FAIR VALUE MEASUREMENTS, INCLUDING DERIVATIVES - SCEG

12 Months Ended

Dec. 31, 2011

FAIR VALUE MEASUREMENTS, INCLUDING DERIVATIVES

7.             FAIR VALUE MEASUREMENTS, INCLUDING DERIVATIVES

The Company values available for sale securities using quoted prices from a national stock exchange, such as the NASDAQ, where the securities are actively traded. For commodity derivative assets and liabilities, the Company uses unadjusted NYMEX prices to determine fair value, and considers such measures of fair value to be Level 1 for exchange traded instruments and Level 2 for over-the-counter instruments. The Company’s interest rate swap agreements are valued using discounted cash flow models with independently sourced data. Fair value measurements, and the level within the fair value hierarchy in which the measurements fall, were as follows:

	Fair Value Measurements Using
Millions of dollars	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)
As of December 31, 2011
Assets-Available for sale securities	$	3	—
Interest rate contracts	—		$	2
Commodity contracts	—		1
Energy management contracts	—		27
Liabilities-Interest rate contracts	—		158
Commodity contracts	1		13
Energy management contracts	—		26
As of December 31, 2010
Assets-Available for sale securities	$	3	—
Interest rate contracts	—		$	8
Commodity contracts	2		2
Energy management contracts	—		9
Liabilities-Interest rate contracts	—		82
Commodity contracts	1		6
Energy management contracts	—		11

There were no fair value measurements based on significant unobservable inputs (Level 3) for either period presented. In addition, there were no transfers of fair value amounts into or out of Levels 1 and 2 during any period presented.

Financial instruments for which the carrying amount may not equal estimated fair value at December 31, 2011 and December 31, 2010 were as follows:

	December 31, 2011				December 31, 2010
Millions of dollars	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Long-term debt	$	4,653.0	$	5,479.2	$	4,488.3	$	4,840.5

Fair values of long-term debt are based on quoted market prices of the instruments or similar instruments. For debt instruments for which no quoted market prices are available, fair values are based on net present value calculations. Carrying values reflect the fair values of interest rate swaps based on discounted cash flow models with independently sourced data. Early settlement of long-term debt may not be possible or may not be considered prudent.

SOUTH CAROLINA ELECTRIC AND GAS COMPANY

FAIR VALUE MEASUREMENTS, INCLUDING DERIVATIVES

7.FAIR VALUE MEASUREMENTS, INCLUDING DERIVATIVES

SCE&G values commodity derivative assets and liabilities using unadjusted NYMEX prices to determine fair value, and considers such measure of fair value to be Level 1 for exchange traded instruments and Level 2 for over-the-counter instruments. Consolidated SCE&G’s interest rate swap agreements are valued using discounted cash flow models with independently sourced data. Fair value measurements, and the level within the fair value hierarchy in which the measurements fall, were as follows:

	Fair Value Measurements Using
Millions of dollars	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)
As of December 31, 2011
Assets-Interest rate contracts	—		$	1
Liabilities-Interest rate contracts	—		77
As of December 31, 2010
Assets-Interest rate contracts	—		$	4
Commodity contracts	$	1	—
Liabilities-Interest rate contracts	—		35

There were no fair value measurements based on significant unobservable inputs (Level 3) for either period presented. In addition, there were no transfers of fair value amounts into or out of Levels 1 and 2 during any period presented.

Financial instruments for which the carrying amount may not equal estimated fair value at December 31, 2011 and December 31, 2010 were as follows:

	December 31, 2011				December 31, 2010
Millions of dollars	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Long-term debt	$	3,241.5	$	3,920.3	$	3,059.7	$	3,321.8

Fair values of long-term debt are based on quoted market prices of the instruments or similar instruments. For debt instruments for which no quoted market prices are available, fair values are based on net present value calculations. Carrying values reflect the fair values of interest rate swaps based on discounted cash flow models with independently sourced data. Early settlement of long-term debt may not be possible or may not be considered prudent.

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