production for the to return to profitability.

Offsetting this, industrial next seven years at prices We are continuing to sales of electricity were l

which will average $1.88 expand our presencein up 5.67c as a result of per dekatherm. We still are this segment of the energy the improved economy.

in position to have a future industry to which we Customer growth was profit or a loss from that remain committed.

1.67c, in line with histor-l portion of the reserves At South Carolina ical rates and current j

which has not been sold.

Electric & Gas Company, expectations. In summary, Our longer term operat-our most significant earnings improvement due ing strategy focuses on subsidiary, operating to our continued growth continuing +o add new profits increased despite was offset substantially by reserves at costs that will more temperate weather milder weather.

be profitable for SCANA during the summer and in addition,SCE&G at current price levels and winter seasons. As you can enjoyed many significant J

'very profitable if prices see from the charts above, operational successes climb appreciably.

1994's winter weather as during the past year. While I am pleased we have measured by " heating these are discussed in taken this timely and deci-degree-days" was 207c greater detail on pages 6-7, sive action to minimize the below normal and 20'7c I must comment on our negativeimpact of sig-below the prior year.

two largest projects. The l

nificant natural gas price Summer weather as construction of the new declines. In dealing directly measumd by " cooling Cope Electric Generating with price volatility, degree-days" was normal, Station is well ahead of i

i j

i 3

d

schedule and well under in the past,I have zational structure, budget. We expect it reported to you about the decentralize our decision-to begin commercial ongoing efforts at SCE&G making and employ l

operation early in 1996.

to examine its cost new technologies which i

Our largest single structum and the actions improve service and

, investment is the V.C.

taken to enhance our reduce costs.

Summer Nuclear Station.

competitive position. Even in kioking to the futum,.

In 1994 it continued to though our retail electric it is quite appamnt that receive recognition from rates are among the lowest the process of allowing

.i BELIEVE the Nuckar Regulatory in the Southeast, partic-competition to enter the Commissionasoneof the ulatly forindustrialloads, electric utility segment of top perfomiing plants in I believe our futum success the energy industry will

-OUR FUTURE the nation. In a refueling depends on continuously continue.The extent to outage during the fourth improving the cost which competition will be quarter,its steam effectiveness of our allowed,and the fonns SUCCESS.

generators, which had operations. The level of which it will take, am not caused major maintenance operation and maintenance yet clearly defined. What activities over theirlifetime, expenses in the past year is clear, however,is that DEPENDS ON wem replaced.The plant was essentially unchanged we must be prepared by j

has returned to senice and from 1993,and our plans having the lowest possible resumed providing low-for 1995 and 1996 call cost structure in combi-CONTINUOUSLY cost ek"rical energy to our for reductions in the cost of nation with the most able customers. Many more providing service, despite and agile management in positive things wem increased numbers of order to succeed. As a IMPROVING-ammphshed in the past customers and sales.

team, we are committed l

year, keeping SCE&G These reductions will result to achieving these goals.

l among the top rank of from continuous efforts to I would like to make unh6es in the nadon.

stmandhne ounirgani-die folknving obsenadons THE COST l LATIV[ TOT.Al f It ! l PEI hAAI E Of SCANA'S CI I

EFFECTIVENESS g

7 9

OF OUR

$,s0 aw OPERATIONS.

S'so U)

I f/-

1

$130

$100 o'

M%

)

N i

NOTL; Anurnes $100 invested <m Jarutary 1,1%0, with dividends reininto J i

- SCANA

-PEER GROUP

-S&P 500

-S&P UTluTIES i

4

I I

i l

in closing. Our principal subsidiaries in the different y

i business now and in the marketsof thisindustry fT I

futum will be our ek ctdc during that time minforce

- *i operations. If you mea-those lessons. The chart

~f l

' sure our performance by at left shows the relative y

traditional standanis, we performance of SCANA's l

, are clearly superior to common stock during

~.

l industry averages in all the past five years as

.j.

i important facets of our compared with a peer 4

~ 7'y) f electric operations. His-group of 95 utilities, the torical standards t ill be Standard & Poor's index

~. ;

j, much less releumt as this of 500 common stocks, as

-.j l

industry is transformed well as the Standard &

and becomes more market-Poor's Index of Utility 1

driven. The challenges for Stocks. Certainly, we are on the eh ctric segment of our the right track in increasing 0

business will be dictated by shamholder value.

[

5 the pace and direction of Our financial position i

regulatory reform. Our continues to be strong

.l '

ability to influence this and our earnings from f.

j process likely will be continuing operations are j

limited. Our ability to sound. Notwithstanding respond and capitalize the disappointing 1994 on opportunities provided operating results, the f

by change will be limited Company continues to l

only by the speed of our grow. At its meeting held L-decision-making, as well February 14,1995, the Imrence M. Grcssette, fr.

I as our adaptability and Board of Directors raised our desire to succeed.

the indicated annual the outstanding common We are beginning the cash dividend on the stockof theCompanyand second decade of SCANA Company's common stock therefore have a vested Corporation as a holding to $2.88 per share, an personalinterest in seeing company. We are a year increase of $.06 per share, continued growth in away from the 150th or 2.1%, compared to shareholder value. The anniversary of the the previous rate.

quality of their hard work i

founding of the original SCANA has grown has brought this Company entity which grew into and changed in response to the forefront of the i

j SCANA.The past 10 years to varying technologies, energy industry.The j

at SCANA have taught us differing economic quality of their hard work j

how to grow and profit conditions and various will keep us there.

in unregulated industries-regulatory schemes during

• how to be successfulin the past century and one less structured and more half. The time available Respectfully submitted, l

cyclical industries.

to make these adaptations g

i

, Obviously, changes which is gwatly foreshortened l

we have encountered in today's world, and Lawrence M. Gressette, Jr.

{

in the past five years in the will be especially so in Chairman of the Ikiard, natural gas segment of tomorrow's world.

President and j

the energy industry and Employees at SCANA Chief Executive Officer j

the performance of our colkctively own 11.5'7c of February 14,1995

?

I 5

4 k

• 19E4 HIGHLIGHTS RESTRUCTURING we also took sters t SERVICECAREGDES

"'"l*'""""'"*.'*'

388""i'dF "*t BEYOND THE METER FOR A COMPETITIVE

"' P"'""

• " * ' a m 3i"' S"'P "

ENVIRONMENT i

targets to reduce SCE&G s providing services beyond The regulatory barriers operating expenses: a l'7' the traditional electric and that once protected utility decrece in 1995's operation gas meters in 1994 with the j

markets are being replaced by and maintenance expeitc.e formation of ServiceCare.

powerful competitive forces.

budget from 1994 and a 207' South Carolina Electric &

SCANA's newest subsidiary ceduction in administrative ovides homeowners with Gas Company is accelerating costs by the end of 1995.

a variety of products and its transition from a conven-To that end, a major savices to provide peace of I

tional utility mto a customer-reorganization of SCE&G mind from everyday hassles.

oriented energy company. To took place in 1994. This For a small monthly fee, remain successrul, SCE&G reorganization will erviceCarc offers a compre-c must offer competitive allow us to accomplish hensive coverage program for S

GE P"""""""""'""""""

• ever^t "biei"'

maior arrliance maintenance deliver them in ways One is to create a business that exceed customers, and repair work.The package development function for includes senice calls, parts expectations-exploring potential business and labor and applies to gas ACCELERATING outing 1994 we took orrortunities. Durins 1994 as waias acaricappuances.

actions that built on our we launched several Mini A 24-hour, toll-free hotline aggressive efforts in im-.

Business Units (MBUs) within riority savice.

ITS TRANSITION P"vi"8 '""""'" *"""" *"-

SCE&G s iarger Strategic un.iceca,c aiso offers an Customer service operatmns Business Units (SUUs).These m Columbia and Charleston option for coverage of heating MBUs serve as a framework to and cooling systems, as well were merged to improve provide additional services as sales of stand-by generators efficiency. W e implemented to customers, thereby shifting that operate on natural gas or a 24-hour service program, cows from the core businesses extended of tice hours on most propane and automatically and creating additional profit.

sw tch over in the event of CONVENTIONAL.

holidays and standardized Two examples are Power customer service ftmetions an ehrtrical power outage.

Delivery Services, which Other opportunities to offer and pmcedures. %e alw provides maintenance and nontraditional services UTILITYINTO A d"""'"P"" ^ P "8'" * "'" " "

technical services on the should present themselves electric customers beyond ch ctricalequipment of the meter with restoration as kn iceCarc's member industrial customers, and base is established. At year-of service after major storms.

Timber Saks' which CUSTOMER-ORIENTE0 ruture plans catt (= estab-m,ximi,cs p,ori,s fmm end y ;s g.

had av 1,

lishing higher customer forestry operations.

service standards, imple-l ENERGY COMPANY.

"""""8"""'"*"""*""

reading and smart meter pilot program and fine-tuning a comprehensive customer senice plan.

ServiceCan A Preferred Member Service b

l l

6

l i

i l

l STEAM GENERATOR Summer Station's record REPLACEMENT of outstanding performance l

COMPLETED continued in 1994. For the sixth consecutive time, the IN RECORD TIME i

Nuclear Regulatory Commis-4 One of SCE&G's biggest sion named Summer Station j

accomplishments during IW4 hon lim ohw dom

. was the replacement of the ing plants. The NRC has V.C. Summer Nuclear evaluated the nation's nuclear 1

Station's three steam gener-a.

identify those compam.'

"F#I '"

'""I"#'

I

?

4 l

""""M" 3 ators. This project, undertaken

~

plants that have demonstrated h"k

@ j M: -

es and

?

p

?

f.

j as part of the plant's eighth Ng e f j

refueling outage,is the largest hk N a level of safety performance at the 88 megawatt plant b

^

j modificatmo ever performed that merits formal NRC 4

i recognition. Only seven and was cenpleted m.38 ggg g

days, a new U.S. record and in the U.S. received this only one day off the world recognition in the a

record for a steam generator latest assessment.

A state-of-the-art coalfired plant in Orangeburg County will begin replacement.

producing electricity for SCE&G customers in 1996. The

{

The successful completion COPE CONSTRUCTION

"""'""""'""F""""P'""'"'"""'h'"""'"^"'"##'

of this project has long-term CONTINUES AHEAD i

financial as well as operational complete. Major milestones budget. Construction is j

benefits. The new steam gen-0F SCHEDULE reached during 1W4 included expected to be complete in late j

erators will result in shorter, Progress also continued completion of the plant's 1995 with commercial less costly refueling outages, during 1W4 on construction of administrative building and operation beginning in early and greater ekttricity output SCE&G's new 385-megawatt electrical substation. Two 1996. This plant represents will result from less required generating plant in central years after the initial ground-the first base-kiad generating maintenance. The next South Carolina near the town breaking, this project is addition to SCE&G's system refueling outage is scheduksi of Cope. At year end the plant approximately four months since Summer Station was for Spring 1W6.

was approximately 68%

ahead of schedule and under brought on-line 10 years ago.

Steam generators arri:v prior to the fall cutage at Summer Station. The plant set a new U.S. record for steam generator replacement, completing the tak in 3S days.

.-- 7 7 a ="syS-N.

.. i g ;.q

><e l

55 qq3 18 -

?,$.

'i g'

7

~2 w-,

.ws a

n ~.. -

xa

.n._

a a s.-

n.-

n w.L

= IRECTORS SCANA CORPORATION Bill L Amick 155 W. Hayne Hipp 155 Chairman of the Board and President and COMMITEES OF THE BOARD ~-

DIRECTORS EMERITI Chief Executive Officer Chief Executive Officer

. OF DfECTORS Amick Farms, Inc.

The Liberty Corporation 1 Member of Execuiive i

y ch Batesburg, South Carolina Greenville, South Carolina

, Committee '

J.B uess,111 2 Member of Audit.

Jack F. Hassell, Jr.

William B. Bookhart,Jr. 2.45 Bruce D. Kenyon Comnuttee -

Francis M. Hipp,

Partner President and Bookhart Farms Chief Operating Officer 3 Member of Management j John H. Lumpkin, Sr.

Allan C. Mustard Elloree, South Carolina South Carolina Electric Development and -

- Edwm W. Pike, Jr. -

& Gas Company Corporate Performance William T. Cassels, Jr. 255 Columbia, South Carolina Committee

. Virgil C. Summer I

A "I'""

Chairman of the Board 4 Member of Nuclear Southeastern Freight F.Creighton McMaster 1.45 Oversight Committee.

Lines,Inc.

President and Manager 5 Member of Long-Term -

Columbia, South Carolina Winnsboro Petroleum L. Compensation Committee --

Company 6 Chairman of the~

Hugh M. Chapman 133 Winnsboro, South Carolina Executive Committee ;

Chairman NationsBank South Henry Ponder, Ph.D. 255 Atlanta, Georgia President Fisk University James B. Edward <,, D.M.D.1.45 Nashville, Tennessee Preside:n Medical University John B. Rhodes 145 of Soath Carolina Chairman and Charkston, South Carohna Chief Executive Officer Rhodes Oil Company,Inc.

Elaine T. Freeman 2,43 Walterboro, South Carolina Executive Director ETV Endowment William B. Timmerman of South Carolina,Inc.

Executive Vice President, Spartanburg, South Carolina Chief FinancialOfficer, Controller and Lawrence M. Cressette, Jr. 6 Assistant Secretary Chairman of the Board, SCANA Corporation President and Columbia, South Carolina Chief Executive Officer SCANA Corporation E. Craig Wall, Jr.155 Columbia, South Carolina President Canal Industries,Inc.

Benjamin A.Hagood 2.45 Conway, South Carolina Chairman of theIkurd William M. Bird and Company, Inc.

Charleston, South Carolina 8

t FINANCIAL REVIEW

,j

-^-

.5.-'

~ -h5b L

+'.b):s:hf5/$.,--

s h

,u yt h : s)* :

M!

s l.

J l

\\\\

I 1

l!

on::

<Ie' 51tt DJ

+=

. n r. t* u n,r gna _18,..

g; 1

4 4

j l

L.

.o 120lo goola

[E(, '

b p!

3 Golo S30 l

j ij

.y eeo 1

)

oo.

l

f f

5'o iL ;

UNB' GK4 j s7 T-~ l

'I7-3 :"

jM[ }{(,fU'?jks s

1 e.

l 10

?

OFFICERS SCANA 0FFICERS OFFICERS OF Martin K. Phalen SUBURBAN PROPANE Lawrer cc M. Gressette, Jr.

PRINCIPAL SUBSIDIARIES Vice President GROUP,INC.

Chairn an of the Board, SOUTH CAROLINA ELECTRIC

'* d""'

Presides and

& GAS COMPANY Chief Executive Officer (1)

Gary J. Taylor Bruce D. Kenyon V ce President Dabney L. Sharp dent and William B. Timmerman Nuclear Operations Executive Vice President Chief Opaating Offic" Executive Vice President, and General Manager Chief Financial Officer, Mitchell S. Tibshrany George J. Bullwm. keg,Jr.

V ce President James M. Clark, Jr.

,ontroller an c

Senior Vice President Assistant Secretary (2)

Retail Electric SOUTH CAROLINA PIPELINE MPX SYSTEMS,INC.

Asbury 11. Gibbes John L. Skolds CORPORATION Lawrence M. Gressette, Jr.

Senior Vice President, Senior Vice President Max Earwood President General Counsel Generation President and Treasurer and Assistant Secretary Michael D. Blackwell l

James H. Young, Jr.

H. Thomas Arthur,II Executive Vice President r

Cathy B. Novinger Senior Vice President Vice President and and General Manager Senior Vice President Business Development Cencral Counsel Administration, Governmental and William B.Timmerman Kristin L Aebersold Public Affairs George Fasano, Jr.

Senior Vice President V ce President Vice President and Controller Marketing and SERVICECARE,INC.

Kevin B. Marsh Economic Development W. Keller Kissam Bruce D, Kenyon Vice President - Finance, Vice President President and Treasurer Treasurer and Secretary 0)

Jimmy E. Addison Vice President and B. J. MacInnis Warren A.Darby Controller (1) Also Chairman and Vice President Senior Vice President Chief Executive and General Manager Warren A. Darby SCANA PETROLEUM Officer of all subsidiaries Vice President RESOURCES. INC.

Richard E. Batton l

(2) Also Chief Financial Gas Operations Max Earwood Vice President Officer and Assistant President Secretary of all Johnny Kinloch PRIMESOUTH. INC.

j subsidiaries Vice President Richard L. Easterwood James M. Woods, Ill G) Also Secretary of Transit and Fleet Vice President President I

l all subsidiaries Maintenance i

and Community Affairs SCANA HYOROCARBONS,INC.

Jeff C. Chapman Max Earwood Senior Vice President, Charles B. McFadden President and Treasurer General Manager and Vice President Assistant Secretary l

Customer Service Charles A. Rampey,Jr.

Executive Vice President S. C. McMeekin, J r.

and General Manager Vice President Customer Relations James N. Cantwell Vice President William E. Moore, Jr.

Vice President B. J. MacInnis Fossil and Hydro Operations Vice President I

l t

i

l COMPANY REPORT ON FINANCIAL STATEMENTS INDEPENDENT AUDITORS' REPORT SCANA Corporation written policies and guide-SCANA CORPORATION:

disclosures in the financial (Company) is responsible lines and are complemented We have audited the statements. An audit also

, for the preparation and by the selection, training and Consolidated Balance Sheets includes assessing the integrity of the financial developmer.c of professional and Consolidated Statements accounting principles used data included in the accom-financial managers and by a of Capitalization of SCANA and significant estimates l

. panying Consolidated staff of internal auditors who Corporation and subsidiaries made by management, Financial Statements. These conduct internal audits.

(Company) as of December as well as evaluating the i

statements have been The Boz.rd of Directors 31,1994 and 1993 and the overall financial statement l

prepared in conformity provides oversight for the related Consolidated presentation. We believe with generally accepted preparation of the financial Statements of Income and that our audits provide a accounting principles, as statements through its Retained Earnings and of reasonable basis for l

applicable. In situations that Audit Committee, which Cash Flows for each of the our opinion.

prevent exact accounting is composed entirely of three years in the period In our opinion, such measurements, informed nonemployee directors.

ended December 31,1994.

financial statements present judgments and estimates The Audit Committee These financial statemeats fairly,in all material respects, l

have been used. Financial meets periodically with are the responsibility of the the financial position of the l

information presented management and internal Company's management.

Company at December 31, l

elsewherein this Annual auditors to review their Our responsibility is to 1994 and 1993, and the l

Report is consistent with activities and responsibilities. express an opinion on these results of its operations l

these financial statements.

The Audit Committee also financial statements based and its cash flows for each l

The Company maintains meets periodically with the on our audits.,

of the three years in the and relies upon internal Company's independent We conducted our audits period ended December 31, accourning controls intended auditors, Deloitte & Touche in accordance with generally 1994 in conformity with to rovide reasonable LLP. The internal and accepted auditing standards.

generally accepwd as,urance that transactions independent auditors have Those standards require that accounting principles.

are properly recorded in the free access to the Audit we plan and perform the i

books and records and that Committee to discuss audit to obtain reasonable assets are protected against internal accounting controls, assurance about whether the loss or unauthorized use.

auditing and financial financial statements are free MbMNd M The degree ofinternal reporting matters.

of material misstatement.

l accounting controlis based An audit includes examining DELOITTE & TOUCHE LLP upon the determination on a test basis, evidence Columbia, South Carolina l

l of the appropriate balance supporting the amounts and February 6,1995 l

between the cost incurred g)p in maintaining internal con-trols and the benefits to be l

derived. Internal accounting W.B. Timmerman j

controls are supported by Executive Vice President, Controller and Chief FinancialOfficer February 6,1995 1

I l

l 11

CONSOLIDATED BALANCE SHEETS 4

k 1

December 31, 1994 1993

]

ASSETS mawduf th)

Utility Plant (Notes 1,3 and 4):

Electric

$3,424,951

$3,328,915 Gas-467,576 451,493 Transit 3,785 3,769 Common.

77,327 72,804 Total.

3,973,639 3,856,981 Less accumulated depreciation and amortization 1,333,360 1,259,689 Total 2,640,279 2,597,292 Construction work in progress 582,628 349,530 Nuclear fuel, net of accumulated amortization.

43,591-29,087 Acquisition adjustment-gas, net of accumulated amortization.

27,169 28,166 Utility Plant, Net 3,293,667 3,004,075 Nonutility Property and Investments (Net of accumulated depreciation and depletion)(Note 1).

395,929 393,728 Current Assets:

Cash and temporary cash investments (Note 8).

10,934 20,766 Receivables.

183,180 174,121 Inventories (at average cost):

Fuel (Notes 3 and 4) 60,273 62,977 Materials and supplies 47,463 46,890 Prepayments 19,853 21,826 Accumulated deferred income taws -_

18,629 8,607 TotalCurrent Assets -

340,332 335,187 Deferred Debits:

Emission allowances.

19,409 Unamortized debt expense.

13,488 13,076 Unamortized deferred return on plant investment (Note 1) 10,614 14,860 Nuclear plant decommissioning fund (Note 1) 30,383 25,103 Other (Notes 1 and 10).

289,3 %

254A97 Total Deferred Debits 363,200 307,536 Total-

$4,393,128

$4,040,526 mm

=__mm_,,

s e

12

l 4

l December 31, 1994 1993 j

CAPITALIZATION AND LIABILITIES

&#a!ny Mao j

Stockholders' Investment (Note 5):

Common equity.

$1,410,438

$1,333,045 Preferred stock (Not subject to purchase or sinking funds).

26,027 26,027 Total Stockholders' Investment 1,436,465 1,359,072 Preferred Stock, Net (Subject to purchase or sinking funds)(Notes 6 and 8).

49,528 52,840 Long-Term Debt, Net (Notes 3,4 and 8).

1,537,624 1,424,399 Total Capitalization.

3,023,617 2,836,311 Current Liabilities:

Short-term borrowings (Notes 8 and 9).

183,027 43,019 Current portion of long-term debt (Note 3).

38,055 34,322 Current portion of preferred stock (Note 6) 2,418 2,504 Accounts payable

.. g...

117,959 129,495 Estimated rate refunds and related interest (Note 2).

2,509 Customer deposits.

13,768 13,498 Ta es accrued.

46,670 50,063 Interest accrued 25,226 21,784 j

Dividends declared.

35,530 33,637 i

Other 17,220 12,649 Total Current Liabilities 479,873 343,480 Deferred Credits:

Accumulated deferred income taxes (Notes 1 and 7) 589,026 568,172 Accumulated deferred investment tax credits (Notes 1 and 7).

91,349 94,981 Accumulated reserve for nuclear plant decommissioning (Note 1).

30,383 25,103 Other (Note 1).

178,880 172,479 Total Deferred Credits 889,638 660,735 Commitments and Contingencies (Note 10).

Total.

54,393,128 54,040,526 Sov Win to Cenwidated hnanaa! Statement ~

13 i

CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS For the Years Ended December 31, 1994 1993 1992 meusands of Dollm except Fr shart amounts)

Opming Revenues (Notes 1 and 2):

Electrie

$ 975,388

$ 940,121

$ 829,477 Cas -

342,672 320,195 305,275 Transit 4,002 3,851 3,623 i

Total Operating Revenues,

1,322,062 1,264,167 1,138,375 Opertting Expenses:

Fuel used in electric generation _

235,136 229,736 206,151 Purchased power _

20,104 13,057 7,323 Cas purchased for resale 220,923 208,695 191,577 Other operation (Note 1) 229,996 223,239 215,800 Maintenance (Note 1) 63,725 67,652 65,442 Depreciation and amortization (Note 1) 119,177 112,844 108,315 income taxes (Notes 1 and 7) 94,510 90,007 ~

60,947 Other taxes 78,938 73,626 73,040 Total Operating Expenses 1,062,509 1,018,856 928,595 Operating income 259,553 245,311 209,780 Othrr Income (Note 1):

Other income (loss), net of income taxes (2,178) 21,147 6,388 Allowance for equity funds used during construction -

8,176 8,929 5,495

(

Total Other income 5,998 30,076 11,883 i

Income Before Interest Charges and Preferred Stock Dividends 265,551 275,387 221,663 Interezt Charges (Credits):

Interest on long-term debt, net 108,804 98,695 93,052 Other interest expense.

6,749 8,672 8,819 Allowance for borrowed funds used during construction (Note 1) :

(7,156)

(6,178)

(4,271)

Total Interest Charges, Net 108,397 101,189 97,600 i

Income Before Preferred Stock Cash Dividends of Subsidiary -

157,154 174,198 124,063 l

Prefstred Stock Cash Dividends of Subsidiary (At stated rates) -

(5,955)

(6,217)

(6,473)

Net Income 151,199 167,981 117,590 Retsined Earnings at Beginning of Year 506,380 462,893 457,393 Common Stock Cash Dividends Declared (Note 5) -

(133,911)

(124,494)

(112,090)

Retrined Earnings at End of Year

$ 523,668

$ 506,380

$ 462,893 Net income

$ 151,199

$ 167,981

$ 117,590 Weighted Average Number of Common Shares l

Outstanding (Thousands) 47,381 45,203 41,475 Etrnings Per Weighted Average Share of Common Stock -

. $3.19

$3.72

$2.84

]

See Notes to Consolidated Financul Statements.

14 i

CONSOLIDATED STATEMENTS OF CASH FLOWS For the Years Ended December 31, 1994 1993 1992 Cash Flows From Operating Activities:

Nsands ofIVim)

Net income

$ 151,199

$ 167,981

$ 117,590 Adjustments to reconcile net income to net cash provided from operating activities:

Depreciation, depletion and amortization --

210,905 158,024 126,695 i

l Amortization of nuclear fuel.

13,487 18,156 23,190 Deferred income taxes, net.

9,967 65,205 (10,783)

Deferred investment tax credits, net (3,632)

(3,658)

(3,667)

Net regulatory asset - accumulated deferred income taxes (1,951)

(31,531)

Dividends declared on preferred stock of subsidiary -

5,955 6,217 6,473 Allowance for funds used during construction -

(15,332)

(15,107)

(9,766)

Unamortized loss on reacquired debt (60)

(17,063)

(81) i j

Nuclear refueling accrual u

- (4,881)

(6,086) 11,862 l

Equity in (earnings) kisses of investees (230)

(319) 652 Over (under) collections, fuel adjustment clause (16,966)

(14,308) 7,482 l

Emission allowances (19,409) l Changes in certain current assets and liabilities:

l (Increase) decrease in receivables _

(9,059)

(35,244)

(8,918)

(Increase) decrease in inventories 2,131 (10,995)

(234)

Increase (decrease) in accounts payable (11,536) 28,109 7,282 Increase (decrease) in estimated rate refunds and related interest -

(2,509)

(15,302) 17,811 i

Increase (decrease)in taxes accrued -

(3,393)

(14,941) 1,691 l

Increase (decrease) in interest accrued 3,442 (7,511) 663 Other, net.

(11,423) 3,955 12,354 Net Cash Provided From Operating Activities 2 %,705 275,582 300,2 %

Cash Flows From Investing Activities:

l Utility property additions and construction expenditures -

(404,600)

(322,381)

(277,636) l (Increase) decrease in nonutility property and mvestments:

Acquisition of oil and gas producing properties.

(47,189)

(122,621)

(74,766) l Nonutility property.

(109,336)

(81,044)

(35,462) i

, Investments -

(19,006)

(4,066)

(2,591)

Sale of real estate assets 79,439 Principal noncash item:

i Allowance for funds used during construction 15,332 15,107

' 9,766 Net Cash Used For Investing Activities.

(485,360)

(515,005)

(380,689)

Cash Flows From Financing Activities:

Proceeds:

Issuance of mortgage bonds 100,000 600,000 Issuance of common stock -

63,317 129,066 126,809 Issuance of notes and loans.--....

60,000 148,059 154,254 Issuance of pollution control bonds.

30,000 Other long term debt 3,005 i

Repayments:

j Mortgage bonds (430,000)

(35,890) i i

Notes _.

(75,545)

(72,(MO)

(95,272)

Other long-term debt (11,430)

(1,195)

(255)

Preferred stock (3,398)

(3,295)

(3,199)

Dividend payments:

Common stock (131,925)

(122,129)

(109,383)

Preferred stock -

(6,048)

(6,247)

(6,558) l Short-term borrowings, net 140,008 1,863 20,390 Fuel financings, net.

13,844 (18,948)

(6,628)

Net Cash Provided By Financing Activities :

178,823 228,139 44,268 Net Decrease in Cash and Temporary Cash investments (9,832)

(11,284)

(36,125)

' Cash and Temporary Cash investments, January 1 20,766 32,050 68,175 Cash and Temporary Cash Investments, December 31

$ 10,934

$ 20,766

$ 32,050 Supplemental Cash Flows Information:

Cash paid for-Interest -

$ 110,347

$ 113,010

$ 100,340

-Income taxes 90,012 93,337 81,819 Noncash Financing Activities:

Department of Energy decontamination and l

decommissioning obligation.

4,965 See ktes to CensoMated Tmancul Statements.

15 lE

CONSOLIDATE = STATEMENTS OF CAPITALIZATION December 31, 1994 1993 Comraon Equity (Note 5):

Nmh of Me)

Common ' tock, without par value, authorized 75,000,000 shares; issued s

and outstanding,1994 - 48,017,510 shares and 1993 - 46,619,457 shares

$ 886,770

$ 826,665 Retained earnings 523,668 506,380 Total Common Equity 1,410,438 46 % 1,333,045 47%

South Carolina Electric & Gas Company:

Cumulative Preferred Stock (Not subject to purchase or sinking fundsHNote 5):

5100 Par Value - Authorized 200,000 shares

$50 Par Value - Authorized 125,209 shares Shares Outstanding

_, _ _ Redemption Price _

Eventual

. Series

_1994_

1993 Current Through Minimum

$100 Par 8.40%

197,668 197,668 102.80 11-30-96 101.00 19,767 19,767

$50 Par 5.00 %

125,209 125,209 52.50 52.50 6,260 6,260 Total P eferred Stock (Not subject to purchase or sinking funds) 26,027 1%

26,027 1%

South Carolina Electric & Gas Company:

Cumulative Preferred Stock (Subject to purchase or sinking funds)(Notes 6 and 8):

$100 Par Value-Authorized 1,550,000 shares Shares Outstanding Redemption Price Eventual

_Serjes 1994

1993_,

Current Throuf,h Minimum 7.70%

89,984 92,992 101.00 101.00 8,998 9,299 8.12%

126,835 131,899 102.03 102.03 12,684 13,190 216,8p 224,831_

550 Par Value-Authorized 1,627,074 shares Shares Outstanding Redemption Price,

Eventual Series 1994 1993_

Current Through Minimum 4.50 %

19,088 20,800 51.00 51.00 954 1,040 4.60 %

2,334 3,834 50.50 50.50 117 192 4.60%(A) 28,052 30,052 51.00 51.00 1,403 1,503 4.60%(B) 78,200 81,600 50.50 50.50 3,910 4,080 5.125 %

73,000 74,000 51.00 51.00 3,650 3,700 6.00 %

86,400 89,600 50.50 50.50 4,320 4,480 8.72 %

127,956 160,000 51.00 12-31-98 50.00 6,398 8,lXX) 9.40 %

190,245 197,191 51.175 51.175 9,512 9,860 l

f 605,275 657,077

=

==

$25 Par Value - Authorized 2,000,000 shares; none oatstanding in 1994 and 1993 Total Preferred Stock (Subject to purchase or sinking funds) 51,946 55,344 Less: Current portion, including sinking fund requirements 2,418 2,504 Total Preferred Stock, Net (Subject to purchase or sinking funds) 49,528 2%

52,840 2%

16

-.. - ~. - - - -

i

?

i December 31, 1994 1993 Long-Term Debt (Notes 3,4 and 8):

mowands of Duilun SCANA Corporation:

i Bank Notes, due 1996 (6.44%, reset quarterly) 60,000 60,000 Medium-term Notes:

Series Year of Maturyi j

5.76 %

1998 20,000 20,000 7.17%

1999 42,400 42,400 6.60% -

1999 30,000 30,000 6.15 %

2000 20,000 20,000 6.51 %

2003 20,000 20,000 South Carolina Electric & Gas Company:

)

First Mortgage Bonds:

Series Year of Maturity 6%

2000 100,000 100,000 61/4%

2003 100,000 100,000 7.70 %

2004 100,000 71/8%

2013 150,000 150,000 71/2%

2023 150,000 150,000 75/8%

2023 100,000 100,000 First and Refunding Mortgage Bonds:

Series Year of Maturity 47/8%

1995 16,000 16,000 5.45 %

1996 15,000 15,000 6%

1997 15,000 15,000 '

61/2%

1998 20,000 20,000 71/4%

2002 30,000 30,000 9%

2006 145,000 145,000 87/8%

2021 155,000 155,000 Pollution Control Facilities Revenue Bonds:

5.95% Series, due 2003 6,660 6,760 Fairfield County Series 1984, due 2014 (6.50%)

K820 56,820 l

Richland County Series 1985, due 2014 (6.50%)

5,:J10 5,210 Fairfield County Series 1986, due 2014 (6.50%)

1,0N) 1,090 Co?!eton and Dorchester Counties Series 1987, due 2014 (6.60%)

4,365 4,365 Orangeburg County Series 1994, due 2024 (floating daily rate) 30,000 Capitalized Lease Obligations, due 1991-1997 (various rates between 5 3/4% and 10%)

1,842 2,897 -

Installment. Note Payable, duc 1996 1,452 2,277 Department of Energy Decontaminatien and Decommissioning Obligation 3,922 4,634 South Carolina Generating Company, Inc.:

Berkeley County Pollution Control Facilities Revenue Bonds, due 2014 (6.50%)

35,850 35,850 Note,7.78%, due 2011 67,400 71,100 South Carolina Fuel Company, Inc.:

Nuclear and Fossil Fuel Liability 50,594 36,750 South Carolina Pipeline Corporation:

Notes,6.72%, due 2013 23,750 25,tX)0 Note,9.27%, due 1991-1994 8,000 SCANA Development Corporation:

Notes, due 1994-2004 (various rates between 8.5% and 12.0%)

1,770 Bank loans, due 1994-1998 (various rates between 6% and 6.25%)

3,246 13,839 j

Total Long-Term Debt 1,580,601 1,464,762 Less - Current maturities, including sinking fund requirements 38,055 34,322

- Unamortized discount 4,922 6,041 TotIl Long-Term Debt, Nel 1,537,624 51 % 1,424,399 50 %

Total Capitalization

$3,023,617 100% $2,836,311 100%

Se Notn to ConwMated Dnonckl Statementt 17

~.

a

l l

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1

SUMMARY

OF SIGNIRCANT ACCOUNTING POUCIES:

was approximately 5297.9 million and 5285.3 million as of l

A. Organization and Principles of Consoli& tion December 31,1994 and 1993, respectively. SCE&G's share of the l

SCANA Corporation (Compa

), a South Carolina direct expenses associated with operatmg Summer Station is corporation,is a public utility h lding company within the Included in the Company's "Other operation and j

meaning of the Public Utility Holding Company Act of 1935 but

, Maintenance expenses.

is exempt from registration under such Act.

D. Allowance for Funds Used During Construction The accompanying Consolidated Financial Statements reflect Allowance for funds used during construction (AFC), a the consolidation of the accounts of the Company and its wholly noncash item, reflects the period cost of capital devoted to plant owned subsidiaries:

under construction. This accounting practice results in the Regidated utilities inclusion, as a component of construction cost, of the costs of South Carolina Electric & Gas Company (SCE&G) debt and equity capital dedicated to construction investment.

South Carolina Fuel Company, Inc.

AFC is included in rate base investment and depreciated as a South Carolina Generating Company, Inc. (GENCO) component of plant cost in establishing rates for utility services.

1 South Carolina Pipehne Corporation (Pipeline Corporation)

The Company's regulated subsidiaries calculated AFC using Nonregulated fwsinesses composite rates of 8.5%, R3% and 9.6% for 1994,1993 and 1992, SCANA Petroleum Resources, Inc. (Petroleum Resources) respectively. These ra'.es do not exceed the maximum allowable r

- SCANA Hydrocarbons,Inc.

rate as calculated under FERC Order No. 561. Interest on nuclear Suburban Propane Group,Inc.

fuel in process and sulfur dioxide emission allowances is 6

MPX Systems, Inc. (MPX) capitalized at the actualinterest amount.

Seru.ceCarr,' Inc.'

E. Deferred Return on Plant Investment SCANA Development Corporation Commencing July 1,1987, as approved by a PSC order on that i

SCANA Capital Resources, In date, SCE&G ceased the deferral of carrying costs associated with Investments m jomt ventures m, c.

i rate base and began amortizing the acumsio sly remove real estate and ulated deferred telecommumcations are reported using the equity method of accounting. Sigmhcant intercompany balances and transactions carrying costs on a straight-line basis over a ten-yc,ar period.

have been eliminated in consolidation.

Amortization of deferred carrying costs, included m j

in January 1994 the Company signed an agreement to sell

" Depreciation and amortization," was approximately $4.2 milh,on j

substantially all of the real estate assets of SCANA Development for each of 1994,1993 and 1992.

Corporation to Liberty Properties Group, Inc. (Liberty) of F. Revenue Recognition Greenville, South Carolina for $91.5 million. On March 4,1994 the Customers' meters are read and bills are rendered on a Company and Liberty amended the agreement to exclude certain monthly cycle basis. Base revenue is recorded during the pmjects then under construction, and the sales price was reduced to accounting period in which the meters are read.

$49.6 million. The transaction was closed on May 27,1994. Certain Fuel costs for electric generation are collected through the fuel other assets of SCANA Development Corporation are being sold to cost component in retail electric rates. The fuel cost component other parties. These transactions did not have a material impact on contained in electric rates is established by the PSC during the Company's financial position or results of operations.

semiannual fuel cost hearings. Any difference between actual fuel B. System of Accounts c st and that contained in the fuel cost component is deferred and The accounting records of the Company's regulated included when determining the fuel cost component dunng the subsidiaries are maintained in accordance with the Uniform next semiannual fuel cost hearing. SCE&G had undercollected System of Accounts prescribed by the Federal Energy Regulatory through the electric fuel cost component approximately $3.5 Commission (FERC) and as adopted by the Public Service million at December 31,1994 and overcolketed approximately $9.2 Commission of South Carolina PSC).

milhon at December 31,1993 which are included in " Deferred Debits-Other" and " Deferred Credits-Other," respectively.

C. Utility Plant Customers subject to the gas cost adjustment clause are billed Utility plant is stated substantially at original cost. The costs based on a fixed cost of gas determined by the PSC during of additions, renewals and betterments to utility plant, including annual gas cost wrovery hearings. Any difference between 4

direct labor, material and indirect charges for engineering, actual gas cost and that contained in the rates is deferred and

'I supervision and an allowance for funds used during included when establishing gas costs during the next annual gas construction, are added to utility plant accounts. The original cost recovery hearing. At December 31,1994 and 1993 the cost of utility property retired or otherwise disposed of is Company had undercollected through the gas cost wcovery removed from utility plant accounts and generally charged, procedure approximately $16.3 million and $12.0 million, along with the cost of removal,less salvage, to accumulated respectively, which are included in " Deferred Debits-Other."

depreciation. The costs of repairs, replacements and renewals of items of property determined to be less than a unit of property G. Depreciation, Depletion and Amortization -

are charged to maintenance expense.

Provisions for depreciation are recorded using the straight.line SCE&G, operator of the V. C. Summer Nuclear Station method for financial reporting purposes and are based on the I

(Summer Station), and the South Carolina Public Servico estimated service lives of the vanous classes of property. The c posite weightc(1 average depreciation rates were as follows:

Authority (PSA) are joint owners of Summer Station in ti'c proportions of two-thirds and one-third, respectively. The parties share the operating costs and energy output of the plant ir these 1994 1993 1992 proportions. Each party, however, provides its own financing.

SCE&G 3.01 %

2.97%

3.00 %

Plant in service related to SCE&G's portion of Summer Station GENCO 2.70 %

2.64 %

2.63 %

was approximately $923.1 million and $920.2 million as of Pipeline Corporation 2.79 %

2.62 %

2.62 %

December 31,1994 and 1993, respectively. Accumulated

~ggregate of Above 2.98 %

2.92 %

2.96 %

A depreciation associated with SCE&G's share of Summer Station 18

)

i Nuclear fuel amortization, which is included in " Fuel used in The Company adopted Statement of Financial Accounting electric generation" and is recovered through the fuel cost Standards No.109, " Accounting for Income Taxes," effective component of SCE&G's rates,is recorded using the units-of-January 1,1993. Prior years' financial statements have not been production method. Provisions for amortization of nuclear fuel restated. Defermd tax assets and liabilities were adjusted from include amounts necessary to satisfy obligations to the United the amounts recorded at December 31,1992 under prior States Department of Energy under a contract for disposal of standards to the amounts required at January 1,1993 under spent nuclear fuel.

State.nent No.109 at currently enacted income tax rates. The The acquisition adjustment relating to the purchase of certain adjusteents were charged or credited to regulatory assets or gas properties in 1982 is being amortized over a 40-year period liabilitin if the Company expected to recover the resulting

. using the straight-line method.

addition <il income tax expense from, or pass through the Depreciation, depletion and amortization (DD& A) of the resulting ie'uctions in income tax expense to, customers of the capitalized costs of oil and gas producing properties is provided Company's repilated subsidiaries; otherwise, they were charged

, for on the units-of-production basis. Units-of-production rates or credited to income tax expense. The cumulative effect of are based on estimated proved reserves.

adopting Statement No.109 en retained eamings as of January 1, 1993, as well as the effect of aooption on net income for the year H. Nuclear Decommissiomng ended December 31,1993, wn not material. At December 31, Decommissioning of Summer Station is presently projected t 1993 the combined effect of adapting Statement No.109 and commence in the year 2022 when the operating heense expires.

adjusting deferred tax assets and liabilitic for the change in 1993 The expenditures (on a before-tax basis) related to SCE&G s of the corporate Federalincome tax rate from 34% to 35%

share of decommissiomng actisities are currently estimated, in resulted in balances of $100.8 millior. in regulatory assets 2022 dollars assuming a 4.5% annual rate of inflation, to be (included in " Deferred Debits-Othe ") and $69.3 million in

$545.3 milhon, mcluding partial reclamation costs. SCE&G is regulatory liabilities (included in " Deferred Credits-Other) for providing for its share of estimated decommissioning costs of the Company's regulated subsidiaries.

In accordance with Statement No.109, deferred tax assets and Summer Station over the life of Summer Station. SCE&G s method of funding c ecommissioning costs is referred to as liabilities are recorded for the tax effect of temporary differences COMRel (Cost of Money Reduction Plan). Under this lan, between the book basis and tax basis of assets and liabilities at funds collected thro.igh rates ($3.2 million and $2.5 mil mn in currently enacted tax rates. Deferred tax assets and liabilities are 1994 and 1993, resrectively) are used to purchase insurance adjusted for changes in such rates through charges or credits to pohcies ora ne hves of key Company personnel. Through the regulatory assets or liabilitias if they are expected to be recovered purchase of insurance contracts, SCE&G is able to take advantage sed through tc, customers of the Company's o

of mcome tax benefits and accrue earnings on the fund on a tax re8" lated subsidiaries; oti.erwise, theY are charged or credited to deferred basis at a rate higher than can be aclueved using more income tax expense.

traditional funding approaches. Amounts for decommissioning Pri r to the adoption of Statement No.109 on January 1,1993, collected through electric rates, insurance proceeds and interest the Company recorded a defer ed income tax provision on all on proceeds less expenses are transferred by the Company to an material timmg differences between the m, clusion of items m, external trust fund in compliance with the financial assurance pretax financialincome and taxable income each year, except for requirements of the Nuclear Regulatory Commission.

those which were expected to be passed through to, or collected Management intends for the fund, including earnings thereon, to from, customers f the Company's regulated subsidiaries.

i provide for all eventual decommissioning expenditures on an Aaumulated deferred income taxes were generally not adjusted after-tax basis. Thus, the trust's sources of decommissioning f r changes m enacted tax rates.

funds under the COMReP program include investment components of life insurance policy proceeds, return on J. Pension Expense investments, and the cash transfers from SCE&G described The Company has a noncontributory defined benefit pension above. SCE&G records its liability for decommissioning costs in plan covering substantially all permanent employees. Benefits deferred credits.

are based on years of accredited service and the employee's The staff of the Securities and Exchange Commission has average annual base earnings received during the last three years questioned certain of the current accounting practices of the of employment. The Company's policy has been to fund pension electric utility industry regarding the recognition, measurement costs accrued to the extent permitted by the applicable Federal and classification of decommissioning costs for the financial income tax regulations as determined by an independent actuary.

statements of electric utilities with nuclear generating facilities.

Net periodic pension cost for the years ended December 31, In response to these questions, the Financial Accounting 1994,1993 and 1992 included the following components:

Standards Board has agreed to review the accountine for removal costs, including decommissioning. If the current e:

' utility 1994 1993 1992 industry accounting practices for such decommisst

are (Timusands of Dollars) changed

(1) annual provisions for decommissioning wuld Service cost-benefits earned increase, and (2) trust fund income from the external during the period

$ 8,684 $ 7,629 $ 7,174 decommissioning trusts could be reported as investment.mcome Interest cost on projected rather than as a reduction of decommissionmg expense.

benefit obligation 21,711 20,413 19,628 In addition, pursuant to the National Ener y Pohey Act passed Adjustments: Return on plan assets 2,365 (50,389) (28,607) by Congress m, 1992, SCE&G has recorded a iability for its Net amortization and deferral (29,760) 25,936 8,096 estimated share of amounts required by the U.S. Department of

, Energy for its decommissioning fund. SCE&G will recover the Net periodic pension cost S 3,000 $ 3,589 $ 6,291 costs associated with this liability, totaling $4.3 million at December 31,1994, through the fuel cost component of its rates; The determination of net periodic pension cost is based upon accordingly, these amounts have been deferred and are ircluded the following - amptions l

in ' Deferred Debits-Other" and 'long-Term Debt, Net."

1994 1993 1992

1. Ineome Taxes Annual discount rate 7.25 %

8.0%

8.0%

The Company and its subsidiaries file consolidated Federal and State income tax returns. Income taxes are allocated to all Expected long-term rate of subsidiaries based on their contributions to consolidated taxable return on plan assets 8.0%

8.0%

8.0%

income.

Annual rate of salary increases 4.75 %

5.5%

5.5%

19

I I

The following table sets forth the funded status of the plan at The determination of net periodic postretirement benefit cost is December 31,1994 and 1993:

based upon the following assumptions:

1994 1993 1994 1993 mmusand< of IbtlA Annual discount rate 7.25%

8.0%

Actuarial present value of benefit obligations:

Ilealth care cost trend rate 11.25 %

13.0%

Vested benefit obligation

$ 205,364 $204,794 Ultimate health care cost trend rate Nonvested benefit obligation 13,966 14,085 (to be achieved in 2004) 5.25%

6.0%

Accumulated benefit obligation

$ 219,330 $218,879

- -~~

The following table sets forth the funded status of the plan, as Projected benefit obligation 5 246,318 $295,718 determined by an independent actuary, at December 31,1994 and Plan assets at fair value 1993:

(invested primarily in equity I

and debt securities) 347,702 351,648 1994 1993 Plan assets greater than mmusands of Dollars) projected benefit obligation 101,384 55,930 Accumulated postretirement Unrecognized net transition liability 11,307 10,713 benefit obligations for:

Unrecognized prior sersice costs 9,374 9,294 Retirees 5 59,174 5 40,865 Unrecognized net gain (102,284) (64,607)

Other fully eligible participants 4,995 6,841 j

Pension asset recognized in Other active participants 24,889 25,767

. - ~ -

~~~-' - - -

Accumulated postretirement benefit Consolidated Balance Sheets 5 19,781 $ 11,330 obligation 89,058 73,473 The accumulated benefit obligation is based on the plan's Plan assets at fair value benefit formulas without considering expected future salary Plan assets less accumulated postretirement increases. The following table sets forth the assumptions used in benefit obligation (89,058) (73,473) the amounts shown above for the years 1994,1993 and 1992.

Unrecognized net transition liability 61,581 64,925 Unrecognized prior service costs 3,453 1994 1993 1992 Unrecognized net loss 11,156 4,284 Annual discount rate used to Postretirement benefit liability recognized determine benefit obligations 8.0%

7.25 %

8.0%

in Consolidated Balance Sheets

$(12,868) $ (4,264)

Assumed annual rate of future

~ - - - - -

l salary increases for projected The accumulated postretirement obligation is based upon the benefit obligation 2.5%

4.75 %

5.5%

plan's benefit provisions and the following assumptions:

l l

The change in the annual discount rate used to determine 1994 1993 benefit obligations from 7.259 to 8.09 and the change in the Assumed health care cost trend rate used to expected salary increase rate from 4.759 to 2.5% as of December measure expected costs 12.0%

11.25 %

31,1994 decreased the projected benefit obligation and increased Ultimate health care cost trend rate the unrecognized net gain by approximately $67.7 million.

(to be achieved in 2004) 6.0%

5.25%

In addition to pension benefits, the Company provides certain Annual discount rate 8.0%

7.25 %

health care and life insurance benefits to active and retired Annual rate of salary increases 2.5%

4.75 %

employees. The costs of postretirement benefits other than pensions are accrued during the years the employees render the The effect of a one-percentage-iint increase in the assumed service necessary to be eligible for the applicable benefits. Prior health care cost trend rate for eac future year on the aggregate to 1993 the Company expensed these benefits, which are of the service and interest cost components of net periodic primarily health care, as claims were incurred. In its June 1993 postretirement benefit cost for the year ended December 31,1994 l

ekctnc rate order the PSC approved the inclusion in rates of the and the accumulated postretirement benefit obligation as of portion of increased expenses related to electnc operations. The December 31,1994 would be to increase such amounts by l

Company expensed approximately $8.6 million and $4.3 million,

$210,000 and $3.3 million, respectively.

net of payments to current retirees, for the years ended December 31,1994 and 1993, respectively.

K. Debt Premium, Discount and Expense, Unamortized Loss on Net periodic postretirement h efit cost for the years ended Reacquired Debt December 31,1994 and 1993 included the following components:

Long-term debt premium, discount and expense are being j

amortized as components of " Interest on long-term debt, net" i

1994 1993 over the terms of the respective debt issues. Gains or losses on macquired debt that is refinanced are deferred and amortized mmmamis of Dalarn Senice cost-benefits earned during over the term of the replacement debt.

the period 5 2,417 $ 1,908 L Environmental Interest cost on accumulated postretirement The Company has an environmental assessment program to benefit obligation 6,644 5,502 identify and assess current and former operations sites that could

• Adjustments:

require environmental cleanup. As site assessments are initiated, Return on plan assets an estimate is made of the amount of expenditures,if any, Amortization of unrecognized necessary to investigate and clean up each site. These estimates transition obligation 3,344 3,344 are refined as additional information becomes available; i

Other net amortization and deferral 860 therefore, actual expenditures could differ significantly from the

)

l Net p_eriodic p_os_tret.i_reme.n_t b._enefit_co_st_$13,26._5

$10_,754 original estimates. Amounts estimated and accrued to date for j

s te assessments and cleanup relate primarily to regulated operations; such amounts have been deferred and are being amortized and recovered through rates over a ten-year period for 20

electric operations and an eight-year period for gas operations.

E. In May 1989 the PSC approved a volumetric and direct Such deferred amounts totaled $20.2 million and $19.6 million at billing meti od for Pipeline Corporation to recover take-or-pay December 31,1994 and 1993, respectively, and are included in costs incurred from its interstate pipeline suppliers pursuant to

" Deferred Debits-Other."

FERC-approved final and non-appealable settlements. In December 1992 the Supreme Court approved Pipeline 1mdg properties are accounted for using the successful-Corporation ls full recovery of the take-or-pay charges imposed by its supphers and treatment of these charges as a cost of gas.

efforts method. The costs of ac9uirin8 nonproducing acreage, However, the Supreme Court declared the PSC-approved drilling successful exploration wells, and all development costs

" purchase deficiency" methodology for recovery of these costs to

, are capitahzed. The Company's net mvestment m oil and gas be unlawful retroactive ratemaking and remanded the docket to properties is subject to a quarterly ceiling hmitation calculation the PSC to reconsider its recovery methodology. On April 30, that is based on the future net revenues from forecasted 1994 the PSC issued an order involving Pipeline Corporation's production of proved oil and gas reserves valued at current or

,.ecovery of take-or-pay cost incurred pursuant to FERC-l

, contract prices. C,arrymg values of proved reserves m excess of pnwed settlements with its upstream interstate pipeline i

the ceiling hmitation are expensed currently. The Company s supplier. This order provided a mechanism for Pipehne l

mvestments m nonpmducmg properties are evaluated Corporation to recover its take-or-pay cost volumetrically over a periodically, and if conditions warrant, an impairment reserve is period of approximately 30 months. SCE&G receives a credit for

~

provided. Costs of that portion of undeveloped acreage likely to payments made prior to the April 30 order which is netted be unproductwe, based largely on histoncal expenence, are against the current volumetric surcharge. That net cost is amortized over the period of exploration. Annual lease rental

• recovered by SCE&G through its purchased gas adjustment and exploration costs, meludmg geological and geophysical costs clause' and exploratory dry-hole costs, are expensed as incurmd.

F. On August 8,1990 the PSC issued an order, effective N. Gas Futures Contracts November 1,1990, approving changes in Pipeline Corporation's The Company sells gas futures and forward contracts, gas rate design for sales for resale service and upholding the I

purchases options and enters into over-the-counter agreements to "value-of-service" method of regulation for its direct industrial I edge price risks for the majority of Petroleum Resources' service. Direct industrial customers seeking " cost-of-service" production. Gains and losses on the above are recognized based rates initiated two separate appeals to the Circuit Court, concurrently with the revenue from the associated gas sales.

which reversed and remanded to the PSC its August 8,1990 order.

Pipeline Corporation appealed that decision to the Supreme Court l

O. Tempora'Y Cash Investments which on January 10,1994, reversed the two Circuit Court The Company considers temporary cash m. vestments having decisions and reinstated the PSC Order. The Supreme Court held original maturities of three months or less to be cash equivalents.

that the industrial customer group's appeal was premature and i

Temporary cash mvestments are generally m the form of failed to exhaust administrative remedies. Additionally, the commercial paper, certificates of deposit and repurchase Supreme Court interpreted the rate-making statutes of' South l

1. 8"""""

Carolina to give discretion to the PSC in selecting the P. Reclassifications methodology to be used in setting rates for natural gas service.

Certain amounts from prior periods have been reclassified to G. On July 3,1989 the PSC granted SCE&G approximately S21.9 conform with the 1994 presentation.

million of a requested $27.2 million annual increase in retail electric revenues based upon an allowed return on common

2. RATE MATTERS:

equity of 13.25%. The Consumer Advocate appealed the decision A. On October 27,1994 the PSC issued an order approving to the Supreme Court which,on August 31,1992, found that the SCE&G's request to recover through a billing surcharge to its gas evidence m the record of that case did not support a return on customers the costs of environmental cleanup at the sites of common equity higher than 13.0% and remanded to the PSC a former manufactured gas plants. The billing surcharge, which p rtion of its July 1989 order for a determination of the proper was effective with the first billing cycle in November 1994, mtum on c mm n equity consistent with the Supreme Court's provides for the recovery of approximately $16.2 million opinion. On January 19,1993 the PSC issued an order allowmg a mtu on conun n equity of 13.0%, approving a refund based on representing substantially all site assessment and cleanup costs i

for SCE&G's gas operations that had previously been deferred.

the difference m rates created by the difference between the 13.0%

l B. On June 7,1993 the PSC issued an order on SCE&G's and the 13.25% return on common equity and making other non-pending electric rate proceeding allowing an authorized return material adjustments to the calculation of cost-of-service. The on common equity of 11.5%, resulting in a 7.4% annual increase t tal refund, before mterest and income taxes, was approximately in retail electric rates, or a projected $60.5 million annually based

$14.6 million and was charged against 1992 "Electnc Revenues."

on a test year. These rates were implemented in two phaks over The refund plus mterest was made during 1993.

a two-year period: phase one, effective June 1993, producing S42.0 million annually, and phase two, effective June 1994,

3. LONG-TERM DEBT:

producing $18.5 million annually, based on a test year.

The annual amounts of long-term debt maturities, including C. On September 14,1992 the 15C issued an order granting the amounts due under the nuclear and fossil fuel agreements SCE&G a 5.25 increase in transit fares from 5.50 to 5.75 in both (see Note 4), and sinking fund requirements for the years 1995 Columbia and Charleston, South Carolina; however, the PSC also through 1999 are summarized as follows:

required 5.40 fares for low income customers and denied

,SCE&G's request to reduce the number of routes and frequency Year Amount Year Amount of service. The new rates were placed into effect on October 3, hw @kIlard 1992. SCE&G has appeakd the PSC's order to the Circuit Court.

1995

$ 38,055 1998

$60,174 D. Effective with the first billing cycle in December 1991, 1996 147,248 1999 92,584 SCE&G's gas rate schedules for its residential, small commercial 1997 38,306 and small industrial customers have included a weather

~

normalization adjustment (WNA). The WNA minimizes fluctuations in gas revenues due to abnormal weather cc.nditions Approximately $14.8 million of the current portion of long-and was subject to an annual review by the PSC. The PSC ordct term debt for 1995 may be satisfied by either deposit and was based on a return on common equ'ity of 12.25%. On August cancellation of btmds issued upon the basis of property additions 26,1994, the PSC ordered that the WNA be made permanent.

or bond retirement credits, or by deposit of cash with the Trustee.

21

in January 1995 the Company arranged for an unsecuwd bank The aggregate annual amounts of purchase fund or sinking loan of $60 million, due January 12,1996 at an initial interest rate fund requirements for preferred stock for the years 1995 through of 6.44% subject to reset quarterly at LIBOR plus ten basis 1999 are summarized as follows:

points. Proceeds from the loan were used to repay bank loans totaling $60 million due January 13,1995; accordingly, such hians Year Amount Year Amount are included in long-term debt at December 31,1994.

3,gg g j Substantially all utility plant and fuel inventories are pledged 1995

$2,418 1998

$2,440 as collateral m connection with long-term debt' 1996 2,482 1999 2,440 1997 2,440

4. FUEL FINANCINGS:

Nuclear and fossil fuel inventories are financed through the The changes in " Total Prefermd Stock (Subject to purchase or issuance of short-term commercial paper. These short-term sinking funds)" during 1994,1993 and 1992 are summarized as borrowings are supported by an irrevocable revolving credit follows:

agreement which expires July 31,1996. Accordingly, the amounts outstanding have been included in long-term debt. The credit Number Thousands agreement provides for a maximum amount of $75 million that of Shams of Dollars r utsfa Balance December 31,1991 998,404

$61,838 al p i g totaled $50.6 million and $36.8 o me a

million at December 31,1994 and 1993 at weighted average

) par ue (6,098)

(610) mterest rates of 6.06% and 3.47% respectively.

$50 par value (51,777)

(2,589)

5. STOCKHOLDERS' INVESTMENT llNCLUDING PREFERRED Oh'"'", h'**em STOCK Noi SUBJECT To PURCHASE OR SINKING FUNDS};

$100 par value (7,374)

(737)

The changes in " Common Stock," without par value, during

$50 par value (51,187)

(2,558) 1994,1993 and 1992 are summarized as follows:

Balance December 31,1993 881,968 55,344 Shares Redeemed:

Number Thousands

$100 par value (8,072)

(807) of Shares of Dollars

$50 par value (51,802)

(2,591)

Balance December 31,1991 40,784,327

$571,597 Balance December 31,1994 822,094

$51,946-"-

Issuance of common stock 3,126,304 127,406 Balance December 31,1992 43,910,631 699,003 Issuance of common stock 2,708,826 127,662

7. INCOME TAXES:

Baltnce December 31,1993 46,619,457 826,665 Total income tax expense for 1994,1993 and 1992 is as follows:

Issuance of common stock 1,398,053 60,105 Balance December 31,1994 48,017,510

$886,770 1994 1993 1992 The Restated Articles of Incorporation of the Company do not Current taxes:

limit the dividends that may be payable on its common stock.

Federal

$62,033 $59,590 $ 67,240 However, the Restated Articles of Incorporation of SCE&G and State 13,178 6,409 8,146 the Indenture underlying its First and Refunding Mortgage Total current taxes 75,211 65,999 75,386 Bonds contam provisions that may limit the payment of cash dividends on its common stock. In addition, with respect to Deferred taxes, net:

hydroelectric projects, the Federal Power Act may require the Federal 10,242 23,219 (11,888) appropriation of a portion of the carnings therefrom. At State (86) 6,003 413 December 31,1994 approximately $13.2 million of retained Total deferred taxes 10,156 29,222 (11,475) earnings were restricted as to payment of cash dividends on Investment tax credits:

i common stock.

Amortization of amounts Cash dividends on common stock were declared at an annual deferred (credit)

(3,631)

(3,659)

(3,659) rate per share of $2.82, $2.74 and $2.68 for 1994,1993 and 1992, Total income tax expense

$81,736 $91,562 $ 60,252 respectively.

=r The differeace in actual bcome taxes and the income taxes

6. PREFERRED STOCK ISUBJECT TD PURCHASE OR calculated fron the applicition of the statutory Federalincome SINKING FUNDSl:

tax rate (35% for 1994 and 1993 and 34% for 1992) to pretax The call premium of the respective series of preferred stock in income is reconcilei as foWws:

no case exceeds the amount of the annual dividend. Retirements under sinking fund requirements are at par values.

At any time when dividends have not been paid in full or i

declared and set apart for payment on all series of preferred stock, SCE&G may not redeem any shares of preferred stock (unless all j

shares of preferred stock then outstanding are redeemed) or j

purchase or otherwise acquire for value any shares of preferred stock except in accordance with an offer made to all holders of preferred stock. SCE&G may not redeem any shares of preterred j

stock (unless all shares of preferred stock then outstanding are j

redeemed) or purchase or otherwise acquire for value any shares of preferred stock (except out of monies set aside as purchaw

/

funds or sinking funds for one or more series of prefcred stock) at j

any time when it is in default under the provisions of the purchase i

fund or sinking fund for any series of preferred stock.

(

22 1

l f

1994 1993 1992 1992 (Thousanh of Dears)

Charged (credited) to expense:

Net income

$151,199 $167,981 $117,590 Property, plant and equipment (including Totalincome tax expense:

DD&A and basis differences)

$ 7,435 Charged to operating expenses 94,510 90,007 60,947 Deferred fuel revenue (2,958) l Charged (credited) to other Property taxes 562 l

income (12,774) 1,555 (695)

Cycle billing (1,321)

Preferred stock dividends 5,955 6,217 6,473 Take-or-pay contracts (1,118) l Total pretax income

$238,890 $265,760 $184,315 Nuclear refueling accrual (4,430) 1 Electric rate refund (6,571)

Income taxes on above at statutor,

injuries and damages (1,377)

Other, net (1,697)

Federalincome tax rate

$83,612 $93,016 $62,667 Increases (decreases) attributable m:

Total deferred taxes

$(11,475)

Allowance for funds used during construction The Internal Revenue Service has examined and closed (excluding nuclear fuel)

(2,862)

(3,125)

(1,868) consolidated Federalincome tax returns of the Company through l

Deferred return on plant 1989 and is currently examining the 1990,1991 and 1992 Federal l

investment, net of amortization 1,486 1,486 1,444 income tax returns. No adjustments are currently proposed by Depreciation differences 2,860 2,794 2,129 the examming agent. The Company does not anticipate that any l

Amortization of investment tax adjustments which might result from this examination will have l

credits (3,631)

(3,659)

(3,659) a significant impact on the earnings or financial position of the State income taxes Oess Federal Company.

income tax effect) 8,510 8,068 5,649 Deferred income tax flowback at

8. RNANCIAL INSTRUMENTS:

higher than statutory rates (4,327)

(4,411)

(5,565)

The carrying amounts and estimated fair values of the Alternate fuel production tax credit (1,274)

(1,373)

(275)

Company's financialinstruments at December 31,1994 and 1993 i

Other differences, net (2,638)

(1,234)

(270) are as foilows:

l Total income tax expense

$81,736 $91,562 $60,252 j

1994 1993 The Omnibus Budget Reconciliation Act was signed into law Estimated Estimated on August. 10,1993, increasing the corporate tax rate from 34% t Carrying Fair Carrying Fair 35% effective January 1,1993. The impact of this change on the Amount Value Amount Value Company's financial position and results of operations was not material.

The tax effects of significant temporary differences comprising Cash and temporary l

cash investments 5 10,934 $ 10,934 $ 20,766 $ 20,766 the Company's net defernd tax liability of $570.4 million at Investments 24,858 27,099 5,312 15,233 1

December 31,1994 and $559.6 million at December 31,1993, l

determined in accordance with Statement No.109 (see Note 11),

Skrt-term borrowings 183,027 183,027 43,019 43,019 are as follows:

Total long-term debt 1,575,679 1,490,852 1,458,721 1,551,873 Total preferred stock (subject to purchase 1994 1993 or sinking funds) 51,946 49,348 55,344 51,618 mwusandwf Dollars}

Defemd tax assets:

The information presented herein is based on pertinent Unamortized investment tax credits 5 56,588 $ 58,839 nformation available to the Company as of December 31,1994 Cycle billing 17,521 15,084 and 1993. Although the Company is not aware of any factors that Nuclear operations expenses j

would significantly affect the estimated fair value amounts, such o6 4,908 Defernd compensation 3,513 5,315 financial instruments have not been comprehensively revalued Other post retirement benefits 3,187 1,631 since December 31,1994 and the current estimated fair value may Other 8,392 11,102 differ significantly from the estimated fair value at that date.

Total deferred tax assets 91,407 96,879 The following methods and assumptions were used to estimate Defernd tax liabilities:

the fair value of the above classes of financialinstruments:

Property, plant and equipment (including Cash and temporary cash investments, including commercial DD&A and basis differences) 625,636 619,859 paper, repurchase agreements, treasury bills and notes are valued Pension expense 9,022 6,266 at their carrying amount.

Deferred fuel revenue 7,803 931 Fair values of investments and long-term debt are based on Reacquired debt 7,146 7,574 quoted market prices for similar instruments, or for those l

Other 12,197 21,814 instruments for which there are no quoted market prices Total deferred tax liabilities 661,804 656,444 available, fair values are based on net present value calculations.

l Net deferred tax liability

$570,397 $559,565 Investments which are not considered to be financial instruments (goodwill) have been excluded from the carrying amount and estimated fair value. Settlement of long-term debt may not be

" Total deferred taxes" charged (credited) to income tax p ssible or may not be a prudent management decision.

l expense result from timing differences in recognition of the following items (thousancIs of dollars):

tqerm borrowmgs are valued at their carrying amount.

The fatt value of preferred stock (subject to purchase or sinking funds)is estimated on the basis of market prices.

Potential taxes and other expenses that would be incurred in an actual sale or settlement have not been taken into consideration.

l 23

9. SHORT-TERM BORROWINGS:

insurance becomes unavailable in the future, and to the extent i

The Company pays fees to banks as compensation for its lines of that SCE&G's rates would not recover the cost of any purchased credit. Comme'rcial paper borrowings are for 270 days or less.

replacement power, SCE&G will retam the risk of loss as a self-Details of lines of credit and short-term borrowings at December insurer. SCE&G has no reason to anticipate a serious nuclear,

incident at Summer Station. If such an mcident were to occur, it 31,1994,1993 and 1992 and for the years then ended are as follows:

l could have a matenally adverse impact on the Company s financial position.

1994 1993 1992 (Millions of Dellar.g C. Environmental Authorized lines of credit at year-end $479.1 $335.0 $288.9 As described in Note IL, the Company has an environmental Unused lines of credit at year-end

$455.1 $308.0 $262.8 assessment program to identify and assess current and former,

Short-term borrowings operations sites that could require erwironmental cleanup. As site outstanding at year-end; assessments are initiated, an estimate is made of the amount of Bank loans

$ 71.1 $ 42.0 $ 41.1 expenditures,if any, necessary to investigate and clean up each site.

• Weighted average interest rate 6.50 % 3.71 % 4.49%

These estimates are refined as additional information becomes Commercial paper

$111.2 $ 1.0 available; therefore actual expenditures could differ sigmficantly from the original estimates. Amounts estimated and accrued to Weighted average interest rate 6.04 % 3.35%

date for site assessments and cleanup relate primarily to regulated operations; such amounts have been deferred and are being

10. COMMITMENTS AND CONTINGENCIES:

amortized and recovered through rates over a ten-year period for A. Construction ek'ctric operations and an eight-year Ivriod for gas operations.

SCE&G entered into a contract with Duke / Fluor Daniel in in September 1992 the Environmental Protection Agency (EPA) 1991 to design, engineer and build a 385 MW coal-fired electric notified SCE&G, the City of Charleston and the Charleston generating plant near Cope, South Carolina in Orangeburg flousing Authority of their potentialliability for the investigation County. Construction of the plant began in November 1992 and and cleanup of the Calhoun Park Area Site in Charleston, South is expected to be complete in late 1995 with commercial Carolina. This site originally encompassed approximately 18 acres operation beginning in early 1996. The estimated cost of the and included properties which were the kications for iadustrial Cope plant, excluding financing costs and AFC but including an operations, including a womi preserving (creosote) plant and one allowance for escalation, is $450 million. In addition, the of SCE&C's decommissioned manufactured gas plants. The transmission lines for interconnection with the Company's original scope of this investigation has been expanded to system are expected to cost $26 million.

approximately 30 acres including adjacent properties owned by Under the Duke / Fluor Daniel contract SCE&G must make the National Park Service and the City of Charleston, and private specified monthly minimum payments. These minimum properties. The site has not been placed on the National Priority payments do not include amounts for inflation on a portion of List, but may be added before cleanup is initiated. The potentially the contract which is subject to escalation (approximately 34% of responsible parties (PRP) have agreed with the EPA to participate the total contract amount). The aggregate amount of such in an innovative approach to site investigation and cleanup called required minimum payments remaining at December 31,1994 is "Superfund Acceleratol Cleanup Model," allowing the pre-as follows (thousands of dollarsh cleanup site investigatius process to be compressed significantly.

The PRPs have negotiateu in administrative order by consent for 1995 5 59,766 the conduct of a Remedial : nvestigation/ Feasibility Study (Rl/IS) 1996 5,603 and a corresponding Scop of Work. Actual field work began Total 5 65,369 November 1,1993 after fi ! approval and authorization was

~ ~ - ~

granted by EPA. SCE&G.s also working with the City of Through December 31,1994 SCE&G had paid $310 million Charleston to investigate potential contamination from the under the contract.

manufactured gas plant which may have migrated to the city's aquarium site. In 1994 the City of Charleston notified SCE&G that B. Nuclear Insurance it considers SCE&G to be responsible for a $43.5 million increase The Price Anderson Indemnification Act, which deals with in costs of the aquarium project attributable to delays resulting public liability for a nuc! car incident, currently establishes the from contamination of the Calhoun Park area site. SCE&G liability limit for third-party claims associated with any nuclear believes it has meritorious defenses against this claim and does incident at $8.9 billion. Each reactor licensee is currently liable for not expect its resolution to have a material impact on its financial up to $79.3 million per reactor owned for each nuclear incident position or results of operations.

occurring at any reactor in the United States, provided that not more than $10 million of the liabihty per reactor would be D, Emission Allowances assessed per year. SCE&G's maximum assessment, based on its The Company has entered into an agreement with a broker of two-thirds ownership of Summer Station, would be approximately sulfur dioxide emission allowances to purchase $6.8 million of

$52.9 million per incident, but not more than $6.7 million per year.

allowances at a fixed price during 1995.

SCE&G currently maintains policies (for itself and on behalf of E. Personal Communication Services licenses the PSA) with Nuclear Electric insurance Limited (NEIL) and MPX is pursuing Personal Communication Services licenses for -

American Nuclear insurers (ANI) providing combined property wireless communications in the Southeast through a joint and decontamination insurance coverage of $1.4 billion for any venture. A $40 million construction loan obtained by the joint losses in excess of $500 million pursuant to existing primary venture has been guaranteed by SCANA Corporation.

coverages (with ANI) on Summer Station. SCE&G pays annual premiums and, in addition, could be assessed a retroactive F. Oil and Gas forward Contracts premium not to exceed 7 W times its annual premium in the In an effort to limit exposure to changing natural gas prices event of property damage kiss to any nuclear generating facilities and to avoid a write-down resulting from the application of the covered by NEll' Ilased on the current annual premium, this ceiling test (see Note IM) at December 31,1994,in January 1995 retroactive premium would not exceed $8.2 million.

the Company entered into a series of forward contracts relating To the extent that insurable claims for property damage, to natural gas production. These forward contracts have the decontamination, repair and replacement and other costs and effect of stabilizing the price that the Company will receive on expenses arising from a nuclear incident at Summer Station approximately sixty percent of its forecasted natural gas exceed the policy limits of insurance, or to the extent such production for the years 1995-2001. The forward contracts are at an average price of $1.88 per dekatherm.

24

i 11 SEGMENT OF BUSINESS INFORMATION:

1992 Segment information at December 31,1994,1993 and 1992 and Electric Gas Transit Total for the years then ended is as follows:

mmuunds of Dollars)

Operating revenues

$ 829,477 $305,275

$ 3,623 51,138,375 I#

Operating expenses, Electric Gas Transit Total excluding depreciation mmusands of Dollars) and amortization 554,897-256,178

. 9,205 820,280 Operating revenues

$ 975,388 5342,672 $ 4,002 $1,322,062 Depreciation and Operating expenses, amortization 93,978 14,174 163 108,315 excluding depreciation Total operating expenses 648,875 270,352 9,368 928,595 and amortization 640,528 292,227 10,577 943,332 Operatingincome 00ss) $ 180,602 $ 34,923

$(5,745) 209,780 l

Depreciation and amortization 102,647 16,304 226 119,177 Add Otherincome, net 11,883 Total operating expenses 743,175 308,531 10,803 1,062,509 1.ess -Interest charges 97,600 Operating income (loss) 5 232,213 5 34,141

$(6,801) 259,553

. Preferred stock dividends 6,473 Add - Other income, net 5,998 Less -Interest charges 108,397 p aff;[nditures:

ex

- Preferred stock dividends 5,955 Net income

$ 151,199 Utilized for overall Company operations 8,877 Capital expenditures:

Total

$ 277,636 Identifiable 5 364,007 5 20,079 5 347 $ 384,433 Utilized for overall Company operations 20,167 Identifiable a%ets at December 31,1992:

f tal 5 W,600 Utility plant, net

$2,4%,691 $299,591

$ 1,240 $2,757,522 i

Inventories 82,717 8,155 481 91,353 Total

$2,539,408 $307,746

$ 1,721 2,848,875 Dec b t31 Utility plant, net

$2,897,954 5315,746

$ 1,791 53,215,491 Inventories 98,669 17,026 495 116,190 Other assets 708,846 Total

$2,996,623 5332,772 5 2,286 3,331,681 Total assets

$3,557,721 Other assets 1,061,447 Total assets 54,393,u8

12. QUARTERLY FINANCIAL DATA (UNAUDITEDl:

1993 1994 Electric Gas Transit Total First Second Third Fourth mmusands of Dollars)

Quarter Quarter Quarter Quarter Annual Operating revenues 5 940,121 $320,195

$ 3,851 51,264,167 Total operating Operating expenses, revenues (000) 5347,309 $296,046 $361,329 5317,378 $1,322,062 excluding depreciation Operating and amortization 620,291 275,984 9,737 906,012 income (000) 69,398 50,048 86,708 53,399 259,553 Depreciation and Net income (000) 50,124 29,167 49,690 22,218 151,199 amortization 97,849 14,820 175 112,844 Earnings per Total operating expenses 718,140 290,8(M 9,912 1,018,856 weighted average Operating income doss) $ 221,981 $ 29,391

$(6,061) 245,311 k as re ed 1.07

.62 1.04

.46 3.19 Add - Other income, net 30,076 1993 lxss -Interest charges 101,189 Preferred stock dividends 6,217 First Second Third Fourth Net income

$ 167,981 Quarter Quarter Quarter Quarter Annual Total operating revenues (000) $321,840 $280,382 $359,453 $302,492 $1,264,167 Capital expenditures:

. Identifiable

$ 279,082 $ 28,761 5 604 $ 308,447 Operating income (000) 63,714 45,370 84,638 51,589 245,311 Net income (000) 45,110 26,909 64,427 31,535 167,981 Utilized for overal: Company operations 13,934 W"E' I"'

. Total 5 322,381 weighted average share of common Identifiable assets at stock as reported 1.02

.61 1.41

,68 3.72 December 31,1993:

Utihty plant, net

$2,628,374 $312,437 51,673 $2,942,484 inventories 77,805 22,019 463 100,287 Total

$2,706,179 $334,456

$ 2,136 3,(M2,771 Other assets 997,755 Total assets

$4,040,526 25

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS COMPETITION the actual primary cash requirements for 1W4 are as follows:

The electric utility industry has begun a major transition that could lead to exparided market competition and less regulatory 1995 1994 protection. The transition began with the enactment of the Public msmusA Mild Utihty Regulatory Policies Act of 1978 which facilitated the entry Property additions and construction of competitors mto the electric generation business. Subsequently, expenditures, excluding allowance for the National Energy Policy Act (NEPA) was enacted m 19% t9 tunds used durin8 construction (AFC)

$348,530

$471,175 promote competition among utility and nonutdity generators in the wholesale ekctric generation market. Recent' initiatives in

^"luisition of oil and gas producing some states to lessen regulation and promote competition, pmperties 47,189 particularly with regard to retail transmission access, also have Nuclear fuel expenditures 23,084 27,429 accelerated the utihty industry's transition.

Maturing obligations, redemptions and I-uture deregulation of ek ctric wholesale and retail markets will sinking and purchase fund requirements 25,630 30,373 create opportumtics to com[vte for new and existing customers Total 3 97,244

$576,166 and markets. As a nsult, profit margins and asset values of some utilities could be adversely affected.

The pace of deregulation, the future market price of electricity, divihnds) was irovided from internakuirements (excluding A roximately 31% of total cash ret sources in 1994 as and the regulatory actions which may be taken by the Pubhc com and to 28 in 1993.

Service Commission of South Carolina (PSC) m response to the The Company has in effect a medium-term note program for the changing environment cannot be predicted. Ilow ever, the issuance from time to time of unsecured medium-term debt Company is aggressively pursumg actions to positmn itself.ts used to fund aIditional business activities in nonutility tin The iroceeds from the sales of these securities may be stratepcally for the transformed environment. To enhance i flexibihty and responsiveness to change, the Company s electric subsidiaries, to reduce short-term debt incurred in con'nection and gas utility, SLE&G, reorganued its operations around therewith or for general corporate poses. In December 1994 a Strategic Business Units. Maintammg a competitive cost structure registration statement filed with th curities and Exchan Commission became effective iroviding for the issuance ofeup to is of paramount importance in the utility s strategic lan. SCE&G has undertaken a vanety of initiatives, including n uctions in an additional $250 million met ium-term notes. At December 31, operation and maintenance costs and m staffing levels. SCE&G btlieves that these actions as well as numerous others that have 1994 the Company had available for issuance $317.6 million.

been and will be taken demonstrate its ability and commitment to SCE&G's First and Refunding Mortgage Bond indenture, dated succeed in the new operating environment to come April 1,1945 (Old Mortgage), contains provisions rohibiting the issuance of additional bonds thereunder (Class A 1 mds) umess net earnings (as therein defined) for 12 consecutive months out of Ll0UIDITY AND CAPITAL RESOURCES the 15 months prior to the month of issuance are at least twice the The cash requirements of the Company arise primarily from annual interest rajuirements on all Class A Bonds to be SCE&G's operational needs, the Company's construction program outstanding (Bond Ratio). For the year ended December 31,1994 and the need to fund the activities or mvestments of the the Bond Ratio was 3.52. The issuance of additional Class A Bonds Company's nonregulated subsidiaries. The ability of the is restricted also to an additional principal amount ajual to ti)1 of Company's regulated subsidiaries to rerbce exisiing plant unfunded net property additions (which unfunded net property investment, as well as to expand to meet future demand for additions totaled appnnimately $499.8 million at December 31, electricity and gas, will depend upon their ability to attract the 1994), Class A Ikmas issued on the basis of retirements of Class A necessary financial capital on reasonable terms. 'The Company's ihmds (no earned retirement credits remained at December 31, regulated subsidiaries recover the costs of providing services 1994), and Class A Honds issued on the basis of cash on deposit through rates charged to customers. Rates for regulated services with the Trustee.

are generally based on historical costs. As customer growth and SCE&G has placed a new bond indenture (New Mortgage) dated inflation occur and the regulated subsidiaries expand their April 1,1993 on substantially all of its electric properties under construction programs, it is necessary to seek increases in rates. As which its future mortgage-backed debt (New Bonds) will be issued.

a result the Company's future financial position and results of New Bonds are expected to be issued under the New Mort ' age on operations will be affected by the regulated subsidiaries' abihty to the basis of a like prmeipal amount of Class A ikmds issu( under obtain adequate and timely rate relief.

the Old Mortgage which have been deposital with the Trustee of Due to continuing customer growth, SCE&G enteral into a the New Mortgage (of which $37 million were available for such contract with Duke / Fluor Damel in 1991 to design, engineer and purpose as of December 31,1994), until such time as all presently build a 385 MW coal-fired ekctric generating plant near Cope, outstanding Class A Ik nds are retired. Thereafter, New Bonds will South Carolina in Orangeburg County. Construction of the plant be issuable on the basis of property additions in a principal amount began in November 1992 and is expected to be complete in late equal to 701 of the original cost of electric and common plant 1995 with commercial operation beginnmg in early 1996. The properties (compared to 60% of value for Class A Ikmds under the estimated cost of the Cope plant, excluding financing costs and Old Mortgage), cash deposited with the Trustee, and retirement of allowance for funds usai during construction ( AlC) but including New Bonds. New Bonds will be issuable under the New Mortgage,

an allowance for escalation,is $450 million. In addition, the only if adjusted net earnings (as therein defined) for 12 consecutive transmission lines for interconnection with the Company's system months out of the 18 months immediately preceding the month of are expaied to cost $26 million. Until the completion of the new issuance are at least twice the annual interest reqmrements on all plant, SCE&G is contracting for additional capacity as necessary to outstanding txmds (including Class A Bonds) and New Bonds to be +

ensure that the energy demands of its customers can be met.

outstanding (New Bond Ratio). For the year endai December 31, As discussed in Note 2B of Notes to Consolidated Financial 1994 the New Bond Ratio was 4.85.

Statements, on June 7,1993 the PSC issued an order granting The tollowing additional financing transactions have occurred SCE&G a 7.4% annual increase in retail ekrtric rates which was since December 31,1993:

implemented in two phases over a two year period: phase one,

• On January 14,1994 the Company closed unsecured bank loans effective June 1993, pnxiucing 542.0 million annually, and phase totaling $60 million due January 13,1995, and used the proceeds two, effective June 1944, pnxiucing 518.,5 million annually, based to pay off a loan in a like total amount. In January 1995 the on a test year.

Company refinanced the loans with a 560 million unsecured bank The estimated primary cash requirements for 1995, excluding loan due' January 12,1996 at an initial interest rate of 6.44%,

requirements for fuel liabilities and short-term borrowings, and subject to reset quarterly at LIBOR plus ten basis points.

26

• On July 21,194 SCE&G issued $100 million of First Mortgage standards and the cost and availability of capital.

Bonds,7.70% series due July 15,2004 to repay short-term The Company expects that it has or can obtain adequate sources borrowings in a like amount.

of financing to meet its projected cash requirements.

• On November 3,1994 SCE&G issued $30 million of Pollution Environmental Matters Control Facilities Revenue Ikmds due November 1,2024. The used to defrav the The Clean Air Act requires electn,c utilities to reduce j

proceeds from the sale of the bonds are beinfisposal of solid waste substantially emissions of sulfur dioxide and nitrogen oxide by the at SCE&G's Cope b. certain facilities for the cost of constructin i

eneratin Station under construction in yeay 2M hese requirements are being phased m over two Orangeburg County, South barolina.

periods. The first phase has a com liance date of January 1,1993 Without the consent of at least a m and the second, January 1,2000.

ie Compan meets alf

+ power of SCE&G's preferred stock, Sha'ority of the total voting ra]uirements of Phase I and,th I hase 11 requirements i E&C may not issue or therefore will not ave to, implement assume any unsecured indebtedness if, after su'ch issue or chan es until comphance wi assumption, the total principal amount of all such unsecured The, ompany then will most likely meet its compliance unrements through the burmng of natural as and/or lower r

indebtedness would exceed 10% of the aggregate principal ital and su fur coal, the addition of scrubbers to coal-ired generating units, amount of all of SCE&G's secured indebtedness and cabe required and the purchase of sulfur dioude emission allowances. At surplus; provided, however, that no such consent shall to enter into agreements for pavment of principal, interest and December 31,1994, the Com any had purchased $19.4 milhon m, emission allowances and ha commitments to purchase $6.8 premium for securities issued forberal Power Act, Sbr mses.

llution control pu Pursuant to Section 2(M of the I

&G and million in emission allowances m 1995. Low nitrogen oxide GENCO must obtain FERC authority to issue short-term burners will be mstalled to reduce mtrogen oxide emissions.

indebtedness. The FERC has authorized SCE&G to issue up to The Company is continuing to refine a compliance plan that

$200 million of unsecured promissorkess but not later thannotes or commercial paper must be filed with the U.S. Environmental Protection Agency with maturity dates of 12 months or (EPA) byJanuary 1,1996., The Com{any currently estimates that December 31,1997. GENCO has not sought such authorization.

air emissmns control equipment w il :equire capital expenditures The Company has $479.1 million authorized lines of credit and "I $158 million over the 1995-190'; period to retrofit existmg has unused lines of credit of 5455.1 million at December 31,1994.

facilities and an increased operation and maintenance cost of in addition, the Company has a credit agreement for a maximum approumately $1 million per year. To meet compliance, of $75 million to finance ' nuclear and fossil fuel inventories, with requirements through the year 2004, the Company anticipates total C {.it I expenditures of $287 million.

$24.4 million available at December 31,1994.

SCE&G's Restated Articles of Incorporation prohibit issuance of he, Federal Clean Water Act, as amended, provides for the additional shares of preferred stock without consent of the imposition of effluent limitations that require various levels of compliance with applicable limitations is actu, der this Act, treatment ur each wastewater discharge. Un preferred stockholders unless net earnings (as defined therein) for eved under a the 12 consecutive months immediately preceding the month of issuance are at least one and one-half times the aggregate of all national permit program. Discharge p&G s and GENCO s ermits have been issued for interest charges and preferred stock dividend requirements all and renewed for nearly all of SCE (Preferred Stock Ratio). For the year ended December 31,1994 the generating units. Concurrent with renewal of these permits, the Preferred Stock Ratio was 2.29.

Permittmg agency has implemented more rigorous control On December 16,1994 the Company registered with the SEC programs. The Company has been developmg compliance plans 2,000,000 additional shares of the Company's common stock to be to meet the add,itional parameters of control, and compliance has issued and sold under the Stock Purchase 4avings Plan (SPSP).

involved updatmg wastewater treatment technologies.,

During 1994 the Company issued 595,438 shares of the Amendments to the Clean Water Act proposed recently m Congress include several provisions which could prove costly to Comp)any's common stock under the Dividend Reinvestment Plan SCE&G. These mclude limitations to mixmg zones and the (DRI. In addition, the Company issued 781,354 shares of its common stock pursuant to its SPSP. The Company has authorized im lementation of technolo y-based standards.

and reserved for issuance, and registered under effective

'he South Carolina Solid Vaste Policy and Management Act of l

registration statements,1,470,386 and 2,091,066 shares of common 1991 requires promulgation of regulations addressmg specified I

stock pursuant to the DRP and the SPSP, respectively.

subjects, one of which affects the management of industrial solid In January 1994 the Company signed an a re< ment to sell

}vaste. This regulation will establish mmimum criteria for substantially all of the real estate assets of S[ANA Development industriallandfills as mandated under the Act. The proposed Corporation to Liberty Properties Group, Inc. of Greenville, South

"'gulati,on,1f adopted as a final regulation m its resent form, i

Carolina for $91.5 million. On March 4,1994 the Company and could sigmficantly impact SCE&G's and GENC 's engineering, Liberty amended the agreement to exclude certain projects then design and operation of existing and future ash management under construction, and the sales price was reduced to 549.6 facilities. Potential cost impacts could be substantial.

million. The transaction was closed on May 27,1994. Certain As described in Note IL of Notes to Consolidated Financial other assets of SCANA Development Corporation are being sold Statements, the Company has an environmental assessment to other parties. These transactions did not have a material impact program to identify and assess current and former operations sites on the Company's financial position or results of operations.

that could require environmental cleanup. As site assessments are MPX Systems, Inc, a wholly owned subsidiary of SCANA, initiated, an estimate is made of the amount of expenditures, if through a joint venture with ITC Transmission Systems, a Georgia, any, necessary to investigate and clean up each site. These based telecommunications holding company, is constructing a estimates are refmed as additional information becomes available; fiber optic network through Texas, Louisian'a, Mississippi, therefore, actual expenditures could differ significantly from the Alabama and Georgia. The network, which will consist of more ongmal estimates. Amounts estimated and accrued to date for site

,than 900 miles of fiber optic lines, is expected to be completed by assessments and cleanup relate primarily to regulated operations; June 1995 at a cost of $58 million. In addition, MPX is pursuing-such amounts have been deferred and are bemg amortized and Personal Communication Services licenses for wireless recovered through rates over a ten-year period for electric communications in the Southeast through a joint venture. A $40 operations and an eight-year permd for gas operations. Such million construction loan obtained by the joint venture has been deferred amounts totah'd $20.2 million and $19.6 million at guaranteed by SCAN A Corporation.

December 31,1994 and 1993, respectively. Estimates to date The Company anticipates that its 1995 cash requirements of 1".clude, among other things, the costs associated with the matters

$397.2 million will be met through internally generated funds discussed in the follo, wing paragraphs.

(approximately 42% exduding dividends), t'he sales of additional The Company's pnncipal subsidiary, SCE&G, owns five equity securities and the incurrence of additional short-term and decommissioned manufactured gas plant sites which contain long-term indebtedness. The timing and amount of such financing residues of by-product chemicals. SCE&G has maintamed an will depend upon market conditions and other factors. Actual active review of the sites to monitor the nature and extent of the residual contamination.

1995 expenditures may vary from the estimate set forth above due to factors such as inflation and economic conditions, regulation In September 1992 the EPA notified SCE&G, the City of

~

and legislation, rates of kiad growth, environmental protection Charleston and the Charleston flousing Authority of t' heir 27 l

i l

l potentialliability for the investigation and cleanup of the Calhoun These forward contracts have the effect of stabilking the price that Park Area Site in Charleston, South Carolina. This site originally the Company will receive on approximately sixty percent of its encompassed approximately 18 acres and included properties forecasted natural gas productmn for the years 1995-2001. The which were the locations for industrial operations, including a forward contracts are at an average price of $1.88 per dekatherm.

l wood preserving (creosote) plant and one of SCE&G's If market prices exceed the forward contracts' prices at the time of decommissioned manufactured gas plants. The original scope of delivery, the Company will forego additional revenues to the i

l this investigation has been expanded to approximately 30 acres extent of the price differential for the quantities subjec' to such including adjacent properties owned by the National Park Service forward contracts. However, the Company believes these forward I

and the City of Charleston, and private operties. The site has contracts are appropriate in light of current market conditions and not been placed on the National Priorit ist, but may be added that the forward contracts reduce the Company's exposure to price before cleanup is initiated. The potenti lly responsible parties risk. The Company remains exposed to pnce risk for any (PRP) have agreed with the EPA to participate in an innovative production that is not subject to such forward contracts.

approach to site investigation and cleanup called *Superfund j

Accelerated Cleanup Model," allowing the pre-cleanup site,RPsRESULTS OF OPERATIONS mvestigations pmcess to be compressed sigmficantly. The 1 I

have negotiated an administrative order by consent'for the Earnings and Dividends conduct of a Remedial Investigation / Feasibility Study (RI/FS) and Earnings per share of common stock, the percent increase a correspeding Scope of Work. Actual field work began (decrease) from the previous year and the rate of return earned on November 1,1993 atter final approval and authorization was common equity for the years 1992 through 1994 were as follows:

granted by EPA. SCE&G is also working with the City of Charlesto'n to investigate potential contamination from the 1994 1993 1992 manufactured gas plant which may have migrated to the city's Earnings per weighted average share 73.19

$3.72

$2.84 aquarium site. In 1994 the City of' Charleston notified SCE&G that Percent increase (decrease) in it considers SCE&G to be responsible for a $43.5 million increase earnings per share (14.2% ) 31.0'7e (15.7%)

m costs of the aquanum propect attributable to delays resulting Return earned on common equity frorn con,tammation of the Calhoun I ark Area Site. SCE&G beheves it has meritorious defenses against this claim and does (year-end) 10.7%

12.6%

10.1'?e not expect its resolution to have a material impact on its financial j

position or results of operation.

• 1994 Earnings per share and return on common equity SCE&G has been listed as a PRP and has recorded liabilities, decreased in 1994 primarily due to operations at Petroleum i

l which are not considered material, for the Macon-Dockery waste Resources, the Company's oil and natural gas exploration and disposal site near Rockingham, North Carolina, the Aqua'-Tech production subsidiary. l'etroleum Resources reported a net loss of i

}

Environmental Inc. Site in Greer, South Carolina and a landfill

$19.2 million for 1994, including an after-tax charge of $12.4 owned by Lexington County in South Carolina.

million recorded during the third quarter of 1994 to reflect an The Arkansas Department of l'ollution Control And Ecology adjustment to accumulated depreciation, depletion and (ADPCE) has identified SCE&G as a potentially responsible party amortization and a writedown of the carrying value of certain of for clean-up of PCBs at an abandoned transformer rebuilding '

Petroleum Resources' gas properties baseEl on a recently plant in Little Rock, Arkansas. No formal notice from ADPLE has completed reserve study.

twen received concerning this issue. SCE&G dom not believe that

• 1993 Earnings per share and return on common equity the resolution of this issue will have a material er vt on SCE&G's increased in 1993 primarily due to a higher electric sales margin i

results of operations or financial position.

and additional nonoperating income.

The Company's financial statements include AFC. AFC is a Regulatory Matters utility accounting practice whereby a portion of the cost of both electn, June 7,1993 the PSC issued an order on SCE&G's pendin8 equity and borrowed funds used t'o finance construction (which is On c rate proceeding allowing an authorized return on common show'n on the balance sheet as construction work in progress) is l

eqmty of 11.59, resultmg m a 7.4% annual increase in retail capitalized. An equity portion of AFC is included in nonoperating electric rates, or a projected $60.5 million annually on a test year ncome and a debt portion of AFC is included in interest charges basis. These rates were implem"nted in two phases over a two-(credits) as noncash items, both of which have the effect of year period: phase one, effective June 1993, producing $42.0 increasing reported net income. AFC represented approximately million annually, and phase two, effective June 1994, producing 6.4% of income before income taxes in 1994,5.7% in 1993 and 534

$18.5 million annually, on a test year basis.

in 1992.

l SCF&G anticipates filing for electric rate relief in 1995. The cash dividend on common stock to 70.5 cents per share f in 1994 the Company's Board of Directors raised the <

fihng is anticipated to encompass primarily the remaining costs of rom 6815 completmg the construction of the Cope Generatmg Station.

able cents per share. The increase, effective with the dividend pay $2.8

, The Company's regulated busmess operations are likely to be on A ril 1,1994, raised the indicated annual dividend rate to l

impacted by the NEI A and FERC Order No. 636. NEPA is per s are from $2.74. The Company has increased the dividend l

designed to create a more competitive wholesale power supply rate on its common stock in 41 of the last 42 years.

(

market by creatmg " exempt wriolesale generators" and by l

potentially requirmg utilities owning transmission facilities to Electric Operations provide transmission access to wholesalers. Order No. 636 is

• 1994 The increase in the ehictric sales margin from 1993 to 1994 i

mtended to deregulate the markets for interstate sales of natural is primarily the result of an increase in retail electric rates phased gas by requiring that pipelines provide transportation services that in over a two-year period beginning June 1993 and an increase in are equal m quality for all gas wppliers whether the customer industrial sales, which more than offset the negative impact of a purchases gas from the pipelire on another supplier. In the six percent decrease in residential sales of electricity due to milder

• opinion of the Company, it wih be able to meet successfully the weather in 1994, challenges of these altered business climates.

• 1993 The increase in electric sales margin from 1992 to 1993 is primarily a result of increased residential and commercial KWH Other sales due to weather and customer growth, an increase in retail The Company's net m. vestment m. oil and gas properties is electric rates beginning in June 1993 and the recording in 1992 of a subject to a quarterly ceiling limitation calculation that is based on

$14.6 million reserve against earnings related to the August 31, the future net revenues from forecasted production of proved oil 1992 retail electric rate ruling from the South Carolina Supreme and gas reserves valued at current or contract prices. Carrying Court (see Note 2G of Notes to Consolidated Financial values of proved reserves in excess of the ceiling limitation are Statements).

expensed currently.

An increase of 7,538 electric customers to 476,412 total In an effort to limit exposure to changm.g natural gas prices and customers contributed to a 1994 peak demand of 3,444 MW on to avoid a write-down resulting from the application of the ceiling January 19. The all-time record of 3,557 MW was set on July 29, test at December 31,1994, m January 1995 the Company entered

1993, into a series of forward contacts relating to natural gas pnxiuction.

28

Gas Operations gas properties tvsed on a recently completed reserve study. In

• 1994 The 1994 gas sales margin increased from 1993 primarily 1993 Petroleum Resources reported net income of $11.1 mdlion.

as a result of lower gas costs, which allowed Pipeline Corporation The Company's net investment in oil and gas properties is to compete successfully with alternative fuel suppliers in subject to a quarterly ceiling limitation calculatmn that is based on industrial markets. Higher oil prices and a stronger economy had the future net revenues frorn forecasted production of proved oil a positive impact on industrial gas sales which increased for'both and gas reserves valued at current or contract prices. Carrying

)

SCE&G and Pipeline Corporation.

values of proved reserves ia excess of the ceiling limitation are i

e 1993 in 1993 the gas sales margin decreased from 1992 as a expensed currently.

result of higher gas prices which reduced Pipeline Corporation's In an effort to limit expo sure to changing natural gas prices and sales due to the competitiveness of alternative fuels. This to avoid a write-down resulting from the application ei the ceiling reduction was partially offset by increases in higher margin test at December 31,1994, m January 1995 the Company entered residential and commercial sales and increased transportation into a series of forward cor. tracts relating to natural gas i

volumes.

pnxluction. These forward contracts have the effect of stabilizing i

the price that the Company will receive on approximately sixty

, Other Operat.mg Expenses nercent of its forecasted natural gas production for the years 1995-

• 1994 Other operation and maintenance expenses increased for M01. The forward contracts are at an average price of $1.88 per 1994 primarily due to an increase in the cost of postretirement dekatherm. If market prices exceed the forward contracts' prices benefits other than pensions which are accrued m accordance with at the time of delivery, the Company will forego additional Financial Accounting Standards Board Statement No.106 (see revenues to the extent of the price differential for the quantities Note 1J of Notes to Consolidated Financial Statements). The subject to such forward contracts. However, the Company increase in depreciation and amortization expenses is attributable believes these forward contracts are appropriate in hght of current to property additions and to increases in depreciation rates. The market conditions and that the forward contracts reduce the increase in other taxes reflects an increase in SCE&G's property Company's exposure to price risk. The Company remains taxes of approximately $5 million.

exposed to price risk for any production that is not subject to such

• 1993 Other operation and maintenance expenses increased for forward contracts.

1993 primarily due to the implementation of Financial Accounting Standards Board Statement No.106 (see Note 1J of Notes to Interest Expense

• 1994 The increase m, mterest expense (excludm, g the debt Consolidated Financial Statements) pursuant to the June 1993 PSC electric rate order and the amortization of environmental component of AFC)is primarily attributable to the issuance of expenses. The depreciation and amortization increase reflects

$100 million of First Mortgage bonds m July and $30 million of additions to plant in service. The increase in income taxes Pollution Control Facilities Revenue Bonds m November, both to corresponds to the increase in income and reflects the increase in finance utility construction, and the issuance of long-term debt the corporate tax rate from 34% to 35% retroactive to January 1, during 1993.

1993.

• 1993 Interest on long-term debt increased approximately $5.6 million in 1993 compared to 1992 due to the issuance of $7'.4 2

Other income million medium-term notes during the latter part of 1992 and $60 Other income, net of income taxes, decreased approximately million medium-term notes in July 1993 to finance acquisitions of

$23.3 million in 1994 primarily due to operations at Petroleuni natural gas reserves and the issuance of $200 million of SCE&G's Resources. Petroleum Resources reported a net loss of $19.2 First Mortgage Bonds to finance utility construction. The resulting million for 1994, including an after-tax charge of $12.4 million increases more than offset the interest' savings resulting from the recorded during the third quarter of 1994 to reflect an adjustment redemption and refinancing of $382 million of First and Refunding to accumulated depwciation, depletion and amortization and a Mortgage Bonds with the proceeds from the issuance of $400 writedown of the carrying value of certain Petroleum Resource million of First Mortgage Bonds by SCE&G at lower interest rates.

W Q y iXPfNSR d

b il

}g 2700 S300 i

,~

A l

lb 5s00

$120

$250 3

bb b

d,

$500 y

g M)

F SECO N

h)

Q

)<

SE*J ej-S400 i

g Q

$150 Li

$300 Q

'j 91 e

s S,00 W

q l

M 580 ci-

$200 "y

r d

m m

l

.(-

2100 q

S5O

]

. 'dNN CCds $ ales Mygm E 3hef E DeDN'Cah00 and E Other faxes AmorWahon 29

SELECTED FINANCIAL DATA l

For the Years Ended December 31, 1994 1993 1992 1991 1990 l

1984~

Statement of Income Datz mtonsanduf dollars except statistics and per share amormts) l Operating Revenues:

Ehrtric

$ 975,388

$ 940,121

$ 829,477

$ 867,215

$ 851,146 5 755,502 Gas 342,672 320,195 305,275 276,742 292,380 378,491 Transit 4,002 3,851 3,623 3,869 4,033 3,178 l

Tota 10perating Revenues 1,322,062 1,264,167 1,138,375 1,147,826 1,147,559 1,137,171 Operating Expenses:

Fuel used in electric generation and purchased power 255,240 242,793 213,474 234,683 223,972 235,246 Gas purchased for resale 220,923 208,695 191,577 171,869 191,939 289,212 j

Other operation and maintenance 293,721 290,891 281,242 270,213 265,887 184,727 l

Depmciation and amortizalion 119,177 112,844 108,315 102/69 97,801 74,914 j

Taws 173,448 163,633 133,987

+146,032 142,003 153,776 Total Operating Expenses 1,062,509 1,018,856 928,595 925,466 921,602 937,875 Operating income 259,553 245,311 209,780 222,360 225,957 199,296 Other income 5,998 30,076 11,883 11,655 54,874 17,647 income Before Interest Charg3 and

(

Preferred Stock Dividends 265,551 275,387 221,663 234,015 280,831 216,943 Interest Charges, Net 108,397 101,189 97,600 91,458 92,317 78,248 i

Preferred Stock Cash Dividends of Subsidiary 5,955 6,217 6,473 6,706 6,911 16,877 Net income

_ $_151,199

$ 167,9_81

$_117,5,90

$ 135,851

$ 181,603

$ 121,818 Percent of Operating income (Loss)

Before income Taxes Ekctric 88 %

90 %

85 %

89'7e 89 %

87 %

Gas 14 %

13%

18%

14 %

14 %

15%

Transit (2%)

(3%)

(3%)

(3%)

(3%)

(2%)

Common Stock Data Weighted Average Number of Common Shares Outstanding (Thousands) 47,381 45,203 41,475 40,361 40,882 39,900 Earnings Per Weighted Average Share of Common Stock

$3.19

$3.72

$2.84

$3.37

$4.44

$3.05 Dividends Declared Per Share of Common Stock

$2.82

$2.74

$2.68

$2.62

$2.52

$2.05 Common Shares Outstanding t

l (Year-End)(Thousands) 48,018 46,619 43,911 40,784 40,882 40,296 Ikmk Value Per Share of Common Stock (Year-End)

$29.37 528.59

$26.46

$25.23

$24.56

$19.31 i

0 e

30

For the Years Ended December 31, 1994 1993 1992 1991 1990 1984 Balance Sheet Data (Thouwsds of dollars except statistics and per share amounw Utility Plant, Net

$3,293,667

$3,004,075 52,810,279

$2,664,651

$2,549,763

$2,205,297 Tpg1 Assets

$4,393,128_

$4,040,526

$3,557,721

$3,305,862

$3,144,936

$2,506,996

.m Common Equity

$1,410,438

$1,333,045

$1,161,896

$1,028,990

$1,003,877 5 778,251 Preferred Stock (Not subject to purchase or sinking fund requirements) 26,027 26,027 26,027 26,027 26,027 26,262 Preferred Stock, Net (Subject to purchase or sinking fund requirements) 49,528 52,840 56,154 59,469 62,704 152,974 Long-Term Debt, Net 1,537,624 1,424,399 1,204,754 1,122,396 938,933 900,878 Tota 1 Capitalization

$3,023,617

$2,836,311

$2,448,831

$2,236,882

$2,031,541

$1,858,365 Other Statistics Electric:

Customers (Year-End) 476,412 468,874 461,900 453,660 446,516 378,963 Territorial sales (Million KWH) 16,838 16,880 15,794 15,645 15,385 12,590 Residential:

Average annual use per customer (KWH) 13,048 14,077 13,037 13,246 13,330 12,061 Average annual rate per KWil

$.0743'

$.0707

$.0695

$.0700

$.0707

$.0757 Generating Capabihty - Net ?viW (Year-End) 3,876 3.864 3,912 3,912 3,891 3,959 Territorial Peak Demand - Net MW 3,444 3,557 3,380 3,300 3,222 2,596 Gas:

Cuatomers (Year-End) 238,613 234,736 231,153 225,819 220,817 189,544 Sales (Thousand Therms) 778,105 717,417 761,721 694,801 711,821 737,059 l

Residential:

Avera;;e annual use per customer (therms) 543 605 577 521 497 618 Average annual rate per therrn 5.84

$.76 S.74

$.77

$.77

$.69 l

l O

1 l

i I

31 1

=.=_-_ -

l COMMON STOCK INFORMATION 1993 1994 l

4th 3rd Ed 1st 4ili 3rd 2Ed Tst-~

Qtr.

Qtr.

Qtr.

Qtr.

Qtr.

Qtr.

Qtr.

Qtr.

Price Range: (a) liigh 44 5/8 46 46 1/2 50 1/8 52 1/4 51 7/8 48 3/8 46 1/2 Low 41 42 3/4 42 1/8 44 3/4 47 7/8 47 5/8 45 40 1/8 j

1 Dividends Per Share:

J 1994 Amount Date Declared Date Paid

_First Quarter

$.705 February 15,1994 April 1,1994 j

Second Quarter

.705 April 28,1994 July 1,1994 Third Quarter

.705 August 24,1994 October 1,1994 Fourth Quarter 705 October 18,1994 January 1,1995 1993 Amount Date Decla. red Dat_e Paid _

i i

First Quarter

$.685 February 16,1993 April 1,1993 Second Quarter

.685 April 29,1993 July 1,1993 Third Quarter

.685 August 25,1993 October 1,1993 Fourth Quarter

.685 October 19,1993 January 1,1994 l

.. _ _.. _ _ _ December 31,_ _,,_ _... _

1994 1993 Number of common shares outstanding 48,017,510 46,619,457 Number of common stockholders of record 39,516 41,564 l

l The principal market for SCANA common stock is the New York Stock Exchange. The ticker symbol used is SCG. The corporate name SCAN A is used in newspaper stock listings.

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

t SECURITIES RATINGS (As of December 31,1994) i SCANA CORPORATION SOUTil CAROLINA ELECTRIC & GAS COMPANY Rating First Mortgage First and Refunding Preferred Commercial Agency Medium-Term Notes Bonds Mortgage Ikmds Stock Paper Duff & Phelps NR A+

A+

A NR Mmxty's A3 Al Al al P-1 t

Standard & Poor's A-A A

A-A1 E

NR - Not Rated e

i 32

i

)

INVESTOR INFORMATION l

ANNUAL MEETING STOCKHOLDER INQUIR!ES STOCK RECORDKEEPING SCE&G first Wrtgage Rinds:

SCANA Corporation's Stockholders with ques-AND TRANSFER Nationsikmk of Georgia, N.A.

7l5 Peachtav Street, NE -

1995 Annual Meeting of tions about stock transfer SCANA Corporation Stockholders will be held in requirements, replacement of maintains stockholder records, C,olumbia, SC on Thursday, lost or stolen stock certificates, issues dividend checks and Adanta, g.M 1

phone N N M j

April 27. The meeting will dividend payments (including acts as Transfer Agent and begin at 10.00 a.m. in the replacement of lost or stolen Registrar for the Company's AUDITORS lbilroom of the Embassy dividend checks), direct common stock and SCE&G's Deloitte & Touche LLP l

Suites Ilotel,200 Stoneridge deposit of dividends, address preferred stock. Stockholders Certified Public Accountants Drive. A formal notice of the changes, elimination of dupli-may send certificates directly 1426 Main Street, Suite 820 meeting and a proxy state-cate mailings or other stock to the Company's Sharehokier Columbia, SC 29201 ment has been mailed along ownership matters may write Services Department (Mail INVESTOR with this report to all stock-the Shareholder Services Code 054) for transfer. There COMMUNICATIONS holders of record as of March Department (Mail Code 054) is no charge for this service.

Interim reports pnwiding 10,1995. Stockholders who at the Company's mailing The Company recommends

~

"" **"'Y are unable to attend the addnss, or call toll-free that certificates be mailed by

"* P""Y "##* ""' ""

Annual Meeting should 1-800-763-5891. Calls not registered or certified mail.

su m foHowing the I

return their proxy card received during normal busi-Signatures required for trans-promptly by mail.

ness hours (8:00 a.m. to 5:00 fer must be guaranteed by MAILING ADDRESS p.m., Monday through Friday) an official of a financialinstitu-

1. E w

n' corded and handkd SCANA Corporation tion that is an approved mem-gg Columbia, SC 29218 the next business day ber of a Medallion Signattur the Securities and Exchange CORPORATE DIVIDEND Guarantee Program.

Comm.ission) and the HEADQUARTERS REINVESTMENT PLP BONDHOLDER INQUIRIES Statisticai SupP ement to i

1426 Main Street Man pmvides stock-Questions concerning the 1994 Annual Report are homers and other investors replacement of interest checks, available without charge.

Columbia, SC 29201 with a convenient and wonom-tax mformation, transfers and Inquiries concerning activities Telephone: (803) 748-3000 ical methat of purchasing other bond account informa-of SCANA Corporation and its STOCK EXCHANGE shares of SCANNs common tion shouM be directed to the subsidiaries and requests for LISTINGS stock without brokerage com-appropriate Bond Trustee and Company publications shouki The common stock of missions or service charges.

Paying Agent listed below. A be addressed to the Investor SCANA Corporation is listed Participants in the Plan may listing of issues under each Relations Department (Mail and traded on the New York purchase slures through auto-classification of SCE&G bonds Code 054) at the Company's Stock Exchange and has nutic reinvestment of cash is shown under the heading mailing address.

unlisted trading privileges dividends and/or by making

" Consolidated Statements of INVESTOR CONTACT on the Boston, Cincinnati, optional cash payments of up Capitalization" in the Financial g~

'g i Midwest, Pacific and Phila-to $36,000 during a calendar Review section of this report.

Manager - Investor Relations delphia exchanges. The year. Persons not presently SCE&G First and Rchmding and Sharebokler Services trading symbol is SCG.

owning shan s of the Com hh Tdephone: (603) 748-3240 Newspaper listings of daily pany s common stock may lotn Chemical ILmk Facsimile: (803) 343-2344 stock transactions use the the Plan by making an imtial Corporate Tmst Department-INVESTORS

• name SCANA. The 59 series cash mvestment of at 1 is250

! cumulative preferred stock but not more than $3w A ASSOCIATION 33r 9m of South Carolina Electric Prospectus describing the Plan For information about this orga-hY NY M

& Gas Company (SCE&G),

and enrollment information are nieadon% activities, wnte to:

Telephone: (800) M8-83X0 SCANNs principal sub-available upon request.

Association of SCANA sidiary,is also listed and Corporation investors traded on the NYSE. The EXPECIED 1995 COMMON STOCK DMDEND DATES c/o Mr. Paul Quattiebaum. Ir.

trading symbol is SAC Pr, Broughton Road Det la ra aon i o wntend I b idend IM idend l the newspaper listing is I ute 11 ate i<et ord Date Pas ment 1) ate Charleston, SC 29407 l SCrE pf. SCE&G's other 4y; um,,p.,m,,nf a rg, n,,. p,,p,

,g g gg gg series of preferred stock are

"'P " N """""# ""

""#"*"M not actively traded and mar-

',g fy -

lun 7 lun 4

hil I v-fe me or canna non m% a% utir a

\\u p

%p 7 het prices are not published.

(ht 17 Dn ~

% p II (kt I f,a.m er er artwu.inori e em I k.11 lan IiF%a

'"*"'d"**

u. i s,a,ca i.,ur a n wra,

,,r r i a res i,

-a.ao, aiv otn.. it t. D. u r.l. e l ben t.r s Ims F wo. N i. l.. ' h.

i u myt n.

im.4 s o.

ir utni l

]

po s.ui i b iJ.%l..m N os.t pa t ;.en r i m~. u -m. ', '

p... m. m.. rma r. m

,,a an iaa A

9 1

Santee Cooper 2000

$$'rt' f)lilllIlf Off r l'ill'igy 10li'Ork)UryOH.

i

'IW,

?

SII'P s

8 SANTEE COOPER ANNUAL REPORT 1994

l P

1 CONTENTS 4 Corporate Statistics 5 Comparative Highlights l

6 Mission Statement 7 Executive Report l

11 Energy Sales 12 Santee Cooper 2000 32 In Memory of Ray Fiddie 33 Financial Statements 35 Report ofIndependent Auditors 51 Audit Committee Chairman's Letter 52 Board of Directors 54 Advisory Board and Management 56 Schedule of Bonds Outstanding 59 Schedule of Refunded Bonds Outstanding 1

COVER Espanded Service in 1994. Santee Cooper made the transition from an electnc utihty to an electnc and water vtihty. This occurred in October with the start-up of the Santee Coope Regional Water System, providing treated water dehvered by four systems to more than 75 000 Lowcountry users -Santee Cooper is today with water where we were more than 50 years ago w th electncity." commented President and Chief Executive Officer T. Graham Edwards at the d

dedication ceremonies for the $34 5 milhon system As part of Santee Cooper's corporate commitment to prc ; ting and improving our envwonment. this annual report was pnnted with soy.

based inks on paper that meets United States Environmental Protection Agency guglehnes for recycled paper We urge you to recycle this paper when you have im;shed with it.

s WE'F4E PUTTING our energy TO WORK s

oryou The National EnerdIblicy Act of 1992 opened the -

door for deregulation of the electric utility industry.

That means commercial, industrial, and. wholesale customers will, in the not tm dtstant future, probably

(

l be able to choose whatever pc wer provider they desire -

just as they can now choose their longdistance tele-phone service pmvider. As a result, by the year 2000, electric utilities will be competing for survival.

8 Responding to this new competitive environment, Santee Cooper and utilities throughout the country are focusing on two major challenges: 1) providing the j

lowest possible, price of power to customers; and 2)-

improving customer service. 5 To meet these chal-Icnges and develop a road map for its future, Santee t

I Cooper completed development in 1994 ofits first i

formal strategic plan, known as Santee Cooper 2000.

Th'e intent of that plan is to better position this i

~

organization for the 21st century. 8 "We'ir nating I

i Our Energy To Work For hu" is the theme of this y

+

{

~

annual report. It is the new corporate identity tag that t

has evolved as a product of Santee Cooper 2000 and..

I

).

tL expresses Santee Cooper's commitment ofservice to its F

customers and the citizens of South Caro:ina.

j F

?

w

{

e.

\\

l

~

1 l

Santee Cooper is

{

l South Carolinak b,

state owned i

electric and water utility.

9 Construction on the utility project began on April 18,1939, with the first electricity generated on February 17,1942, from the Pinopolis Power Plant, a five-unit hydroelectric facility i

near hioncks Corner. Santee Cooper generates the power distributed by 15 of the state's 20 electric cooperatives to i

l

. 360,000 custorners located in 35 counties, supplies power to 29 large industries, the municipalities of Bamberg and Georgetown, and two military installations at Charleston. In addition to its originalliydmelectric station, the utility has four large-scale. coal-fired generating stations in South Carolina:

Jefferies Station in hioncks Corner, Cross Station in Cross, Winyah Station in Georgetown, and Grainger Station in Conway. Santee Cooper alsc has combustion turbine-peak'ing units at hlyttle Beach and Hihon Head Island, and a small hydroelectric unit at the Santee Dam. The utility has a one-third ownership in the V.C. Summer Nuclear Station near i

Jenkinsville. On October 1, the Santee Cooper Regional

[

,,i Water System began commercial operation.This signals a new i

I 4

=

era in Santec Cooper senice to South Carolina.The citizens of

,{

i 1

hioncks Corner, Goose Creek and Summerville, and customers nw g.

I of the Berkeley County Water & Sanitation Authority, are the

{

beneficiaries of this stable supply ofone oflife s most precmus y

commodities.

Santee k

Wr.

{

t r

"['

• ~ ~ ' " " " *

'F y=

I

h e

H O MF @i M ?P M R p p "" 9 % p % E ~ cf;pl S y b. @ @ U3 % g g p p y 3

.p.r'b

1. ~; y 7

, 3.g

. y7 y

• • 6

,I f

.4 F.

s.~.-.

4 S

e e

t!!Q4g.

v n..m...s s., ; ;.

1, t

,..;fn,k,(.

,%. < ; ([, ;.. '. '

m

g...

'b

-g.g'

)

The new Sentee coeppe Reglemal weser system treesme(pe psens seested meer aseneks com s.c.

I h

CORPORATE STATISTICS Calendar Year 1994 1993 1992 1991 1990 Total Utihty Plant-Net includmg Nuclear fuel (at year end)(in thousands of dollars) 2,313,068 2.190.396 2.015.526 1.852,471 1.78G 059 Bonded Indebtedness (at year end)(in thousands of dollars; 2,648,965 2.677.810 2.$69.010 2237129 1.937,721 1

l Operating Revenues (in thousands of dollars)

Residential 63,373 60.251 56.958 56.884 54.356 Commercia!

65,330 60.802 57.994 58.064 56,156 Pubhc Street Lighting & Other 2,354 2.032 2.077 2,010 1.904 Industnal 166,640 168.339 173.278 184107 182.662 Wholesale 296,636 292.606 251.41B 256.071 252.988 Sales to Other Utihties*

5,703 3.327 1,173 Interdepartmental Sales of Electncity 99 Miscellaneous 5,095 5.453 5,153 4.842 5.914 Total Electac Revenues 605,230 592.810 548.051 562.578 553.980 Interdepartmental Sales of Electacity and Water (102)

Total-Net of Interdepartmental Sales 605,128 592.810 548.051 562.578 553.980 Water System 528 Total 0perating Revenues 605,656 592.810 548.051 562.578 553.980 Operahng & Maintenance Expenses Charged to Operahons (in thousands of dollars) 377,825 366.439 333.191 344.320 341.743 Payments in L.ieu of Taxes Charged to Operahons (in thousands of dollars)"

2,235 3,643 3,643 3.364 3.426 Payments to the State Charged to Reinvested Eamings (in thousands of dollars) 6,157 5.997 5.816 5.640 5,629 Net Operating Revenues Available for Debt Service (m thousands of dollars) 245,497 243.627 235.324 245.706 233.179 Reinvested Eamings (in thousands of dollars) 35,375 37.583 29.717 40.968 40,001 Kilowatthour Sales (in thousands)

Readential 1,018,355 1,024 861 981,163 935.650 900 626 Commercial 1,188,268 1,152,137 1,113.505 1.062.371 1.027.319 Pubhc Street Ughhng & Other 46,190 38.481 40,642 36.304 34.939 Industrial 5,168,556 5.155 259 5.502.276 5.474,394 5.533.130 Wholesale 7,159,329 7.059.116 6,395.055 6 088.552 6.052.241 Sales to Other Utihties" 141,729 171.231 65,586 Interdepartmental Sales v Electncity to the Water System 2,111 Total 14,724,518 14.601.085 14.098.227 13.597.271 13.548.255 Number of Customers tat year end)

Residental 83,487 80.S13 78.671 76.824 74.922 Commercial 15,886 15,362 15.250 15.158 14.950 Public Street Ughtmg & Othei 409 395 294 294 298 Industrial 31 31 32 32 34 Wholesale 5

5 5

5 6

Tota!

99,818 96.706 94.252 92.313 90.210 Residenbat Statistics (average) Kilowatthour Consumphon/ Customer 12,139 12.754 12.449 12,151 12.071 Cents /Kiiowatthour 6.22 5 88 5 81 0 08 6 04

~

Generatmg Capabihty (at year end)(megawatts) 2,780 2.780 2.780 2.780 2.780 Power Requirements and Supply (kilowarthours in milhons)

Generation Hydro 527 508 556 598 548 Steam 12,533 11.974 10.843 11.233 11.006 Combusbon Turbme 10 4

1 3

Nuclear 1,476 2.030 2,499 1.776 2.031 Total 14,546 14.516 13.898 13.608 13.588 Purchases. Net interchanges Ett

• 862 849 778 681 615 k

Totar 15,408 15.365 14.676 14.239 14.203 Terntorial Peak Demand (megawatts) 2,931 2.655 2.620 2.571 2.508

• Begmning m 1994 and reMafed for 1993 and 1992. sales to other ubbtes is shewn as operahng revenue and mcluded in Kdo*3fthour sales rather than netted agamsi purchased power

{

" Begmnmg m Aprd 1994. tranctuse fees a<e no bnger shown as revenues and expenses Arneunts acc'ved for parnent to the municipanties smce 4/1/94 totaled $14E000

{

COMPARATIVE HIGHLIGHTS

+

Calendar Year 1994 W3

% Change e

Financial (Thousands of Dollats) 3 Total Revenues & Incorne

$ 623,977

$ 612.153 19

[p Total Expenses & Interest Charges 609,564 598.165 19

(

Other 20,962 23.59S (11 2) 1 2

Renvested Earnings S 35,375

$ 37.583 (5 9) j Debt Service Coverago 1.41 times 146 times (3 4) p Debt / Equity Ratio 79/21 80/20 4

Statistical "x

Retail Custorners Served 99,78E 96.670 32 Average Annual Residential Consumption (KWH) 12,139 12.754 (4.8)

Average Resdential Cost (cents per KWH) 6.22 5 88 5.8 Energy Sales (MWH) 14,724,518 14.601.085 09 Teintonal Peak Demand (MW) 2,931 2E55 10.4 AVERAGE SOURCES RESIDENTIAL OF INCOME COST in ik,awub cr,a, pa M>unkur 4

E sales to lhtric C# cps

$ 227.920 44.54 %

s.b E Industrial Sales 166,640 26.71 %

1993 h,atwna/ Atrrage 8 28 M

M E Cd'mmercial Sales 65,330 10.4?%

Lnta Cuper 5.88 fN B ResidentialSales 63,373 10.16 %

(--o V

E Other sales for Resale 24A16 3.91 %

$![,

Other income 18,321 2.94 %

Q E Other Electric Revenue 5.095

.82%

1994 Nationa/Awrage

& 40

^ ~

~~ ~

E Public sirect l.ighting 2,354

.37%

E Water Sa!cs 528

.0%

Santer Cwyer 6.22 AVERAGE RESIDENTIAL DISTRIBUTlON CONSUMPTION OF INCOME I"

in Mrwnhoun 1993 Nationa/Awrage 9,7,35 M rueland Purchased rower

$ 227,203 36.41%

MRisatizammmt*me B

sation and Maintenance 131,831 21.13 %

Lnta Cmper 12,751 i(

B.nieren 150.622 24.14 %

f f M Additions to Plant, inventories, Lic. 73,167 11.73 %

M If Retirensent of Debi 34,342 5.50 %

M0N Y')""' '" ' ' 5'

l994 Nattur:) Airrage 9.884

---mmmun

%Q3 E Sums in Iicu of Taxes 655

.35%

Lnta Cwsper 12,139 mm

"The mission ofSantee Cooper is to be the state' s

leading resom cefbr improving the quality of hfe for the people ofSouth Carolina. "

To fulBil this mission, Santee Cooper is committed to:

- being the lowest cost producer and distributor of reliable energy, water, and other essential services

- providing excellent customer service

- maintaining a quality work force through effective employee involvement and training

- operating according to the highest ethical standards

- protecting our environment

- being a leader in economic I

development

{

[

(

{

EXECUTIVE REPORT ltisachallengingand exciting time to be in the electrie utility business. A deregulated electric utility envi-ronment is coming to the United States, the result of the Energy Policy Act passed in 1992 by the U.S. Congress, Deregulation is without question a ma-i jor factor affecting Santee Cooper's future.

While its ramifications will take many years i

to be realized, we must be prepared to oper-are c&ctively in a competitive environment n.

where customers may choose electric service f

much like telephone customers select a long-distance carrier. Issues of retail wheeling and j

open-transmission access are cornerstones of deregulation and these issues will take time

\\

to sort out.

~ '

Banking, airlines, tekrommunications, and broadcasting are already deregtdated industries. While the prudence of deregula-f tion will likely be subject to debate now and T. Graham Edwards John S. Rainey in the future, we unquestionably stand at i

I the threshold of it in the electric utility I

business.

A positive beginning is that all our cor-I g.

potate goals were met in 1994.This signifi-cantly contributed to an increasingly com-petitive posture. And it is the individual employee working as part of a cohesive, l

e&ctive team that has always been a hall-mark ofour operations. This corporate way of life will be even more critical in the i

j future.

t l

1 In 1994, Santee Cooper successfully Where there is demand, there is growth, concluded several major projects that will and there is explosive growth along South i

solidify our position as we approach de-Carolina's G rand Strand and Waccamaw Neck.

~

regulation.The new 540-megawart unit ar Country music venues, golf courses, outlet i

i the Cross Generating Station was first malls, residential housing. and retail business PEAK DEMAND added to the grid in September durin:; test lu mgaum openings represent nothing short ofa regional start-up. It's particularly gratifying to bring economic juggernaut. Santec Cooper will con-1990 2,508 a unit on-line under budget and on tinue to provide power to propel this impres-unmemmusumus schedule.

sive growth.

1991 2,57i The Cross I unit's budget was origi-musumumannuus The Santee Cooper Regional Water System nally $509 million. But it has been built was dedicated in October and the long-stand-1992 2,620 for $418 million. This is a testament to ing dream of utilizing water from the Santee conscious etTorts to hold down costs and 1993 2.655 Cooper Lakes became a reality. This $34.5 d

unummusumuumme take advantage of attractive interest rates million (excluding net interest cost) project, IM 2,m and a favorable construction environment.

completed under budget and on time, is proof Santec Cooper and its customers need this positive that governmental entities in the Low-power, and while other utilities struggle to country can and should work together. Before meet peak demand, we are well-positioned.

/= mgawm the year was out, a local movement was under To pay for this unit, Santec Cooper way to provide water from Lake Marion to implemented a rate increase on April 1, users in portions of Calhoun, Clarendon, the first since 1985. Two more adjust-Dorchester, and Orangeburg counties.

1991 2,995 ments will become effective on April 1.

Momly's, a major Wall Street bond-rating 1995, and April 1,1996.The system aver' 1992 2,995 firm, gave Santee Cooper high marks, citing age increases total 9.8 percent over the

" strong management' and " stable financial per-three-year period.

1993 2,995 formance." Moody's assessment is atypical of ununummmmmmmmmu We offered an expanded menu of in-how many electric utilities are viewed in the 1994 2,995 dustrial rates, and introduced real-time mammmmmmmmmmmmmm financial community due to the unknowns pricing. It shouki be remembered that even posed by deregulation. It is indeed gratifying with all the adjustments, projections indi-that confidence in us is solid.

care Santee Cooper will remain the lowest-By not ofTering minibonds this year, Santee cost producer and distributor ofany major Coyr was able to assist the state treasurer's generating utility in South Carolina.

office in the state's first-ever sale of minibonds.

l l

l Santee Cmper personnel provided technical Santee Cooper. in i994, nine new compa-and practical advice throughout the pmcess.

nies were announced in eight different Approximately $24.5 million of the state's imnds counties. These announcements repre-were sold, sented a total capital investment of $ 160.7 With the Charleston Naval Base and million and arcexpected to generate l 835 HATES 0 a r *d *- / ~~ard~d a'"/'

new jobs. In addition,18 signi6 cant ex-Charleston Naval Shipyard closing in mid-ura"na, ws"., s",~non.s Awe l

i 1996, we made etli>rts to retain serving these pansions at cooperative-served industries facilities as we'vc done since 1942, and under Residential in 13 counties totalled $121 million in l

Natiowl 8 40 contract since 1954.

magummmmmes new capital investment rnd will result in With the election of Gov. David Beasley, Strau Cna 6.22 the creation of 484 new jobs.

c..

the state's emphasis on economic development The Charleston Regional Develop-is projected to continue as it did under Gov.

ment Alliance was formed in the fall, re-G"2"sercial Carroll A. Campbell Jr. Santee Cooper re-placing the Trident Economic Develop-Nation.d 7.n sponded to Gov. Campbelfs request to act as an ment Authority. Fostering greater input agent of the state in a complicated land swap sirna Cnc 5 50 from all segments of Berkeley, Charleston, that expanded a weapons range near Shaw Air and Dorchester counties is the group's Force Ibse in Sumter County in exchange for a overriding goal Induarial portion of the former My rtle Beach Air i orce The selection ofSantec Cooper's presi-Natwn.d 4.85 Base which closed in 1993. This should put

-a dent and chief executive officer as chair-Shaw AFB in a more advantageous position senza C e n $ 22 man of the alliance reflects strong confi-enumma prior to the next round of base closings. The dence in Santee Cmpen leadership for swap, which involved the S.C. Forestry Com-economic development in the Lowcountry.

mission, allowed AVX Corp., a major capacitor Santee Cooper continued at the fore-manufacturer and Harry County's largest em-front of environmental protection by de-player, to expand on the tract ofland which was fending the Santec Cooper Lakes. The part of the fi>rmer Myrtle Beach Air Force Base, owners of a hazardous waste landfill near Cmperation is the key to so many issues, Lake Marion in Sumter County were re-and Santee Cooper will continue to work as quired to place the first payment in a trust part of the Palmetto Economic Development ftmd for cleanup of the site.The require-Corp. (PEDC). Based in Columbia, PEDC is ment has been cha!!enged by the company governed by representatives of Central FJectric every step of the way and litigation is Power Cooperative's 15 member co-ops and ongoing.

E

The Give Oil For Energy Recovery or

2. The State's leading Rewurre-lb he GOFER $ program passed the one million recognized by state and kwal governments gallons mark in statewide collections.11y and the citiuns ofSouth Carolina as a valued year's end, every county had at least one provider of essential services.

GOFER site where do-it-yourscifoil chang-

.3. EspandedScrrices-lb provide essen-FUEL ers can conveniently and safely dispose of

"" #I #I' G E N ER ATING l

uwd oil. Santee Cooper converts the oil into will enhance the quality oflife for the people cost

(.orn pi k&mwnhor electric power, and GOFER represems one of South Carolina.

of th. state's more visible aspects of public

'od 4E

4. Mrk kre Management -lb im-service and environmental protection, prove company-wide performance through Ilcing named to the National Environ.

enhanced employee involvemerr and par-mental Development Association's (NEDA) ricipative work force n anagement.

1994 Honor Roll was a significant environ.

Aswemoveh wardtomid-decade, San-mental achievement. The NEDA recogni-d"'*#'

tee Cooper challenges its emphiyces to find 1""M"" U"" I tion is only given to companies promoting ways to improve operations, and to be cre-the development of environmental policies acive and innovative. We are posit ioning San-that contribute to both a clean environment ice Cooper to be cost-competitive as we are and a strong economy. Santee Cooper joined challenged by market-based rates near the ranks of Disney Development Co.,

century's end.

Amoco Corp., Eastman Kodak Co., and Philips Electronics North America Corp.,

and others for this special honor.

The foundation for preparing for our future and that of the customers we serve was John S. Raincy Chairman. BoaniofDirectors laid with implementation of a new strairpe plan, " Santee Cooper 2000." les four long.

term objectives best describe the course se 7

___ W for Santec C,ooper as we approach the 21st T. Graham FJwards

"'"'Y hrsident and ChiefErmitiw Ofcer

1. Inu-Cost Energy - lh remain the state's lowest-cost producer and distributor of reliable electric services.

ENERGY SALES At the end of 1994 Santee Cooper percent over the previous year. The average cost of as serving 99,782 residential, commercial, and power to industrial customers was 3.22 cents per other retail customers located in Berkeky. f lorry, and kilowarthour,1.5 percent less than in 1993 and Georgetowr counties. This was an increase of 3,112 33.6 percent k>wer than the national average.

or 3.2 percent over 1993. Ofthis increase,2,574 were Sales to Central Electric Ibwer Cooperative residential and 538 were commercial & others.

Inc. forits 15 member co-ops increased 1.3 percent Sales to these retail customers were 2,253 to 6,903 gigawatthours. Central is Santee Cooper's gigawatthours, up 1.7 percent over theprevious year.

largest single customer. The electric cooperatives The average annual consumption of electricity distribute power to more than 360,000 customers by Santee Cooper residential customers decliaed to in 35 counties.

12,139 kilowarthours,4.8 percent less than 1993.

Sales to the municipalities of 11amberg, and Industrial's were 5,169 gigawatthours, up 0.3 Georgetown decreased 0.2 percent.

$1 -

s, 4:

j.'.

e TOTAL TOTAL Es ENERGY SALES PEAK DEMAND h '

In gigawam in megauurts O

I9%

• 14.725 1994*

2,9JI 1995 14.603 1995 2,95fi 1996 15.589 1996 2.985 I997 15.893 1997 3.(Mi t

'^ -

_s.--..__m 1993 16.212 1992 3,129 treamenwmrmmmrzmermestcrem r

1999 16.491 1999 3.196 Elli3llEltttEltElWN251G525513mmButteg 20(X) l4 680 2(NK) 2 938 g.

.a.

2(K)]

14.346 2(K)]

3.(M19 erEW MEME 2(W)2 14.644 2002 3.079

. ~ ~.. -

...m 2003 l4.943 2(X13 3.I50 m.

,.._m.

m..

m., - -

2tN)4 15.44l 2(K)4 3.249 m

.. ___.._ _ _,_.aratte 2(X)5 15,746 2(X]5 3.321 a-wm-reremrmemwrrgeyype 2(WKi Ifi.065 2(KM 3.399

• actual actual

e e

D-

)

i a

k 1

g 1

9 48 e

9 h

e o

M,.

d s

e' 4

e I

l 6

4 n"

w O

B.

J E

C T

I V

E lNUm 31 n 11)r o

(

b k k b.h lowestcost 70 ucer and distributor of reliable electric services n i t,13 U ') h G u t t!( *vry-tt r f *11 a i n l l3 ;,

S T t. H T U P OF CROSS UNIT 1 ( In l 01 li. l'h4 L tla i

1, i t '

'IO.

+ 't( o $ t pl o d u c 4 r ;>n(!

5.uun ( iiiiji I lisi.ml i nt I lun t< it s aut!n iri/nl s i>nst rih Iliin ist

<f i s t r i h t.* u r tu a v,* o p t-a r t o h e simpli c t f(

g.

{,j g g(

(

11 W i!l 7 6 ' G iJ f f t

• it triff-C a ? I t i ? ? ) i ( i t 'j ' t 1 ( l torn lk'i kt-lcs ( isunti emph,m at ecer3 h,el T he f c.. t e. t h. : t I our \\ c.u s mJ inne inon t h,1.ut i, ths rut hmc p ia r.nor th4

n t

of ;e w ra tinq, b.c t r ic it y on.

'('li n til lll<,liki I titw l 'ill[ l u,ls G lh liflifll/( tl ta i NJf1tcc t nue - t: grc 4 and to u

.p our rate s lot I 4 "'}h l s (Ia lT h 't'l ld i sil ' Apt l2 J! l 2 I) $,l.nl I ssyrit t,gll\\ a

% 1! i I.: i

.i r h 4 f 7 O I I). t l l. t 7, d ". f() p r i ;Il ' ! r:(

L 5

~

C I > -~. ! - C 11 ! ! l l y ll'

• D*,UT('

}i i! { };yO U(;h { h '

'" I '1" " ' " " l ' ' ' " "' l "' " " '"'3'u'"! ds ""'t f lic i n cli V e d u a l fforis of 5linte - Coop <r cin pio s c e that m wor k ef f ectively a - a

' 'n 'n u< non J un.ut of toda6 cla n h unhn mJuun.

t e a rn. a nd it all be t he o ug h t h eir m div t rio :+ t l l u' ; + 0 r nc.:au.u t l nu I is on< of the h u l.upc-st alc etfort' t h;,1 wo r e rnie m t h.

' ' f o w i 4,1 co,*

hasdoad p m raun;. unus hmh m tla l N vi tlic law Jn aJc.

produc e r ;ind dis t r !btit o-

\\ lint unht ws an h m,s.. n, ornho snon t ur h n< unus as a i

i

~ - - - - -... _.

ds

~

y.

Y

}

g.

I.

y..

4 1

. s g x%

.f9 1 4

s p

4

_ n.m

.. e._,.

~

% c.-

\\

\\

\\.

\\

4,

- t

\\

\\

.s s

1 v.

7" p

g 9

~~

~~ F k

4 4

+

a A

t g

. y N

I 4

\\

s s

N y

g q

q

\\

y w

\\

\\

I'l

< \\

A \\

g

\\

e y

e Unit Operators Darrell Poston and Joe Wilson regulate the ou<th rns u.n to ou a pt ak 1rnand. Ba' o mth 4,rt'ihs turbine generator for Cross tand Niand sud i v.u h on d i, t out.d i U nu li m i Station's Unit 1 at the state of-the art control console. The

\\ ' " 1 : "'" ' * :" '" 'd " ' l a t h.a a ha + h iJ u n a a e d u-interactive, full color, touch

,g,,,

gg..

(,

,g, m.,.g g, screen displays are a comrpunications link to system hardware that controls the 1h o r a u% <n:t u t i.n x mJrh, omp onu m a

4 unit. Unit operators are ih< !ak n o,J n u. n u, m o l < t n o.n b. a n x.q'p o < 1 u t h.n responsible for controlling the

'" ' " 'I' ' "

"' "' ' " 'p, n n n. h n n, u s i bs components of generating units from a central control n ui.. n (

i t,.,.n,

,A i, a s e q < <,, p 3 ws room and generating electricity.

'u ' i t ' na'on 'i..

e-n i. n.

mt pt L6inan n

's i m th non,

,,o ot s i 'no p. i l \\\\ l y n n

,mp

.m ih. n A

, n.1 e, r b t h nun <auun:

t General 1:lectric Co. have resulted in a 20-megawart gain over increase of 2.5 percent in April 1995 and a 3 percent overall the original rating.

increase in 1996.

Cross I will go into commercial operatior. on May 1.

The demand for electric power has climbed 46 percent 1995, providing power well into the next century, since 1985, which led to the decision to build the second unit at the Cross Station in Berkeley County. Paying for construc-RATES ADJUSTED FOR THE FIRST TIME SINCE tion of the new $418 million unit was the primary reason for 1985 No utility likes to raise rates. But there comes a time the adjustment.

when it simply cannot be delayed. On Jan. 24, the board It is signficant that even with all the projected mcreases, gave final approval to a three-step rate iocrease efkctive Santee Cmper will remain the lowest-cost producer and April 1,1994,1995, and 1996. Rates were last raised in distributor of ekctric power of any large-scale generating 1985.

utility in South Carolina.

The decision followed a three-month period of review and comment on the proposed rates by Santee Cooper's customers.

SUDSTATION LINKS SANTEE COOPER WITH Rates for all customer classes increased an average of 4.3 DUKE POWER CO. Santee Cooper is the beneficiary, percent in April. This will be followed by an overall average but so are customers of utilities in North Carolina, and even mwum.my75pmrmm Senior Sulmtetten Operator Anon t i cw reeenes oeunser rendense en a ' power oirealt breaker' at tsee 5

new 230 kV Greenweed County

,q b.

h

..Switchisig Stellen. Yleis feelety

.c v 1

e g.

inteesenneetion es twe' -

.; 230 kV.tranenniesien Ihees ;

..m

~.. -

Power co. et esse 'inseermee.

. use honeseenneessen wini?

_ Seestee Coopeeseeleer?

e

,e I

gammmmmEmm&ama k

fl

(,

k 3

il s

L w,wuaa.=:.wwa n x.uwamanum.wmiwsa w &

E

people as far away as Ohio. A 230-kilovolt switching station and Branson, Mo. don't have a thing on the strand's twang. By in Greenwood County now links Santee Cooper and Duke mid-year more than 51 billion wonh of construction was Power Co., one of the nation's largest investor-owned underway or about to begin, including dozens of t., 'aotels.

utilities based in Charlotte, N.C.

restaurants, and stores.

The switching station is testimony to the importance of The announcement generating tl.e most attention was the our nation's unified electric grid where the buying and selling

$460 million Isle ofAmerica theme park on 1,052 acres on the ofpower goes on every hour ofevery day all across the country.

former Myrtle Beach Air Force Base. Up to 5,000 year-round Before the Greenwood County station was energized, Santee employees are expected to keep the park running.The project Cooper and Duke Power were limited in their purchases of is expectep to be larger than Walt Disney World's Magic electric power from one another. That usually meant going Kingdom.This is what's planned:

through another utility and paying a delivery fee or wheeling A 50.000 sq. ft. Centennial Exposition, charge.

modeled after an 1890's World's Fair The new tie with Duke Ibwer cuts out this " middle man."

Rock 'n' Roll Fair Square, featuring an inverted

=

It's projected that Santee Cooper will save thousands ofdollars roller coaster in wheeling charges.

Explorer's Isle, a lakefront park with rides and

=

The engineering and construction was done in 17 months, eateries catering to children an impressively short period oftime considering the amount of New England Waterfront, with a log-flume a

engineering work required. Nearly a dozen Santee Cooper ride, and a U.S. liouse of Representadves g

units were involved. It's just another example of establishing a solid future for the next millennium.

E re-created I

River City, U.S.A., with a jazz club, Delta

=

THE GRAND S T A N D'S ECONOMIC SUCCESS l

STORY CONTINUES Founeen million people visit the g

nonhern coast of South Carolina every year. Tagged the g

" Grand Strand" in the 1950s by a clever public relations The Final Frontier, which includes an indoor E

practitioner, the seashore from Georgetown to little River, roller coaster and IMAX theater E

anchored by Myrtle Beach, is a textbook enterprise zone of Thunder Canyon, a river-rapids ride featur-E a

magnanimous proponions.

Visitors spend $1.7 billion. as full buses and cars flock to the nation's newest country music venuo. Nashville, Tenn.

Then there's the announced $250 million Broadway At C

C E

'p.-mn,vnyv~,mmnern The Beach on 350 acres of property on U.S. Highway 17

$~

g

,s E

['

N, J[

Bypass. Twelve theaters are projected with as many as 25 o,

2

_ a:, <

cj}

possible. A 75.000 sq. ft. aquarium is aho slated.

C j

s g

Barefoot 1.anding, located in North M.yrtle Beach, is i

W 2.j

)

w, c

scheduled to open its $25 to $30 million aquarium in the b'

..c

>d y;W,.

cx.

y g r,.

v summer of 1995 behind the Alabama Theatre. Ar:d yet an-q Ws.

)i'. M,. t M. - M.1

d. =

9

' A+t v

4 other aquarium has been announced at Fantasy Harbour.

<M

.f 4,

L, A

The $ 23 million Myrtle Beach Convention Center project

~ '

~ ^ -

Santee cooper ano 'toalueletene s..

.3 -

held a grand epening in October. The refurbished facilities

. westi to seceasee's pelo to M, w, 43 now have 21,000 sq. ft. of space m. 21 meeting rooms, an d #M le measuutne at the new MOS ?,

,1

,..a w.... c 3

y p

j 3 8,000 y. ft. ballroom, and new Ltchen and banquet facili-F m

fgm D'

ties. There's over 100.000 sq. ft. of exhibition 3. pace, and it osaunesetet deceleconust in SIpIIe features the new S.C. Hall of Fame Museum.

' - meessi.11ee 14 salilles people mese.

w

' J.

w... ~

-.m Tenagt tene asettisen esset af S.S.: -

i.

The Grand Strand is trtdy the centerpiece of the 1990s h ogi p,,,, e,

ggy 9

" age of entertainment.-

hMNem OsandStoned "

, jg eeesessau.

,e I

Wuu nak, t

7

]f.

,y I '<i

,i s.

3 4

l;

1a m

4 4WM n,u.

..(,

' tj) j c;.. ]

y v.f ~

r i.

a g

~

]

d

=d

~.

av_

g 1'{

w,J t -,

waaau wmmme;2

9 6

+%

, ' g,ef yg.y ; -

<+

-.,y: li g.,.

.. at,.

. )' $;,{ ~ f.".' ), '4..

1 7.(. G,5 i., ',' -7f p

1.,

t.

f

..,_...,?-'

• . ?

g.,.. ;a: t."..." gjg a

f

.l-:

1

(),... ' '.

'g.

ys.

' ~

g3 h

p.

g.:.,

c

$i ?l*

\\

,+

s '

we %petM,0,gW ', 3

.l l.". '.

. [,

ye wo+

r y

,,e

" t; <

ff 8'k

...h

'l,.s it g'

5 4

12 f -f g

4 a.

W{i fW,'e : j $a}. f f&

s

.L.

.u....

1 L

O B

J E

C T

I V

E II)CIcasilly a Wa l'Cil C SS 0

antee 00 er ilS a pnWit}C1'Of essentialserviees During the Iist 50 years Santee SANTEE COOPER HAS A NEW CORPORATE Cooper has worked as a sort of COMMITMENT l hrough the itaJes. s.inse Cooper he sile n t p.t ri ne r" t o t h e people of South J sescral sorporarc st.ucincnts to idennn thc essinsc ot the C a r olin.i; our se r vic e. have influenced organvanon. I he I.ucst sr.ncrnent. '.W..c rc Purnng(Iur I ncrp and i nip r o v e d the q u alit y of life for I o hk I or iou." rs a tonuninnent th.a rdleds the Tantec r esident s throughout the state, yet we

( oopo.'unn" snarcp ro h lJh i mhr A c i he dcregul.ncd elc< t r is have tak en rninirnal credit f or our ef f orts unLn in.u kupla c.

Times change. however, and develop NEDAAWARD l or us etn irontnt utalouncA h rtions, santec ments within the industry are now

"'f " " ""'" '" ""'

direc ting ut to a higher profile stanc e Through a wide range of rnedia, Santee I kI'P'"'"' \\"'"'" ""' "' N I I I '\\ I\\"'" d ' h """"" I'h n s.

Cooper will now attempt to increase R.nnn n s en ed the resopu non.n.ui a n.o d s damer in awareness a rn o n n South C a r olinia n s W.idungron.1 ) (. sa n t et ( ooper is now part of the N11)-\\

about Ihe matsy services we provide.

I L.n. t 1L,ll h,r its pn n t n o nunir nicor ni prinn.,tmg pn.per E

~.;

_,3 e:

p% ',,, i

~

~

1 7 c -v wy

,+-

.c--

s.,,*'

yf Q.

.' '[i;

-m

. g

,,a

+. ;y sp,,,

s s

)

s

},

s

?

s

.s f.

Y

.y

.t:[ [hid

< y(to N

',. '~

x JL Ae -

__ ' _.U).

N s y

y 8

.O N

Land Agent Brenda Chapman and Forestry and Undeveloped Landa Supervisor Jos4 Stephens monitor nues at least 10 organizations t'or their ciliirts toward sound growth of young pine tree plantations

'"' i f"" *'"I "I i' * '

as part of Santee Cooper's reforesta.

tion program. In 1994, Santee Cooper Nmetcen other businesses, industries and assotiations were planted 93,000 seedlings on 134 acres also scletted for melusion on the honor roll. Santcc ('uoper of Santee Cooper's undeveloped lands.

joincd tirnn sut h as I hsney I)csclopment (:o.1.astman Kodal l'o. l.h I illv N (:o.. and Amoso Corp stew.udship of the cinironment. i he programs sponsored bv EDWARDS ELECTED CH AIRM AN OF CHARLESTON Namu ( limper ins lade:

REGION AL DEVELOPMENT ALLI ANCE In 1)ctembcr.

1 m ironmental st holarships tur tolleges m the st.nc l'rcsident and ( 'l ( ) I (iraham 1.dwards w as clettcd thairman An annual cm nonmental cwn toncest for the statis of the newh tormedt harleston RegionalI)csclopment Albansc.

sacmh graders

( 're.ned last tall. thc Alhan<c w ill os crsec cionomis do ciopmcnt The annual 41 I ( haJoor AJs enture ('.unp tor mung a<tnitics m liciLeles. ( harleston. and 1)orthestcr ununnes and propic assumes the rolc preuoush bckl by the inou, inonut An annual statewiJe enuronmemal ss mposium I >nclopment Authonn. I har group has becn dnsohed m the sponsor &p of the a n kly 5 (.. I dotanonal Icicusion mterest of more hannonious ctonomis dnclopment cthirts m Netuork progr.m ' Naturc%cnc~

rhe tn-t ouray area.

hl 1 ) \\, b illiaded in } C 5. lirtin)istes tlic des t itipnicitt (,I I kic Allla!)(ck kui.trd til dirc(tiers h U1[Ilpriset! E tt a illini-cnuronmental pohn that auntnbmes to lioih a slean enuron.

morn of 2 i busmess and uinunumn members. All lotal tund-ment anti a Nt riang c(4 tnienn. I atll _Vc.tr t!K aW hlaritill ret tig Ing is.intis tpated l(I Li brilc tr(if11 t hic i!!!cc t ilJrinkicis t iI s t illirficf t e t

80

in the tri-county area and the three county governments, the sible corporate citizen. It represents another example of real-latter based on each county's share of the tri-county population.

world change-a paradigm shift in business culture not seen Edwards says immediate items on the agenda include nam-until recently.

ing an executive director, formulating a budget, and handling In the four years under his chairmanship, Rainey has estab-the many administrative and organizational issues of forming a lished a unique summit of environmental and business leaders:

new organization.

the South Carolina Environmental Symposium. In Septeraber, No one believes it will be easy. Intrasectional acrimony has the third such gathering assembled again on Kiawah Island, a twen viewed as inhibiting a much-needed cohesive and unified showpiece that blends progressive development with acute sen-effort to move the tri-coumy area foward. Leaders acknowledge sitivity to its natural setting.

i the time has come to enfranchise all segments of the low-Environmental and business leaders from the state, region, country, not simply the strict confines of metropolitan Charles-national, and international scene share concerns, ideas, and ton..As the Charleston dady newspaper stated after Edwards' solutions to the compelling ecological challenges facing the planet.

election. " Edwards is responsible for Santee Cooper's strong The S.C. Envimn mental law Project's publicatior1,"Moun-name in the busine;,s community."

tains & Marshes," recognized the chairman's efforts to hold the owners of the hazardous waste landfill on the shores of Lake CHAIRMAN NAMED 1994 CONSERVATIONIST OF Marion financially accountable for the facility.The landfill issue THE YE AR Board Chairman John S. Rainey was named the received considerable attention from Santee Cooper during the 1994 Conservationist ofthe Year by the S.C.WiluSfe Federation.

year to maintain the chairman's stance: "The lakes must be held This prestigious honor recognizes the Anderson native's u suence inviolate, and they must be defended."

in advocating a balance between a sound economy and environmental stewardship.

The chairman set the tone for how Santee Cooper views the hygyMe ' 7 74,

7 environmental responsibility in April 1990, only three months

=

~~as e

after being named chairman by Gov. Carroll

[

r mymm-~,,-

A. CampbellJr. it was at this time, the 20th k

y.Q M M, f.m!il

.e k%hMU d

s anniversary of Earth Day, that he intro-M

. y,7( f s 2 g...,; 9 y.

c.

duced a resolution to the board of direc-l: l ce g,,

g.gi ?, t y:.,. -

g<

s47 s

" Protection and improvement ofour p

S. Itainey was i tors:

h 4 seleeted 1994 ;

'u d f 'i7,y, g "3 M environment are equal in importance to j.

1 1(Y,.

-3 Conservatieselet

'1.:

b J

providing affordable electric energy."

t

1 F

'of t0se Year'tpy+(

I k

,6

?,

• p. s 1

Such a definitive statement from one E

fee,. g,c; ungggg.

T

.,,.,f e.f 1 k

y.. L y-of the country's largest public pmver utili-

{. '

~ Feeleration.(

7n

-.i.

ties is far beyond a firm's desire to be

[f s

.i-

,,n I

5

..6J-

'i e

u, a

perceived as an environmental}y respon-

/-

/.

l mumm.mmmmmmm.ama

G 8

\\

g h

4 4.

r s

)

0

,e s

p "

I f

l l

e e

l s

C

'O B

J E

C T

I V

E b,n n, allClllq u

[lC ualtVI o 1e s

k)r the people o

outh arolina it only takes a brief glance through S A N T E E C O O P E F1 R E GIO N A L. W A T E R S Y S T E M Watt r.

the legislation that created Santee one of hh's lus nctessitics has traduninally bccn in abun-Cooper ta find that qu alit y of lif e danse m iht %uth ( 'arohna 1.ou tounny. It on< c w as so improvement has been part of our job sunpk. I bill a util. y ou gt t uarcr-and pkon or it. I hings since day onc. t 1 f i r <. t, t h e mission was ho c < hangcd sin <c cu n tow n, large and small alikt. <ould ea sily de fined. at the greatest amprove-pun:p u hai seemcJ hke endless gallons of um r oui of the ment imaginable wa' the electrification gn,u nJ.

of the state's rural areas. T oday, howe ver,

.\\s the populunin in the to ununn.uca musluo.,med in t w' e helteVe II 15 Our rili s s i o n both as a ik l'M k.ud 'N h (6 u mt uM lx m Jn gmg \\ l.m,

g compin, nd as individuals to continue to oiu rn h d pnil k nn u nh ulmun or li.ud u.ucr." Indw rin improve the qualit y of t he hves of our u hl pim dug mb.ud ru,n.imiu liendh k ra!k dn d g state s resident s -- and we will do so in a h and d@ d h b diin g sa t 'l bk i m wide range of ways ArW u.uA r Mul dri&y um add 1

4

__.i...

i,

a y

mp-mm mpq

@M v.

,c V

~

c;n C"

E Og 3

.8 c ymra :

i For i

v lR' Y;

~

p%

3

,p %

~7

p

,".G0FE10t!

v-uS

-'\\

c

~;t q.

i J.

1, 4

,3 o

o,>

bf iQi

- eme}

.w' Q WY??h, w -.

,1 1

P<

45 4

s j

kioming large on the horizon forced mayors, town councils, h

~..and EnvM

')

1 Services Technieel a a.a.

c-'

Thennes Evans punipe eN heenI..

and water ent t es to kx)%>nd parochialinterests and think

}/

+ 7g

.. ;+.

. one of Sie OOFER tanke loested S

regional and long-term.

-l st 302'oeNeetten' sites -

I

^

3 T.he result is the Santee Looper Regional Water System, theoesgleeut 3eutti Casoline. Thej.

Q p

- 3 3

( G0FER smessiot Mth$ 3

' g made possible by cooperation from Santee Cooper and four

..b

~.

atinug

.. = te outetending other subdivisions ofgovernment: the Berkeky County Water n

,No u. --

T oro is et' J

& Sanitation Authority, the city of Coose Creek, the Moncks

.me a

'.least one 00FER tank in overy

]

' (eeunty in the state. On Dec.'.13,H d

Corner Public Works Commission, and the Summerville r

j 1994, the one entNienth geNem of

' eN was penaped front 's tank atl Com.uissioners of Public Works.

?

The four entities formed the Lake Moultrie Water A gency, w

h a

GreenvMio, S.C. The 'essed ou is T

to buy the 24-million gallons per day capacity of the regional eenverted inteLeteetrie power at

'I]

~

system. While talked about since the m.d-1980s, serious i e Sesetoe Ceeper generating 3 3

~

i

.a discussions and needed legislation bore fruit in 1987 when the

+

stetten.

h.

[,.

]a S.C. General Assembly passed a law to allow Santee Cwper to e>

q j

becomeawaterwholesalerin Berkeley, Charleston.C!arer. don, 4

v4 j

Dorchester, and Orangeburg counties. Sumter County was

{6 g

3 c

<t bd.EO.axh h e6 La1Qm,6n h AJLi.iWiu-6)$

added to the list in 1989.

L b

[

~

Plans for the system were announced in 1991. and construc-Beautiful. The GOFER program is the most visible public tion on the 23 miles of pipelines began in early 1993. Staior service program offered by Samee Gmper to those who do not achievements in 1994 induded completion of the one million receive Santee Gmper power or water. It's another way that gallon elevated storage tank near Carnes Crossnuds. On Aug.

dramatically illustrates the true statewide public service ren-11, the first water was drawn from lake Aioultrie and treated at dered by Santee Guper.

the water treatment plant, k>cated near Aloncks Corner.

One million gallons is a lot of oil that might otherwise On Sept. 20, the system began delivering water to have been illegally intnxiuced into the state's streams, landfills, Summer ille. Aloncks Corner followed on Sept. 21, with ditches, soil, or water. The GOFER truck has become a Berkeley County coming on-line on Sept. 22 and Goose Creek familiar sight on our highways and byways, picking up oil and s

on Sept. 26. Commercial operation began on Oct.1. Gov.

transporting it to theJefTeries and Winyah stations where it is Carroll A. Campbell Jr. dedicated the system on Oct. 20.

converted into electric power. Consider that one million gallons of used oil has enough cracrgy to:

COFER* PROGRAM NETS MILLIONTH G ALLON Power 1,310 homes for one year Do-it-yourself oil changers and backyard mechanics Power 478,000 homes for one day throughout South Carolina have helped keep the state's environment cleaner by depositing more than one million MYRTLE BEACH AIR FORCE BASE LAND SWAP gallons ofused motor oil since 1990 through the Give Oil For Alany people don't koow Santee Gmper is a major player in Energy Recovery or GOFER program.

military base redevelopment. Its success has been achieved in The one millionth gallon was picked up from Greenville facilitating the redevelopment ofthe former Aiyrtle Beach Air l

County on Dec.13. Chief Operating Officer Robert V.

Force Base property in llorry County.

Tanner presented a plaque io Greenville County oflicials Santee Gmper became involved in the task at the request l

during ceremonics at the Enorce landfill attended by hical ofGov. Carroll A. CampbellJr. w ho sought someone to act as officials and representatives from the S.C. Dept. of f icahh and an agent of the state throughout a complicated land-swap Environmental Control.

process that began in September 1992.

l The GOFER program began in July 1990, an idea born by The land swap between the state and the U.S. Air Force 1

employees in the EnvironmentalServices unit. As 1994 ended, was completed Atay 26 during signing ceremonies at Santee l

302 GOFER sites were in place.There is at least one collection Cooper's corporate headquarters. The exchange of 12,500 site in each county in South Carolina.

acres of S.C. Forestry Commission land in Sumter County, GOFER won three environmental awards in 1994, and currently used as a bombing range near Shaw Air Force Base, the total is now nine. In December, GOFER picked up a was made for more than 1,550 acres at the closed Aiyrtle Beach prestigious award in llouston, Texas from Keep America Air Force Base.

ss

Gov. Campbell said the action ".. puts South Lamlina at B.A.S.S.' 27-year poundage record was broken the first the forefront of the base redevelopment movement nation-day. The tournament was won by O.T. Fears of Sallisaw, Okla.

wide, and it puts the Grand Strand in a position to capture jobs His total catch was 77 lbs.,4 ozs., a three-day B.A.S.S. record.

and opportunities.

Fears won $14,000 cash and a fully rigged Ranger bass boat "The land swap not only grants us control ofour develop-valued a: $21,000. Anglers from 34 states, Japan, and Mexico ment destiny at Myrtle Beach, it also significantly enhances participated.

Shaw Air Force Base for the next round of base closures by The landing is named after Clarendon County Sen. John solving major enctnachment problems. I want to thank my C. land 111. He termed the landing "as an example ofgovern-staff, the entire team at Santee Cooper, our Washington ment working together." In addition to Santee Cooper, enti-delegation, and the Air Force for leading us toward t'as great ties involved in the project included the S.C. Dept. of Natural achievement," said Campbell.

Resources, the S.C. Dept. of Parks, Recreation and Tourism, the U.S. Fish and Wildlife Service, the Clarendon Coutty JOHN C. LAND 111 DOATING AND SPORTS FISHING legislative Delegation, and the States Organization of Boating FACILITY On May 6, under picture-perfect skies, theJohn Administrators.

C. Land 111 Sports Fishing Facility on 12ke Marion was Recreation considered a byproduct ofthe original Santee dedicated during a very special event. The dedication coincided Cooper Hydroelectric and Navigation Project, has grown to with the final weigh-in of the 1994 Bassmasters invitational an industry providing an annual economic benefit to the five-FishingTournament sanctioned by the Bass Anglers Sportsman county region of nearly $200 million and providing approxi-Society or B.A.S.S.

mately 3,000 tourism-related jobs. In the July 1994 issue of A crowd of 2,000 onlookers was on hand for the dedica-B.A.S.S. Times the headline trumpeted,"Santec Cooper Stakes tion and B.A.S.S. fmale, sponsored by the Clarendon County its Claim as the Nation's Best All-Around Bass Fishery."

Chamber of Commerce. Clarendon is one of five counties surrounding 12kes Marion and Moultric. commonly referred LEASEHOLDERS SURVEYED ON DUYlHG THEIR to as the Sante Cooper lakes. While the governor thanked LAKE LOTS Santec Cooper conducted a survey of Santee Cooper for the donation of the land, the supreme praise a pproximat ely 2,600 residential leaseholders inj uly to determine

~

came from B.A.S.S. ofTicial and veteran angler Ray Scott. He if they would be interested in purchasing their subdivision lots told the gathering that the 26-acre "megalanding " as it's often kicated on Lakes Marion and Moultrie. The survey elicited a called,"is one of the finest in this country, if not the finest." i le response rate of nearly 85 percent. Of those who responded:

Approximately 32 percent stated they would be inter-also characterized the tournament as one ofIhe most successful B.A.S.S. has ever conducted.

ested in purchasing the property now a

P,,.

J ',

• b4481%.

hg ' I 1

Ih - Mi; "T"$

.r

+

.;,gg.

M

,'s

~

~.'y.,

,~ g -

'/*G

• Y R..

_6

^i^

TQ?^

.m v

=.m

?!

• i ;.,

kf-

' h,gg, e.Nt

, %_"g.l%

i.

.- t-g 'd d?E 2%"k B

A crowd of 2,000 fishing enthusiasts gathered on May 6 for the dedication of the John C. Land 111 Boating and Sportsfishing Facility on Lake Marion. The event was the final weigh.in for the 1994 Bassmasters invitational Fishing Tournament.

\\pprounun h 1 s pera nt st.n ni tha u nuki be mici-( oopci s indroclcun< lisensc was icncual m 197 I i ik cstal m purm hemg the propt rn u nlun the ont tiu ulus h ha nscs all hphocluins proicus m the i A. dctcr-s c.u s nunalih.a pnipotics m u rt.un s.mtec t ooper subdn iuons in

\\ ppt tis ti; Lits b l 5 ps t s ctu l1hf k.ititk !!)O u t ulld tiill-k$c!k(lc\\. ( a]iiutt. ( larcnda sti. ant} ( Irallpcluttg t i stillt h s u cic 8 siJer pur hastng the propa cy u alun i to m scats no lonp r essentui tor in drocicurk operanons. \\ppn unuu k r posem sutut thec uoulJ bt mu r- = nu c chesc ' lcisuu ome darlopmenis' beg m.1 aschuld s csud m pui.lusum tht pr opu t w hen thor ! cast u s h.n t ow ned thcn d.ulhngs but t null not ...n ihe piop-( s it s e {lls1 Cnt (d '! ( cll\\ alh I rJllNjk tltacit in {rc-subdn tsions luu hu n a tiuun on the Nunct ( oopo st na d the suncs icsuhs to the s nice ( noper Bo.ud of a I akcs snue PM and ;I Jotlopmems dot the lakes I)ncaors Propcin ( 'onunmcc on.\\ng. 22 %les.nc powh!c doc to the ratuump or I cJeral 1 ncip Ret onunendanons on a possibic sales opnon ucre n-Regul.non ( 'omnnssion (11 lu > boundancs u hen Nunce procd ni be prcsented to the biurd ot docuors in carh Pm

~ ' ~ ~ ~ ~ - - - - _ 9 f.if}h;,,'\\ p ~ 1, ) f y ysg M .M. 1,,e!;y i s1;# J 9, J:- I 4 ~ i '4 4' wy (/ v~ 'Q "0 At g h.h, f .e, 4 3-; j ;7g;;; f_5 y, ,. $Q ' yo' 1 'hg s'fS b w&exwas e m ~

,'f+-E s' 9"'-"' 'N

1. /*.

ri;'8.y y W-' 8 "O

e,

b g V n j s. i A i; s L

f

1 L;,.;-

- ~ _ M-n s, f" p),D./m n, l!: i er ? ~ ,b'. /,- f l y .s 1 W' r b,- L ~,). f E p LO

B [fJ / ' E z! C /' 3T AI? N E-i 8

l ' H,>4 a, s. f.- f- .l . ^ f l -r ,h }. l j. y 1 n VI j# j. ',t i [.:.a~. w s;.

w ' Od L. < s w

G...~ L.w.+L - s u~alxa +Jn w ~~ a-Improving company-wide er OT7HaHCC through enhanced em lo) vee inv0lvement

[7 It is the employees of Santee I. S A N TE E C OOPEH 000 With thc 21st ctntury rapidly L J-) Cooper who mako us a great company. approaching, Santec Cooper is poised to chart a new course as it is their dedication, dependability, and au clectric utihties preparc ro mcet fundamental thanges in the creativity that have, for over 50 years, way hus. mess is condutted. I hose who adapt wdl survise and enabled this company to operate as a even flourish in a deregulated clectric utility environment. cohesive team. It is also they who know where we need improvement; as a result, we have chargod our employees at alllevels "'I" to think not just about how to do a goodjob, '"' N ' E "" "E " "* ' ' "'I "I '*"""E but how to do a beiferjob. By receiving their individual input on how we can improve thange. not resisting it. specific aspects of our operations, we will in March, a hardbound hook. "Santec Cooper 2000 - continue to improve as a whole. Energizing the I uture" became part of Santec Cooper's path-

M ys .g ' ~~ '. p p as y,..~ v. t i [ t \\ 4-k' } [.

1. g t

Av, / f

i. -

f 3 .s [ -.

• y b

D' ..'/..-( h - I. \\ i-p f g p. ~ 4 p .7 y-Offlee. Specialists Joyce Tow) J g and Debra Cullinspect t tional utih..ues, to buiki and operate power plants, and to [ t l printed materials for Santee : J tompete with existing utilities. No one knows pretisely how 4 - Ceeper,s Goals program. The. l l program lists corporate goals K ) these thanges will atTett Santee Cooper, elettric to-ops, or v L that employees strive to i l investor-ow ned utilitics. Aaording io "Santec Cooper 2000" meet each year. l cmploy ces shoukl: ,.w..., - ) [ lie willing to aaept thange and look tiir new ways to = way to tomorrow. l'his strategit plan represents the work ot' imprin e Streamhne and'or enhante protesses to nuke them dozens ofemploy ces w ho were charged by hesident and CLO = T. Graham tilwards uith the dauming task of anitut.uing the more c0iicnt and competitis e 1)esclop new seniscs sision of $antee (:ooper's setond tentury. Promote demand-side management programs suth One of the most dramatic thanges will be the abihty, a ibIlbligli retall ubecling, thir t ustomers to tbothC lbcir power as ( tot id ('ents and k 120 ddVantage l ind ways to uintrol and redutc operating and main-company much hke they now can (hoose a long-distante = telephone carricr. tenante wsts, and capital equipment and uinstruc-( h her utihties w ill be ahic to use Santee Cooper's t ransmis-tion expenses l l sion lines. I his is ca!!cd open transmission auess Ncgulators OdCr ideas for tbc design, Utustruction, operJtion, 8 will allow independent power produ<ers, w ho are not tradi-and nuintenante of systems and f atihtics to make as

them more reliable and cost-beneficial project or activity that is mutually decided upon. PEP has an look for creative ways to complement and protect impressive cumulative empkiyce participation rate of 95 per- = natural resources cent.This exceeded the corporate goal of 85 percent. Share knowledge, skills, and ideas with fellow em-During the year,1,715 employees participated on 334 = ployees and the community teams. When it comes to selecting projects, PEP teams contin-Communicating the strategic plan was accomplished in ued to place more emphasis on activities relating to corporate meetings with managers and supervisors, distribution of bro-goals. h's paying off. The estimated net annual savings from chures to employees, videotaped presentations, and articles in PEP was $730,367. the employee newsletter. Examples of 1994 PEP projects include the Rates Market-ingTeam which developed a marketing plan for Santee Cooper's "'ROGR AM FOR EfAPI.OYE E PARTICIP ATION Employees electric rates. The objective was to help Santee Cooper's em-have a way to constructively share ideas in a level of partici-playees and customers become aware of and understand pative management at Santec Cmper. It's called the Program Santec Cmper's electric rates. In association with " Santee for Employee Participation or PEP. Cooper 2000," a Strategic Action'Iiam was formed to review PEP empowers the indhidual employee through collec-corporate public education programs. tive dechion making processes. A PEP group focuses on a PEP has been a fixture at Santec Cooper since 1983. a : y.;. 3;.:.n 7 - aan,pj .: p .4. . m,w v b. - y.y q m m y.y, q Wayne Grooms l Dale Cooler,j 'j a iBobby Hughes, Rutus Gibson,i j ...:.Q,,.m' .3 ~. < Robert Bowers.'and Tony ' sj, o' r 1 3 LThompson' members of the - 4 4 1 d ' ' ~ Bluftt'en Wensmis.sien I.ine Crowi j .,g O 3 . now have an ald-towain vehletel i N,' c that enables them to inspoet and :: c maintain eines in swampaq v. o. e m.rs-a..n. o.stmt.tt. m a . retain water. T>masmission1 '] ~ ]y ' employees ~used the PSP process N ito meet this challenge widohh -} 4 . Jaaves ever $32,000 annustly.j <l m . a ?. 3:): y; % ddM Alii.h a=Jd6bksdl4.iu dah h ahaw G.adi.(L d Airo as4 6aA b w h A L.A.d.J,s.;.dh.sdN

IN MEMORY OF RAY FIDDLE \\ " l" ' ~ "} It's a sad day when a loved one, ~ co-worker, a friend. is lost. It is t j not easy when you worked with 'i or knew someone, particularly, one who is young and has a wife and family. It is not easy, but life presents us challenges, and we <3, i must go on. g; This is the harsh reality Santee E n, . Cooper faced in the spring of 1994 following the accidental death of Moncks Corner LineTechnician Ray Fiddie, who died Man b

29. Fiddie came in contact with a 12-kilovolt line i

while dismantling a transformer at a North Charleston, i S.C. substation. Fiddie was a 12-year employee of Santee Cooper. He is survived by his wife Roberta "Lynn" and an 8-year-old daughterJennifer. e 1 o I i

South Carolina Public Service Authority Calendar Year s l

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To the Advisory Board and Board of Directors of the South Carolina Public Service Authority: We have audited the accompanying balance sheets of the South Carolina Public Service Authority (a component unit of the State of South Carolina-Note 1) as of December 31, 1994 and 1993 and the related statements of accumulated earnings reinvested in the business, reinvested earnings, and cash flows for each ofthe three years in the period ending December 31,1994. These financial statements are the responsibility of the Authority's management, Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes. examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In out opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the South Carolina Public Service Authority as of December 31,1994 and 1993, and the results ofits operations and its cash flows for each of the three years in the period ending December 31,1994 in conformity with generally accepted accounting principles. j f As explained in Note 4 of the notes to financial statements effective January 1,1994, the i South Carolina Public Service Authority changed its method of accounting for certain I investments in debt and equity securities. 1. Charlotte, North Carolina February 17,1995 l'>

CALANCE CHEETS South Carolina Public Service Authority December 31,1994 and 1993 ASSETS 1994 1993 (Thousands) ' Utility Plant - At Cost: Plant in service $ 2,625,451 5 2,540,433 Less accumulated depreciation 883,058 814,425 Plant in service 1,742,393 1,726,008 Construction in Progress 549,317 450,306 Nuclear fuel-at amortized cost 21,358 14,082 Utility plant - net 2,313.068 2,190,396 Other Physical Property (Net ofAuumulated Depreciation) l,720 1,748 Cash andInvestments Hellby Trustee (Designated) 291,878 440,427 CurrentAssets: Cash and investments held by trustee (undesignated) 51,778 50,794 Bond funds - current portion 106.415 90,031 Accounts receivable - net of allowance for doubtful accounts of $887,000 and $2,907,000 in 1994 and 1993, respectively 54,581 57,339 Accrued interest receivable 2,922 3,203 Inventories, at average cost: Fuel (coal and oil) 43,844 26,901 Materials and supplies 33,018 32,716 Prepaid expenses 1,011 1,312 Total current assets 293,569 262,296 DeferredDebits and Other Assets: Unamortized debt expense 25,026 25,838 Unamortized loss on refunded debt 290,963 305,131 Costs to be recovered from future revenue 386,037 365,075 Other 27,343 31,754 Total deferred debits and other assets 729,369 727,798 Total 5 3,629,604 5 3,622,665 t The accompanying notes are an integral part of these financial statements. ( C

i l l LIABILITIES AND CAPITALIZATION 1994 1993 (Thousands) Long-Term Debt: Electric Revenue Bonds - Priority Obligations 39,380 42,100 Electric System Expansion Revenue Bonds 1,058,050 1,079,455 Capitalized lease obligations 46,131 49,448 Revenue Bonds 1,343,740 1,370,910 Total long-term debt (net of current portion) 2,487,301 2,541,913 Less: Reacquired debt i1,285 10,550 Unamortized debt discount and premium - net 53,825 55,268 Long-term debt - net 2,422,191 2,476,095 Current Liabilities: Current portion oflong-term debt 54,612 33,704 Accrued interest on long-term debt 72,625 68,362 Commercial paper notes 118,700 108,250 Mini-Bonds and Revenue Bonds (Series M) 156,500 154,865 Accounts payable 33,526 29,179 j Other 11,940 18,794 Total current liabilities 447,903 413,154 Deferred Credits and Other Non-Current Liabilities: Construction fund liabilities 27,638 32,233 Nuclear decommissioning costs 28,165 27,756 Unamortized gain on reacquired debt 324 470 Other 20,452 16,835 Tbtal deferred credits and other non-current liabilities 76,579 77,294 Commitments and Contingencies Capital Contributions - U.S. Government Grants 34,438 34,438 Accumulated Earnings Reinvested in the Business 648,493 621,684 i l Total s 3,629,604 $ 3,622,665

STATEMENTS OF ACCUMULATED EARNINGS REINVESTED IN THE BUSINESS South Carolina Public Service Authority Years Ended December 31,1994,1993, and 1992 1994 1993 1992 (Thousands) Accumulated earnings reinvested in the business - beginning of year $ 621,684 $ 590,098 $ 566,197 Reinvested earnings for the year 35.}75 37.583 29,717 Total 657,059 627,681 595,914 Distribution to the State of South Carolina 6,157 5,997 5,816 Total 650,902 621,684 590,098 Net unrealized loss on investment securities available-for-sale (2,409) Accumulated earnings reinvested in the business - end of year 5 648,493 $ 621,684 $ 590,098 e ( The accompanying notes are an integral part of these financial statements. { [ __S

STATEMENTS OF REINVESTED EARidlNGS South Carolina Public Service Authority Years Ended December 31,1994,1993, and 1992 1994 1993 1992 (Thousands) Operating Revenues: Sale of electricity 5 600,036 $ 587,357 5 542,898 Sale of water 528 Other operating revenues 5.092 5,453 5,153 Total operating revenues 605,656 592,810 548,051 Operating Expenses: Electric operation expense Production 233,308 237,685 217,223 Purchased and interchanged power 28,271 16,190 11,598 Transmission 3,692 4,068 3,197 Distribution 3,789 3,594 3,810 Customer accounts 2,477 3,571 3,919 Sales 1,610 1,618 1,295 Administrative and general 49,496 48,087 39,784 Electric maintenance expense 54,824 51,626 52,365 Water operation expense 338 Water maintenance expense 20 Total operation and maintenance expense 377,825 366,439 333,191 Depreciation and amortization 80,222 78,329 75,025 Sums in lieu of taxes 2,235 3,643 3,643 Total operating expenses 460,282 448,411 411,859 Operating Income 145,374 144,399 136,192 Other Income: Interest income 18,271 17,493 21,980 Other - net 50 1 b50 642 Total other income 18,321 19.343 22,622 Interest Charges: Interest on long-term debt 117,970 122,557 129,894 Other 31,312 27,197 23,356 Total interest charges 149,282 149,754 153,250 Costs to be recovered from future revenue 20,962 23,595 24,153 Reinvested Earnings $ 35,375 $ 37,583 $ 29,717 The accompanying notes are an integral part of these financial statements. 1

STATEMENTS OF CASH FLOWS South Carolina Public Service Authority han Ended Daember 31,1994,1993, and 1992 1994 1993 1992 (Thousands) Cash Flows From Operating Activities: Operating Income 5 145,374 $ 144,399 $ 136,192 Adjustments to reconcile operating income to net cash provided by operating activities: Depreciation and amortization 86,660 86,913 85,602 Other Income 50 1,850 33 Changes in assets and liabilities: Accounts receivable, net 2,758 (7,051) (4,692) Inventories (17,245) 17,489 (11,437) Prepaid expenses 301 (326) 70 Other deferred debits 3,473 (2,659) (4,380) Accounts payable 4,347 1,050 (1,253) Other current liabilities (7,590) (6,612) 6,174 Other non-current liabilities (569) 16,090 .,3,244 Net cash provided by operating activities 217,559 251,143 239,553 Cash Flows From Investing Activities: Net decrease (increase) in investments 163,356 106,127 (215,041) Interest on investments 20.228 29,379 39,769 Net cash provided by (used in) investing activities 183,584 135,506 (175.272) l Cash Flows From Noncapital-Related Financing Activities: Disuibution to the State of South Carolina (6,157) (5,997) (5,815) Cash Flows From Capital-Related Financing Activities: Proceeds from sale of bonds 977,955 544,388 (Additions) retirements of reacquired debt (544) (5,205) 310 Net commercial paper proceeds (repayments) 10,450 (13,500) (2 250) Repayment and refunding of bonds (31,162) (964,183) (227,858) Interest paid on borrowings (156,503) (183,548) (167,613) Construction and betterments of utility plant (182,160) (240,513) (235,279) Debt issuance costs (739) (15,021) (7,699) Other (3,225) (3,148) (3,052) Net cash used in capital-related financing activities (363,883) (447,163) (99,053) Net Increase (Decrease) in Cash and Cash Equivalents 31,103 (66.511) (40,587) Cash and Cash Equhalents at the Beginning of the Year 121.985 188,496 229,083 Cash and Cash Equivalents at the End of the Year 5 153,088 $ 121.985 5 188,496

N 1994 1993 1992 (Thousands) Reconciliation of Cash and Cash Equivalents: Cash and investments held by trustee (designated) $ 291.878 $ 440,427 $ 607,112 Cash and investments held by trustee (undesignated) 51,778 50,794 46,536 Bond funds - current portion 106,415 90,031 99,205 Less investments, not considered cash and cash equivalents 296,983 459,267 564,357 Cash and cash equivalents at the end of the year 5 153,088 $ 121,985 $ 188,496 The accompanying notes are an integral part of these financial statements. E

NOTES TO FINANCI AL STATEMENTS Note I Summary of Significant Accounting Policies: construction of a regional water system. The Authority executed a contract with the 1. ale Moultrie Water Agency, a joint municipal A - Reporting Ent ry - The South Carolina Public Senis e AuthorH utet systcm constsungof ihe tollow mg membenim of Summerville (the Authority), a component unit of the State of South Carohna, wa' Commission of Public Works. lown of MontLs Corner Commission created in 1934 by the State 1egislature. The Board of Directors is d Pal % City of Goose Creek and the County of Berkeley. appointed by the Governor of South Carohna. The purpose of the The Lake Mouhric Water Agency will purchase all of the capacity of Authority is to provide electric power and wholesale water to the A-system and sell such [apacity to the four members. The people of South Carolina. Capital projects are funded by bond; issued water system commenced initial operation on October 1,1994. The by the Authority and internally generated funds. The Board of construction costs incurred as of December 31, 1994 totalled Directors sets rates charged to customers to pay debt service and g, gyg, operating expenses and to provide funds required unJer bond covenants. Mee 3 Costs to be Recovered from i uture Revenue: B - Synem oplavunts-The accounting records of the Authority are in accordance with generally acceptco accounting principles applicable The Authority's electric races are established based upon debt to governmental entitiesINote 12) and are maintained substantially service and operating fund requirements. Straight-line depreciation is in accordance with the Uniform System ofAccounts prescribed by the n t c nsidered in the cost of service calculation used to design rates. Federal Energy Regulatory Commission (FERC) and the National The differences between debt principal maturities (adiusted for the ~ Association of Regulatorv Utihty Commissioners (NARUC) as c6ecn of premiunu, disc ums and amonimions of defened gains ~ applicable. and losses) and straight-line depreciation are retognimi as costs to be vered from finure revenue.The remvery ofoutstanding amounts ret C - Utility Plant - Utility plant is recorded at cost, which includes asuiated with costs to be recovered from future revenue will coincide materials, labor, overhead, and interest capitalized during construction. Capitalizedinterest was!27,149,000in 1994,521,523,000in 1993, w ith the retirement ofthc outstandinglong-term debr of the Authority. and 514.020h00 in 1992.The costs ofrepairs and minor replacements A,vre 4 Cash and investments Held by Trustee (Designatedh are charged to appropriate operation and maintenance expense accounts.The costs of renewals and betterments are capitalized. The UnexpenJed funds from the sale of bonds, debt service funds, original cost ofutility plant retired and the cost of remm al less salvage other special funds, and cash and investments are held and maintained are charged to accumulated depreciation. by trustees and their use designated in accordance with applicable D - Deprrritrion - Depreciation is computed on a straight-line basis provis;ons of various trust indentures, bond resolutions, lease over the stimared useful lives of the various classes of the plant. agreements, and the Enabling Act included in the South Carolina law. Annual depreciation provisions, expressed as a percentage of average Such funds consist principally ofinvestments in government securities. depreciable utility plant in service, were approximately 3.3% for each Effective January 1,1994, the Financial Accounting Standards Board ofthe three years in the penod ended Detember 31,1994. Amortization Statement No. I 15 was adoptedflhis statement requires investments of capitalized leases is also induded in depreciation expense. to be clasufied into one of three categories: trading. held-to-maturity E - Rnenue /kgrurwn andFue/ cv3ts - Substantially all wholesale and or available-for-sale. The Authority's investments are all classified as industrial revenues are billed and recorded at the end ofcath month. either held-to-maturity or available-for-sale. As required by this Revenues for electricity delivered to retail customers which hase not statement, investments clauified a held-uwmaturity are carried at been billed are accrued fuel costs are reflected in operating expenses amortized cost. Securities categorized as available-for-sale are carried as fuel is consumed. at market value with the net unrealued gain or k>ss offset against F - Bond Asuance Cv;ts - Unamortized debt diswunt, premium and accumulated earnings reinvested in the business. expense are amortized to income over the terms of the related debt As of December 31,1994, the Authority had heid-n> maturity issues. Unamortized gains or losses on refunded debt are ger-ally investments carried at amortized cost of $84,665,000 and available-deferred and amortized to income over the terms of the refundu.g for-sale investments carried at fair market valuc of 5316,706.000.The debt issues. pm unrealized holding losses totalled 5521,000 on the held.to-G - Ca3h and Ca3h Equivalenn - For purposes of the statements ofcash matu% securities. The gross unrealized holding gains totalled flows, the Authority considers highly liquid investments with original $ 183.000 an I ross unreahzed holding losses totalled $7,669,000 on g maturities ofless than three months and cash on deposit with financial the available-ir-sale securities. Included in the Authority's availabic-institutions as cash and cash equivalents. for-sale investments carried at fair market value are nuclear H - State Dbmbunon-The distribution to the State of South Carolina dewmmissioning funds of $26,040 000 with related unrealized is determined utilizing a formula required under the 1949 InJenture holding losses of $5,076 000 These unrealized holdmg losses are which is based essentially on operating cash flows and mandatory reflected in the decommissioning liability and not as a separate reserve requirements. Such calculation varies substantially from component of accumulated earnings reinvested in the business. reinvested earnings for the year principally due to costs to be recovered All the Authority's investments with the eucption of decummis-from future revenue and working capital requirements. sioning funds are hmited to a maturity of ten years or less. For the year I - Red,mfications-Certain prior year amounts have been reclassified ended Dec ember 31,1994. the Authority had proceeds of 512,153,000 to conform to the current year presentation. from sales of available for421e securities and realized 531.0000fgains and 518,000 oflosses in conneaion with these sales. These gains and Mrc 2 Regional Water System: losses were wmputed a the dMerence between the proceeds and in 1992, the Authority's Board of Directors authonzed the qwcifically identified amortwed wst per security. et

Cmh -Cash is categorized as follows: Category 1 includes bank the cost ofthe repurchasc agreement. Securities underlying repurchase balances entirely covered by federal depository insurance. Category 2 agreements are delivered by broker / dealers to the Authority's trust includes bank balances that are uncollateralized or collateralized with agents. At lkccmber 31,1994, thc Authority's repurchasc agreements securities pledged to the Authority by pledging fmancial institutiom totailed $92?S4.000. but not held in the Authority's name. The Authority's investments are ategorized to give an indication huermenu - Trust indentures and resolutions authorize the Authority of the level of risk assumed by the Authority at year-end. Category to invest in obligations of the U.S. Treasury, agencies, instrumentalities, 1 includes investmenes that are insured or registered or for which the and certi6 cates of deposit. The Authority's investments consist of securities are held by trust agents in the Authority's name. Category U.S. Government securities, certificates of deposit, and repurchase 2 includes uninsured certificates of deposit which are collateralized agreements. The Authority requires that securities underlying with securities pledged to the Authority by pledging fmancial repurchase agreements have a market value of at least 102 percent of institutions but not held in the Authority's name. 1994 Investments Cash Total Category Caregory Category Category Carrying Market 1 2 1 2 Value Value I (Thousands) Cash and Investments Held by Trustee (Designated) General lmprovement Funds. $ 53,238 $ 1.300 $ 33 80 $ 54.651 5 54.651 Debt Service Reserve Funds.. 128,179 0 0 1,030 129,209 129.209 Other Special Funds. 76,782 0 0 425 77.207 77,207 Funded Interest. 30,811 0 0 0 30,811 30,295 Total Cash and Investments Held by Trustee (Designated). $ 289,010 $ 1,300 $ 33 $ 1,535 $ 291,878 $ 291.362 Cash and Investments Held by Trustee (Undesignated) Revenue Fund.. $ 53,155 5 0 $ 0 (5.875) $ 47,280 $ 47,280 Special Reserve Fund. 4,307 0 100 91 4,498 4,498 Total Ca0 and in estments Held by Tretee (Undesignated). $ 57,462 0 $ 100 $ (5,784) $ 51,778 5 51,778 Bond Funds - Current Portion Interest. $ 24,421 0 $ 0 $ 36,011 5 60,432 5 60,432 Bond Principal.. 28,797 0 0 617 29,414 29,409 Funded Interest. 497 0 0 15,634 16,131 16,131 Lease.. 438 0 0 0 438 438 Total Bond Funds - Current Portion. $ 54,153 0 $ 0 $ 52,262 $ 106.415 $ 106.410 m. 43

1993 investments Cash Total Category Category Category Category Carrying Market 1 2 1 2 Value Value (Thousands) Cash and investments Held by Trustee (Designated) General Improvement Funds. $ 57,568 $ 1,650 $ 55 $ 205 5 59,478 5 59,292 Debt Service Reserve Funds. 162,729 0 0 55 162,784 172,038 Other Special Funds - 157,066 0 0 28 157,094 157,151 Funded Interest. 61,067 0 0 4 61,071 61,908 Total Cash and Investments Held by Trustee (Designated).. $ 438,430 $1,650 $ 55 292 $ 440,427 $ 450,389 Cash and Investments Held by Trustee (Undesignated) Revenue Fund.. $ 44,764 0 $ 0 $ (2,098) $ 42,666 5 42,643 Special Reserve Fund. 7,616 0 100 412 8,128 8,143 Total Cash and investments Held by Trustee (Undesignated).. $ 52,380 0 $ 100 $ (1,686) $ 50,794 $ 50,786 Bond Funds - Current Portion Interest. $ 24,120 0 $ 0 $ 36,686 $ 60,806 $ 60.806 Bond Principal.. 16.245 0 0 0 16.245 16.247 Funded Interest. 12,542 0 0 0 12,542 12,542 lease.. 438 0 0 0 438 438 Total Bond Funds - Current Portion. 5 53,345 0 0 $ 36,686 $ 90,031 $ 90,033 e 44

Mer 5 long-Term Debt Outstanding: The Authority's long-term debt at December 31,1994 and 1993 consisted of the following: December 31, twl 1993 (Thousands) Electric Revenue Bonds - Priority Obligations. (mature through 2006) Interest rate 4.10% - 42,100 44,705 Electric System Expansion Revenue Bonds: (mature through 2022) Interest rates vary f om 5.30% - 8.60%. 1,079,455 1,099,525 Capitalized lease obligations: (mature through 2015) Interest rates vary from 2.00% - 5.00% - 49,448 52,672 Revenue Bonds: (mature through 2032) Interest rates vary from 3.40% - 7.00% _ 1J'o,910 1,378,715 Totallong-Term Debt.- 2,541,913 2,575,617 Current i onion - Iong-Term Debt - 54.612 33,704 TotJ Iong-Term Debt - Net. 5 2,48'301 $ 2,541,913 Maturities oflong-term debt through 1999 are as follows: Priority Expansion Capitalized Revenue Obligations Bonds leases Bonds Total Year Ending December 31, (Thousands) 1995. $ 2,720 $ 21,405 $ 3,318 $ 27,170 $ 54.613 1996. 2,845 23,165 3,418 10,670 40,098 1997. 2,975 19,160 3,527 18,380 44,042 1998. 3,105 19,980 3,609 15,800 42,494 1999. 3,245 14,960 3,328 23,270 44,803 Tora!.. $ 14,890 $ 98,670 $ 17,200 $ 95,290 $ 226,050 The fair value of the Authority's debt is estimated based on the In 1993, the Authority issued $385,125,000 in 1993 Refunding quoted market prices for the same or similar issues or on the current Series A&B Bonds and $631,360,000 in 1993 Refunding Series C rates offered to the Authority for debt with the same remaining Bonds.These refundings reduced the Authority's total debt senice maturities. Based on the borrowing rates currently available to the over the life ofits bonds by approximately $66,501,000, resulting in Authority for tax-exempt bonds and other debt with similar terms and an economic gain over the life of the bonds of approximately average maturities, the fair value ofdebt is approximately $2.5 billion $30,249,000. = and $2.85 billion at December 31,1994 and 1993, respectively. The Authority refunds and defeases debt primarily as a recans of reducing debt service, thereby postponing or reducing future rate adjustments. 45

Refunded amounts outstanding, original loss on refunding, and the unamortized loss at December 31,1994 are as follow: Refunding Issue Refunded Bonds Refunded Arnount Original Unanwrtized Oumanding loss Imss fibusands) 1985 Refunding $ 150,000 of the 1982 Series B $ 30,570 $ 1,163 Cash Defcasance $ 20,000 of the 1982 Series A 2,763 2,026 1986 A&B Refunding 5 42,725 of the 1980 Series A $ 42,000 of the 1981 Series A 5 61,000 of the 1981 Series B $ 4,420 of the 1981 Series C $ 7,820 of the 1982 Series A 5 9,010 of the 1982 Series B 43,736 2,939 1986 C&D Refunding $280.275 of the 1982 Refunding Series 97.109 81,689 1987 A Refunding $160,510 of the 1985 Refunding Series 160,510 48,038 36,824 1988 A Refunding 5 18,220 of the 1980 Series A 5 18.315 of the 1981 Series A $ 9,110 of the 1982 Refunding Series $ 5,000 of the 1985 Refunding Series $120,890 of the 1985 A Refunding Series 125,890 28,644 17,950 1991 A,B&C Refunding & 5 4,855 of the 1980 Series A Improvement Series 5 8,075 of the 1981 Senes A 5 13,500 of the 1985 Series 5 32,500 of the 1985 A Refunding Series 32,500 4,856 1,430 1992 A Refunding 5 3,370 of the 1985 Refunding Series 5 5,405 of the 1985 A Refunding Series 5100,010 of the 1986 Refunding Series A 5 22,555 of the 1988 Refunding Series A 5 15,370 of the 1991 Refunding Series B $ 12,085 of the 1991 Series D 158,795 42,188 37,615 1993 A&B Refunding $ 86,180 of the 1974 Series 5 93,360 of the 1979 Series A $ 4,980 of the 1985 A Refunding Series 5 14,935 of the 1986 Refunding Series A 5 23,675 of the 1986 Refunding Seri-s B 5135,705 of the 1991 Refunding & improvement Series B and C 179,295 38,870 38,870 1993 C Refunding $167,660 of the 1977 Refunding Series 5 900 of the 1985 Refunding Series $ 2,390 of the 1985 A Refunding Series $ 6,365 of the 1986 Refunding Series A 5 14,905 of the 1988 Refunding Series A 5100,110 of the 1991 Refunding & Improvement Series B and C $279,905 of the 1991 Series D 404,575 72,311 70,457 Total $ 1,061,565 5 409,085 5 290,963 The Authorirfs bond indentures provide for certain restrictions, Authority's electric system and all necessary repairs, replacements, the most significant of which are: and renewals thereof.

1. The Authority covenants to establish rares sufficient to pay all 2.The Authority is restricted from issuing additional parity bonds debt service, required lease payments, capital improvement fund unless certain conditions aie met, requirements and all costs of operation and maintenance of the As of December 31,1994, the Authority is in compliance with all debt covenants.

Note 6 Commercial Paper and Mini Bonds: used to support the Authority's issuance ofcommercial paper. There The Board of Directors has authorized the issuance of commercial wcre n bormwings under the agreement during 1994 or 1993 paper not to exceed $250,000,000. The paper is issued for valid In 1988 and 1989 the Authority issued bonds (Mini-Bonds) in corporate purposes with a term not to exceed 270 days. For the years small den minations which are due on demand by the iegistered ended December 31,1994,1993, and 1992, the information rekated wner under a Mini-Bond Resolution. In 1990 the Revenue Bond to commercial paper was as follows: Remlution was adopted and all senior debt including the existing 1988 and 1989 Mini-Bonds were freaen except for Refunding purposes. Under the Revenue Bond Resolution, small denomination 1991 1993 1992 bonds due on demand (Series M Bonds) were issued.The pledge of revenues securing Revenue Bonds is junior and subordinate to the M'"i*' iSC" '8t* pledge ofrevenues securing the Priority Obligations, Elearic System (at December 31) 199% 2.52 % 2.69 % Expansion Revenue Bonds, and the 1988 and 1989 Mini-Bonds and Average annual amount capital lease bligations, but is superior to the lien and pledge of outstandmg $108.5'2,000 $117,700,000 $115,410,000 revenues securing the Commercial Paper, payments to the Contingency Fund, Capital Impmvement Fund, Special Reserve Average annual maturity 62dap 52 days 62 days Fund and the payments to the State. At December 31,1994, the Authority had additional Revolving A**'*E' """"'I '"*" Credit Agreements with NationsBank totalling $40,000,000.These mterest rate . 90% 2.40 % 2.96 % agreements are used to provide h.quidity for the put feature on all outstanding Mini. Bonds. There were no borrowings under these At December 31,1994 the Authority had a Revolving Credit agreements in 1994 or 1993. Agreement with NationsBank for $250,000,000. This agreement is Commercial Paper and Mini-Bonds outstanding at December 31, are as follows: 1991 1993 (Thousands) Commercial Paper.. $ 118.700 $ 108,250 Mini-Bonds: 1988 Series, bearing interest at 7.75% and due 2003.. 16 M $ 16,622 1989 Series, bearing interest at 7.00% and due 2004.. I8.95 18.615 Total Mini-Bonds.. 5 35.522 5 ;,3,237 Revenue Bonds (Series M): 1990 Series bearing interest at 7.30% and due 2005, and 2006.. s 22.602 $ 22,185 1991 Series bearing interest at 6.875% and due 2007, and 2008.. 28.105 28.030 1992 Series bearing interest at 6.25% and due 2007,2008, and 2009. 40.231 39.816 1993 Series bearing interest at 5.35% and due 2010,2011, and 2012.. 29.7 0 29,597 Total Revenue Bonds (Series M).. 5 120,9'8 $ 119,628 Total Mini-Bonds and Revenue Bonds (Series M) s 156.500 $ 154.865 Total Commercial Paper, Mini-Bonds, and Revenue Bonds (Series M).. 5 273.200 $ 263,115 Note 7 Summer Nuclear Station: Nuclear Station, and the Authon.ry is obligated to pay its ownersh.ip The Authority and South Caniina Electric and Gas (SCE&G) are share of all costs relating thereto.The Authority receives 331/3% of parties to a joint ownership agreement providing that the Authority the net electricity generated. At December 31,1994 and 1993, the and SCE&G shall own the Summer Nuclear Station with undivided plant accounts included approximately $440,604.000 and interests of 331/3% and 66 2/3%, respectively. SCE&G is solely $438,514,000,respectively representingthe Authority'sinvestment, responsible for the design, construction, budgeting, management, including capitalized interest, in the Summer Nuclear Station. For operation, maintenance, and decommissioning of the Summer each of the three years ended December 31,1994,1993 and 1992,

the Authority's operation and maintenance expenses included associated with replacement energy during the Summer Nuclear $36,393.000, $38,772,000 and $41,431,000, respectively, for the Station refueling outages. Deferred credits applied to fuel costs Summer Nuclear Station. during 1994 totaled $185,000. Nuclear fuel costs are being amonized based on energy expended The Energy Policy Act of 1992 gave the Department of Energy which indudes a component for estimated disposal costs of spent (DOE) the authority to aness utilities for the decommissioning ofits nuclear fuel. This amortization is included in fuel expense and is facilities used for the enrichment ofuranium included in nuclear fuel recovered through the Authority's races. costs. In order to decommission these facilities the DOE estimates SCE&G has an on-site spent fuel storage capability until at least that it would need to charge utilities a total of $ 150,000,000, indexed 2008 and expects to be able to expand its storage capacity to for inflation, annually for fifteen (15) years based on enrichment accommodate the spent fuel output for the life of the plant through services used by utilities in past periods. Based on an estimate from rod consolidation, dry cask storage or o,her technok>gy as it becomes SCE&G cmering the fifteen years, the Authority 's remaining one-available. In addition, there is sufRcient on site storage capacity over third share of the liability at December 31,1994 totals $1,961,000. the life of Summer Nuclear Station to permit storage of the entire Such amount has been deferred and will be recovered through rates reaaor core in the event that complete unloading should become as paid. These costs are included on the balance sheet in Deferred desirable or necessary for any reason. Credits and Other Noncurrent Liabilities. The Nudcar Regulatory Commission (NRC) has published fmal The maximum liability for public claims arising from any nuclear regulations on decomsioning of nudear facilities that require a incident his been established at $9.4 billion by the Price-Anderson licensee of a nuclear reactor to provide minimum fmancial assurance Indemnification Act. This $9.4 billion would be covered by nuclear ofits ability to decommission its nuclear facilities. In compliance liability insurance of about $200 million per site, with potential with the applicable NRC regulations, the Authority established an retrospective assessments of up to $79.275 million per licensee for external trust fund and began making deposits into this fund in each nudear incident occurring at any reactor in the United States September 1990. In addition to providing for the minimum (payable at a rate not to exceed $10 million per incident, per year). requirements imposed by the NRC, the Authority makes deposits flased on its one-third interest in Summer Nuclear Station, the into an internal fund in the amount necessary to fund the difference Authority would be responsible for the maximum assessment of between a site-specific decommissioning study completed in 1"91 $26.425 million. not to exceed approximately $3.3 million per incident, and the NRC's imposed minimum requirement. Santee Cooper's per year. This amount is subject to further increases to reflect the effect one-third share of the estimated decommissioning costs of the of (i) inflation, (ii) the licensing for operation of additional nuclear Summer Nuclear Station equals appmximately $76,266,000 in reactors and (iii) any increase in the amount of commercial liability 1990 dollars. The Authority accrues for its share of the estimated insurance required to h maintained by the NRC. decommissioning costs over the remaining life of the facility. These Additionally, SCE&G and the Authority maintain with American cosw being recovered through the Authority's races. Nuclear insurers (ANI) and Nuclear Electric Insurance Limited Based on current decommissioning cost estimates developed by (NEIL) $500 million primary and $1.4 billion excess property and SCE&G. tiese funds, which totalled approximately $26,076,000 decontamination insurance to cover the costs of cleanup of the (adjusted to market) at December 31, 1994, along with future facility in the event of an accident. In addition to the premiums paid deposits into both the extemal and intenui decommissioning accounts on the excess policy, SCE&G and the Authority could also be and investment earnings, arc estimated to provide sufRcient funds for assessed a retroactive premium, not to exceed 7.5 times the annual the Authority's one-third share of the total decommissioning costs. premium,in the event of property damage to any nuclear generating Due to stress corrosion cracking. the steam generators at the facility covered by NEIL Based an che current annual premium and Summer Nuclear Station had to be replaced. SCE&G had fled suit the Authority's one-third interest, the Authority's maximum retroactive against the manufacturer of the generators seeking damages for the premium would be $4.1 million. replacement of the generators. The Authority is self-insured for any retroactive premium in January 1994 SCE&G and the Authority reached a settlement assessments, claims in excess of stated coverage, or cost increaves due agreement with the manufacturer of the steam generators resolving to the purchase of replacernent power. the dispute involving the steam generators. Terms of the settlement will remain confdential and there will be no material adverse impact on the Authority. An order dismissing this suit was entered by the judge on January 12,1994. The generators were replaced in 1994. The Authority has capital lease contracts with Central Electric The supplier under the originat uranium supply contract breached Power Cooperative, Inc. (Central), covering a sicam electric generating the contract in 1975 due to uranium market conditions. SCE&G plant, transmission facilities, and various other facilities. The lease initiated action seekingspecific performance of the contact provisions, terms range from one to twenty-one years. Quarterly lease payments and a fmal settlement was reached and approved by all parties in April are based on a sum equal to the interest on and prindpal of Centrafs 1980. By terms of the serdement, the Authority has received indebtedness to the Rural Electrification Administration for funds approximately $10,243.000 in cash as partial settlement of the horrowed to construct the above-mentioned facilities.The Authority lawsuit. Additionally, the agreement provides fordelisery ofuranium, has options to purchase the leased properties at any time during the long-term deliveries ofequipment and services (including conversion period ofthe lease agreements for sums equal to Centrafs indebtedness and fuel fabrication) at a discount.The cash and discounts received remaining outstanding on the properties at the time the options are (and related interest earned) which approximated $ 17,429.000, were exercised or to return the properties at the termination of the lease. recorded as deferred credits. During prior refueling outages deferred The Authority plans to exercise each and every option to acquire credits and related interest were used to offset additional fuel costs ownership of such facilities prior ro expiration of the leases.

Future minimum lease payments on Central leases, at December NrAue Commitments-The Authority has contracted for long-term 31,1994 were: malpurchases under contracts with outstanding mininmm obligations at December 31,1994 as follows: Years ending December 31: Amount (Thousands) Years ending December 31: Amount (Thousands) 1995 5.23* 1996 5,229 1995- $ 104,476

1997, 5,229 19%.

104.476 1998. 5,19g 1997. 104,476 1999-4,802 1998 85,074 Thereafter - 41,602 1999. 85,074 Thereafter.. 282,552 Total minimum lease payments. 67,293 Less amounts representing interest.. 17,845 Tota!.. $ 766,128 Balance at December 31,1994 5 49,448 The Authority's outstanding minimum obligations under existing Property under capitalized leases and related accumulated purchased power contracts as of December 31,1994, were amortization included in utility plant at December 31,1994 totalled approximately $117.1 million. He terms of the contracts range 599,628,000 and $59.002,000, respectively, and at December 31, rmm I to 41 years. 1993 totalled $100,207,000 and $56,672,000, respectively. HeAuthorityhascommitmentsofapproximately$140.3 million Operating lease payments during the years ended December 31, f r its one-third share under the joint ownership agreement with 1994,1993, and 1992, totalled $ 1,116.000, $753,000, and SCE&G for the purchase, conversion, enrichment and fabrication of $1,021,000, respectively. uramum. Clean Air Aer-The Authority endeavors to ensure that its facilities Note 9 Contract with Central Electric Power Cooperative, Inc.: mmply with applicable environmental regulations and standards. Congress has promulgated comprehensive amendments to the Power supply and transmission services are provided to Central in Clean Air Act, including the addition of a new federal pmgram accord 2nce with a power system coordination and integration relating to acid precipitation. The Authority has evaluated the agreement. In addition, the Authority will be the sole supplier of potential impact of this legislation, including new limits on the Centrars energy needs excluding energy Central receives from the allowable rates of emission of sulfur dioxide and nitrogen oxide. Southeastern Power Administration and SCE&G. While the legislation contains a number of new restrictions, the most significant new requirements, relating to acid precipitation, would Note M Commitments and Contingencies: n t begin to impact the Authority until the year 2000. Under the Clean Air Act, among other things, specific reductions Budget-The Authority's capital budget provides for expenditures of in sulfur dioxide and nitrogen oxide emissions from fossil-fueled approximately $ 139,454,000 during the year ending December 31, generating units will be required in two phases. In general, Phase 1 1995, and $168,085,000 during the two years thereafter. Rese compliance must be implemented by January 1,1995 and Phase !! projects will be financed by internally generated funds and additional compliance by January 1, 2000. Specific regulations, rules and borrowings. procedures for implementing the Clean Air Act are currendy being Futwr Generation - The Authority's Board of Directors approved the promulgated by the EPA. The Authority currendy projects it can construction ofa second 540-megawatt coal-fueled electric generating meet Clean Air Aa mmpliance with its existing units but may need unit at the Cross Plant. m envir nmentally disparch the order of operation. The Authority He estimated cost ofconstruction is expected to total approximately has installed conrinuous emissions monitoring equipment at a cost of $460.7 million which includes $417.9 million for the generating $5.3 milli n and estimates that it will spend $f.1 million for h>w unit, $25.9 million for related transmission facilities, $9.9 million for nitrous xide hurner technology by the year 2900. coal cars and $7.0 million for the initial coal stockpile. On September 12.1994 at 12:03 a.m., Cross Unit I was synchronized to the Santee Eneqy Po/ icy Act ofl992-He Energy Iblicy M of 1992 (Energy ^"I

• • • • 5

'"*'EY 'I'Ci'"'Y' "I*^55** f"'I "'.e, W increased Cooper transmission grid and produced its first test generation. P Commercial operation is expected to commence in May 1995. mmpetition f r cleanc unhnes and will have a s,igmficant in ipact on the utility industry. Under the Energy Act, Independer; Power Producers (IPPs) are allowed access to a utility's transmssion lines to selltheirelectricityeootherutilities,thusenhancingtheirincentive o build generation plants for the utility's large industrial and commercial cusromers. At this time, the Authority is not able to determine what impact open transmission access will have on the fmancial results of the Authority.

hyaA Turbine Fire - On December 30,1994, an explosion and on an actuarially determined basis. As of December 31,1994, there subsequent fire severely damaged the Winyah Unit I turbine generator were 37 active participants and 23 retirees. The accrued liability at causing approximately $25 million in damage to the 270-megawatt December 31,1994,1993 and 1992, was appmximately $3,572,000, unit. The turbine generator will be repaired and is expected to be out $3,255.000, and $2,956,000, respectively. of service for 12 months. Insurance carried by the Authority should insulate ratepayen from any impact of paying for repairs, with the Note 12 Other Post-Retirement Benefits: exception ofthe $405,000 deductible. Because the new 540-megawatt ne Authority pmvides certain health, dental and life insurance unit at Cross is ahead of schedule, the Authority does not anticipate bene 6a for retired employees. Substantially all of the Authority's difficulty in meeting customer load. employees may become eligible for these benefits if they retire at any age with 30 years ofservice or at age 60 with at least 20 years ofservice. Note 11 Retirement Plan: Currendy, approximately 270 retirees meet these requirements. The cost of the health, dental and life insurance benefits are recognized as Substannally all Authon.ty full-time employees must participate in expense as the premiums are paid. For theyears ended December 31, one of the components of the South Carolina Retirement System 1994,1993 and 1992, these costs totalled $558,000, $515,000 and (System), a cost-sharing, multip e-employer pubh.c employee l $371,000, respectively. retirement system. The payroll for employees covered by the System During their fint ten years ofservice, full-time permanent employees for each of the years ended Decernber 31,1994,1993 and 1992, wa, can cam up t 15 days vacation leave per year. After ten years of $69,705,000, $65,727,000 and $61,558,000, respecw.4 semce, empf yees earn an ad&nonal day vacation leave for each year Vested employees who retire at age 65 or with 30 years ofsemce at f mwce ver ten until they reach the maximum of 25 days per year. any age are entit!cd to a retirement benefit, payable monthly,r life, Prnployees earn annually a halfday per month plus three adinonal The annual benefit amount is equal to 1.82 percent of their wevge days at year end for sick leave. final compensation times years of service. Beneics fully vest on t p yees may cany f rward uP to 45 days ofvacation leave and l reaching five years ofservice. Reduced retirement benefn ace payaMe 18L Q f sick leave from one calendar year to the next. Upon as early as as;c 55. The System also provides death and disanitity tern.nati n, the Authority pays employees for accumulated vacation benefits. I enefits are established by state statute. leavs at the pay rate then in effect. In addition, the Authority pays Employees are required by stare statute to contritree 6 percent of salary.The Authority is required by the same statute to coraribute emph yees upon retirement 20 percent of their accumulated sick leave at se pay rate then in effect. These costs are carried as a deferred debit 7.55 percent of total paymil.The contribution requirement for each and a h ibility on the balance sheet and will be recovered through rates of the years ended December 31,1994,1993 and 1992, was $5,370,000, $5,063.000, and $4,742,000 from the Authority and as they are paid. 54,183,000, $3,944,000, and $3.689,000 from employees. An actuarial valuation is icformed for the System annually. Noir 13 Credit Risk and Major Customers: According to the South Carolina detirement System's June 30,1994 financial statements, the pension t enefit obligation for retired and Concemrations of credit risk with respect to the receivables are active members was approximately 113.8 billion.The amortized cost limited due to the large number of customers in the Authority's ofassets ofthe System was approximely $ 10.4 billion. The unfunded cuswmer base and their dispersion across different industries. The pension obligation was approximately $3.4 billion. The pension Authority maintains an allowance for uncollectible accounts bami benefit obligation is a standardized measure of the present value of upon the expected collectibility of all accounts receivable. pension benefits, adjusted for the effects ofprojected salary increases, maj r cust mers for the years ended December 31, Sales t tw estimated to be payable in the future as a result ofemployee service to date. The measure, which is an actuarial present value of credited projected b:nefits, is intended to help users assess the System funding status on a going <oncern basis, assess progress made m accumulating sufficient assets

tty benefits when due, and make comparisons (Thousands) among public empioyce retirement systems. H.e S.ystem does not make separate raeasurements of assets and benefits payable for Central Electric Power individual employers. The Authority's contribution represented Cooperative, Inc.

5 28.000 $ 277,000 $ 236,000 approximately one and a half percent of the total contribution to the Alumax of South System. Carolina, Inc. 5 71,000 $ 72,000 $ 82,000 Ten-year historical trend information showing the System's progress in accumulating sufficient assets to pay benefits when due is presented in the System's June 30, 1994 Comprehensive Annual Financial Report. The Authority also provides deferred compensation benefits to certain employees who are eligible to ret re with ten years of service i and have reached the age of 50. The cost of these benefits is accrued

AUDli COMMITTEE CH AIRM AN'S LETTER The Finance-Audit Comminee of the lhurd of Directors is compmed of five independent directore Iron S. Goodall, thairman; ILI Elendricks; D. Gene Rickenbaker: J. Mac Wahers; and Johnnie (Joe) Young. T'ie Committee meets monthly with memtwrs of nunagement and Internal Audit to review and discuss their activities and responsibilities. The Finance-Audit Committee oversees Santee Cooper's financial reporting and internal auditing pnwcwes on behalfof the Ikurd of Directors. Monthly briefings on the financial statements and periodic reports from management and the.nternal auditors pertaining to operations and representations were received. In fulfilling its responsibilities, the Commit-tee also reviewed the overall scope and specific plans for the respective audits by the internal auditors and the independent public accountant.The Committee discussed ihe Company's financial statements and the adequacy ofits srstem of internal controh. The Committee met with the independent public accountant and with the General Auditor, without management present, to discuss the resuhs of the examination, the evaluation of Santee Cooper's internal controls, and the overall quality of Santee Cooper's financial reporting. uun s.Gooaaii Chairman Finance-Audit Committee

BOARD OF DIRECTORS .i. ....l ,.o g 4,;i."

.'1:~ fy.

y ,..y G +' f e. John S. Itainey Chairma n \\ ^ i 5- 'f ":\\ j g {r _ w Robert D. llennett icon S. Goodall l'rst t' ice c Anrman Second \\'uc Chiirman s Repraentiils Hearic Coycratives Represenn 2nd Congroswna! Distri, t

• j J_-

A, 's p l h4 I ./ ,j

J 4

~ ^

m. ~

4 e Juanita W. thown Ralph 11. IJlis Reprnents ist Congroswnal()istria Repreenn livrry ('ounty

I,# wn _6{ t G Y$(igjly e W b ^- { l b" s e J. Mac Walters 11.I... Hendricks Represents 4th Congres>ional District Represents 3rd Longresswnal District g'W -' g -.- u%f;a;:y 4 _ ..p. f a ' i n L John D. Trout D. Gene Rickenbaker Repre>cnn Berkeley County Represents 5th Gmgrenior:alDistria ..j, .f ]'4. ; CHANGES IN THE BOARD .g ^ W. Mehin lirow n represented the 6rst congrewional district I ~ on Santee Cooper's lloard of Directors froin July 1993 until his death in June 1994.1 lis wife, Juanita W. Brow n, t;-l was appointed to fill his un-A ':E expired term. lier con 6rnution !.'. + 4 by the state Senate is expected ~y> [,5 in early 1995. 4 = ,.Y.'y Y Rf Ilenry 11. Rickenbaker J. Joseph Young krprr><nts 6th Congrenional Dutru t Repre>ent, Georgetown County

ADVISORY BOARD MANAGEMENY Carroll A. Campbell Jr.* T. Graham Edwards Robert E Petracca Gmrrnor nnident and Vice lyesident b" 'E 'E James h1. h1iles Secretary ofState Robert V. Tanner Byron C. Rodgers Jr. Cl>iefOperating Oficer Vice hrsident T. T,ravis hiedlor A* Erigiriceririg arid Atorney General Bill hicCall Jr. Gnutruction Afanagement Executiir Vice President Earle E. Almris /&oduction Jerry L Stafford Comptn>ller General y 3,, jygjg,,,, Corporate Communications Grady L Patterson Jr.* E.tecurne 1,ur nrsident "'N""'" Engineering and Operations William R. Sutton Vice 19esident \\ John H:liencken ]r. 111nning and Pourr Supply Evecume 17ce 1%ident CHANGES IN THE General Counsel LE " Butch" Volf ADVISORY DOARD g 74,jg7,,, Emily S. Brown S stem Operations

• In South Carolinis J

Senior L, ice nrsident November general Adminiureniori and Finamr Elaine G. Peterson election. David A1. Controller Alfred Calafiore* Beasley was elected Senior 17ce Arsident

11. Roderick h1urchison gwrnor: Charles A1.

fy,,,,,j,ig arid Bull Pauer Alarlets Treasurrr G.ndon was elected htaxie C. Chaplin W. Glen Brown auocney generah and Vice nesident Corporate Sarctary Richa-d Eckstrom was I&ndmtiori Opnatioris elected state treasurer. All were rworn-in on Zack W. Dusenbury CHANGES IN \\,w.e l>esident Jan. I1.1997. MANAGEMENT jf, p ,,, gj,,j,jy,, Ronaki i1. I tolmes

• In February 1995, 17ce lynidern Alfred Calafiore joined

//uman Raounrs the executive manage-ment stafTas senior vice president of Planning and Bulk Power Alarkets. e

SCNEDULE OF BONDS OUTSVANDING As of Daember 31. lW) (in ~1houunda 1985 1985 A 1986 A88 MATURITY 1967 1973 1974 1977 1978 Il79 A REFUNDING REFUNDING REFUNDING DATE SERIES SERIES SERIES SERIES SERIES SERIES SERIES SERIES SERIES JulV 1 lot Rate Amt Int Rale Amt Int Rate Amt Int Rate Amt mi Rate Amt Int Rate Amt int Rate Amt int Rate Ami lot Rate Amt 1995 410 2720' 5 '. 1795' 6 40 2 035 5 30 785 5 30 1 515 605 1490 8 40 765 8 20 2 425 740 6580 1996 410 2845' 51 1900' 6 40 2 155 5 40 830 5 35 1585 8 60 825 8 40 2 030 7 'h 7 645 1997 410 2975' 5 '. 2 010 5 45 800 5 40 1.670 7 60 7.995 1998 410 3105* 5 ". 2.12 ? 57 935 5 40 1.760 770 5925 1999 4 10 3.245' 5. 2 245' 57 1.005 5 70 1.850* 2000 410 3395' 5'. 2.375' 5.55 1.065 5 70 1940* 2001 410 3545' S t. 2 510' 5 60 1.130 5 70 2.045' 2002 410 3705' 5. 2 655' 5 60 1 220 5 70 2 145* 2003 410 3870* 5% 2 810' 5% 1.295* 5 70 2260' 2004 410 4045' 5. 2 970' 5% 1380' 5 70 2.380' 2005 410 4230' 5'. 3 140' 5'. 1 460* 5 70 2.500* 2006 410 4420' 5'. 3 325' 5 '.. 1 570* 5 70 2.630' 2007 5. 3 515' 5% 1.795* 5 70 7,385* 2008 5'= 3 715' 5% 1 945" 5 70 7.845' 2009 57. 3 930' 5% 2 080* SW 8 330* 2010 5'. 4 155' 5% 2 225' 5h 8 845" 2011 5s. 11 520' SS 2.180' 5% 9 390* 2012 5 12 180' 5% 2 300' 54 9 980* 4 2013 5 12 880' 5% 2.500" 5W 10.590' 2014 5% 2 640' 5a 11250' 2015 5 % 21.065' 5% 11 950' 2016 5 % 21 235' 5% 12 555' 2017 5 '. 34.580' 5 '.. I3 190' 20t8 5'. 50 600' 2019 2020 2021 2002 2023 2024 2025 2026 2027 2028 2029 2030 20; 2032 Ac1 T;Lir Outstandmg As of 12 3194 42 1 % 81 755 4 190 108 110 t 66190 1 430 1 590 4 455 28 145 Bonds Redm ed As r)1231 9 -, 530 18 245 18 630 6 8't0 13 810 13 585 4 B45 7 225 22 825 Bu ds DefundN n As of '2 31 N 0 O 86 130 0 0 94 925 169 780 166 165 144 985 Less AmeM Vuue As tf 12 3194 Net Ong ra !;sse Ac t 51 600 1 JC ff, 109 r/y]

5 M 200 DJC 117 000 176 215 177 845 195 955 FOOTNOTES

• Tern Bonds (3) T!mse a e fta! og auttaen tarement FF LCATs j antt (4) S10 210 000 are senal bands and 59 000 000 are tem teds e*T UPOd;#afA I "G N liPdS

) l 1 Cy that payment 15 made bCluWe 01 f unded and 11 l S a P mse ~m,, m mmd 5 % ~ oe mose (2) Mat; ms are on Jawn 1 trsNd of Jut,1 oth a f,tal rr.funN of 6.2S'2013 nur Deta is on Cans Sec Sonedule of Refunded Bonds Octstand og ")

SCHEDULE OF REFUNDED BONDS OUTSTANDING As of Decemha 31,1+4 (In Thousands) I CALL DATE JULY 1.1995 JANUARV 1.19J6 JULY 1.1996 JULY 1,2001 JULY 1,2002 SERIES 1985 REF 1985 A REF 1988 A REF 1986-A & B REF 1991 B&C REF 1991 0 OR t Rate Amount Rate Amount Rate Amount Rais Amount Rate Amount Rats Amount , y 04tf JULY 1 1995 1996 1997 8 80 900 8 60 2 390 1993 9 00 1 060 8 70 4 980 1999 9 05 1.160 8 75 5 405 7 80 6.365 2000 9 10 1.t 50 7 80 13 200 2001 7 90 835 6 60 15 370 5 90 5.870 2002 7 90 900 6 00 6.215 2003 9 00 32.500* 8 00 4.695 2004 8 00 5.070 2005 9'. 5 000* 8 00 5.475 2006 8 00 5 910 2007 8 10 6,390 7 00 4 025 2008 8 10 6 905 2009 7 00 8915* 2010 2011 2012 7W 25 610* 2013 2014 2015 7016 2217 2018 2019 8 00 65,565* 2020 7 00 23 675* 2021 9 20 120 890* 7~s 37 460* 7 10 135 705* 202' 9 160 510 2023 2024 6 50 130 275* 20^5 2025 6 '. 61.560* 202' 2C2' 2029 2030 2031 6% 149 630* Totes per $169 780 5166 165 537 460 $144 985 5251 185 $291990

See, Toles L+r Ctl

$335 945 $37 460 $144 985 5251 185 $291990 Date

• Term Bonds

1986 C&D 1987 A 1988 M 1988 A 1989 M 1990 M 1991 A 8&C 1991 M REFUNDING REFUNDING MINI-BOND REFUNDING MIN 180ND MINI BOND REFUNDING 8 MIN 180ND 1991 0 4 SERIES SERIES SERIES SERIES SERIES SERIES IMPROVEMENT SERIES SERIES SERIES Int Rate Amt. Int Rata Amt in1. Rate Amt. Int Rate Amt int Rita Ami Int Rate Amt. Int Rate Amt Int Hala Amt. Int. Rafa Amt. 6 20 1 095 5 90 1 080 7 00 1.840 6 00 18 480 6 40 1.160 5 90 1 140 700 3895 6 60 1 235 6 00 1.205 7 00 4 155 5 30 4.730 6 70 1 320 6 10 1 280 7 10 6 635 6 ". 2 935 5 50 4 980 6 80 1 400 6% 1.350 7.20 7.110 6.30 3 120 .' s 5.255 6 90 1 505 6 40 1 435 7 30 7.650 6.40 4 205 5 80 5 550 7 00 1.605 61 2 875 7 40 8 220 7 05 1.715 6 '/ 4.233 7 40 13 520 6 70 6 240 7 10 3 510 6 60 4575 7u 16 547 7 50 330 7.10 4 920 6S 20.390 7 50 365 7 00 18 975 (1) 7 10 5265 6 a 16 795 7 60 5 385 7 30 15.409 7 20 5 625 6t 2 350 7*. 320' 7 30 7.193 (1) 7 00 3.760 6 40 6 590 7 20 6 000 6t. 2 525 74 340' 6% 20 759 7 00 6 415' 6 '.' 2 715' 72 365' 61, 7 646 II) 7 00 6 850-6', 2 925' 7. 395* 7 00 7.310' 6i 3.140' 7s 420* 7 00 6C25' 6 ': 3 380' 7 ". 460-6 50 7.010' 2 7 00 6 430-67 3 625' 7. 490' 6 50 7.470' 7 30 6 870' 6 90 3 880' 7 v. 525 6 50 7,955' 7 30 7915' 6 90 4 150' 7'. 7315' 6 50 8.470' 7 30 8 145' 6 90 4 465-7. 8 210* 7 30 20 430' 6 90 4 735' 7T 275' 730 21S.'5' 6 90 5 160* 7 ', 300* 7.30 23 425 6 90 5 575* 7-325' 7 30 25 030' 6 90 6 030 7i 19 610' 7 30 27 005' 6 90 6 523 7 25 995-7 30 56 985 6 90 7040' 7 23 945 6% 62 325' 7 00 61 023 6 00 1? 120-6 00 12 850' 6 00 13 620' 6 00 14 435' 6 00 15 300* 323 443 185 695 16 547 143 395 18 97541) 22 602 O ) 107 065 28 405(1) 58 010 6 90 6%5 465 2 720 377 363 12 160 286 0 0 0 0 37 460 0 0 251 185 0 291.990 1.881 1 P97 1 533 335 630 192 660 17 y2 158 575 17471 21 068 370 410 27158 350.000

SCHEDULE OF REFUNDED BONDS OUTSVANDING As of Desember 31, IW4 (in Thouunda r-CALL DATE JULY 1,1995 JANUARY 1.1996 JULY 1,1996 JULY 1. 2001 JULY 1. 2002 SERES 1985 REF 1985 A REF 1988 A REF 1986 A & B REF 1991 BSC REF 1991-D OR Rate ArNum Rate Amount Rats Amount Rate Amount Rate Amount Rate Amcuni cATE JULY 1 1995 1996 1997 8 80 900 8 60 2.390 g 1998 9 00 1.000 8 70 4 980 M 1999 9 05 1160 8 75 5 405 7 80 6 365 2000 9 10 1 150 7 80 13.200 2001 7 90 835 6 60 15.370 5 90 5 870 2002 7 90 900 6 00 6.215 2003 9 00 32 500* 8 00 4 695 2004 8 00 5.070 2005 9 n. 5 000* 8 00 5 475 2006 8 00 5 910 2007 8 10 6 390 7 00 4 025 2008 8 10 6 905

1. 9 7 00 8 915'

' ~ 2010 2011 2012 7 00 25 610* 2013 20f4 2015 2016 2317 20f8 2019 3 00 65 565* 2020 7 00 23 675* m 2021 9 20 120 390-7 37 460* 7 10 135 705* 2022 9-160 510' 2023 2 24 6 50 130.275* 2025 2026 65 61 560* 202' 2028 20?9 2030 C' 6*. 149 630* TJtais ger $169780 $166165 $37 460 $144 985 1251 185 5291 990 wws Totaps Pef Cai: $335 945 $37 460 $144 985 5251.185 $291.990 Cate

• Tern 89 rids

---

mm a

m-immimumi

For AdditionalInforrnation

Contact:

Jerry L. Stafford, Vice President Corporate Communications Santee Cooper One Riverwood Drive Moncks Corner, S.C. 29461-2901 (803) 761-4051 Editor Bah Oliwr/Sintee Cooper 1%:ographer Jim Huff /Santer Cooper Writers Bah Oliwrand WillardStrong / Santee Cooper Designer Ise Hebner /Adwrtising Service Agency

e A NSantee fCooper One Riverwood Drive Moncks Corner South Carolina 29461-2901}}