SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

6 Months Ended

Jun. 30, 2014

Significant Accounting Policies

Significant Accounting Policies [Text Block]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Plant to be Retired

As previously disclosed, in 2012 SCE&G identified six coal-fired units that it intends to retire by 2018, subject to future developments in environmental regulations, among other matters. These units had an aggregate generating capacity (summer 2012) of 730 MW. Three of these units had been retired by December 31, 2013, and their net carrying value is recorded in regulatory assets (see Note 2). The net carrying value of the remaining units is identified as Plant to be Retired, Net in the condensed consolidated financial statements. SCE&G plans to request recovery of and a return on the net carrying value of these remaining units in future rate proceedings in connection with their retirement, and expects that such deferred amounts will be recovered through rates. In the meantime, these units remain in use and in rate base, and SCE&G depreciates them using composite straight-line rates approved by the SCPSC.

Earnings Per Share

The Company computes basic earnings per share by dividing net income by the weighted average number of common shares outstanding for the period.  The Company computes diluted earnings per share using this same formula after giving effect to securities considered to be dilutive potential common stock utilizing the treasury stock method.  The Company has issued no securities that would have an antidilutive effect on earnings per share.

Reconciliations of the weighted average number of common shares for basic and diluted earnings per share computation purposes are as follows:     

	Second Quarter		Year to Date
Millions	2014	2013	2014	2013
Weighted Average Shares Outstanding - Basic	141.7	139.6	141.4	137.0
Effect of dilutive equity forward shares	—	—	—	0.9
Weighted Average Shares - Diluted	141.7	139.6	141.4	137.9

Asset Management and Supply Service Agreements

PSNC Energy utilizes asset management and supply service agreements with counterparties for certain natural gas storage facilities.  Such counterparties held 41% and 48% of PSNC Energy’s natural gas inventory at June 30, 2014

and December 31, 2013, respectively, with a carrying value of $15.8 million and $22.8 million, respectively, through either capacity release or agency relationships.  Under the terms of the asset management agreements, PSNC Energy receives storage asset management feesof which 75% are credited to rate payers. No fees are received under supply service agreements. The agreements expire March 31, 2015. 

New Accounting Matter

In May 2014, the Financial Accounting Standards Board issued new accounting guidance for revenue arising from contracts with customers that supersedes most current revenue recognition guidance, including industry-specific guidance. This new revenue recognition model provides a five-step analysis in determining when and how revenue is recognized, and will require revenue recognition to depict the transfer of promised goods or services to customers in an amount that reflects the consideration a company expects to receive in exchange for those goods or services. The Company will be required to adopt the new guidance in the first quarter of 2017, and early adoption is not permitted.  The Company has not determined the impact this guidance will have on its results of operations, cash flows or financial position.

SCEG

Significant Accounting Policies

Significant Accounting Policies [Text Block]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Variable Interest Entities

SCE&G has determined that it is the primary beneficiary of GENCO and Fuel Company (which are considered to be VIEs) and, accordingly, the accompanying condensed consolidated financial statements include the accounts of SCE&G, GENCO and Fuel Company. The equity interests in GENCO and Fuel Company are held solely by SCANA, SCE&G’s parent. Accordingly, GENCO’s and Fuel Company’s equity and results of operations are reflected as noncontrolling interest in Consolidated SCE&G’s condensed consolidated financial statements.

GENCO owns a coal-fired electric generating station with a 605 MW net generating capacity (summer rating). GENCO’s electricity is sold, pursuant to a FERC-approved tariff, solely to SCE&G under the terms of a power purchase agreement and related operating agreement. The effects of these transactions are eliminated in consolidation. Substantially all of GENCO’s property (carrying value of approximately $473 million) serves as collateral for its long-term borrowings. Fuel Company acquires, owns and provides financing for SCE&G’s nuclear fuel, certain fossil fuels and emission allowances. See also Note 4.

Plant to be Retired

As previously disclosed, in 2012, SCE&G identified six coal-fired units that it intends to retire by 2018, subject to future developments in environmental regulations, among other matters. These units had an aggregate generating

capacity (summer 2012) of 730 MW. Three of these units had been retired by December 31, 2013, and their net carrying value is recorded in regulatory assets (see Note 2). The net carrying value of the remaining units is identified as Plant to be Retired, Net in the condensed consolidated financial statements. SCE&G plans to request recovery of and a return on the net carrying value of these remaining units in future rate proceedings in connection with their retirement, and expects that such deferred amounts will be recovered through rates. In the meantime, these units remain in use and in rate base, and SCE&G depreciates them using composite straight-line rates approved by the SCPSC.

New Accounting Matter

In May 2014, the Financial Accounting Standards Board issued new accounting guidance for revenue arising from contracts with customers that supersedes most current revenue recognition guidance, including industry-specific guidance. This new revenue recognition model provides a five-step analysis in determining when and how revenue is recognized, and will require revenue recognition to depict the transfer of promised goods or services to customers in an amount that reflects the consideration a company expects to receive in exchange for those goods or services. Consolidated SCE&G will be required to adopt the new guidance in the first quarter of 2017, and early adoption is not permitted.  Consolidated SCE&G has not determined the impact this guidance will have on its results of operations, cash flows or financial position.