nuclearform8-k.htm

0000754737-08-000024.txt : 20080530 0000754737-08-000024.hdr.sgml : 20080530 20080530115442 ACCESSION NUMBER: 0000754737-08-000024 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20080523 ITEM INFORMATION: Entry into a Material Definitive Agreement ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20080530 DATE AS OF CHANGE: 20080530 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SCANA CORP CENTRAL INDEX KEY: 0000754737 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC & OTHER SERVICES COMBINED [4931] IRS NUMBER: 570784499 STATE OF INCORPORATION: SC FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-08809 FILM NUMBER: 08869210 BUSINESS ADDRESS: STREET 1: 1426 MAIN ST STREET 2: MAIL CODE - 051 CITY: COLUMBIA STATE: SC ZIP: 29201 BUSINESS PHONE: 8032179000 MAIL ADDRESS: STREET 1: 1426 MAIN STREET STREET 2: MAIL CODE - 051 CITY: COLUMBIA STATE: SC ZIP: 29218 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SOUTH CAROLINA ELECTRIC & GAS CO CENTRAL INDEX KEY: 0000091882 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC & OTHER SERVICES COMBINED [4931] IRS NUMBER: 570248695 STATE OF INCORPORATION: SC FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-03375 FILM NUMBER: 08869211 BUSINESS ADDRESS: STREET 1: 1426 MAIN ST CITY: COLUMBIA STATE: SC ZIP: 29201 BUSINESS PHONE: 8032179000 MAIL ADDRESS: STREET 1: 1426 MAIN ST CITY: COLUMBIA STATE: SC ZIP: 29201 8-K 1 nuclearform8-k.htm NUCLEAR FORM 8-K nuclearform8-k.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D. C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): May 23, 2008

Commission	Registrant, State of Incorporation,	I.R.S. Employer
File Number	Address and Telephone Number	Identification No.

1-8809	SCANA Corporation	57-0784499
	(a South Carolina corporation)
	1426 Main Street, Columbia, South Carolina 29201
	(803) 217-9000

1-3375	South Carolina Electric & Gas Company	57-0248695
	(a South Carolina corporation)
	1426 Main Street, Columbia, South Carolina 29201
	(803) 217-9000

Not applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

This combined Form 8-K is separately filed by SCANA Corporation and South Carolina Electric & Gas Company. Information contained herein relating to any individual company is filed by such company on its own behalf. Each company makes no representation as to information relating to the other company.

Item 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT

On May 23, 2007, South Carolina Electric & Gas Company (SCE&G), a principal subsidiary of SCANA Corporation (SCANA), for itself and as agent for the South Carolina Public Service Authority (Santee Cooper), South Carolina’s state-owned utility (together, the “Owner”), entered an engineering, procurement and construction (EPC) contract for two Westinghouse AP1000 nuclear units to be constructed at the site of the V. C. Summer Nuclear Station near Jenkinsville, South Carolina.

See also our Form 8-K, Item 8.01, Other Items, dated April 1, 2008, which reported several developments related to SCE&G’s plans to continue to pursue the construction of new nuclear generating capacity. These included the announcement of the submission to the Nuclear Regulatory Commission (NRC) of a combined construction and operating license (COL) application and the filing with the Public Service Commission of South Carolina (SC PSC) of a letter of intent to submit a combined application under the South Carolina Base Load Review Act (BLRA), as well as the entry into an agreement authorizing the purchase of long-lead time materials for plant construction.

Under the terms of the EPC contract, Westinghouse Electric Company LLC and Stone & Webster, Inc., a subsidiary of The Shaw Group, Inc. (Westinghouse Electric Company LLC and Stone & Webster, Inc. together, the “Contractor”), will provide design, engineering, procurement, and construction services for two 1,117-megawatt nuclear electric-generating units. The work contemplated by the EPC contract will be conducted in two phases. Although limited site preparation activities may be approved to occur early, SCE&G will not commence substantive construction of the nuclear units until after SCE&G has obtained all necessary licenses and permits, including an order from the SC PSC granting it a certificate of environmental compatibility and public convenience and necessity (the above-mentioned BLRA order). Phase I will include, among other things, engineering and other services required to support the Owner’s licensing efforts for the units, design work, project management, engineering and administrative support to procure long lead time equipment, construction mobilization and site preparation. Phase II will encompass the remainder of the work required to complete the units and will begin with the Owner’s issuance to the Contractor of a written authorization to proceed with the remainder of the work (Full Notice to Proceed). While the Full Notice to Proceed may be issued prior to the receipt by the Owner of a COL from the NRC, certain critical aspects of the work may not be performed unless and until a COL is received.

The first unit is expected to be substantially complete in 2016. The second unit is expected to be substantially complete in 2019. The Owner may cancel either or both of the units on or before the issuance of the Full Notice to Proceed, in which case the Owner would be required to pay certain costs to the Contractor to bring the work to an orderly conclusion, including but not limited to costs to demobilize and cancel equipment and material orders placed. If the Owner cancels either or both of the units after the issuance of the Full Notice to Proceed, a termination fee also would be incurred. However, a mechanism has been devised for recovery of payments for certain long-lead time materials if the above BLRA order is not received by March 23, 2009.

**Information omitted pursuant to a request for confidential treatment and filed separately with the Commission.** While confidential treatment has been requested for the specific contract price, the total estimated cost for both units upon completion, including forecasted inflation, owner’s costs (site preparation, etc.) and contingencies, is approximately $9.8 billion. SCE&G’s share of that total is about $5.4 billion and Santee Cooper’s share is about $4.4 billion. The EPC contract includes various pricing components designed to minimize the construction cost to the Owner, and a significant portion of the contract price is fixed or fixed with agreed-upon inflation factors. Contract costs are also subject to adjustment for change orders, and certain of the pricing components are subject to contractor performance bonuses. SCE&G will also incur financing, transmission upgrade and other costs related to placing the plants in service.

SCE&G and Santee Cooper are joint owners and share operating costs and generating output of the existing V. C. Summer Nuclear Station’s 966-megawatt unit in the proportion of two-thirds and one-third, respectively. Under a similar arrangement, the new units described above are to be jointly owned, and operating costs and output will be shared in the proportion of 55% and 45%, respectively. As with the existing unit, SCE&G will be the operator of the new units. Westinghouse and some of its affiliates provide certain engineering and fuel fabrication services and certain materials, services and equipment used at V. C. Summer.

On May 27, 2008 SCANA and Santee Cooper issued a press release, a copy of which is attached hereto as Exhibit 99.1, with additional information regarding the entry into the EPC contract.

Finally, on May 30, 2008, SCE&G submitted to the SC PSC the above-referenced combined application under the BLRA. The application documents the need for new generation and provides information for the determination of the prudency of SCE&G's construction plans, including the projected costs, schedules and siting decisions. In that application, SCE&G’s share of total costs, including transmission projects and financing costs, are projected to be approximately $6.3 billion. Under the BLRA, an order must be issued by the SC PSC by no later than the end of February, 2009. On May 30, 2008, SCANA issued a press release, a copy of which is attached hereto as Exhibit 99.2, with additional information regarding this application.

Item 9.01 FINANCIAL STATEMENTS AND EXHIBITS

(d) Exhibits

Exhibit 99.1 Press release dated May 27, 2008

Exhibit 99.2 Press release dated May 30, 2008

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, each of the registrants has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. The signature of each registrant shall be deemed to relate only to matters having reference to such registrant and any subsidiaries thereof.

	SCANA Corporation
	South Carolina Electric & Gas Company
	(Registrants)

May 30, 2008	By:	/s/James E. Swan, IV
		James E. Swan, IV
		Controller

EXHIBIT INDEX

Number

99.1	Press release dated May 27, 2008

99.2 Press release dated May 30, 2008

EX-99.1 2 nuclearpressrelease.htm NUCLEAR PRESS RELEASE nuclearpressrelease.htm

Exhibit 99.1

SCE&G & Santee Cooper Announce Contract to Build Two New Nuclear Units

COLUMBIA, S.C.--(BUSINESS WIRE)--South Carolina Electric & Gas Company (SCE&G), principal subsidiary of SCANA Corporation (NYSE: SCG), and Santee Cooper, a state-owned electric and water utility in South Carolina, today announced a contractual agreement with Westinghouse Electric Company, LLC, and a subsidiary of The Shaw Group Inc. (NYSE: SGR), Stone & Webster, Inc., for the design and construction of two 1,117-megawatt nuclear electric-generating units at the site of the V.C. Summer Nuclear Station, near Jenkinsville, S.C.

SCE&G and Santee Cooper are joint owners and share operating costs and generating output of the existing 966-megawatt V.C. Summer plant, which began commercial operation in 1984. SCE&G is the plant operator. A similar arrangement will apply to the two additional units, with SCE&G accounting for 55 percent of the cost and output and Santee Cooper the remaining 45 percent. SCE&G executed the Engineering, Procurement and Construction (EPC) contract on behalf of both companies.

“This is an important milestone in our efforts to ensure we can continue meeting the energy needs of our customers safely, reliably, and with minimal impact on the environment,” said Bill Timmerman, Chairman and CEO of SCANA Corporation. “These new nuclear units will provide our customers with a clean, non-emitting source of power and will allow for a significant reduction in emissions for our system.”

“South Carolina’s forecast is bright, with projected growth in population and employment promising a strong economic future,” said Lonnie Carter, president and CEO of Santee Cooper. “As leaders in the state’s energy industry, we must meet the needs of growth and ensure the stability of our tremendous natural resources and environment. Nuclear energy is clean, safe, reliable and emissions-free, and it is an increasing source of generation worldwide.”

“Nuclear generation is also cost-competitive with other forms of generation,” said Kevin Marsh, President of SCE&G. “Our evaluation included coal, natural gas and other forms of generation, including renewables. Bottom line, nuclear is the right choice for our customers in South Carolina.”

The ultimate cost of the two new nuclear units is based on today’s contract price, plus forecasted inflation, owner’s costs (site preparation, etc.) and contingencies. We estimate the cost for both units upon completion is approximately $9.8 billion. SCE&G’s share of that total is about $5.4 billion and Santee Cooper’s share is about $4.4 billion. Each company will also incur costs related to transmission facilities and certain financing costs related to the project.

“The EPC contract is the result of very hard work by our new nuclear team over the past three years,” said Marsh. “We are fortunate to have experienced engineers working on this project, many of which were here while the V. C. Summer Nuclear Station was under construction and when it came on line in 1982. The EPC contract is designed to help us minimize the cost of the new units. A significant portion of the contract price is fixed, or fixed with agreed-upon inflation factors. In addition, the ability to construct the new units on our existing nuclear site will lower the cost and minimize the need for new transmission lines.”

SCE&G expects to file a combined application for a Certificate of Environmental Compatibility, Public Convenience and Necessity, and for a Base Load Review Order, with the South Carolina Public Service Commission (PSC) and the South Carolina Office of Regulatory Staff (ORS) later this week. The application is being filed under provisions of the Base Load Review Act (BLRA), a state law enacted in 2007 to add structure and consistency to the process SCE&G and other regulated utilities must follow when building nuclear power plants. The application will document SCE&G’s need for new electric generation and provide information that will allow regulators to determine, up front, the prudency of the company’s plans to construct the two new nuclear units to meet that need.

“The Base Load Review Act allows for annual adjustments to rates during construction of the units as a means of recovering financing costs associated with the project,” said Marsh. “Allowing for recovery of those costs during construction, as opposed to after construction has been completed, will substantially lower the total cost of the new units to SCE&G’s ratepayers when completed.”

A public hearing will be conducted during which the PSC will hear testimony related to the contract, the prudency of the company’s plans to construct the two new nuclear units to meet demand, and the selection of technology and suppliers for the project. The Commission is required to issue an order within nine months of the filing. New rates, if approved by the Commission, would be effective in March 2009.

SCE&G and Santee Cooper submitted an application with the Nuclear Regulatory Commission (NRC) March 31 for a combined construction and operating license. Following an approximate three-to-four-year review process, the NRC could issue the combined license in 2011. Construction would begin shortly thereafter, subject to PSC approval, with an in-service date as early as 2016 for the first unit, and 2019 for a second unit. SCE&G and Santee Cooper estimate that base load generation will be needed for both utilities at those times.

PROFILES

Santee Cooper is South Carolina's state-owned electric and water utility and serves more than 160,000 residential and commercial customers in Berkeley, Georgetown and Horry counties. The utility also generates the power distributed by the state's 20 electric cooperatives to more than 685,000 customers in all 46 counties. All total, nearly 2 million South Carolinians receive their power directly or indirectly from Santee Cooper. For more information, visit www.santeecooper.com.

South Carolina Electric & Gas Company is a regulated public utility engaged in the generation, transmission, distribution and sale of electricity to approximately 643,000 customers in 26 counties in the central, southern and southwestern portions of South Carolina. The company also provides natural gas service to approximately 305,000 customers in 34 counties in the state.

SCANA Corporation, a Fortune 500 company headquartered in Columbia, SC, is an energy-based holding company principally engaged, through subsidiaries, in electric and natural gas utility operations and other energy-related businesses. Information about SCANA and its businesses is available on the Company’s web site at www.scana.com.

SAFE HARBOR STATEMENT – SCANA CORPORATION

Statements included in this press release which are not statements of historical fact are intended to be, and are hereby identified as, “forward-looking statements” for purposes of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include, but are not limited to, statements concerning key earnings drivers, customer growth, environmental regulations and expenditures, leverage ratio, projections for pension fund contributions, financing activities, access to sources of capital, impacts of the adoption of new accounting rules, estimated construction and other expenditures and factors affecting the availability of synthetic fuel tax credits. In some cases, forward-looking statements can be identified by terminology such as “may,” “will,” “could,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “projects,” “predicts,” “potential” or “continue” or the negative of these terms or other similar terminology. Readers are cautioned that any such forward-looking statements are not guarantees of future performance and involve a number of risks and uncertainties, and that actual results could differ materially from those indicated by such forward-looking statements. Important factors that could cause actual results to differ materially from those indicated by such forward-looking statements include, but are not limited to, the following: (1) the information is of a preliminary nature and may be subject to further and/or continuing review and adjustment; (2) regulatory actions, particularly changes in rate regulation and environmental regulations; (3) current and future litigation; (4) changes in the economy, especially in areas served by subsidiaries of SCANA Corporation (SCANA); (5) the impact of competition from other energy suppliers, including competition from alternate fuels in industrial interruptible markets; (6) growth opportunities for SCANA’s regulated and diversified subsidiaries; (7) the results of financing efforts; (8) changes in SCANA’s or its subsidiaries’ accounting rules and accounting policies; (9) the effects of weather, including drought, especially in areas where the Company’s generation and transmission facilities are located and in areas served by SCANA's subsidiaries; (10) payment by counterparties as and when due; (11) the results of efforts to license, site and construct facilities for baseload electric generation; (12) the availability of fuels such as coal, natural gas and enriched uranium used to produce electricity; the availability of purchased power and natural gas for distribution; the level and volatility of future market prices for such fuels and purchased power; and the ability to recover the costs for such fuels and purchased power; (13) performance of SCANA’s pension plan assets; (14) inflation; (15) compliance with regulations; and (16) the other risks and uncertainties described from time to time in the periodic reports filed by SCANA or South Carolina Electric & Gas Company (SCE&G) with the United States Securities and Exchange Commission (SEC). The Company disclaims any obligation to update any forward-looking statements.

Contacts

SCANA Media Contact:

Eric Boomhower, 803-217-7701; eboomhower@scana.com

SCANA Investor Contact:

Bryan Hatchell, 803-217-7458; bhatchell@scana.com

Santee Cooper Contact:

Mollie Gore, 843-761-7093; mrgore@santeecooper.com

EX-99.2 3 pressrelease53008.htm MAY 30 - PRESS RELEASE pressrelease53008.htm

Exhibit 99.2

SCE&G Files Application with Public Service Commission of South Carolina

Detailing Plans for New Nuclear Units and Proposed Impact on Rates

SCANA to Discuss Filing in June 9 Webcast

COLUMBIA, S.C.--(BUSINESS WIRE)--South Carolina Electric & Gas Company (SCE&G), principal subsidiary of SCANA Corporation (NYSE: SCG), today filed a combined application for a Certificate of Environmental Compatibility, Public Convenience and Necessity, and for a Base Load Review Order, with the South Carolina Public Service Commission (PSC) and the South Carolina Office of Regulatory Staff. The application was filed under provisions of the Base Load Review Act (BLRA), a state law enacted in 2007 to add structure and consistency to the process SCE&G and other regulated utilities must follow when building nuclear power plants. SCE&G also filed a petition requesting permission to begin initial clearing, excavation and construction work on the site pending approval of the BLRA application.

SCE&G and Santee Cooper, a state-owned electric and water utility in South Carolina, announced Tuesday that they had entered into a contractual agreement with Westinghouse Electric Company, LLC, and a subsidiary of The Shaw Group Inc., Stone & Webster, Inc., for the design and construction of two 1,117-megawatt nuclear electric-generating units at the site of the V.C. Summer Nuclear Station, near Jenkinsville, S.C. SCE&G and Santee Cooper are joint owners and share operating costs and generating output of the existing 966-megawatt V.C. Summer plant. SCE&G is the plant operator. A similar arrangement will apply to the two additional units, with SCE&G accounting for 55 percent of the cost and output and Santee Cooper the remaining 45 percent. The companies submitted an application with the Nuclear Regulatory Commission (NRC) March 31 for a combined construction and operating license. Following an approximate three-to-four-year review process, the NRC could issue the combined license in 2011. The first unit is expected to come on line in 2016, the second in 2019. SCE&G and Santee Cooper estimate that base load generation will be needed for both utilities at those times.

The BLRA application filed today documents SCE&G’s need for new electric generation and provides information that will allow state regulators to determine, up front, the prudency of the company’s plans to construct the two new nuclear units to meet that need. Along with outlining projected costs and construction schedules, the application includes a schedule of forecasted adjustments SCE&G would make to customer rates based on nuclear construction expenditures.

“The Base Load Review Act allows for annual adjustments to rates during construction of the units as a means of recovering financing costs associated with the project,” said SCE&G President Kevin Marsh. “Paying financing costs while construction is ongoing, as opposed to waiting until the project has been completed, will lower the cost of the new units by about $1 billion. We estimate this reduction will save our customers approximately $4 billion in electric rates over the life of the new units.”

A public hearing will be conducted during which the PSC will hear testimony related to the application. The Commission is required to issue an order within nine months of the filing. If approved by the Commission, rates would be adjusted each year based on construction expenditures made since the last increase. Year-by-year adjustments to rates under BLRA are estimated below (actual amount and timing of adjustments may vary):

Month/Year % change

Mar 2009 0.49

Oct 2009 2.8

Oct 2010 2.8

Oct 2011 3.8

Oct 2012 3.5

Oct 2013 4.0

Oct 2014 3.7

Oct 2015 2.8

Apr 2016 1.4

Feb 2017 2.2

Feb 2018 3.1

Jan 2019 1.1

SCANA to discuss BLRA filing in Webcast

SCANA will Webcast a conference call with security analysts June 9 at 4 p.m. to discuss the filing. All interested persons, including investors, media and the general public, may listen to a live Webcast of the conference call at the SCANA’s Web site, www.scana.com. Participants should go to the Web site at least five to 10 minutes prior to the call start time and follow the instructions. A replay of the Webcast will also be available on the site approximately two hours after conclusion of the call.

PROFILES

SAFE HARBOR STATEMENT – SCANA CORPORATION

Contacts

SCANA Media Contact:

Eric Boomhower, 803-217-7701

eboomhower@scana.com

SCANA Investor Contact:

Bryan Hatchell, 803-217-7458

bhatchell@scana.com