INCOME TAXES

12 Months Ended

Dec. 31, 2014

income tax [Line Items]

Income Tax Disclosure [Text Block]

INCOME TAXES

Components of income tax expense are as follows:

Millions of dollars	2014			2013			2012
Current taxes:
Federal	$	38		$	161		$	103
State	(4		)	17			10
Total current taxes	34			178			113
Deferred taxes, net:
Federal	184			39			72
State	34			10			14
Total deferred taxes	218			49			86
Investment tax credits:
Amortization of amounts deferred-state	(1		)	(1		)	(14		)
Amortization of amounts deferred-federal	(3		)	(3		)	(3		)
Total investment tax credits	(4		)	(4		)	(17		)
Total income tax expense	$	248		$	223		$	182

The difference between actual income tax expense and the amount calculated from the application of the statutory 35% federal income tax rate to pre-tax income is reconciled as follows:

Millions of dollars	2014			2013			2012
Net income	$	538		$	471		$	420
Income tax expense	248			223			182
Total pre-tax income	$	786		$	694		$	602
Income taxes on above at statutory federal income tax rate	$	275		$	243		$	211
Increases (decreases) attributed to:
State income taxes (less federal income tax effect)	24			22			19
State investment tax credits (less federal income tax effect)	(5		)	(5		)	(13		)
Allowance for equity funds used during construction	(11		)	(9		)	(8		)
Deductible dividends—Stock Purchase Savings Plan	(10		)	(10		)	(9		)
Amortization of federal investment tax credits	(3		)	(3		)	(3		)
Section 41 tax credits	(3		)	—			—
Section 45 tax credits	(9		)	(5		)	(5		)
Domestic production activities deduction	(7		)	(11		)	(9		)
Other differences, net	(3		)	1			(1		)
Total income tax expense	$	248		$	223		$	182

The tax effects of significant temporary differences comprising the Company’s net deferred tax liability are as follows:

Millions of dollars	2014		2013
Deferred tax assets:
Nondeductible accruals	$	127	$	84
Asset retirement obligation, including nuclear decommissioning	216		220
Financial instruments	40		32
Unamortized investment tax credits	17		19
Regulatory liability, net gain on interest rate derivative contracts settlement	—		27
Monetization of bankruptcy claim	10		11
Other	10		13
Total deferred tax assets	420		406
Deferred tax liabilities:
Property, plant and equipment	$	1,928	$	1,765
Deferred employee benefit plan costs	107		63
Regulatory asset, asset retirement obligation	122		121
Deferred fuel costs	27		25
Regulatory asset, unrecovered plant	53		55
Regulatory asset, net loss on interest rate derivative contracts settlement	21		—
Demand side management costs	21		21
Prepayments	27		25
Other	45		38
Total deferred tax liabilities	2,351		2,113
Net deferred tax liability	$	1,931	$	1,707

During the third quarter of 2013, the State of North Carolina passed legislation that lowered the state corporate income tax rate from 6.9% to 6.0% in 2014 and 5.0% in 2015.  In connection with this change in tax rates, related state deferred tax amounts were remeasured, with the change in their balances being credited to a regulatory liability. The change in income tax rates did not and is not expected to have a material impact on the Company’s financial position, results of operations or cash flows. Additionally, during the third quarter of 2013, the IRS issued final regulations regarding the capitalization of certain costs for income tax purposes and re-proposed certain other related regulations (collectively referred to as tangible personal property regulations). Related IRS revenue procedures were then issued on January 24, 2014. These regulations did not and are not expected to, have a material impact on the Company's financial position, results of operations or cash flows.

The Company files a consolidated federal income tax return, and the Company and its subsidiaries file various applicable state and local income tax returns. The IRS has completed examinations of the Company’s federal returns through 2004, and the Company’s federal returns through 2007 are closed for additional assessment. The IRS is currently examining SCANA's open federal returns through 2012. With few exceptions, the Company is no longer subject to state and local income tax examinations by tax authorities for years before 2010.

Changes to Unrecognized Tax Benefits

Millions of dollars	2014		2013		2012
Unrecognized tax benefits, January 1	$	3	—		$	38
Gross increases—uncertain tax positions in prior period	—		—		—
Gross decreases—uncertain tax positions in prior period	—		—		(38		)
Gross increases—current period uncertain tax positions	13		$	3	—
Settlements	—		—		—
Lapse of statute of limitations	—		—		—
Unrecognized tax benefits, December 31	$	16	$	3	$	—

In connection with the change in method of tax accounting for certain repair costs in prior years, the Company had previously recorded an unrecognized tax benefit. During the first quarter of 2012, the publication of new administrative guidance from the IRS allowed the Company to recognize this benefit. Since this change was primarily a temporary difference, the recognition of this benefit did not have a significant effect on the Company's effective tax rate.

During 2013 and 2014, the Company amended certain of its tax returns to claim certain tax-defined research and development deductions and credits. In connection with these filings, the Company recorded an unrecognized tax benefit of $16 million. If recognized, $13 million of the tax benefit would affect the Company’s effective tax rate. It is reasonably possible that this tax benefit will increase by an additional $2 million within the next 12 months. It is also reasonably possible that this tax benefit may decrease by $7 million within the next 12 months. No other material changes in the status of the Company’s tax positions have occurred through December 31, 2014.

As of December 31, 2014, prepayments primarily relates to the late 2014 extension of the 50% bonus depreciation deduction. Further, a current deferred tax liability of $51.3 million related to the sales of CGT and SCI is included within other current liabilities.

The Company recognizes interest accrued related to unrecognized tax benefits within interest expense and recognizes tax penalties within other expenses. In connection with the resolution of the uncertainty and recognition of the tax benefit in 2012, during 2012 the Company reversed $2 million of interest expense which had been accrued during 2011. The Company has not recorded interest expense or penalties associated with uncertain tax positions in 2013 or 2014.

SCE&G

income tax [Line Items]

Income Tax Disclosure [Text Block]

INCOME TAXES

Components of income tax expense are as follows:

Millions of dollars	2014			2013			2012
Current taxes:
Federal	$	39		$	146		$	91
State	(6		)	13			8
Total current taxes	33			159			99
Deferred taxes, net:
Federal	157			25			62
State	32			9			12
Total deferred taxes	189			34			74
Investment tax credits:
Amortization of amounts deferred—state	(1		)	(1		)	(13		)
Amortization of amounts deferred—federal	(3		)	(3		)	(3		)
Total investment tax credits	(4		)	(4		)	(16		)
Total income tax expense	$	218		$	189		$	157

The difference between actual income tax expense and the amount calculated from the application of the statutory 35% federal income tax rate to pre-tax income is reconciled as follows:

Millions of dollars	2014			2013			2012
Net income	$	446		$	380		$	341
Income tax expense	218			189			157
Noncontrolling interest	12			11			11
Total pre-tax income	$	676		$	580		$	509
Income taxes on above at statutory federal income tax rate	$	237		$	203		$	178
Increases (decreases) attributed to:
State income taxes (less federal income tax effect)	21			18			17
State investment tax credits (less federal income tax effect)	(5		)	(5		)	(13		)
Allowance for equity funds used during construction	(10		)	(9		)	(7		)
Amortization of federal investment tax credits	(3		)	(3		)	(3		)
Section 41 tax credits	(3		)	—			—
Section 45 tax credits	(9		)	(5		)	(5		)
Domestic production activities deduction	(7		)	(11		)	(9		)
Other differences, net	(3		)	1			(1		)
Total income tax expense	$	218		$	189		$	157

The tax effects of significant temporary differences comprising Consolidated SCE&G’s net deferred tax liability are as follows:

Millions of dollars	2014		2013
Deferred tax assets:
Nondeductible accruals	$	47	$	17
Asset retirement obligation, including nuclear decommissioning	205		209
Unamortized investment tax credits	17		19
Regulatory liability, net gain on interest rate derivative contracts settlement	—		27
Other	6		11
Total deferred tax assets	275		283
Deferred tax liabilities:
Property, plant and equipment	$	1,623	$	1,494
Regulatory asset, asset retirement obligation	115		114
Deferred employee benefit plan costs	91		54
Deferred fuel costs	27		26
Regulatory asset, unrecovered plant	53		55
Regulatory asset, net loss on interest rate derivative contracts settlement	21		—
Demand side management costs	21		21
Prepayments	25		23
Other	23		18
Total deferred tax liabilities	1,999		1,805
Net deferred tax liability	$	1,724	$	1,522

Consolidated SCE&G is included in the consolidated federal income tax return of SCANA and files various applicable state and local income tax returns. The IRS has completed examinations of SCANA’s federal returns through 2004, and SCANA’s federal returns through 2007 are closed for additional assessment. The IRS is currently examining SCANA's open federal returns through 2012. With few exceptions, Consolidated SCE&G is no longer subject to state and local income tax examinations by tax authorities for years before 2010.

Changes to Unrecognized Tax Benefits

Millions of dollars	2014		2013		2012
Unrecognized tax benefits, January 1	$	3	—		$	38
Gross increases-uncertain tax positions in prior period	—		—		—
Gross decreases-uncertain tax positions in prior period	—		—		(38		)
Gross increases-current period uncertain tax positions	13		$	3	—
Settlements	—		—		—
Lapse of statute of limitations	—		—		—
Unrecognized tax benefits, December 31	$	16	$	3	$	—

In connection with the change in method of tax accounting for certain repair costs in prior years, the Company had previously recorded an unrecognized tax benefit. During the first quarter of 2012, the publication of new administrative guidance from the IRS allowed Consolidated SCE&G to recognize this benefit. Since this change was primarily a temporary difference, the recognition of this benefit did not have a significant effect on the Consolidated SCE&G's effective tax rate.

During 2013 and 2014, Consolidated SCE&G amended certain of its tax returns to claim certain tax-defined research and development deductions and credits. In connection with these filings, Consolidated SCE&G recorded an unrecognized tax benefit of $16 million. If recognized, $13 million of the tax benefit would affect Consolidated SCE&G’s effective tax rate. It is reasonably possible that this tax benefit will increase by an additional $2 million within the next 12 months. It is also reasonably possible that this tax benefit may decrease by $7 million within the next 12 months. No other material changes in the status of the Consolidated SCE&G’s tax positions have occurred through December 31, 2014.

As of December 31, 2014, prepayments primarily relates to the late 2014 extension of the 50% bonus depreciation deduction.

Consolidated SCE&G recognizes interest accrued related to unrecognized tax benefits within interest expense and recognizes tax penalties within other expenses. In connection with the resolution of the uncertainty and recognition of the tax benefit in 2012, during 2012 Consolidated SCE&G reversed $2 million of interest expense which had been accrued during 2011. Consolidated SCE&G has not recorded interest expense or penalties associated with uncertain tax positions in 2013 or 2014.