As filed with the Securities and Exchange Commission on
January 4, 2001
File No. 70-9533
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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POST-EFFECTIVE AMENDMENT NO. 2 TO
APPLICATION-DECLARATION
ON FORM U-1
UNDER THE
PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
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SCANA CORPORATION PALMETTO LIME, LLC
SOUTH CAROLINA ELECTRIC SCANA RESOURCES
AND GAS COMPANY DEVELOPMENT
SOUTH CAROLINA GENERATING CORPORATION
COMPANY, INC.
SOUTH CAROLINA FUEL SCANA PETROLEUM
COMPANY, INC. RESOURCES, INC.
SOUTH CAROLINA PIPELINE SCANA SERVICES, INC.
CORPORATION PUBLIC SERVICE COMPANY
SCANA ENERGY MARKETING INC. OF NORTH CAROLINA,
SCANA ENERGY TRADING, LLC INCORPORATED
SCANA PROPANE GAS, INC.
SCANA PROPANE STORAGE, INC. SCANA PUBLIC SERVICE
SERVICECARE INC. COMPANY LLC
PRIMESOUTH, INC. CARDINAL PIPELINE COMPANY, LLC
PALMARK, INC. PINE NEEDLE LNG COMPANY, LLC
1426 Main Street
Columbia, South Carolina 29201
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(Name of companies filing this statement and
address of principal executive offices)
SCANA CORPORATION
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(Name of top registered holding company parent)
Kevin B. Marsh
H. Thomas Arthur
<PAGE>
SCANA CORPORATION
1426 Main Street
Columbia, South Carolina 29201
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(Name and address of agent for service)
The Commission is requested to mail copies of
all orders, notices and communications to:
William S. Lamb, Esq.
LeBoeuf, Lamb, Greene & MacRae, L.L.P.
125 West 55th Street
New York, New York 10019
<PAGE>
On February 9, 2000, SCANA Corporation ("SCANA") received approval under
the Public Utility Holding Company Act of 1935, as amended (the "Act"), from the
Securities and Exchange Commission (the "Commission") to acquire the outstanding
voting securities of Public Service Company of North Carolina, Incorporated
("PSNC") in a merger transaction, Holding Co. Act Release No. 27133 (Feb. 9,
2000) (the "Merger Order"). SCANA and PSNC completed their merger effective at
the close of business on February 10, 2000 and SCANA registered as a public
utility holding company under the Act on February 11, 2000.
SCANA and the companies set forth on the cover page hereto (collectively,
the "Applicants") hereby file this post-effective amendment to its
application/declaration on Form U-1 relating to certain financing transactions
(the "Application/Declaration") under the Act in order to revise certain
authorized financing amounts contained in the order relating thereto, Holding
Co. Act Release No. 27137 (Feb. 14, 2000) (the "Financing Order").
ITEM 1. DESCRIPTION OF PROPOSED TRANSACTIONS
The Financing Order permitted, among other things, the following financing
transactions, subject to certain parameters set forth in section A below: (i)
issuances of equity and debt securities by SCANA in an amount totaling $1.935
billion and (ii) issuances by PSNC of commercial paper and short-term debt in an
amount totaling $125 million. The aggregate financing amount authorized in the
Financing Order is $2.385 billion.
The Applicants hereby submit this Application/Declaration for the
authorization and approval under sections 6(a), 7, 9(a), 10 and 12 of the Act
and Rules 43, 45, 53 and 54 to increase its authorized aggregate financing
amount to $3.125 billion from $2.385 billion by (i) increasing the aggregate
financing to be obtained from the issuance and sale of common stock, no par
value (other than for employee benefit plans or stock purchase and dividend
reinvestment plans), when combined with issuances of long-term debt by SCANA, to
$2.45 billion from $1.935 billion, and (ii) increasing the amount PSNC is
authorized to issue in the form of commercial paper and short-term debt to $200
million to be outstanding at any one time from $125 million to be outstanding at
any one time and obtaining authorization for PSNC to issue $150 million in
long-term debt, in each case through February 11, 2003 (the "Authorization
Period").
The increases described herein reflect a more complete analysis of the
financial needs of the post-merger system. Any financing transactions undertaken
pursuant to this authorization will remain subject to the safeguards provided by
the financing parameters set forth in the Financing Order and described in (A)
below as well as the capitalization commitments set forth in the Merger Order.
All other amounts authorized by the Financing Order that are not specifically
discussed herein shall remain unchanged.
A. Parameters for Financing Order
The following general terms are applicable, where appropriate, to the
financing transactions set forth herein:
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1. Effective Cost of Money on Borrowings
The effective cost of money on long-term debt borrowings occurring pursuant
to the authorizations granted under this Application/Declaration will not exceed
300 basis points over the comparable term U.S. Treasury securities and the
effective cost of money on short-term debt borrowings pursuant to authorizations
granted under this Application/Declaration will not exceed 300 basis points over
the comparable term London Interbank Offered Rate ("LIBOR").
2. Maturity of Debt
The maturity of indebtedness will not exceed 50 years.
3. Issuance Expenses
The underwriting fees, commissions or other similar remuneration paid in
connection with the non-competitive issue, sale or distribution of a security
pursuant to this Application/Declaration will not exceed 5% of the principal or
total amount of the security being issued.
4. Use of Proceeds
The proceeds from the sale of securities in external financing transactions
will be used for general corporate purposes including (i) the financing, in
part, of the capital expenditures of the SCANA system, (ii) the financing of
working capital requirements of the SCANA system, (iii) the acquisition,
retirement or redemption pursuant to Rule 42 of securities previously issued by
SCANA or its Subsidiaries without the need for prior Commission approval, and
(iv) other lawful purposes, including direct or indirect investment in companies
authorized under the Merger U-1 and in Rule 58 companies and ETCs. The
Applicants represent that no such financing proceeds will be used to acquire a
new subsidiary unless such financing is consummated in accordance with an order
of the Commission or an available exemption under the Act.
B. Description of Transactions
(i) SCANA External Financing
Subject to the parameters above, as well as the other conditions set forth
in the Financing Order, the Applicants hereby request authorization for an
increase in the amount of equity and long-term debt SCANA is permitted to issue
to $2.45 billion from $1.935 billion. Attached as Annex A hereto is the pro
forma capital structure of SCANA taking into account the above amended financing
request. This Application/Declaration does not include any request to supplement
or amend the financing authorization of South Carolina Electric & Gas Co. or
Genco, nor any request to supplement or amend intrasystem financing authority
with respect to these entities.
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(ii) PSNC Financing
(a) Short-Term Financing
Subject to the parameters above, as well as the other conditions set forth
in the Financing Order, the Applicants hereby request authorization for an
increase in the amount of commercial paper and credit lines PSNC is permitted
issue to $200 million from $125 million. The increase is required to fully take
into account increased short-term financing needs of PSNC during its peak season
(winter months).
(b) Long-Term Debt Securities
Subject to the parameters set forth above, as well as the other conditions
set forth in the Financing Order, the Applicants hereby request authorization
for PSNC to issue up to $150 million in long-term debt securities during the
Authorization Period. Such long-term debt securities would be comprised of
medium-term notes under the indenture attached hereto as Exhibit B-1 or
institutional debt. Any long-term debt security would have such designation,
aggregate principal amount, maturity and interest rate(s) or methods of
determining the same, terms of payment of interest, redemption provisions,
sinking fund terms and other terms and conditions as PSNC may determine at the
time of issuance. PSNC will not issue any new long- term debt unless its
outstanding long-term debt is rated "investment grade" by at least one
nationally recognized statistical rating organization. This authorization is
required because issuances of such securities by PSNC technically do not qualify
for the exemption provided in Rule 52 of the Act.1 Pursuant to Rule 52, most
securities issuances by public utility subsidiaries of registered holding
companies, such as PSNC, are exempt from prior Commission approval provided,
among other things, "the issue and sale of the security have been expressly
authorized by the state commission of the state in which the subsidiary is
organized and doing business". The Rule 52 exemption is designed to give effect
to the Commission's belief "registered holding company systems should have a
greater ability to engage in routine financings without the regulatory burden of
prior Commission authorization, and that this may be done without jeopardizing
the interests the Act is designed to protect." (Holding Co. Act Release No.
26311 (June 20, 1995))
The interests that the Act is designed to protect will not be jeopardized
by these debt issuances despite the fact that they do not fit within the safe
harbor of the Rule 52 exemption. PSNC is a public utility company franchised to
serve a 31-county area in North Carolina, transporting, distributing and selling
natural gas to approximately 360,000 residential, commercial and industrial
customers in North Carolina. In accordance with the Amended and Restated
Agreement and Plan of Merger among SCANA, PSNC, Merger Sub I and Merger Sub II
and as set out in detail in the Merger Order, PSNC was merged with and into
Merger Sub II, a South Carolina corporation, with Merger Sub II surviving as a
1As of June 30, 2000, PSNC had the following outstanding medium-term notes,
all of which were issued prior to the Merger Effective Time: $21.5 million
principal amount of 10% Notes Due 2004; $32.0 million principal amount 8.75%
Notes Due 2012; $50 million principal amount 6.99% Notes Due 2026; and $50
million principal amount 7.45% Notes Due 2026.
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<PAGE>
wholly owned subsidiary of SCANA and changing its name to PSNC. Thus, PSNC is
currently incorporated in the state of South Carolina although it conducts its
gas distribution activities entirely within the state of North Carolina. Under
South Carolina law, the South Carolina Public Service Commission (the "SCPSC")
jurisdiction with respect to securities issuances is limited to electric utility
companies operating in the state of South Carolina. Therefore, PSNC is unable to
obtain authorization from the state in which it is organized since the SCPSC
does not have any legislatively approved interest in such issuances. However,
with respect to North Carolina, the only state in which PSNC operates as a
utility and has ratepayers, the North Carolina Utilities Commission has
authorized the issuance by PSNC of up to $150 million in long-term debt
securities and has found such issuance to be compatible with the public interest
and the consistent with PSNC's provision of adequate utility service to the
public (See Exhibit D-1).
Attached as Annex A hereto is the pro forma capital structure of PSNC
taking into account the above amended financing request.
C. Certificates of Notification
SCANA will include in the quarterly Rule 24 certificates that it is
required to file pursuant to the Financing Order the amount and terms of any
long-term debt issued by PSNC pursuant to the authorization sought hereunder as
well as copies of any additional note or agreement executed and delivered
pursuant thereto.
D. Involvement of SCANA and its Affiliates with Exempt
Wholesale Generators and Foreign Utility Companies
Neither SCANA nor any subsidiary thereof presently has, or as a consequence
of the proposed transactions will have, an interest in any exempt wholesale
generator ("EWG") or foreign utility company ("FUCO"), as those terms are
defined in Sections 32 and 33 of the Act, respectively. None of the proceeds
from the proposed transactions will be used to acquire any securities of, or any
interest in, an EWG or FUCO. Moreover, neither SCANA nor any of its subsidiaries
is, or as a consequence of the proposed transactions will become, a party to,
and such entities do not and will not have any rights under, a service, sales or
construction contract with any affiliated EWGs or FUCOs except in accordance
with the rules and regulations promulgated by the Commission with respect
thereto. Rule 53(a) states that in determining whether to approve the issue or
sale of a security by a registered holding company for the purposes of financing
the acquisition of an EWG or issue a guarantee in favor of an EWG, the
Commission shall not make a finding that such security is not reasonably adapted
to the earning power of such company or to the security structure of such
company or companies in the same holding company system, or that the
circumstances are such as to constitute the making of such guarantee an improper
risk, if certain conditions are met, including that the aggregate investment
does not exceed 50 percent of the system's consolidated retained earnings. This
Application/Declaration is not requesting authorization to issue a security for
the purposes of financing the acquisition of an EWG nor is it requesting
authority to issue a guarantee in favor of an EWG. Rule 54 provides that in
determining whether to approve the issue or sale of a security by a registered
holding company for
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<PAGE>
purposes other than financing the acquisition of an EWG or issuing a guarantee
in favor of an EWG or for other transactions by a registered holding company or
subsidiaries other than with resepct to EWGs or FUCOs, the Commission shall not
consider the effect of the capitalization or earnings of any subsidiary which is
an EWG or FUCO upon the registered holding company system if Rules 53 (a), (b)
and (c) are satisfied. Because SCANA does not have any direct or indirect
subsidiaries that are EWGs or FUCOs, it is not requesting any relief under Rule
54 in this Application/Declaration. Finally, as stated above, SCANA and its
subsidiaries currently have no investment in EWGs or FUCOs, it follows that the
SCANA's aggregate investment in such entities is currently 0% of consolidated
retained earnings.
ITEM 2. FEES, COMMISSIONS AND EXPENSES
The fees, commissions and expenses of the Applicants are expected to be
paid or incurred, directly or indirectly, in connection with the transactions
described above are estimated as follows:
Legal fees .......................................... $10,000
Miscellaneous .......................................... $ 4,000
Total .......................................... $14,000
ITEM 3. APPLICABLE STATUTORY PROVISIONS
Sections 6(a), 7, 9(a), 10 and 12 of the Act and Rules 43 and 45 are
considered applicable to the proposed transactions.
To the extent that the proposed transaction is considered by the Commission
to require authorization, approval or exemption under any section of the Act or
provision of rules or regulations other than those specifically referred to
herein, request for such authorization, approval or exemption is hereby made.
ITEM 4. REGULATORY APPROVALS
The South Carolina Public Service Commission has jurisdiction over
issuances of securities by SCE&G and GENCO, other than securities payable within
one year of the date of issuance or the renewal of short-term obligations for a
two-year or shorter period. The North Carolina Utilities Commission has
jurisdiction over issuances of securities by PSNC, other than the issuance of
notes with a maturity of two years or less or renewals thereof for a six-year or
shorter period.
No state or federal commission other than the Commission has jurisdiction
with respect to any of the proposed transactions described in this
Application-Declaration.
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ITEM 5. PROCEDURE
It is requested that the Commission issue and publish no later than January
5, 2001, the requisite notice under Rule 23 with respect to the filing of this
Application-Declaration, such notice to specify a date not later than January
29, 2001 as the date after which an order granting and permitting this
Application-Declaration to become effective may be entered by the Commission and
that the Commission enter not later than January 31, 2001, an appropriate order
granting and permitting this Application-Declaration to become effective.
The Applicants respectfully request that appropriate and timely action be
taken by the Commission in this matter. No recommended decision by a hearing
officer or other responsible officer of the Commission is necessary or required
in this matter. The Division of Investment Management of the Commission may
assist in the preparation of the Commission's decision in this matter. There
should be no thirty-day waiting period between the issuance and effective date
of any order issued by the Commission in this matter, and it is respectfully
requested that any such order be made effective immediately upon the entry
thereof.
ITEM 6. EXHIBITS AND FINANCIAL STATEMENTS
a) Exhibits
Exhibit No. Description of Exhibit
B-1 PSNC Indenture (filed as Exhibit 4-E-1 to
PSNC Form 10-Q filed with the Commission
on February 13, 1996 (File No. 1-11429)
and incorporated by reference herein).
D-1 North Carolina Utilities Commission Order
Regarding PSNC Debt Issuances (previously
filed)
F-1 Opinion of Counsel (to be filed by
amendment)
F-2 "Past Tense" Opinion of Counsel (to be
filed by amendment).
G-1 Financial Data Schedule (previously filed)
G-2 SCANA's 10-K for the year ended December
31, 1999 filed with the Commission on
March 27, 2000 (File No. 1-8809) and
incorporated by reference herein.
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<PAGE>
G-3 SCANA's 10-Q for the period ended March
31, 2000 filed with the Commission on May
12, 2000 and amended on May 19, 2000 (File
No. 1-8809) and incorporated by reference
herein.
G-4 SCANA's 10-Q for the period ended June 30,
2000 filed with the Commission on August
11, 2000 (File No. 1-8809) and incorporated
by reference herein.
G-5 SCANA's 10-Q for the period ended September
30, 2000 filed with the Commission on
November 14, 2000 (File No. 1-8809) and
incorporated by reference herein.
H-2 Proposed Form of Notice (previously filed)
b) Financial Statements
No. Description of Financial Statements
FS-1 SCANA's Actual Consolidated Condensed Balance
Sheet as of December 31, 1999 (Filed with
the Commission with SCANA's 10-K for the
year ended 1999 (File No. 1-8809) and
incorporated by reference herein).
FS-2 SCANA's Unaudited Pro Forma Condensed
Consolidated Balance Sheets as of
September 30, 2000
FS-3 SCANA's Actual Consolidated Condensed
Statement of Earnings for the year ended 1999
(Filed with the Commission with SCANA's 10-K
for the year ended 1999 (File No. 1-8809) and
incorporated by reference herein).
FS-4 SCANA's Unaudited Pro Forma Consolidated
Condensed Statement of Earnings as of
September 30, 2000
FS-5 Notes to SCANA's Unaudited Pro Forma
Condensed Consolidated Financial Statements
as of September 30, 2000
ITEM 7. INFORMATION AS TO ENVIRONMENTAL EFFECTS
None of the matters that are the subject of this Application-Declaration
involve a "major federal action" nor do they "significantly affect the quality
of the human environment" as those terms are used in Section 102(2)(C) of the
National Environmental Policy Act. None of the proposed transactions that are
the subject of this Application-Declaration will result in changes in the
operation of the Applicants that will have an impact on the environment. The
Applicants are not aware of any federal agency which has prepared or is
preparing an environmental impact statement with respect to the transactions
proposed herein.
SIGNATURE
Pursuant to the requirements of the Public Utility Holding Company Act of
1935, the Applicants have duly caused this Application-Declaration to be signed
on their behalf by the undersigned thereunto duly authorized.
Dated: January 4, 2001
SCANA CORPORATION
By:/s/ H. Thomas Arthur
--------------------
Name: H. Thomas Arthur
Title: Senior Vice President and
General Counsel
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ANNEX A
<TABLE>
SCANA Corporation
Historical and Pro Forma Capital Structure
September 30, 2000
(Dollar Amounts in Millions)
<CAPTION>
Maximum Additional % of Total
% of Total Financing Financing Pro Forma Capitalization
Actual Capitalization Adjustments Pro Forma Adjustments as adjusted as adjusted
<S> <C> <C> <C> <C> <C> <C> <C>
Common stock equity $ 2,068 38.3% $ 2,068 $ 200(2) $ 2,268 33.1%
Preferred stock equity $ 117 2.2% $ 117 $ 117 1.7%
SCE&G Obligated Mandatorily $ 50 0.9% $ 50 $ 50 0.7%
Redeemable Preferred Securities of
SCE&G's Subsidiary Trust I, holding
solely $50 million principal amount
of 7.55% Junior Subordinated
Debentures of SCE&G, due 2027
Debt (long and short-term) $ 3,164 58.6% $ 935(1) $ 4,099 $ 315(2) $ 4,414 64.5%
------------------------ ----------- ------------------- --------------------------
Total $ 5,399 100.0% $ 935 $ 6,334 $ 515 $ 6,849 100.0%
======================== =========== =================== ==========================
Public Service Co of North Carolina, Incorporated
Historical and Pro Forma Capital Structure
September 30, 2000
(Dollar Amounts in Millions)
Maximum Additional % of Total
% of Total Financing Financing Pro Forma Capitalization
Actual Capitalization Adjustments Pro Forma Adjustments as adjusted as adjusted
Common stock equity $ 702 71.3% $ 702 $ 702 52.8%
Debt (long and short-term) $ 283 28.7% $ 119(3) $ 402 $ 225(4) $ 627 47.2%
------------------------ ----------- ------------------- --------------------------
Total $ 985 100.0% $ 119 $ 1,104 $ 225 $ 1,329 100.0%
======================== =========== =================== ==========================
See Notes to Historical and Pro Forma Capital Structure.
</TABLE>
To record increased debt of $1,235 million to reflect the maximum amount
originally authorized by the PUCHA order of February 2000, computed as follows,
assuming issue costs of 5%.
Current financing authority $1,935 million
Debt issued to finance acquisition 700 million
Debt issued for other purposes 300 million
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Remaining financing authority $ 935 million
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To record increased common stock of $200 million and debt of $315 million to
reflect authorization requested in this U-1, computed as follows, assuming issue
costs of 5%.
Current financing authority $1,935 million
Additional authority requested 515 million
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Authority if request approved $2,450 million
===========
To record increased short-term debt of $119 million to reflect the maximum
amount originally aughorized by the PUHCA order of February 2000, computed as
follows:
Current financing authority $ 125 million
Issuances, net 6 million
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Remaining financing authority $ 119 million
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To record increased short and long-term debt to reflect authorization requested
in this U-1, computed as follows:
Current financing authority $ 125
Additional commercial paper and
short-term debt authority requested 75
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Authority if request approved $ 200
===========
Additional commercial paper and
short-term debt authority requested $ 75
Long-term debt authority requested 150
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Additional financing adjustments $ 225
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