Annual Report (Form 10-K), fiscal year 1994

ITEM 1. BUSINESS
THE COMPANY
ORGANIZATION
SCANA, a South Carolina corporation having general business powers, was incorporated on October 10, 1984 and is a public utility holding company within the meaning of PUHCA but is exempt from registration under such Act (see Regulation). SCANA has its principal executive office at 1426 Main Street, Columbia, South Carolina 29201, telephone number (803) 748-3000. SCANA holds all the capital stock of each of its subsidiaries except for the Preferred Stock of SCE&G and the capital stock of SCANA's indirect, wholly owned subsidiaries which are not material individually or in the aggregate. SCANA and its subsidiaries had 4,575 full-time, permanent employees as of December 31, 1994 as compared to 4,788 full-time, permanent employees as of December 31, 1993.
SEGMENTS OF BUSINESS
SCANA neither owns nor operates any physical properties. It currently has 12 direct, wholly owned subsidiaries which are engaged in the functionally distinct operations described below.
Regulated Utilities The Company's principal subsidiary, SCE&G, is a regulated public utility engaged in the generation, transmission, distribution and sale of electricity and in the purchase and sale, primarily at retail, of natural gas in South Carolina. SCE&G also renders urban bus service in the metropolitan areas of Columbia and Charleston, South Carolina. SCE&G's business is subject to seasonal fluctuations. Generally, sales of electricity are higher during the summer and winter months because of air-conditioning and heating requirements, and sales of natural gas are greater in the winter months due to its use for heating requirements.
SCE&G's electric service area extends into 24 counties covering more than 15,000 square miles in the central, southern and southwestern portions of South Carolina. The service area for natural gas encompasses all or part of 29 of the 46 counties in South Carolina and covers more than 20,000 square miles. The total population of counties representing the combined service area is approximately 2.3 million.
The predominant industries in the territories served by SCE&G include: synthetic fibers; chemicals and allied products; fiberglass and fiberglass products; paper and wood products; metal fabrication; stone, clay and sand mining and processing; and various textile-related products.
GENCO owns and operates Williams Station and sells electricity solely to SCE&G. Fuel Company acquires, owns and provides financing for SCE&G's nuclear fuel, fossil fuel and sulfur dioxide emission allowance requirements.
Pipeline Corporation is engaged in the purchase, transmission and sale of natural gas on a wholesale basis to distribution companies and directly to industrial customers in 39 counties throughout South Carolina. Pipeline Corporation owns LNG liquefaction and storage facilities. It also supplies the natural gas for SCE&G's gas distribution system. Other resale customers include municipalities and county gas authorities and gas utilities. The industrial customers of Pipeline Corporation are primarily engaged in the manufacturing or processing of ceramics, paper, metal, food and textiles.
Nonregulated Businesses
Petroleum Resources owns and/or operates oil and gas properties in 12 states and Federal waters offshore Texas, Louisiana and Alabama.
Hydrocarbons markets natural gas and light hydrocarbons. It also owns and operates an 80 million gallon underground propane storage cavern near York, South Carolina and a 62 mile, six-inch propane pipeline that connects the cavern facility with Dixie Pipeline Company near Bethune, South Carolina. The cavern leases storage space to industries, utilities and propane suppliers. Hydrocarbons also owns and operates the Wilburton Gathering System in Oklahoma.
Suburban Propane purchases, delivers and sells propane. In 1994 Suburban sold approximately 23 million gallons of propane and had approximately 32,000 residential, commercial and industrial customers at year end.
MPX Systems, Inc. is involved in telecommunications-related ventures providing fiber optic telecommunications, video conferencing and specialized mobile radio services. Having installed over 2,000 miles of fiber optic cable in South Carolina, Georgia, Alabama, Mississippi, Louisiana and Texas, MPX has, in addition, recently begun efforts in video conferencing and the establishment of a Specialized Mobile Radio system in South Carolina and is also pursuing Personal Communication Services licenses for wireless communications in the Southeast.
In January 1994 the Company signed an agreement to sell substantially all of the real estate assets of SCANA Development Corporation to Liberty Properties Group, Inc. of Greenville, South Carolina for $91.5 million. On March 4, 1994 the Company and Liberty amended the agreement to exclude certain projects then under construction, and the sales price was reduced to $49.6 million. The transaction was closed on May 27, 1994. Certain other assets of SCANA Development Corporation are being sold to other parties. These transactions did not have a material impact on the Company's financial position or results of operations.
ServiceCare, Inc. is engaged in providing energy related products and services beyond the energy meter. Its primary business is providing homeowners with service contracts on their home appliances. At year end, ServiceCare had approximately 16,000 customers.
Primesouth, Inc. is engaged in power plant management and maintenance services.
SCANA Capital Resources, Inc. has provided equity capital for diversified investments.
Information with respect to major segments of business for the years ended December 31, 1994, 1993 and 1992 is contained in Note 11 of the Notes to Consolidated Financial Statements and all such information is incorporated herein by reference.
COMPETITION
The electric utility industry has begun a major transition that could lead to expanded market competition and less regulatory protection. The transition began with the enactment of the Public Utility Regulatory Policies Act of 1978 which facilitated the entry of competitors into the electric generation business. Subsequently, NEPA was enacted in 1992 to promote competition among utility and nonutility generators in the wholesale electric generation market. Recent initiatives in some states to lessen regulation and promote competition, particularly with regard to retail transmission access, also have accelerated the utility industry's transition.
Future deregulation of electric wholesale and retail markets will create opportunities to compete for new and existing customers and markets. As a result, profit margins and asset values of some utilities could be adversely affected.
The pace of deregulation, the future market price of electricity, and the regulatory actions which may be taken by the PSC in response to the changing environment cannot be predicted. However, the Company is aggressively pursuing actions to position itself strategically for the transformed environment. To enhance its flexibility and responsiveness to change, SCE&G, reorganized its operations around Strategic Business Units. Maintaining a competitive cost structure is of paramount importance in the utility's strategic plan. SCE&G has undertaken a variety of initiatives, including reductions in operation and maintenance costs and in staffing levels. SCE&G believes that these actions as well as numerous others that have been and will be taken demonstrate its ability and commitment to succeed in the new operating environment to come.
CAPITAL REQUIREMENTS AND FINANCING PROGRAM
Capital Requirements
The cash requirements of the Company arise primarily from SCE&G's operational needs, the Company's construction program and the need to fund the activities or investments of the Company's nonregulated subsidiaries. The ability of the Company's regulated subsidiaries to replace existing plant investment, as well as to expand to meet future demand for electricity and gas, will depend upon their ability to attract the necessary financial capital on reasonable terms. The Company's regulated subsidiaries recover the costs of providing services through rates charged to customers. Rates for regulated services are generally based on historical costs. As customer growth and inflation occur and the regulated subsidiaries expand their construction programs, it is necessary to seek increases in rates. As a result, the Company's future financial position and results of operations will be affected by the regulated subsidiaries' ability to obtain adequate and timely rate relief.
As discussed in Note 2B of Notes to Consolidated Financial Statements, on June 7, 1993 the PSC issued an order granting SCE&G a 7.4% annual increase in retail electric rates which was implemented in two phases over a two year period: phase one, effective June 1993, producing $42.0 million annually, and phase two, effective June 1994, producing $18.5 million annually, based on a test year.
During 1995 the Company is expected to meet its capital requirements principally through internally generated funds (approximately 42%, excluding dividends), sales of additional shares of common stock including sales pursuant to the DRP and SPSP, and the issuance and sale of debt securities. Short-term liquidity is expected to be provided primarily by issuance of commercial paper. The timing and amount of such sales and the type of securities to be sold will depend upon market conditions and other factors.
The Company's estimates of its cash requirements for construction (excluding potential oil and gas investments) and nuclear fuel expenditures, which are subject to continuing review and adjustment, for 1995 and the four-year period 1996-1999 as now scheduled, are as follows:
Type of Facilities 1996-1999 1995 (Thousands of Dollars) South Carolina Electric & Gas Company: Electric Plant: Generation . . . . . . . . . . . . . . $ 388,193 $129,825 Transmission . . . . . . . . . . . . . 92,701 25,928 Distribution . . . . . . . . . . . . . 295,571 67,283 Other. . . . . . . . . . . . . . . . . 69,322 16,874 Nuclear Fuel. . . . . . . . . . . . . . . 68,171 23,084 Gas . . . . . . . . . . . . . . . . . . . 60,415 18,895 Transit . . . . . . . . . . . . . . . . . 1,012 432 Common . . . . . . . . . . . . . . . . . 35,090 25,342 Nonutility . . . . . . . . . . . . . . . 580 175 Total . . . . . . . . . . . . . . . . . 1,011,055 307,838 Other Companies Combined. . . . . . . . . . 214,960 63,530 Total . . . . . . . . . . . $1,226,015 $371,368
The above estimates exclude AFC.
Construction
The Company's cost estimates for its construction program for the periods 1995 and 1996-1999, shown in the above table, include costs of the projects described below.
SCE&G entered into a contract with Duke/Fluor Daniel in 1991 to design, engineer and build a 385 MW coal-fired electric generating plant near Cope, South Carolina in Orangeburg County. Construction of the plant began in November 1992 and is expected to be complete in late 1995 with commercial operation beginning in early 1996. The estimated cost of the Cope plant, excluding financing costs and allowance for funds used during construction (AFC) but including an allowance for escalation, is $450 million. In addition, the transmission lines for interconnection with SCE&G's system are expected to cost $26 million. Until completion of the new plant, SCE&G is contracting for additional power as necessary to ensure that the energy demands of its customers can be met.
The steam generators at Summer Station were replaced in late 1994 during the regularly scheduled refueling outage. The replacement was completed in 38 days, a new U.S. record and only one day off the world record for a steam generator replacement. The new steam generators are expected to result in shorter, less costly refueling outages, and greater electricity output is expected to result from less required maintenance.
During 1994 SCE&G and GENCO expended approximately $11.4 million as part of a program to extend the operating lives of certain generating facilities. Additional improvements to be made under the program during 1995 are estimated to cost approximately $15.0 million.
Additional Capital Requirements
In addition to the Company's capital requirements for 1995 described above, approximately $25.6 million will be required for refunding and retiring outstanding securities and obligations. For the years 1996-1999, the Company has an aggregate of $338.3 million of long-term debt maturing (including approximately $59.4 million for sinking fund requirements, of which $59.0 million may be satisfied by deposit and cancellation of bonds issued upon the basis of property additions or bond retirement credits) and $9.8 million of purchase or sinking fund requirements for preferred stock.
Actual 1995 expenditures may vary from the estimates set forth above due to factors such as inflation, economic conditions, regulation, legislation, rates of load growth, environmental protection standards and the cost and availability of capital.
Financing Program
The Company has in effect a medium-term note program for the issuance from time to time of unsecured medium-term debt securities. The proceeds from the sales of these securities may be used to fund additional business activities in nonutility subsidi- aries, to reduce short-term debt incurred in connection therewith or for general corporate purposes. In December 1994, a shelf registration statement filed with the Securities and Exchange Commission became effective, providing for the issuance of up to an additional $250 million in medium-term notes. At December 31, 1994 the Company had available for issuance $317.6 million under this program.
SCE&G's First and Refunding Mortgage Bond Indenture, dated April 1, 1945 (Old Mortgage), contains provisions prohibiting the issuance of additional bonds thereunder (Class A Bonds) unless net earnings (as therein defined) for 12 consecutive months out of the 15 months prior to the month of issuance are at least twice the annual interest requirements on all Class A Bonds to be outstanding (Bond Ratio). For the year ended December 31, 1994 the Bond Ratio was 3.52. The issuance of additional Class A Bonds is restricted also to an additional principal amount equal to 60% of unfunded net property additions (which unfunded net property additions totaled approximately $499.8 million at December 31, 1994), Class A Bonds issued on the basis of retirements of Class A Bonds (no retirement credits remained at December 31, 1994) and Class A Bonds issued on the basis of cash on deposit with the Trustee.
SCE&G has placed a new bond indenture (New Mortgage) dated April 1, 1993 on substantially all of its electric properties under which its future mortgage-backed debt (New Bonds) will be issued. New Bonds are expected to be issued under the New Mortgage on the basis of a like principal amount of Class A Bonds issued under the Old Mortgage, which have been deposited with the Trustee of the New Mortgage (of which $57 million were available for such purpose at December 31, 1994), until such time as all presently outstanding Class A Bonds are retired. Thereafter, New Bonds will be issuable on the basis of property additions in a principal amount equal to 70% of the original cost of electric and common plant properties (compared to 60% of value for Class A Bonds under the Old Mortgage), cash deposited with the Trustee, and retirement of New Bonds. New Bonds will be issuable under the New Mortgage only if adjusted net earnings (as therein defined) for 12 consecutive months out of the 18 months immediately preceding the month of issuance are at least twice the annual interest requirements on all outstanding bonds (including Class A Bonds) and New Bonds to be outstanding (New Bond Ratio). For the year ended December 31, 1994 the New Bond Ratio was 4.85.
The following additional financing transactions have occurred since December 31, 1993:
, On January 14, 1994 the Company closed unsecured bank loans totaling $60 million, due January 13, 1995, and used the proceeds to pay off a loan in a like total amount. In January 1995 the Company refinanced the loans with an unsecured bank loan of $60 million due January 12, 1996 at an initial interest rate of 6.44%, subject to reset quarterly at LIBOR plus ten basis points.
, On July 21, 1994 SCE&G issued $100 million of First Mortgage Bonds, 7.70% series due July 15, 2004 to repay short-term borrowings in a like amount.
, On November 3, 1994 SCE&G issued $30 million of Pollution Control Facilities Revenue Bonds due November 1, 2024. The proceeds from the sale of the bonds are being used to defray the cost of constructing certain facilities for the disposal of solid waste at SCE&G's Cope Generating Station under construction in Orangeburg County, South Carolina.
Without the consent of at least a majority of the total voting power of SCE&G's preferred stock, SCE&G may not issue or assume any unsecured indebtedness if, after such issue or assumption, the total principal amount of all such unsecured indebtedness would exceed 10% of the aggregate principal amount of all of SCE&G's secured indebtedness and capital and surplus; provided, however, that no such consent shall be required to enter into agreements for payment of principal, interest and premium for securities issued for pollution control purposes.
Pursuant to Section 204 of the Federal Power Act, SCE&G and GENCO must obtain FERC authority to issue short-term debt. The FERC has authorized SCE&G to issue up to $200 million of unsecured promissory notes or commercial paper with maturity dates of 12 months or less but not later than December 31, 1997. GENCO has not sought such authorization.
The Company had $479.1 million authorized lines of credit and had unused lines of credit of $455.1 million at December 31, 1994. In addition SCE&G has a credit agreement for a maximum of $75 million to finance nuclear and fossil fuel inventories with $24.4 million available at December 31, 1994.
SCE&G's Restated Articles of Incorporation prohibit issuance of additional shares of preferred stock without consent of the preferred stockholders unless net earnings (as defined therein) for the 12 consecutive months immediately preceding the month of issuance are at least one and one-half times the aggregate of all interest charges and preferred stock dividend requirements (Preferred Stock Ratio). For the year ended December 31, 1994 the Preferred Stock Ratio was 2.29.
On December 16, 1994 the Company registered with the SEC 2,000,000 additional shares of the Company's common stock to be issued and sold under the SPSP.
During 1994 the Company issued 595,438 shares of the Company's common stock under the DRP. In addition, the Company issued 781,354 shares of its common stock pursuant to its SPSP. The Company has authorized and reserved for issuance, and registered under effective registration statements, 1,470,386 and 2,091,066 shares of common stock pursuant to the DRP and the SPSP, respectively.
In January 1994 the Company signed an agreement to sell substantially all of the real estate assets of SCANA Development Corporation to Liberty Properties Group, Inc. of Greenville, South Carolina for $91.5 million. On March 4, 1994 the Company and Liberty amended the agreement to exclude certain projects then under construction, and the sales price was reduced to $49.6 million. The transaction was closed on May 27, 1994. Certain other assets of SCANA Development Corporation are being sold to other parties. These transactions did not have a material impact on the Company's financial position or results of operations.
MPX Systems Inc., a wholly owned subsidiary of SCANA, through a joint venture with ITC Transmission Systems, a Georgia-based telecommunications holding company, is constructing a fiber optic network through Texas, Louisiana, Mississippi, Alabama and Georgia. The network, which will consist of more than 900 miles of fiber optic lines, is expected to be completed by June 1995 at a cost of $58 million. In addition, MPX is pursuing Personal Communication Services licenses for wireless communications in the Southeast through a joint venture with ITC Personal Communications, Inc., Intercel PCS Services, Inc., and South Atlantic PCS Corporation. A $40 million construction loan obtained by the joint venture has been guaranteed in part by SCANA Corporation. All new ventures currently capitalize on fiber infrastructure in place and provide for expansion of the network.
The ratio of earnings to fixed charges (SEC method) was 3.02, 3.41, 2.79, 3.24 and 4.07 for the years ended December 31, 1994, 1993, 1992, 1991 and 1990 respectively.
The Company expects that it has or can obtain adequate sources of financing to meet its projected cash requirements.
Fuel Financing Agreements
SCE&G has assigned to Fuel Company all of its rights and interests in its various contracts relating to the acquisition and ownership of nuclear and fossil fuel. To finance nuclear and fossil fuel, Fuel Company issues, from time to time, its promissory notes with maturities of less than 270 days ("Commercial Paper"). The issuance of Commercial Paper is supported by an irrevocable revolving credit agreement which expires July 31, 1996. Accordingly, the amounts outstanding have been included in long- term debt. Fuel Company's Commercial Paper and amounts outstanding under the revolving credit agreement, if any, are guaranteed by SCE&G. The credit agreement provides for a maximum amount of $75 million that may be outstanding at any time.
At December 31, 1994 Commercial Paper outstanding for nuclear and fossil fuel inventories was approximately $50.6 million at a weighted average interest rate of 6.06%. Such fuel inventories and fuel-related assets and liabilities are included in the Company's financial statements (See Note 4 of Notes to Consolidated Financial Statements).
ELECTRIC OPERATIONS Electric Sales
In 1994 residential sales of electricity accounted for 42% of electric sales revenues; commercial sales 30%; industrial sales 21%; sales for resale 4%; and all other 3%. KWH sales by classification for the years ended December 31, 1994 and 1993 are presented below:
Sales KWH % Classification 1994 1993 Change (thousands)
Residential 5,311,139 5,650,753 (6.01) Commercial 4,846,619 4,835,492 0.23 Industrial 5,161,717 4,887,121 5.62 Sale for resale 1,024,376 1,005,968 1.83 Other 494,030 500,937 (1.38) Total Territorial 16,837,881 16,880,271 (0.25) Interchange 171,046 198,059 (13.64) Total 17,008,927 17,078,330 (0.41)
SCE&G furnishes electricity for resale to three municipalities, three investor-owned utilities, two electric cooperatives and one public power authority. Such sales for resale accounted for 4% of SCE&G's total electric sales revenues in 1994.
During 1994 the Company recorded a net increase of 7,538 electric customers, increasing its total customers to 476,412.
The electric sales volume decreased for the year ended December 31, 1994 compared to the corresponding period as a result of decreased residential kilowatt-hour sales and interchange power delivered due to milder weather in 1994. The peak demand of 3,444 MW was recorded on January 19, 1994. The all-time record of 3,557 MW was set on July 29, 1993.
Electric Interconnections
SCE&G's transmission system is part of the interconnected grid extending over a large part of the southern and eastern portion of the nation. SCE&G, Virginia Power Company, Duke Power Company, Carolina Power & Light Company, Yadkin, Incorporated and PSA are members of the Virginia-Carolinas Reliability Group, one of the several geographic divisions within the Southeastern Electric Reliability Council which provides for coordinated planning for reliability among bulk power systems in the Southeast. SCE&G is also interconnected with Georgia Power Company, Savannah Electric & Power Company, Oglethorpe Power Corporation and Southeastern Power Administration's Clark Hill Project.
Fuel Costs
The following table sets forth the average cost of nuclear fuel and coal and the weighted average cost of all fuels (including oil and natural gas) used by the Company for the years 1992-1994.
1994 1993 1992 Nuclear: Per million BTU $ .51 $ .47 $ .52 Coal: Per ton $40.43 $40.48 $40.45 Per million BTU 1.59 1.57 1.57 Weighted Average Cost of All Fuels: Per million BTU $ 1.39 $ 1.32 $ 1.27
The fuel costs shown above exclude the effects of a PSC approved offsetting of fuel costs through the application of credits carried on SCE&G's books as a result of a 1980 settlement of certain litigation.
Fuel Supply
The following table shows the sources and approximate percentages of total KWH generation by each category of fuel for the years 1992-1994 and the estimates for 1995 and 1996.
Percent of Total KWH Generated Actual Estimated 1994 1993 1992 1996 1995
Coal 77% 72% 65% 72% 69% Nuclear 17 22 29 23 26 Hydro 6 5 5 5 5 Natural Gas & Oil - 1 1 - - 100% 100% 100% 100% 100%
Coal is currently used at all four of SCE&G's major fossil fuel-fired plants and GENCO's Williams Station. Unit train deliveries are used at all of these plants. On December 31, 1994 SCE&G had approximately a 74-day supply of coal in inventory and GENCO had approximately a 68-day supply.
The supply of coal is obtained through contracts and purchases on the spot market. Spot market purchases are expected to continue for coal requirements in excess of those provided by the Company's existing contracts. Contracts for the purchase of coal represent the following percentages of estimated requirements for 1995 (approximately 5.1 million tons) and expire at the dates indicated (giving effect to the Company's potential to exercise renewal options):
Range of % of Initial Final No. of Tons % of 1995 Sulfur Content Expiration Expiration Per Year Requirement per Contract Date (1) Date (1)
482,500 9.5 1.1-1.5 02/28/1996 02/29/2000 359,500 7.0 1.0-1.8 12/31/1996 12/31/2002 562,500 11.0 1.1-2.0 03/31/1997 03/31/2003 144,000 2.8 1.0-1.6 04/30/1995 04/30/1997 981,000 19.2 up to 1.5 12/31/1996 12/31/2002 732,170 14.4 0.75-1.75 04/30/1997 04/30/2003 425,000 8.3 0.8-1.5 06/30/1995 06/30/1999 3,686,670 72.2
(1) Contract extensions beyond the initial expiration date are subject to mutual agreement on price, terms, quantity and quality.
All of the above contracts, except the contracts expiring on April 30, 1995 and June 30, 1995 which have firm prices, are subject to periodic price adjustments based on changes in indices published by the U. S. Department of Labor.
Coal purchased in December 1994 had an average sulfur content of 1.26%, which permitted SCE&G and GENCO to comply with existing environmental regulations. The Company believes that SCE&G's and GENCO's operations are in substantial compliance with all existing regulations relating to the discharge of sulfur dioxide. The Company has not been advised by officials of DHEC that any more stringent sulfur content requirements for existing plants are contemplated at the State level. However, the Company will be required to meet the more stringent Federal emissions standards established by the Clean Air Act (see "Environmental Control Matters").
SCE&G currently has adequate supplies of uranium under contract to manufacture nuclear fuel for Summer Station through 1997. The following table summarizes all contract commitments for the stages of nuclear fuel assemblies:
Commitment Contractor Regions(1) Term
Uranium Energy Resources of Australia 9-13 1990-1996 Uranium Everest Minerals 9-13 1990-1996 Conversion Sequoyah Fuel Corp. 8-12 1989-1995 Enrichment USEC (2) Through 2022 Fabrication Westinghouse 1-21 1982-2009 Reprocessing None
(1) A region represents approximately one-third to one-half of the nuclear core in the reactor at any one time. Region no. 11 was loaded in 1994 and Region no. 12 will be loaded in 1996.
(2) The contract with the USEC is a "requirements" type contract whereby the USEC supplies total enrichment requirements for the unit through the year 2022, as specified by its then current schedule.
SCE&G has on-site spent fuel storage capability until at least 2008 and expects to be able to expand its storage capacity to accommodate the spent fuel output for the life of the plant through rod consolidation, dry cask storage or other technology as it becomes available. In addition, there is sufficient on-site storage capacity over the life of Summer Station to permit storage of the entire reactor core in the event that complete unloading should become desirable or necessary for any reason. (See "Nuclear Fuel Disposal" under "Environmental Control Matters" for information regarding the contract with the DOE for disposal of spent fuel.)
GAS OPERATIONS Gas Sales
In 1994 residential sales accounted for 29% of gas sales revenues; commercial sales 19%; industrial sales 38%; sales for resale 14%. Dekatherm sales by classification for the years ended December 31, 1994 and 1993 are presented below:
SALES DEKATHERMS % CLASSIFICATION 1994 1993 CHANGE
Residential 11,531,558 12,651,000 (8.9) Commercial 9,886,622 9,611,556 (0.3) Industrial 41,513,880 30,335,059 36.9 Sale for resale 15,178,820 19,144,130 (20.7) Transportation gas 16,067,294 29,542,805 (45.6) Total 94,178,174 101,284,550 (7.3)
During 1994 the Company recorded a net increase of 3,878 customers, increasing its total customers to 238,614.
The demand for gas is affected by conservation, the weather, the price relationship between gas and alternate fuels and other factors.
The deregulation of natural gas prices at the wellhead which took place on January 1, 1985 and the changes in the prices of natural gas that have occurred under Federal regulation have resulted in the development of a spot market for natural gas in the producing areas of the country. Pipeline Corporation has been successful in purchasing lower cost natural gas in the spot market and arranging for its transportation to South Carolina. Pipeline Corporation has also negotiated contracts with certain direct and indirect industrial customers for the transportation of natural gas that the industrial customers purchase directly from suppliers.
On November 1, 1993 Transco and Southern Natural (Pipeline Corporation's interstate suppliers) began operations under Order No. 636, which deregulated the markets for interstate sales of natural gas by requiring that pipelines provide transportation services that are equal in quality for all gas supplies whether the customer purchases gas from the pipeline or another supplier. The Company's gas subsidiaries are positioned for the related market changes arising from this order.
Pipeline Corporation, operating wholly within the State of South Carolina, provides natural gas utility service, including transportation services, for its customers, and supplies natural gas to SCE&G and other wholesale purchasers. Hydrocarbons acquires and sells natural gas in the newly deregulated markets. Petroleum Resources owns natural gas reserves that supply natural gas for the interstate markets. Neither Hydrocarbons nor Petroleum Resources supplies natural gas to any affiliate for use in providing regulated gas utility services.
To reduce dependence on imported oil, NEPA imposes purchase requirements for alternate fuel vehicles for Federal, state, municipal and private fleets which increase over a period of years. The Company expects these requirements for alternate fuel vehicles to develop business opportunities for the sale of compressed natural gas as fuel for vehicles, but it cannot predict the magnitude of this new market.
Gas Cost and Supply
Pipeline Corporation purchases natural gas under contracts with producers and marketers on a short-term basis at current price indices and on a long-term basis for reliability assurance at index prices plus a gas inventory charge. The gas is brought to South Carolina through transportation agreements with both Southern Natural and Transco. The volume of gas which Pipeline Corporation is entitled to transport through these contracts on a firm basis is shown below:
Maximum Daily Supplier Contract Demand Capacity (MCF)
Southern Natural Firm Transportation 188,000 Transco Firm Transportation 29,300 Total 217,300
Additional natural gas volumes are brought to Pipeline Corporation's system as capacity is available for interruptible transportation.
During 1994 the average cost per MCF of natural gas purchased for resale, including spot market purchases, was approximately $2.00 compared to approximately $2.42 during 1993.
To meet the requirements of its other high priority natural gas customers during periods of maximum demand, Pipeline Corporation supplements its supplies of natural gas from two LNG plants. The LNG plants are capable of storing the liquefied equivalent of 1,900,000 MCF of natural gas, of which approximately 1,524,833 MCF were in storage at December 31, 1994. On peak days the LNG plants can regasify up to 150,000 MCF per day. Additionally, Pipeline Corporation had contracted for 6,450,727 MCF of natural gas storage space on December 31, 1994, of which 4,550,847 MCF were in storage at such date.
The Company believes that current supplies under contract and spot market purchases of natural gas are adequate to meet existing customer demands for service and to accommodate growth.
Curtailment Plans
The FERC has established allocation priorities applicable to firm and interruptible capacities on interstate pipeline companies which require Southern Natural and Transco to allocate capacity to Pipeline Corporation. The FERC allocation priorities are not applicable to deliveries by Pipeline Corporation to its customers, which are governed by a separate curtailment plan approved by the PSC.
Gas Reserves
Petroleum Resources is actively involved in oil and natural gas exploration, development and production activities. It currently owns and/or operates oil and gas properties in Texas, Louisiana, Mississippi, Oklahoma, California, Arkansas, Nebraska, Kansas, New Mexico, Alabama, Utah, Wyoming and Federal waters offshore Texas, Louisiana and Alabama.
Gas Marketing
Hydrocarbons markets natural gas as well as other light hydrocarbons. Hydrocarbons also owns and operates the Wilburton Gathering System in Oklahoma.
Propane Operations
Suburban purchases, delivers and sells propane. In 1994 Suburban sold approximately 23 million gallons of propane and had approximately 32,000 residential, commercial and industrial customers at year end.
Hydrocarbons owns and operates an 80 million gallon under- ground propane storage facility that leases storage space to industrial companies, utilities and others. It also owns and operates a 62 mile propane pipeline connected to the Dixie Pipeline System which traverses central South Carolina.
REGULATION General
SCANA is a public utility holding company within the meaning of PUHCA, but is exempt under Section 3(a)(1) of PUHCA from regulation by the SEC as a registered holding company unless and until the SEC shall otherwise order, except for Section 9(a)(2) thereof prohibiting the acquisition of securities of other public utilities without a prior order of the SEC.
SCE&G is subject to the jurisdiction of the PSC as to retail electric, gas and transit rates, service, accounting, issuance of securities (other than short-term promissory notes) and other matters.
National Energy Policy Act of 1992
Congress has passed NEPA, the principal thrust of which is to create a more competitive wholesale power supply market by creating "exempt wholesale generators" (EWGs) designated by the FERC, which are independent power producers (IPPs) whose owners will not become holding companies under PUHCA. Upon application of a wholesaler of electric energy, the FERC may order any electric utility that owns transmission facilities used for wholesale sales of electric energy to provide transmission service (including any enlargement of transmission capacity needed to provide the service) to the applicant. Charges for transmission service must be "just and reasonable" and a utility is entitled to recover "all legitimate, verifiable economic costs" incurred in connection with any transmission service so ordered. The FERC may not order such service where it (1) would "unreasonably impair the continued reliability of electric wheeling" judged by reference to "consistently applied regional or national reliability standards, guidelines or criteria;" (2) would result in "retail wheeling;" or (3) would conflict with state laws governing retail marketing areas of electric utilities. Electric utilities, including exempt and non-exempt holding companies, may own and operate EWGs subject to advance approval by state utility commissions, which are given access to books and records of the EWG and its affiliates to the extent that such a commission requires access to perform its regulatory duties. It allows both registered and exempt utility holding companies to acquire interests in foreign utility companies engaged in the generation, transmission or distribution of electricity or the retail distribution of gas, where a state commission has certified that it has the ability to protect the utility's retail ratepayers against adverse investments in foreign utilities by affiliates of public utilities that such commissions regulate. State commissions must consider rate making changes and other regulatory reform to ensure that electric utilities' investments in energy efficiency and demand side management programs are at least as profitable as investing in new generating capacity. FERC has issued a Notice of Proposed Rule Making to develop regulations under NEPA concerning EWGs and electric transmission service.
NEPA also has provisions concerning nuclear power, alternate fuel vehicles, minimum efficiency standards, integrated resource planning, demand side management incentives, a variety of energy research projects relating to environmental measures, electric and magnetic fields, hydroelectric projects, and global warming. It authorizes one step licensing for nuclear power plants and requires EPA to issue standards for the Yucca Mountain repository site for nuclear waste (see "Nuclear Fuel Disposal" under "Environmental Control Matters"). To reduce dependence on imported oil, NEPA imposes purchase requirements for alternate fuel vehicles for federal, state, municipal and private fleets which increase over a period of years (see "Gas Operations").
The Company's regulated business operations are likely to be impacted by the NEPA and FERC Order No. 636. As discussed above, NEPA is designed to create a more competitive wholesale power supply market by creating "exempt wholesale generators" and by potentially requiring utilities owning transmission facilities to provide transmission access to wholesalers. Order No. 636 is intended to deregulate the markets for interstate sales of natural gas by requiring that pipelines provide transportation services that are equal in quality for all gas suppliers whether the customer purchases gas from the pipeline or another supplier. In the opinion of the Company, it will be able to meet successfully the challenges of these altered business climates and does not anticipate there to be any materially adverse impact on the results of its operations, its financial position or its business prospects.
Federal Energy Regulatory Commission
SCE&G and GENCO are subject to regulation under the Federal Power Act, administered by the FERC and the DOE, in the transmission of electric energy in interstate commerce and in the sale of electric energy at wholesale for resale, as well as with respect to licensed hydroelectric projects and certain other matters, including accounting and the issuance of short-term promissory notes.
SCE&G holds licenses under the Federal Water Power Act or the Federal Power Act with respect to all its hydroelectric projects. The expiration dates of the licenses covering the projects are as follows:
Project Capability (KW) License Expiration Date
Neal Shoals 5,000 1993 Stevens Creek 9,000 1993 Columbia 10,000 2000 Saluda 206,000 2007 Parr Shoals 14,000 2020 Fairfield Pumped Storage 512,000 2020
Pursuant to the provisions of the Federal Power Act as amended by the Electric Consumers Protection Act of 1986, applications for new licenses for Neal Shoals and Stevens Creek were filed with the FERC on December 30, 1991. No competing applications were filed. The Neal Shoals license application was declared to be ready for environmental analysis by FERC Notice dated June 3, 1994, and the Stevens Creek Application was declared to be ready by FERC Notice dated September 6, 1994. FERC has issued Notices of Authorization for Continued Project Operation for both projects until FERC has acted on SCE&G's applications for new licenses. FERC is in the process of performing a Multiple-project Environmental Assessment for Neal Shoals, and a Single-project Environmental Assessment for Stevens Creek.
At the termination of a license under the Federal Power Act, the United States government may take over the project covered thereby, or the FERC may extend the license or issue a license to another applicant. If the United States takes over a project or the FERC issues a license to another applicant, the original licensee shall be paid its net investment in the project, not to exceed fair value, plus severance damages.
Nuclear Regulatory Commission
SCE&G is subject to regulation by the NRC with respect to the ownership and operation of Summer Station. The NRC's jurisdiction encompasses broad supervisory and regulatory powers over the construction and operation of nuclear reactors, including matters of health and safety, antitrust considerations and environmental impact. The NRC conducts semiannual reviews that identify plants that have demonstrated an excellent level of safety performance. For the sixth consecutive time, the NRC named Summer Station to its short list of top performing plants.
In addition, the Federal Emergency Management Agency is responsible for the review, in conjunction with the NRC, of certain aspects of emergency planning relating to the operation of nuclear plants.
RATE MATTERS
The following table presents a summary of significant rate activity for the years 1990 - 1994 based on test years:
*As modified to reflect lowering of rate of return SCE&G was seeking.
**Reflects a rate reduction of $3.7 million on January 4, 1993 (see discussion below) and excludes impact of rate reduction of $7.7 million on January 3, 1990 which corresponds to $7.7 million reduction in cost-of-service resulting from NRC approval of extension of Summer Station's operating life to 40 years.
On October 27, 1994 the PSC issued an order approving SCE&G's request to recover through a billing surcharge to its gas customers the costs of environmental cleanup at the sites of former manufactured gas plants. The billing surcharge, which was effective with the first billing cycle in November 1994 and is subject to annual review, provides for the recovery of approximately $16.2 million representing substantially all site assessment and cleanup costs for SCE&G's gas operations that had previously been deferred.
On June 7, 1993 the PSC issued an order on SCE&G's pending electric rate proceeding allowing an authorized return on common equity of 11.5%, resulting in a 7.4% annual increase in retail electric rates, or a projected $60.5 million annually, based on a test year. These rates are to be implemented in two phases over a two-year period: phase one, effective June 1993, producing $42.0 million annually, and phase two, effective June 1994, producing $18.5 million annually, based on a test year.
On September 14, 1992 the PSC issued an order granting SCE&G a $.25 increase in transit fares from $.50 to $.75 in both Columbia and Charleston, South Carolina; however, the PSC also required $.40 fares for low income customers and denied SCE&G's request to reduce the number of routes and frequency of service. The new rates were placed into effect on October 5, 1992. SCE&G has appealed the PSC's order to the Circuit Court.
Effective with the first billing cycle in December 1991, SCE&G's gas rate schedules for its residential, small commercial and small industrial customers have included a weather normalization adjustment (WNA). The WNA minimizes fluctuations in gas revenues due to abnormal weather conditions and is subject to an annual review by the PSC. The PSC order was based on a return on common equity of 12.25%. On August 26, 1994, the PSC ordered that the WNA be made permanent.
In May 1989 the PSC approved a volumetric and direct billing method for Pipeline Corporation to recover take-or-pay costs incurred from its interstate pipeline suppliers pursuant to FERC- approved final and non-appealable settlements. In December 1992 the Supreme Court approved Pipeline Corporation's full recovery of the take-or-pay charges imposed by its suppliers and treatment of these charges as a cost of gas. However, the Supreme Court declared the PSC-approved "purchase deficiency" methodology for recovery of these costs to be unlawful retroactive ratemaking and remanded the docket to the PSC to reconsider its recovery methodology. On April 30, 1994 the PSC issued an order regarding Pipeline Corporation's recovery of take-or-pay cost incurred pursuant to FERC-approved settlements with its upstream interstate pipeline suppliers. This order provided a mechanism for Pipeline Corporation to recover its take-or-pay cost volumetrically over a period of approximately 30 months. SCE&G receives a credit for payments made prior to the April 30 order which is netted against the current volumetric surcharge. That net cost is recovered by SCE&G through its purchased gas adjustment clause.
On August 8, 1990 the PSC issued an order effective November 1, 1990, approving changes in Pipeline Corporation's gas rate design for sales for resale service and upholding the "value-of-service" method of regulation for its direct industrial service. Direct industrial customers seeking "cost-of-service" based rates initiated two separate appeals to the Circuit Court, which reversed and remanded to the PSC its August 8, 1990 order. Pipeline Corporation appealed that decision to the Supreme Court which on January 10, 1994 reversed the two Circuit Court decisions and reinstated the PSC Order. The Supreme Court held that the industrial customer group's appeal was premature and failed to exhaust administrative remedies. Additionally, the Supreme Court interpreted the rate-making statutes of South Carolina to give discretion to the PSC in selecting the methodology to be used in setting rates for natural gas service.
On July 3, 1989 the PSC granted SCE&G approximately $21.9 million of a requested $27.2 million annual increase in retail electric revenues based upon an allowed return on common equity of 13.25%. The Consumer Advocate appealed the decision to the Supreme Court which, on August 31, 1992, found that the evidence in the record of that case did not support a return on common equity higher than 13.0% and remanded to the PSC a portion of its July 1989 order for a determination of the proper return on common equity consistent with the Supreme Court's opinion. On January 19, 1993 the PSC issued an order allowing a return on common equity of 13.0%, approving a refund based on the difference in rates created by the difference between the 13.0% and the 13.25% return on common equity and making other non-material adjustments to the calculation of cost-of-service. The total refund, before interest and income taxes, was approximately $14.6 million and was charged against 1992 "Electric Revenues." The refund plus interest was made during 1993.
Fuel Cost Recovery Procedures
The PSC has established a fuel cost recovery procedure which determines the fuel component in SCE&G's retail electric base rates semiannually based on projected fuel costs for the ensuing six- month period, adjusted for any overcollection or undercollection from the preceding six-month period. SCE&G has the right to request a formal proceeding at any time should circumstances dictate such a review.
In the April 1994 semiannual review of the fuel cost component of electric rates, the PSC voted to increase the rate from 13.0 mills per KWH to 14.16 mills per KWH, a monthly increase of $1.16 for an average customer using 1,000 KWH per month. For the October 1994 review the PSC voted to continue the rate of 14.16 mills per KWH.
SCE&G's gas rate schedules and contracts include mechanisms which allow it to recover from its customers changes in the actual cost of gas. SCE&G's firm gas rates allow for the recovery of a fixed cost of gas, based on projections, as established by the PSC in annual gas cost and gas purchase practice hearings. Any differences between actual and projected gas costs are deferred and included when projecting gas costs during the next annual gas cost recovery hearing.
In the October 1994 review the PSC authorized an increase in the base cost of gas from 47.100 cents per therm to 51.058 cents per therm which resulted in a monthly increase of $3.96 (including applicable taxes) based on an average of 100 therms per month on a residential bill during the heating season.
ENVIRONMENTAL MATTERS
General
Federal and state authorities have imposed upon the Company environmental regulations and standards relating primarily to air emissions, wastewater discharges and solid, toxic and hazardous waste management. It is difficult to forecast the ultimate effect of these regulations and standards upon existing and proposed operations. Moreover, developments in these areas may require that equipment and facilities be modified, supplemented or replaced. Capital Expenditures
In the years 1992 through 1994, capital expenditures for environmental control amounted to approximately $105.0 million. In addition, approximately $11.1 million, $9.4 million, and $7.9 million of environmental control expenditures were made during 1994, 1993 and 1992, respectively, which are included in "Other operation" and "Maintenance" expenses. It is not possible to estimate all future costs for environmental purposes but forecasts for minimum capitalized expenditures are $37.4 million for 1995 and $215.9 million for the four-year period 1996 through 1999. These expenditures are included in the Company's construction program.
Air Quality Control
The Clean Air Act requires electric utilities to reduce substantially emissions of sulfur dioxide and nitrogen oxide by the year 2000. These requirements are being phased in over two periods. The first phase has a compliance date of January 1, 1995 and the second, January 1, 2000. The Company meets all requirements of Phase I and, therefore, will not have to implement changes until compliance with Phase II requirements is necessary. The Company then will most likely meet its compliance requirements through the burning of natural gas and/or lower sulfur coal, the addition of scrubbers to coal-fired generating units, and the purchase of sulfur dioxide emission allowances. At December 31, 1994, the Company had purchased $19.4 million in emission allowances and had commitments to purchase $6.8 million in emission allowances in 1995. Low nitrogen oxide burners will be installed to reduce nitrogen oxide emissions.
The Company is continuing to refine a compliance plan that must be filed with the EPA by January 1, 1996. The Company currently estimates that air emissions control equipment will require capital expenditures of $158 million over the 1995-1999 period to retrofit existing facilities and an increased operation and maintenance cost of approximately $1 million per year. To meet compliance requirements through the year 2004, the Company anticipates total capital expenditures of $287 million.
Water Quality Control
The Federal Clean Water Act, as amended, provides for the imposition of effluent limitations that require various levels of treatment for each wastewater discharge. Under this Act, compliance with applicable limitations is achieved under a national permit program. Discharge permits have been issued for all and renewed for nearly all of SCE&G's and GENCO's generating units. Concurrent with renewal of these permits the permitting agency has implemented a more rigorous control program. The Company has been developing compliance plans to meet the additional parameters of control and compliance has involved updating wastewater treatment technologies. Amendments to the Clean Water Act proposed recently in Congress include several provisions which could prove costly to SCE&G. These include limitations to mixing zones and the implementation of technology-based standards.
Superfund Act and Environmental Assessment Program
As described in Note 1L of Notes to Consolidated Financial Statements, the Company has an environmental assessment program to identify and assess current and former operations sites that could require environmental cleanup. As site assessments are initiated, an estimate is made of the amount of expenditures, if any, necessary to investigate and clean up each site. These estimates are refined as additional information becomes available; therefore actual expenditures could differ significantly from the original estimates. Amounts estimated and accrued to date for site 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 electric operations and an eight-year period for gas operations. Such deferred amounts totaled $20.2 million and $19.6 million at December 31, 1994 and 1993, respectively. Estimates to date include, among other things, the costs estimated to be associated with the matters discussed in the following paragraphs.
The Company's principal subsidiary, SCE&G, owns five decommissioned manufactured gas plant sites which contain residues of by-product chemicals. SCE&G has maintained an active review of the sites to monitor the nature and extent of the residual contamination.
In September 1992 the EPA notified SCE&G, the City of Charleston and the Charleston Housing Authority of their potential liability for the investigation and cleanup of the Calhoun Park Area Site in Charleston, South Carolina. This site originally encompassed approximately 18 acres and included properties which were the locations for industrial operations, including a wood preserving (creosote) plant and one of SCE&G's decommissioned manufactured gas plants. The original scope of this investigation has been expanded to approximately 30 acres, including adjacent properties owned by the National Park Service and the City of Charleston, and private properties. The site has not been placed on the National Priority List, but may be added before cleanup is initiated. The potentially responsible parties (PRPs) have agreed with the EPA to participate in an innovative approach to site investigation and cleanup called "Superfund Accelerated Cleanup Model," allowing the pre-cleanup site investigations process to be compressed significantly. The PRPs have negotiated an administrative order by consent for the conduct of a Remedial Investigation/Feasibility Study (RI/FS) and a corresponding Scope of Work. Actual field work began November 1, 1993 after final approval and authorization was granted by EPA. SCE&G is also working with the City of Charleston to investigate potential contamination from the manufactured gas plant which may have migrated to the city's aquarium site. In 1994 the City of Charleston notified SCE&G that it considers SCE&G to be responsible for a $43.5 million increase in costs of the aquarium project attributable to delays resulting from contamination of the Calhoun Park Area Site. SCE&G believes it has meritorious defenses against this claim and does not expect its resolution to have a material impact on its financial position or results of operations.
SCE&G has been listed as a PRP and has recorded liabilities, which are not considered material, for the Macon-Dockery waste disposal site near Rockingham, North Carolina, the Aqua-Tech Environmental Inc. site in Greer, South Carolina and a landfill owned by Lexington County in South Carolina.
The Arkansas Department of Pollution Control and Ecology (ADPCE) has identified SCE&G as a PRP for clean-up of PCBs at an abandoned transformer rebuilding plant in Little Rock, Arkansas. No formal notice from ADPCE has been received concerning this issue. SCE&G does not believe that the resolution of this issue will have a material effect on SCE&G's results of operations or financial position.
Solid Waste Control
The South Carolina Solid Waste Policy and Management Act of 1991 requires promulgation of regulations addressing specified subjects, one of which affects the management of industrial solid waste. This regulation will establish minimum criteria for industrial landfills as mandated under the Act. The proposed regulation, if adopted as a final regulation in its present form, could significantly impact SCE&G's and GENCO's engineering, design and operation of existing and future ash management facilities. Potential cost impacts could be substantial.
Nuclear Fuel Disposal
The Nuclear Waste Policy Act of 1982 requires that the United States government make available by 1998 a permanent repository for high level radioactive waste and spent nuclear fuel and imposes a fee of 1.0 mill per KWH of net nuclear generation after April 7, 1983. Payments, which began in 1983, are subject to change and will extend through the operating life of SCE&G's Summer Station. SCE&G entered into a contract with the DOE on June 29, 1983 providing for permanent disposal of its spent nuclear fuel by the DOE. The DOE presently estimates that the permanent storage facility will not be available until 2010. SCE&G has on-site spent fuel storage capability until at least 2008 and expects to be able to expand its storage capacity to accommodate the spent fuel output for the life of the plant through rod consolidation, dry cask storage or other technology as it becomes available. The Act also imposes on utilities the primary responsibility for storage of their spent nuclear fuel until the repository is available.
OTHER MATTERS
With regard to SCE&G's insurance coverage for Summer Station, reference is made to Note 10B of Notes to Consolidated Financial Statements, which is incorporated herein by reference.
The Company's net investment in oil and gas properties is subject to a quarterly ceiling limitation calculation that is based on the future net revenues from forecasted production of proved oil and gas reserves valued at current or contract prices. Carrying values of proved reserves in excess of the ceiling limitation are expensed currently.
In an effort to limit exposure to changing natural gas prices and to avoid a writedown resulting from the application of the ceiling test at December 31, 1994, in January 1995 the Company entered into a series of forward contacts relating to natural gas production. These forward contracts have the effect of stabilizing the price that the Company will receive on approximately sixty percent of its forecasted natural gas production for the years 1995-2001. The forward contracts are at an average price of $1.88 per dekatherm. If market prices exceed the forward contracts' prices at the time of delivery, the Company will forego additional revenues to the extent of the price differential for the quantities subject to such forward contracts. However, the Company believes these forward contracts are appropriate in light of current market conditions and that the forward contracts reduce the Company's exposure to price risk. The Company remains exposed to price risk for any production that is not subject to such forward contracts.
ITEM 2.



ITEM 2. PROPERTIES
SCANA owns no property other than the capital stock of each of its subsidiaries. It owns all of the capital stock of each subsidiary except for the Preferred Stock of SCE&G and the capital stock of SCANA's indirect, wholly owned subsidiaries which are not material individually or in the aggregate. The assets formerly belonging to Peoples, acquired by SCANA Corporation in 1990, were transferred to SCE&G on January 1, 1994.
SCE&G's bond indentures, securing the First and Refunding Mortgage Bonds and First Mortgage Bonds issued thereunder, constitute direct mortgage liens on substantially all of its property. GENCO's Williams Station is subject to a first mortgage lien.
For a brief description of the properties of the Company's other subsidiaries, which are not significant as defined in Rule 1- 02 of Regulation S-X, see Item 1, "Business."
ELECTRIC
The following table gives information with respect to electric generating facilities, all of which are owned by SCE&G except as noted.
Net Generating Present Year Capability Facility Fuel Capability Location In-Service (KW)(1)
Steam (2) Urquhart Coal/Gas Beech Island, SC 1953 250,000 McMeekin Coal/Gas Irmo, SC 1958 252,000 Canadys Coal/Gas Canadys, SC 1962 430,000 Wateree Coal Eastover, SC 1970 700,000 Williams (3) Coal Goose Creek, SC 1973 560,000 Summer (4) Nuclear Parr, SC 1984 590,000
Gas Turbines Burton Gas/Oil Burton, SC 1961 28,500 Faber Place Gas Charleston, SC 1961 9,500 Hardeeville Oil Hardeeville, SC 1968 14,000 Canadys Gas/Oil Canadys, SC 1968 14,000 Urquhart Gas/Oil Beech Island, SC 1969 38,000 Coit Gas/Oil Columbia, SC 1969 30,000 Parr (5) Gas/Oil Parr, SC 1970 60,000 Williams (6) Gas/Oil Goose Creek, SC 1972 49,000 Hagood Gas/Oil Charleston, SC 1991 95,000
Hydro Neal Shoals Carlisle, SC 1905 5,000 Parr Shoals Parr, SC 1914 14,000 Stevens Creek Martinez, GA 1914 9,000 Columbia Columbia, SC 1927 10,000 Saluda Irmo, SC 1930 206,000
Pumped Storage Fairfield Parr, SC 1978 512,000
Total 3,876,000
(1) Summer rating. (2) Excludes Cope Electric Generating Station, a 385,000 KW plant currently under construction and scheduled for commercial operation in early 1996. (3) The steam unit at Williams Station, owned by GENCO, was converted from oil-fired to coal-fired operation in 1984 and, with modifications, can be reconverted to oil-fired operation should the need arise. (4) Represents SCE&G's two-thirds portion of the Summer Station. (5) Two of the four Parr gas turbines are leased and have a net capability of 34,000 KW. This lease expires on June 29, 1996. (6) The two gas turbines at Williams are leased and have a net capability of 49,000 KW. This lease expires on June 29, 1997.
SCE&G owns 445 substations having an aggregate transformer capacity of 18,885,437 KVA. The transmission system consists of 3,057 miles of lines and the distribution system consists of 15,421 pole miles of lines and 3,122 trench miles of underground lines.
GAS Natural Gas
SCE&G's gas system, including the Peoples system acquired by SCANA and transferred to SCE&G on January 1, 1994, consists of approximately 6,719 miles of three-inch equivalent distribution pipelines and approximately 11,078 miles of distribution mains and related service facilities.
Pipeline Corporation's gas system consists of approximately 1,759 miles of transmission pipeline of up to 24 inches in diameter which connect its resale customers' distribution systems with transmission systems of Southern Natural and Transco.
Pipeline Corporation owns two LNG plants, one located near Charleston, South Carolina the other in Salley, South Carolina. The Charleston facility can liquefy up to 6,000 MCF per day and store the liquefied equivalent of 1,000,000 MCF of natural gas. The Salley facility, which became operational in 1994, can store the liquefied equivalent of 900,000 MCF of natural gas and has no liquefying capabilities. On peak days, the Charleston facility can regasify up to 60,000 MCF per day and the Salley facility can regasify up to 90,000 MCF.
Petroleum Resources owns and/or operates oil and gas properties in Texas, Louisiana, Mississippi, Oklahoma, California, Arkansas, Nebraska, Kansas, New Mexico, Alabama, Wyoming and Utah and Federal waters offshore Texas, Louisiana and Alabama.
Propane
SCE&G has propane air peak shaving facilities which can supplement the supply of natural gas by gasifying propane to yield the equivalent of 102,000 MCF per day of natural gas. These facilities can store the equivalent of 430,405 MCF of natural gas.
TRANSIT
SCE&G owns 97 motor coaches which operate on a route system of 285 miles.
ITEM 3.

ITEM 3. LEGAL PROCEEDINGS
For information regarding legal proceedings, see ITEM 1., "BUSINESS" and Note 10 of Notes to Consolidated Financial Statements appearing in Item 8., "FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA."
ITEM 4.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not Applicable
CORPORATE STRUCTURE
SCANA CORPORATION A Holding Company, Owning Twelve Direct, Wholly Owned Subsidiaries
SOUTH CAROLINA SCANA HYDROCARBONS, INC. ELECTRIC & GAS COMPANY Markets natural gas as well Generates and sells electricity as other light hydrocarbons to wholesale and retail customers, and owns and operates a natural purchases, sells and transports gas gathering system in Oklahoma. natural gas at retail and provides Owns and operates a propane public transit service in Columbia pipeline and provides for and Charleston. transportation and bulk storage of propane. SOUTH CAROLINA GENERATING COMPANY, INC. SCANA PETROLEUM RESOURCES, INC. Owns and operates Williams Owns and/or operates oil and gas Station and sells electricity properties. to SCE&G. SERVICECARE, INC. SOUTH CAROLINA FUEL Provides energy related products COMPANY, INC. and services beyond the energy Acquires, owns and provides for meter, principally service financing for SCE&G's nuclear contracts on home appliances. fuel, fossil fuel and sulfur dioxide emission allowances. PRIMESOUTH, INC. Engages in power plant SUBURBAN PROPANE GROUP, INC. management and maintenance Purchases, delivers and services. sells propane. SCANA DEVELOPMENT CORPORATION SCANA CAPITAL RESOURCES, INC. Engaged in the acquisition, Has provided equity capital development, management and for diversified investments. sale of real estate. (In liquidation.) MPX SYSTEMS, INC. Provides fiber optic SOUTH CAROLINA PIPELINE telecommunications, video CORPORATION conferencing, specialized Purchases, sells and transports mobile radio services and is natural gas to wholesale and pursuing Personal Communication direct industrial customers. Services licenses for wireless Owns and operates two LNG plants communications. for the liquefaction, regasifi- cation and storage of natural gas.
Each of the above listed companies is organized and incorporated under the laws of the State of South Carolina.
EXECUTIVE OFFICERS OF THE REGISTRANT
The executive officers are elected at the annual organizational meeting of the Board of Directors, held immediately after the annual meeting of stockholders, and hold office until the next such organizational meeting, unless the Board of Directors shall otherwise determine, or unless a resignation is submitted.
Positions Held During Name Age Past Five Years Dates
L.M. Gressette, Jr. 63 Chairman of the Board, Chief Executive Officer and President *-present
W.B. Timmerman 48 Executive Vice President 1994-present Assistant Secretary 1993-present Senior Vice President *-1994 Chief Financial Officer and Controller *-present
B.D. Kenyon 52 President and Chief Operating Officer - SCE&G 1990-present Senior Vice President - Division Operations, Pennsylvania Power and Light Company *-1990
A. H. Gibbes 48 Senior Vice President - 1994-present SCANA and Assistant Secretary - SCE&G GENCO, Fuel Company, MPX, PrimeSouth, ServiceCare and SCANA Development Corp. General Counsel and Assistant Secretary 1993-present President and Treasurer - SCANA Development Corp. 1990-present
C.B. Novinger 45 Senior Vice President - Administration *-present
Max Earwood 62 President and Treasurer - South Carolina Pipeline Corporation *-present President and Treasurer - SCANA Hydrocarbons, Inc.; SCANA Petroleum Resources, Inc.; *-present Vice President - Gas Distribution, SCE&G *-1991
K.B. Marsh 39 Vice President - Finance, Treasurer & Secretary 1992-present Vice President of Corporate Planning - SCE&G 1991 Vice President and Controller - SCE&G 1989-1991
*Indicates position held at least since March 1, 1990
PART II
ITEM 5.

ITEM 5. MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED SECURITY HOLDER MATTERS