SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
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ACT OF 1934
For the quarterly period ended September 30, 1998
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OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from to
Commission file number 1-3375
South Carolina Electric & Gas Company
(Exact name of registrant as specified in its charter)
South Carolina 57-0248695
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
1426 Main Street, Columbia, South Carolina 29201
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (803) 217-9000
-----------------------
Former name, former address and former fiscal year, if changed
since last report.
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X . No .
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.
Yes . No .
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
As of September 30, 1998, there were issued and outstanding 40,296,147
shares of the registrant's common stock, $4.50 par value, all of which were
held, beneficially and of record, by SCANA Corporation.
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SOUTH CAROLINA ELECTRIC & GAS COMPANY
INDEX
PART I. FINANCIAL INFORMATION Page
Item 1. Financial Statements
Consolidated Balance Sheets as of September 30, 1998
and December 31, 1997.................................... 3
Consolidated Statements of Income and Retained Earnings
for the Periods Ended September 30, 1998 and 1997........ 5
Consolidated Statements of Cash Flows for the Periods
Ended September 30, 1998 and 1997........................ 6
Notes to Consolidated Financial Statements............... 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations....................... 11
Item 3. Quantitative and Qualitative Disclosure About Market Risk. 18
PART II. OTHER INFORMATION
Item 1. Legal Proceedings......................................... 18
Item 6. Exhibits and Reports on Form 8-K.......................... 18
Signatures............................................................ 19
Exhibit Index......................................................... 20
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PART I
FINANCIAL INFORMATION
Item 1. Financial Statements.
<TABLE>
<CAPTION>
SOUTH CAROLINA ELECTRIC & GAS COMPANY
CONSOLIDATED BALANCE SHEETS
As of September 30, 1998 and December 31, 1997
(Unaudited)
September 30, December 31,
1998 1997
---- ----
(Millions of Dollars)
<S> <C> <C>
ASSETS
Utility Plant:
Electric............................................. $4,034 $4,020
Gas.................................................. 355 353
Other................................................ 86 84
------ ------
Total.............................................. 4,475 4,457
Less accumulated depreciation and amortization....... 1,493 1,421
------ ------
Total.............................................. 2,982 3,036
Construction work in progress........................ 335 221
Nuclear fuel, net of accumulated amortization........ 43 53
------ ------
Utility Plant, Net............................... 3,360 3,310
------ ------
Nonutility Property and Investments, net of
accumulated depreciation............................. 16 17
------ ------
Current Assets:
Cash and temporary cash investments.................. 22 6
Receivables - customer and other..................... 190 165
Inventories (at average cost):
Fuel............................................... 21 23
Materials and supplies............................. 46 48
Prepayments.......................................... 12 10
Deferred income taxes................................ 21 21
------ ------
Total Current Assets............................. 312 273
------ ------
Deferred Debits:
Emission allowances.................................. 31 31
Environmental........................................ 28 32
Nuclear plant decommissioning fund................... 54 49
Pension asset, net................................... 100 82
Other................................................ 262 260
------ ------
Total Deferred Debits............................ 475 454
------ ------
Total................................. $4,163 $4,054
====== ======
See notes to consolidated financial statements.
</TABLE>
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<TABLE>
<CAPTION>
SOUTH CAROLINA ELECTRIC & GAS COMPANY
CONSOLIDATED BALANCE SHEETS
As of September 30, 1998 and December 31, 1997
(Unaudited)
September 30, December 31,
1998 1997
(Millions of Dollars)
<S> <C> <C> )
CAPITALIZATION AND LIABILITIES
Stockholders' Investment:
Common Equity......................................... $1,501 $1,447
Preferred Stock (not subject to purchase or sinking
funds).............................................. 106 106
------ ------
Total Stockholders' Investment.................... 1,607 1,553
Preferred Stock, net (subject to purchase or
sinking funds)........................................ 11 12
Company - Obligated Mandatorily Redeemable Preferred Securities of the Company's
Subsidiary Trust, SCE&G Trust I holding solely $50 million, principal amount
of 7.55% of Junior Subordinated Debentures of the
Company, due 2027..................................... 50 50
Long-term debt, net..................................... 1,247 1,262
------ ------
Total Capitalization............................ 2,915 2,877
------ ------
Current Liabilities:
Short-term borrowings................................. 33 13
Current portion of long-term debt..................... 29 48
Accounts payable...................................... 43 53
Accounts payable - affiliated companies............... 20 32
Customer deposits..................................... 17 16
Taxes accrued......................................... 90 45
Interest accrued...................................... 25 22
Dividends declared.................................... 58 58
Other................................................. 7 7
------ ------
Total Current Liabilities....................... 322 294
------ ------
Deferred Credits:
Deferred income taxes................................. 554 539
Deferred investment tax credits....................... 87 89
Reserve for nuclear plant decommissioning............. 54 49
Postretirement benefits............................... 83 61
Other................................................. 148 145
------ ------
Total Deferred Credits.......................... 926 883
------ ------
Total ................................. $4,163 $4,054
====== ======
See notes to consolidated financial statements.
</TABLE>
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<TABLE>
<CAPTION>
SOUTH CAROLINA ELECTRIC & GAS COMPANY
CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS
For the Periods Ended September 30, 1998 and 1997
(Unaudited)
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Three Months Ended Nine Months Ended
September 30, September 30,
1998 1997 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
(Millions of Dollars)
OPERATING REVENUES:
Electric.......................................... $393 $340 $ 962 $ 841
Gas............................................... 37 36 169 162
Transit........................................... 1 1 1 1
---- ---- ----- ------
Total Operating Revenues..................... 431 377 1,132 1,004
---- ---- ----- ------
OPERATING EXPENSES:
Fuel used in electric generation.................. 68 58 164 136
Purchased power (including
affiliated purchases)........................... 33 29 95 81
Gas purchased from affiliate
for resale...................................... 25 26 104 101
Other operation................................... 62 58 173 162
Maintenance....................................... 20 15 58 49
Depreciation and amortization..................... 35 35 96 104
Income taxes...................................... 52 41 110 85
Other taxes....................................... 24 22 71 67
---- ---- ----- ------
Total Operating Expenses..................... 319 284 871 785
---- ---- ----- ------
OPERATING INCOME.................................... 112 93 261 219
---- ---- ----- ------
OTHER INCOME:
Allowance for equity funds used
during construction............................. 2 1 5 4
Other income (loss), net of income taxes.......... (1) 2 (1) 2
---- ---- ----- ------
Total Other Income........................... 1 3 4 6
---- ---- ----- ------
INCOME BEFORE INTEREST CHARGES...................... 113 96 265 225
---- ---- ----- ------
INTEREST CHARGES (CREDITS):
Interest expense on long term debt................ 24 24 72 73
Other interest expense............................ 1 1 4 4
Allowance for borrowed funds
used during construction........................ (1) (2) (5) (5)
---- ----- ----- ------
Total Interest Charges, net.................. 24 23 71 72
---- ---- ----- ------
INCOME BEFORE PREFERRED DIVIDEND REQUIREMENTS
ON MANDATORILY REDEEMABLE PREFERRED
SECURITIES 89 73 194 153
PREFERRED DIVIDEND REQUIREMENT OF COMPANY
- OBLIGATED MANDATORILY REDEEMABLE
PREFERRED SECURITIES 1 - 3 -
---- ---- ----- ------
NET INCOME.......................................... 88 73 191 153
Preferred Stock Cash Dividends
(at stated rates)................................. (2) (3) (5) (7)
---- ---- ----- ------
Earnings Available for Common Stock................. 86 70 186 146
Retained Earnings at Beginning
of Period......................................... 464 421 438 415
Common Stock Cash Dividends
Declared.......................................... (57) (36) (131) (106)
---- ---- ----- ------
Retained Earnings at End of Period.................. $493 $455 $ 493 $ 455
==== ==== ===== ======
See notes to consolidated financial statements.
</TABLE>
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SOUTH CAROLINA ELECTRIC & GAS COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Periods Ended September 30, 1998 and 1997
(Unaudited)
Nine Months Ended
September 30,
1998 1997
(Millions of Dollars)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income........................................... $ 191 $ 153
Adjustments to reconcile net income to net cash
provided from operating activities:
Depreciation and amortization...................... 96 105
Amortization of nuclear fuel....................... 15 16
Deferred income taxes, net......................... 15 3
Pension asset...................................... (18) (12)
Postretirement benefits............................ 22 9
Allowance for funds used during construction....... (10) (9)
Over collections, fuel adjustment clause........... (1) 10
Changes in certain current assets and liabilities:
(Increase) decrease in receivables............... (25) 4
(Increase) decrease in inventories............... 4 3
Increase (decrease) in accounts payable.......... (22) (14)
Increase (decrease) in taxes accrued............. 45 27
Increase (decrease) in interest accrued.......... 3 4
Other, net......................................... (2) 12
----- -----
Net Cash Provided From Operating Activities............ 313 311
----- -----
CASH FLOWS FROM INVESTING ACTIVITIES:
Utility property additions and construction
expenditures, net of AFC........................... (147) (157)
Nonutility property and investments.................. 1 (5)
----- -----
Net Cash Used For Investing Activities................. (146) (162)
----- -----
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds:
Equity contributions from parent................... - 12
Other long-term debt............................... - 1
Issuance of preferred stock........................ - 99
Repayments:
Preferred stock.................................... (1) (3)
First and refunding mortgage bonds................. (20) (15)
Other long-term debt............................... (4) (10)
Dividend payments:
Common stock....................................... (130) (105)
Preferred stock.................................... (6) (5)
Short-term borrowings, net........................... 20 (90)
Fuel and emission allowance financings, net.......... (10) (1)
----- -----
Net Cash Used For Financing Activities................. (151) (117)
----- -----
NET INCREASE IN CASH AND TEMPORARY
CASH INVESTMENTS..................................... 16 32
CASH AND TEMPORARY CASH INVESTMENTS AT JANUARY 1....... 6 5
----- -----
CASH AND TEMPORARY CASH INVESTMENTS AT SEPTEMBER 30.... $ 22 $ 37
===== =====
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for - Interest (includes capitalized
interest of $5 for 1998 and 1997.... $ 78 $ 71
- Income taxes......................... 41 51
NON-CASH INVESTING ACTIVITIES
- City of Charleston Franchise Fee..... - 25
See notes to consolidated financial statements.
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SOUTH CAROLINA ELECTRIC & GAS COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 1998
(Unaudited)
The following notes should be read in conjunction with the Notes to
Consolidated Financial Statements appearing in South Carolina Electric & Gas
Company's (the Company) Annual Report on Form 10-K for the year ended December
31, 1997. These are interim financial statements, and the amounts reported in
the Consolidated Statements of Income are not necessarily indicative of amounts
expected for the year. In the opinion of management, the information furnished
herein reflects all adjustments, all of a normal recurring nature except as
described in Note 2, which are necessary for a fair statement of the results for
the interim periods reported.
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
A. Basis of Accounting
The Company accounts for its regulated utility operations, assets and
liabilities in accordance with the provisions of Statement of Financial
Accounting Standards No. 71 (SFAS 71). The accounting standard requires
cost-based rate-regulated utilities to recognize in their financial
statements revenues and expenses in different time periods than do
enterprises that are not rate-regulated. As a result the Company has
recorded, as of September 30, 1998, approximately $224 million and $62
million of regulatory assets and liabilities, respectively, including
amounts recorded for deferred income tax assets and liabilities of
approximately $118 million and $52 million, respectively. The electric
and gas regulatory assets (excluding deferred income tax assets) of
approximately $69 million and $35 million, respectively, are being
recovered through rates, and the Public Service Commission of South
Carolina (PSC) has approved accelerated recovery of approximately $24
million of the electric regulatory assets. In the future, as a result of
deregulation or other changes in the regulatory environment, the Company
may no longer meet the criteria for continued application of SFAS 71 and
could be required to write off its regulatory assets and liabilities.
Such an event could have a material adverse effect on the Company's
results of operations in the period the write-off is recorded, but it is
not expected that cash flows or financial position would be materially
affected.
B. Reclassifications
Certain amounts from prior periods have been reclassified to conform with
the 1998 presentation.
2. RATE MATTERS
On January 9, 1996 the PSC issued an order granting the Company an
increase in retail electric rates of 7.34%, which was designed to produce
additional revenues, based on a test year, of approximately $67.5 million
annually. The increase was implemented in two phases. The first phase, an
increase in revenues of approximately $59.5 million annually, or 6.47%,
commenced in January 1996. The second phase, an increase in revenues of
approximately $8.0 million annually, or .87%, was implemented in January
1997. The PSC authorized a return on common equity of 12.0%. The PSC also
approved establishment of a Storm Damage Reserve Account capped at $50
million to be collected through rates over a ten-year period.
Additionally, the PSC approved accelerated recovery of a significant
portion of the Company's electric regulatory assets (excluding deferred
income tax assets) and the remaining transition obligation for
postretirement benefits other than pensions, changing the amortization
periods to allow recovery by the end of the year 2000. The Company's
request to shift, for rate-
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making purposes, approximately $257 million of depreciation reserves from
transmission and distribution assets to nuclear production assets was
also approved. The Consumer Advocate and two other intervenors appealed
certain issues in the order to the South Carolina Circuit Court, which
affirmed the PSC's decisions, and, subsequently, to the South Carolina
Supreme Court. In March 1998, the Company, the PSC, the Consumer Advocate
and one of the other intervenors reached an agreement that provided for
the reversal of the shift in depreciation reserves and the dismissal of
the appeal of all other issues. The PSC also authorized the Company to
adjust depreciation rates that had been approved in the 1996 rate order
for its electric transmission, distribution and nuclear production
properties to eliminate the effect of the depreciation reserve shift and
to retroactively apply such depreciation rates to February 1996. As a
result, a one-time reduction in depreciation expense of $5.5 million
after taxes was recorded in March 1998. The agreement does not affect
retail electric rates. In September 1998, the Supreme Court affirmed the
Circuit Court's rulings on the issues contested by the remaining
intervenor. The Federal Energy Regulatory Commission (FERC) had
previously rejected the transfer of depreciation reserves for rates
subject to its jurisdiction.
3. RETAINED EARNINGS:
The Restated Articles of Incorporation of the Company and the Indenture
underlying its First and Refunding Mortgage Bonds contain provisions
that, under certain circumstances, could limit the payment of cash
dividends on its common stock. In addition, with respect to hydroelectric
projects, the Federal Power Act requires the appropriation of a portion
of certain earnings therefrom. At September 30, 1998, approximately $24.3
million of retained earnings were restricted by this requirement as to
payment of cash dividends on common stock.
4. CONTINGENCIES:
With respect to commitments at September 30, 1998, reference is made to
Note 10 of Notes to Consolidated Financial Statements appearing in the
Company's Annual Report on Form 10-K for the year ended December 31,
1997. Contingencies at September 30, 1998 are as follows:
A. Nuclear Insurance
The Price-Anderson Indemnification Act, which deals with public liability
for a nuclear incident, currently establishes the liability limit for
third-party claims associated with any nuclear incident at $9.9 billion.
Each reactor licensee is currently liable for up to $88.1 million per
reactor owned for each nuclear incident occurring at any reactor in the
United States, provided that not more than $10 million of the liability
per reactor would be assessed per year. The Company's maximum assessment,
based on its two-thirds ownership of the V. C. Summer Nuclear Station
(Summer Station), would be approximately $58.7 million per incident, but
not more than $6.7 million per year.
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The Company currently maintains policies (for itself and on behalf of
the PSA) with Nuclear Electric Insurance Limited (NEIL) and American
Nuclear Insurers (ANI) providing combined property and decontamination
insurance coverage of $2.0 billion for any losses at Summer Station. The
Company pays annual premiums and, in addition, could be assessed a
retroactive premium not to exceed five times its annual premium in the
event of property damage loss to any nuclear generating facility covered
under the NEIL program. Based on the current annual premium, this
retroactive premium assessment would not exceed $6.1 million.
To the extent that insurable claims for property damage,
decontamination, repair and replacement and other costs and expenses
arising from a nuclear incident at Summer Station exceed the policy
limits of insurance, or to the extent such insurance becomes unavailable
in the future, and to the extent that the Company's rates would not
recover the cost of any purchased replacement power, the Company will
retain the risk of loss as a self-insurer. The Company has no reason to
anticipate a serious nuclear incident at Summer Station. If such an
incident were to occur, it could have a material adverse impact on the
Company's results of operations, cash flows and financial position.
B. Environmental
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, estimates are
made of the expenditures, if any, deemed 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 assessment and cleanup relate primarily to
regulated operations; such amounts are deferred (approximately $28
million) and are being amortized and recovered through rates over a
five-year period for electric operations and an eight-year period for
gas operations. The deferral includes the estimated cost associated with
the matters discussed below.
o In September 1992, the Environmental Protection Agency (EPA) notified
the Company, 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 encompasses approximately 30 acres and includes properties
which were the locations for industrial operations, including a wood
preserving (creosote) plant, one of the Company's decommissioned
manufactured gas plants, properties owned by the National Park Service
and the City of Charleston, and private properties. The site has not
been placed on the National Priorities List, but may be added in the
future. The Potentially Responsible Parties (PRPs) have negotiated an
administrative order by consent for the conduct of a Remedial
Investigation/Feasibility Study and a corresponding Scope of Work.
Field work began in November 1993, and the EPA approved a Remedial
Investigation Report in February 1997 and a Feasibility Study Report
in June 1998. A Record of Decision, which sets forth EPA's view of the
extent of each PRP's responsibility for site contamination and the
level to which the site must be remediated, has not been issued.
However, in July 1998, EPA approved the Company's Removal Action Work
Plan for soil excavation. Accordingly, the Company began soil
excavation for Phase One of the Removal Action in August 1998, and
completed field work in October 1998. The total cost for Phase One is
expected to be approximately $1.5 million. Phase Two will include
excavation and installation of several permanent barriers to mitigate
coal tar seepage. Phase Two is expected to begin in November 1998, and
is expected to cost approximately $2.2 million. The Company is
continuing to investigate cost-effective cleanup methodologies.
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In October 1996 the City of Charleston and the Company settled all
environmental claims the City may have had against the Company
involving the Calhoun Park area for a payment of $26 million over
four years (1996-1999) by the Company to the City. The Company is
recovering the amount of the settlement, which does not encompass
site assessment and cleanup costs, through rates in the same manner
as other amounts accrued for site assessments and cleanup as
discussed above. As part of the environmental settlement, the Company
has agreed to construct an 1,100 space parking garage on the Calhoun
Park site and to transfer the facility to the City in exchange for a
20-year municipal bond backed by revenues from the parking garage and
a mortgage on the parking garage. Construction is expected to begin
before the end of 1998. The total amount of the bond is not to exceed
$16.9 million, the maximum expected project cost.
o The Company owns three other decommissioned manufactured gas plant
sites which contain residues of by-product chemicals. For the site
located in Sumter, South Carolina, effective September 15, 1998, the
Company entered into a Remedial Action Plan Contract with the South
Carolina Department of Health and Environmental Control (DHEC)
pursuant to which it agreed to undertake a full site investigation
and remediation under the oversight of DHEC. Site investigation and
characterization are proceeding according to schedule. Upon
selection and successful implementation of a site remedy, DHEC will
give the Company a Certificate of Completion, and a covenant not to
sue. The Company is continuing to investigate the other two sites,
and is monitoring the nature and extent of residual contamination.
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Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
SOUTH CAROLINA ELECTRIC & GAS COMPANY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
General
The following discussion should be read in conjunction with Management's
Discussion and Analysis of Financial Condition and Results of Operations
appearing in SCE&G's (the Company) Annual Report on Form 10-K for the year ended
December 31, 1997.
Statements included in this discussion and analysis (or elsewhere in this
quarterly report) which are not statements of historical fact are intended to
be, and are hereby identified as, "forward-looking statements" for purposes of
the safe harbor provided by Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended.
Readers are cautioned that any such forward-looking statements are not
guarantees of future performance and involve a number of risks and
uncertainties, and that actual results could differ materially from those
indicated by such forward-looking statements. Important factors that could cause
actual results to differ materially from those indicated by such forward-looking
statements include, but are not limited to, the following: (1) that the
information is of a preliminary nature and may be subject to further and/or
continuing review and adjustment, (2) changes in the utility regulatory
environment, (3) changes in the economy in areas served by the Company, (4) the
impact of competition from other energy suppliers, (5) the management of the
Company's operations, (6) growth opportunities for the Company, (7) the results
of financing efforts, (8) changes in the Company's accounting policies, (9)
weather conditions in areas served by the Company, (10) inflation, (11) changes
in environmental regulations and (12) the other risks and uncertainties
described from time to time in the Company's periodic reports filed with the
Securities and Exchange Commission. The Company disclaims any obligation to
update any forward-looking statements.
Material Changes in Capital Resources and Liquidity
Since December 31, 1997
Liquidity and Capital Resources
On January 9, 1996, the PSC issued an order which, among other things,
authorized the Company to earn a return on common equity of 12.0%. The PSC also
approved establishment of a Storm Damage Reserve Account capped at $50 million
to be collected through rates over a ten-year period. Additionally, the
Company's request to shift, for ratemaking purposes, approximately $257 million
of depreciation reserves from transmission and distribution assets to nuclear
production assets was approved. The Consumer Advocate and two other intervenors
appealed certain issues in the order to the South Carolina Circuit Court, which
affirmed the PSC's decisions, and, subsequently, to the South Carolina Supreme
Court. In March 1998, the Company, the PSC and the Consumer Advocate and one of
the other intervenors reached an agreement that provided for the reversal of the
shift in depreciation reserves and the dismissal of the appeal of all other
issues. The PSC also authorized the Company to adjust depreciation rates that
had been approved in the 1996 rate order for its electric transmission,
distribution and nuclear production properties to eliminate the effect of the
depreciation reserve shift and to retroactively apply such depreciation rates to
February 1996. As a result, a one-time reduction in depreciation expense of $5.5
million after taxes was recorded in March 1998. The agreement does not affect
retail electric rates. See "Results of Operations - Earnings and Dividends." In
September 1998, the Supreme Court affirmed the Circuit Court's ruling on the
issues contested by the remaining intervenor. The FERC had previously rejected
the transfer of depreciation reserves for rates subject to its jurisdiction.
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The following table summarizes how the Company generated funds for its
utility property additions and construction expenditures during the nine months
ended September 30, 1998 and 1997:
Nine Months Ended
September 30,
1998 1997
(Millions of Dollars)
Net cash provided from operating activities $ 313 $ 311
Net cash used for financing activities (151) (117)
Cash and temporary cash investments available
at the beginning of the period 6 5
- -----------------------------------------------------------------------------
Net cash available for utility property
additions and construction expenditures $ 168 $ 199
=============================================================================
Funds used for utility property additions
and construction expenditures, net of
noncash allowance for funds used during
construction $ 147 $ 157
=============================================================================
Funds used for (provided from) nonutility
property additions and investments $ (1) $ 5
===============================================================================
On November 2, 1998, the Company redeemed, prior to maturity, all $30
million principal amount outstanding of its 7.25% Series First and Refunding
Mortgage Bonds due January 1, 2002.
The Environmental Protection Agency has proposed new regulations relating
to nitrogen oxide emissions which, if enacted in their present form, could have
a material adverse effect on the results of operations, cash flows and financial
position of the Company.
SCANA Corporation, the Company's parent, and Westvaco, each own a 50%
interest in Cogen South LLC (Cogen). Cogen was formed to build and operate a
cogeneration facility at Westvaco's Kraft Division Paper Mill in North
Charleston, South Carolina. Construction of the facility began in September 1996
and it is expected to be operational by November 30, 1998. Construction
financing for the facility, originally estimated at $170 million, is provided to
Cogen by banks. The contractor in charge of construction is Black & Veatch
Construction, Inc. (B&V). On September 10, 1998, B&V filed suit in South
Carolina Circuit Court seeking approximately $35 million from Cogen. B&V alleges
that it incurred construction cost overruns relating to the facility, and that
the construction contract provides for its recovery of these costs. In addition
to Cogen, B&V has also named Westvaco, the Company and SCANA in the suit. The
Company and the other defendants believe the suit is without merit and are
mounting an appropriate defense. The Company does not believe that the
resolution of this issue will have a material impact on its results of
operations, cash flows or financial position.
The Company anticipates that the remainder of its 1998 cash requirements
will be met through internally generated funds and the incurrence of additional
short-term and long-term indebtedness. The timing and amount of such financings
will depend upon market conditions and other factors. The Company expects that
it has or can obtain adequate sources of financing to meet its projected cash
requirements for the next twelve months and for the foreseeable future. The
ratio of earnings to fixed charges for the twelve months ended September 30,
1998 was 4.49.
Year 2000 Issue
The Year 2000 is an issue because many computers, embedded systems and
software were originally programmed using two digits rather than four digits to
identify the applicable year. This may prevent them from accurately processing
information with dates beyond 1999. Because the Year 2000 issue could have a
material impact on the operations of the Company if not addressed, our goal is
to be Year 2000 ready. This means that before the year 2000, critical systems,
equipment, applications and business relationships will have been evaluated and
should be suitable to continue into and beyond the year 2000 and that applicable
contingency plans are in place.
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In 1993, the Company began the first of several projects to replace many of
its business application systems to provide increased functionality and to
improve access to business information. Accordingly, the Company has implemented
new general ledger, purchasing, materials inventory and accounts payable
systems, and is currently implementing a new customer information system. The
new customer information system is being phased into production by geographical
area, and should be fully implemented by first quarter of 1999. These new
systems, which comprise a significant portion of the Company's application
software, are designed to be Year 2000 compliant, and therefore mitigate our
overall Year 2000 exposure.
In 1997, SCANA Corporation established a Corporate Year 2000 Project Office
(Project Office) to direct Year 2000 efforts for itself and each of its
subsidiaries, including the Company. A Steering Committee was formed to direct
the efforts of the Project Office. The Steering Committee reports to the senior
officers of SCANA and the Company and to SCANA's board of directors. It is
chaired by SCANA's chief financial officer, and is comprised of officers
representing all operational areas. The Project Office is staffed by nine full
time project managers and extensive support personnel. The Project Office is
responsible for addressing Year 2000 issues and coordinating the required
assessment and remediation efforts.
The Company's Year 2000 efforts encompass three projects, all reporting to
the Steering Committee. The Information Technology Project covers all mainframe
and client server application software, infrastructure hardware, system
software, desktop computers and network equipment. The Embedded Systems Project
covers all microprocessors, instrument and control devices, monitoring equipment
on power lines and in substations, security and control devices, telephone
systems and certain types of meters. The Procedures and External Interfaces
Project covers Year 2000 procedures, documentation and communications with key
suppliers, vendors, customers, financial institutions and governmental agencies.
The Company's Year 2000 project approach involves the following: (1)
inventorying all Year 2000 internal and external items and entities and updating
the Year 2000 Inventory Database; (2) performing risk analysis and corporate
prioritization of all inventory entries; (3) performing detailed assessments of
all inventory entries to determine Year 2000 readiness and establishing a
remediation action plan where necessary; (4) remediating all inventory entries
assessed as non-compliant, including repairing, replacing or developing
acceptable work-arounds; (5) testing through date simulation and comprehensive
test data (6) implementation of all converted systems and equipment into
production operations; and (7) contingency planning.
In the second quarter of 1998, the Companycompleted the inventory and the
risk analysis and corporate prioritization for each of the projects. Remaining
work on each of the projects is ongoing. Each of the Year 2000 projects is
currently on schedule to complete all phases by July 1999.
The Information Technology Project Team has completed the assessment process
for all application software. Most of the code remediation efforts are complete
and the code is being tested in an isolated Year 2000 testing environment. The
assessment of all infrastructure items, desktop computers and network equipment
is scheduled to be complete by the end of 1998. The Information Technology
Project was approximately 40% complete through September 1998.
The Embedded Systems Project Team, which includes approximately 20 engineers
with prior experience with microprocessors, was formed, and detailed assessment,
remediation and testing procedures were developed. This team is currently
working closely with each of the Company's business units to complete the
assessments of critical systems and equipment based on the corporate
prioritization process. An Embedded Systems Audit Review Committee has been
established to review all assessments for critical systems. As assessments are
completed, any required remediation efforts are evaluated and implemented. The
Embedded Systems Project was approximately 30% complete through September 1998.
13
<PAGE>
PAGE 14
The Procedures and External Interfaces Project Team has developed written
documentation and procedures for Year 2000 compliance definition, document
control, inventory, prioritization, assessment, remediation, change control,
business continuity planning, and vendor and supplier communications. This team
is coordinating communications with all significant vendors and suppliers in an
attempt to determine the extent to which the Company may be vulnerable to their
failure to remediate their own Year 2000 issues. The Company has completed an
initial survey of vendors and is currently evaluating the responses to those
surveys. The Company is also in the process of surveying critical third party
service providers to ascertain their Year 2000 readiness. The Company has
developed communications materials explaining its Year 2000 efforts and has
initiated communications with significant customers and external groups,
including the South Carolina Public Service Commission. The Procedures and
External Interfaces Project was approximately 25% complete through September
1998.
The Company has projected the total cost of its Year 2000 efforts to be
approximately $19 million. The table below outlines the anticipated timing and
breakdown of these expenditures:
- ----------------------------- ----------------------------- -------------------
Internal Out of Pocket Total
- ----------------------------- ----------------------------- -------------------
Project To Date $ 2.0 $ 4.0 $ 6.0
Remaining 1998 1.0 2.0 3.0
1999 3.0 7.0 10.0
--- --- ----
- ----------------------------- ----------------------------- -------------------
The cost of the project is based on Management's best estimates, which are
based on assumptions regarding future events. These future events include
continued availability of key resources, third parties' Year 2000 readiness and
other factors. The cost of the project is not expected to have a material impact
on the results of operations or on the financial position or cash flows of the
Company. The costs of implementing the new business application systems referred
to earlier are not included in these cost estimates.
A failure to correct a material Year 2000 problem by the Company or by a
critical third party supplier could result in an interruption in, or a failure
of the Company's ability to provide energy services. At this time, the Company
believes its most reasonably likely worst case scenario is that Year 2000
failures could lead to temporary reduced generating capacity on the Company's
electrical grid, temporary intermittent interruptions in communications and
temporary intermittent interruptions in gas supply from interstate suppliers or
producers. A Year 2000 problem of this nature could result in temporary
interruptions in electric or gas service to our customers. We have no historical
experience with interruptions caused by this scenario. However, these temporary
interruptions in service, if any, might be similar to weather related outages
that the Company encounters from time to time in its business today. Although
the Company does not believe that this scenario will occur, the Company is
enhancing existing contingency plans to ensure preparedness and to mitigate the
long term effect of such a scenario. Since the expected impact of this scenario
on the Company's operations, cash flow and financial position cannot be
determined, we cannot guarantee that it would not be material.
The Company has established seven business continuity planning task groups
to develop Year 2000 business continuity plans. These task groups will develop
plans to cover the Company's Customer Service Operations, Electric Generation,
Transmission and Distribution Operations, Gas Delivery Operations,
Telecommunications, Information Technology, Procurement and Emergency
Preparedness. Detailed contingency plans that are already in place to cover
weather related outages, computer failures and generation outages will be the
basis for our Year 2000 business continuity plans. The existing plans will be
enhanced, and where necessary, new plans devloped to include mitigation
strategies and emergency response action plans to address potential Year 2000
scenarios and critical system failures. The final plans will also include
mitigation strategies to address our reliance on critical third party suppliers.
14
<PAGE>
PAGE 15
The North American Electric Reliability Council (NERC) is coordinating Year
2000 efforts of the electric utility industry in the United States and
contingency planning within the regional electric reliability councils.
Coordination in the Company's region is through the Southeastern Electric
Reliability Council (SERC). The Company's contingency planning efforts will
comply with the SERC and NERC contingency planning guidelines which require
draft contingency plans to be complete by December 31, 1998 and final
contingency plans to be complete by June 30, 1999.
In addition to NERC and SERC, the Company is working with the Electric Power
Research Institute (EPRI) to address the issue of overall grid reliability and
protection. To ensure that all Year 2000 issues at its Summer Station nuclear
plant are addressed, the Company is closely cooperating with other utility
companies that own nuclear power plants. The utilities are sharing technical
nuclear plant operating and monitoring systems information to ensure the prompt
and effective resolution of the year 2000 issue.
15
<PAGE>
PAGE 16
SOUTH CAROLINA ELECTRIC & GAS COMPANY
Results of Operations
For the Three and Nine Months ended September 30, 1998
As Compared to the Corresponding Periods in 1997
Earnings and Dividends
Net income for the three and nine months ended September 30, 1998 increased
approximately $15 million and $39 million, respectively, when compared to the
corresponding periods in 1997. Higher electric margins more than offset the
impact of higher operating costs. In addition, net income for the nine months
ended September 30, 1998 includes a one-time, after-tax reduction to
depreciation expense of approximately $5.5 million related to a change in
depreciation rates retroactive to February 1996. This change in rates results
from the reversal of a $257 million shift of depreciation reserves from electric
transmission and distribution assets to nuclear production assets, previously
approved in a PSC rate order in January 1996. See "Liquidity and Capital
Resources."
Allowance for funds used during construction (AFC) is a utility accounting
practice whereby a portion of the cost of both equity and borrowed funds used to
finance construction (which is shown on the balance sheet as construction work
in progress) is capitalized. Both the equity and the debt portions of AFC are
noncash items of nonoperating income which have the effect of increasing
reported net income. AFC represented approximately 4% of income before income
taxes for the nine months ended September 30, 1998 and 1997, respectively.
The Company's Board of Directors authorized payment of dividends on common
stock held by SCANA, as follows:
- --------------------- ------------------------- ------------------ -------------
Declaration Dividend Quarter Payment
Date Amount Ended Date
- ----------------------------- -------------- ------------------ ----
February 17, 1998 $36.9 million March 31, 1998 April 1, 1998
April 23, 1998 $37.7 million June 30, 1998 July 1, 1998
August 19, 1998 $56.4 million September 30, 1998 October 1, 1998
October 20, 1998 $36.3 million December 31, 1998 January 1, 1998
- ----------------------------- -------------- ------------------ ----
Sales Margins
Changes in the electric sales margin for the three and nine months ended
September 30, 1998, when compared to the corresponding periods in 1997, were as
follows:
Three Months Nine Months
Change % Change Change % Change
(Millions) (Millions)
Electric operating revenues $52.9 15.5 $121.4 14.5
Less: Fuel used in electric
generation 10.1 17.5 28.9 21.3
Purchased power 4.9 17.1 14.2 17.6
----- ------
Margin $37.9 14.9 $ 78.3 12.5
=============================================================================
The electric sales margin increased for the three and nine months ended
September 30, 1998 when compared to the corresponding periods in 1997 primarily
as a result of more favorable weather and customer growth.
16
<PAGE>
PAGE 17
Changes in the gas sales margin for the three and nine months ended
September 30, 1998, when compared to the corresponding periods in 1997, were as
follows:
Three Months Nine Months
Change % Change Change % Change
(Millions) (Millions)
Gas operating revenues $1.3 3.7 $7.4 4.5
Less: Gas purchased for resale (0.5) (1.8) 3.4 3.3
---- ----
Margin $1.8 17.5 $4.0 6.5
======================================= ======================================
The gas sales margin for the three months ended September 30, 1998
increased from 1997 levels primarily as a result of strong interruptible sales
and slightly higher rates for those sales. The gas sales margin increased for
the nine months ended September 30, 1998, when compared to the corresponding
period in 1997 primarily as a result of more favorable weather and increased
sales to industrial interruptible customers attributable to strong economic
conditions in the first quarter.
Other Operating Expenses
Changes in other operating expenses, including taxes, for the three and
nine months ended September 30, 1998 when compared to the corresponding periods
in 1997, were as follows:
Three Months Nine Months
Change % Change Change % Change
(Millions) (Millions)
Other operation and maintenance $ 7.8 10.7 $19.6 9.3
Depreciation and amortization 0.5 1.5 (8.0) (7.7)
Income taxes 11.0 26.5 24.6 28.9
Other taxes 1.6 7.2 3.8 5.7
----- -----
Total $20.9 12.2 $40.0 8.5
===============================================================================
Other operation and maintenance expenses for the three and nine months
ended September 30, 1998 increased from 1997 levels primarily as a result of
increased maintenance costs for electric generation and distribution facilities,
various other electric operating costs, and Year 2000 remediation costs. The
decrease in depreciation and amortization expenses for the nine months ended
September 30, 1998 reflects the non-recurring adjustment to depreciation expense
discussed under "Earnings and Dividends." The changes in income tax expense
reflect the changes in operating income. The increase in other taxes for the
periods primarily results from increases in property taxes.
Other Income
Other income, net of income taxes, for the three and nine months ended
September 30, 1998 decreased approximately $2.4 million and $2.7 million,
respectively, when compared to the corresponding periods in 1997. The decreases
are primarily attributable to lower returns on sales of property and investments
during the three months ended September 30, 1998.
17
<PAGE>
PAGE 18
Item 3. Quantitative and Qualitative Disclosure About Market Risk
With regard to the market risk information disclosed in the
Company's Annual Report on Form 10-K at December 31, 1997 there
have been no material changes in market risk exposure related
to interest rate risk.
PART II
OTHER INFORMATION
Item 1. Legal Proceedings
For information regarding legal proceedings see Note 2 "Rate
Matters," appearing in the Company's Annual Report on Form 10-K for
the year ended December 31, 1997, and Note 4 "Contingencies" of
Notes to Consolidated Financial Statements appearing in this
Quarterly Report on Form 10-Q.
Items 2, 3, 4 and 5 are not applicable.
Item 6. Exhibits and Reports on Form 8-K
A. Exhibits
Exhibits filed with this Quarterly Report on Form 10-Q are
listed in the following Exhibit Index. Certain of such
exhibits which have heretofore been filed with the Securities
and Exchange Commission and which are designated by reference
to their exhibit numbers in prior filings are hereby
incorporated herein by reference and made a part hereof.
B. Reports on Form 8-K
None
18
<PAGE>
PAGE 19
SOUTH CAROLINA ELECTRIC & GAS COMPANY
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
SOUTH CAROLINA ELECTRIC & GAS COMPANY
(Registrant)
November 13, 1998 By: s/Jimmy E. Addison
------------------------------
Jimmy E. Addison
Vice President and Controller
(Chief accounting officer)
19
<PAGE>
PAGE 1
SOUTH CAROLINA ELECTRIC & GAS COMPANY Sequentially
EXHIBIT INDEX Numbered
Number Pages
2. Plan of Acquisition, Reorganization, Arrangement,
Liquidation or Succession
Not Applicable
3. Articles of Incorporation and By-Laws
A. Restated Articles of Incorporation of the
Company as adopted on December 15, 1993
(Exhibit 3-A to Form 10-Q for the quarter
ended June 30, 1994, File No. 1-3375)...................... #
B. Articles of Amendment, dated June 7, 1994,
filed June 9, 1994 (Exhibit 3-B to Form 10-Q
for the quarter ended June 30, 1994, File
No. 1-3375)
C. Articles of Amendment, dated November 9, 1994
(Exhibit 3-C to Form 10-K for the year ended
December 31, 1994, File No. 1-3375)........................ #
D. Articles of Amendment, dated December 9, 1994
(Exhibit 3-D to Form 10-K for the year ended
December 31, 1994, File No. 1-3375)........................ #
E. Articles of Correction, dated January 17, 1995
(Exhibit 3-E to Form 10-K for the year ended
December 31, 1994, File No. 1-3375)........................ #
F. Articles of Amendment, dated January 13, 1995
(Exhibit 3-F to Form 10-K for the year ended
December 31, 1994, File No. 1-3375)........................ #
G. Articles of Amendment, dated March 31, 1995
(Exhibit 3-G to Form 10-Q for the quarter
ended March 31, 1995, File No. 1-3375)..................... #
H. Articles of Correction - Amendment to Statement
filed March 31, 1995, dated December 13, 1995
(Exhibit 3-H to Form 10-K for the year ended
December 31, 1995, File No. 1-3375)........................ #
I. Articles of Amendment dated December 13, 1995
(Exhibit 3-I to Form 10-K for the year ended
December 31, 1995, File No. 1-3375)........................ #
J. Copy of By-Laws of the Company as revised and
amended on December 17, 1997 (Exhibit
4-J to Form 10-K for the year ended
December 31, 1997, File No. 1-3375)........................ #
K. Articles of Amendment dated February 18, 1997
(Exhibit 3-L to Registration Statement No. 333-
24919)...................................................... #
L. Articles of Amendment dated February 21, 1997
(Exhibit 3-L to Form 10-Q for the quarter ended
March 31, 1997)............................................. #
M. Articles of Amendment dated April 22, 1997
(Exhibit 3-M to Form 10-Q for the quarter ended
June 30, 1997).............................................. #
# Incorporated herein by reference as indicated.
20
<PAGE>
PAGE 2
SOUTH CAROLINA ELECTRIC & GAS COMPANY Sequentially
EXHIBIT INDEX Numbered
Number Pages
N. Articles of Amendment dated April 9, 1998 (Exhibit 3-N
to Form 10-Q for the quarter ended March 31, 1998).......... #
4. Instruments Defining the Rights of Security Holders,
Including Indentures
A. Indenture dated as of January 1, 1945, from the
South Carolina Power Company (the "Power Company")
to Central Hanover Bank and Trust Company, as
Trustee, as supplemented by three Supplemental
Indentures dated respectively as of May 1, 1946,
May 1, 1947 and July 1, 1949 (Exhibit 2-B to
Registration No. 2-26459).................................. #
B. Fourth Supplemental Indenture dated as of April 1,
1950, to Indenture referred to in Exhibit 4A,
pursuant to which the Company assumed said
Indenture (Exhibit 2-C to Registration No. 2-26459)........ #
C. Fifth through Fifty-second Supplemental Indentures
to Indenture referred to in Exhibit 4A dated as
of the dates indicated below and filed as
exhibits to the Registration Statements and
1934 Act reports whose file numbers are set
forth below................................................ #
December 1, 1950 Exhibit 2-D to Registration No. 2-26459
July 1, 1951 Exhibit 2-E to Registration No. 2-26459
June 1, 1953 Exhibit 2-F to Registration No. 2-26459
June 1, 1955 Exhibit 2-G to Registration No. 2-26459
November 1, 1957 Exhibit 2-H to Registration No. 2-26459
September 1, 1958 Exhibit 2-I to Registration No. 2-26459
September 1, 1960 Exhibit 2-J to Registration No. 2-26459
June 1, 1961 Exhibit 2-K to Registration No. 2-26459
December 1, 1965 Exhibit 2-L to Registration No. 2-26459
June 1, 1966 Exhibit 2-M to Registration No. 2-26459
June 1, 1967 Exhibit 2-N to Registration No. 2-29693
September 1, 1968 Exhibit 4-O to Registration No. 2-31569
June 1, 1969 Exhibit 4-C to Registration No. 33-38580
December 1, 1969 Exhibit 4-Q to Registration No. 2-35388
June 1, 1970 Exhibit 4-R to Registration No. 2-37363
March 1, 1971 Exhibit 2-B-17 to Registration No. 2-40324
January 1, 1972 Exhibit 4-C to Registration No. 33-38580
July 1, 1974 Exhibit 2-A-19 to Registration No. 2-51291
May 1, 1975 Exhibit 4-C to Registration No. 33-38580
July 1, 1975 Exhibit 2-B-21 to Registration No. 2-53908
February 1, 1976 Exhibit 2-B-22 to Registration No. 2-55304
December 1, 1976 Exhibit 2-B-23 to Registration No. 2-57936
March 1, 1977 Exhibit 2-B-24 to Registration No. 2-58662
May 1, 1977 Exhibit 4-C to Registration No. 33-38580
February 1, 1978 Exhibit 4-C to Registration No. 33-38580
June 1, 1978 Exhibit 2-A-3 to Registration No. 2-61653
April 1, 1979 Exhibit 4-C to Registration No. 33-38580
# Incorporated herein by reference as indicated.
21
<PAGE>
PAGE 3
SOUTH CAROLINA ELECTRIC & GAS COMPANY
Exhibit Index (Continued)
Number
June 1, 1979 Exhibit 4-C to Registration No. 33-38580
April 1, 1980 Exhibit 4-C to Registration No. 33-38580
June 1, 1980 Exhibit 4-C to Registration No. 33-38580
December 1, 1980 Exhibit 4-C to Registration No. 33-38580
April 1, 1981 Exhibit 4-D to Registration No. 33-49421
June 1, 1981 Exhibit 4-D to Registration No. 2-73321
March 1, 1982 Exhibit 4-D to Registration No. 33-49421
April 15, 1982 Exhibit 4-D to Registration No. 33-49421
May 1, 1982 Exhibit 4-D to Registration No. 33-49421
December 1, 1984 Exhibit 4-D to Registration No. 33-49421
December 1, 1985 Exhibit 4-D to Registration No. 33-49421
June 1, 1986 Exhibit 4-D to Registration No. 33-49421
February 1, 1987 Exhibit 4-D to Registration No. 33-49421
September 1, 1987 Exhibit 4-D to Registration No. 33-49421
January 1, 1989 Exhibit 4-D to Registration No. 33-49421
January 1, 1991 Exhibit 4-D to Registration No. 33-49421
February 1, 1991 Exhibit 4-D to Registration No. 33-49421
July 15, 1991 Exhibit 4-D to Registration No. 33-49421
August 15, 1991 Exhibit 4-D to Registration No. 33-49421
April 1, 1993 Exhibit 4-E to Registration No. 33-49421
July 1, 1993 Exhibit 4-D to Registration No. 33-57955
D. Indenture dated as of April 1, 1993 from South Carolina
Electric & Gas Company to NationsBank of Georgia, National
Association (Filed as Exhibit 4-F to Registration
Statement No. 33-49421)...................................... #
E. First Supplemental Indenture to Indenture referred to
in Exhibit 4-D dated as of June 1, 1993 (Filed as
Exhibit 4-G to Registration Statement No. 33-49421).......... #
F. Second Supplemental Indenture to Indenture referred
to in Exhibit 4-D dated as of June 15, 1993 (Filed
as Exhibit 4-G to Registration Statement No. 33-57955)..... #
G. Trust Agreement for SCE&G Trust I (Filed as Exhibit 4-G
to Form 10-K for the year ended December 31, 1997)............ #
H. Certificate of Trust for SCE&G Trust I (Filed as
Exhibit 4-H to Form 10-K for the year ended
December 31, 1997)........................................... #
I. Junior Subordinated Indenture for SCE&G Trust I
(Filed as Exhibit 4-I to Form 10-K for the year
ended December 31, 1997)..................................... #
J. Guarantee Agreement for SCE&G Trust I
(Filed as Exhibit 4-J to Form 10-K for the year
ended December 31, 1997)..................................... #
K. Amended & Restated Trust Agreement for SCE&G
Trust I (Filed as Exhibit 4-K to Form 10-K for the
year ended December 31, 1997)................................ #
# Incorporated herein by reference as indicated.
22
<PAGE>
PAGE 4
SOUTH CAROLINA ELECTRIC & GAS COMPANY
Exhibit Index (Continued)
Number
10. Material Contracts
Not Applicable
11. Statement Re Computation of Per Share Earnings
Not Applicable
15. Letter Re Unaudited Interim Financial Information
Not Applicable
18. Letter Re Change in Accounting Principles
Not Applicable
19. Report Furnished to Security Holders
Not Applicable
22. Published Report Regarding Matters Submitted to
Vote of Security Holders
Not Applicable
23. Consents of Experts and Counsel
Not Applicable
24. Power of Attorney
Not Applicable
27. Financial Data Schedule (Filed herewith)
99. Additional Exhibits
Not Applicable
23
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