SCEG OATT Formula Transmission Rate Filing.pdf - SCANA ...

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20091231-0037 FERC PDF (Unofficia1) 12/29/2009 Exhibit No. SCE-S(A) Summary: SCANA Corp. Through SCANA Energy, SCANA is exposed to retail gas marketing operations in Georgia, serving abour 460,000 customers, including about 95,000 customers under a provider-of-last-resort arrangement that includes low-income and high credit risk customers. SCANA Energy will hold this role as the provider of last resort through August 2009. Standard & Poor IS views this operation as having significantly higher business risk compared to the regulated utility operations, stemming from the potential for customers to leave SCANA Energy for alternative suppliers as well as the challenge of matching supply and demand without any regulatory recourse for cost under-recoveries. The latter risk is partly mitigated by a significant percentage of customers who are on variable pricing plans that adjust monthly to reflect current market prices. SCANA's consolidated financial risk profile is aggressive. For 2008, adjusted funds from operations (FFO) were $714.3 million and adjusted total debt was $5.16 billion. Credit metrics have weakened from prior years' levels, in large part due to a significant increase in debt to fund capital spending which totaled $914 million in 2008. Adjusted FFO interest coverage was 3.4x, adjusted FFO to total debt was 13.8% and adjusted total debt to total capital was 62.5%. The expected capital spending program is significant with about $1.2 billion annually in 2009 and 2010 and $1.4 billion in 2011, a material portion of which will be for the proposed nuclear plants. The large capital spending program contributes to the aggressive financial risk profile and necessitates not only a balanced funding approach but, importantly, timely rate relief for both the nuclear construction construction to collect a cash return on work in process, but also through base rate relief to address the ongoing capital spending needs of the remaining company. Absent such relief, the financial profile C3n weaken further, placing additional downward pressure on ratings, even after accounting for the company's with equity issuances. plan to fund a portion of these capital expenditures Liquidity SCANA's liquidity is adequate to meet capital spending and other needs. SCANA's liquidity consists of $1.1 billion in revolving credit facilities (SCANA: $200 million, SCE&G: $650 million; and PSNC: $250 million) that expire in 2011 and which had $564 million still undrawn. Liquidity also benefits from $272 million of cash on hand as of Dec. 31, 2008. Debt maturities are manageable and somewhat mitigate refinancing risk at least over the intermediate tern, with $144 million in 2009, $25 million in 2010, about $546 million in 2011, $275 million in 2012 and $167 million in 2013. Outlook The stable outlook on SCANA incorporates expectations that the proposed nuclear construction proceeds on schedule and on budget within the SCPSC-approved scheduling and budget mechanism. In addition, the stable outlook incorporates expectations that the financial risk profile will remain aggressive with adjusted FFO to interest coverage of no less than 3.5x, adjusted FFO to total debt of 14% to 15%, and adjusted total debt to total capital that will begin to moderate from the end of 2008 levels of 62.5% as a result of retained earnings and proposed equity issuances to support the construction program. Ratings could be lowered if credit merrics underperform expectations principally as a result of waning regulatory support resulting in delays for the recovery of unanticipated capital expenditures for the nuclear construction or schedule delays that are deemed imprudent with associated costs not recovered. Therefore, FFO to interest coverage of less than 3.0x, FFO to total debt of lower than 14%-15% and debt leverage that increases above current levels of about 62.5% are pressure points towards lower ratings. Standard & Poor's does not currently contemplate a higher rating during the construction period, given the size and scale of the project. www.standardandpoors.com!ratingsdirecl Standafll & Poor's. All rights reserved. Nt) reprlRI or dissemination without S&P's ]l&I'fflissiOll, See Terms of Use/Disclaimer 0fI11le IClS1page. 3
20091231-0037 FERC PDF (Unofficia1) 12/29/2009 Exhibit No. seE-SeA) Copyright © 2009, Standard Be Poors, a division of The McGraw-Hili Companies, Inc. {S&P).S&P and/or its third party licensors have exclusive proprietary rights in the data or information provided herein. This data/information may 001'1be used internally for business purposes and shall not be used lor any Ulllawful or unauthorized purposes. Dissemination, dis1ribvtion or reproduction of this data/information in any form is strictly plOhibited except with the prior written pennission of S&P. Because of Ihe possU)~ity of human or mechanical error by S&P, its affilIates Of its third party licensors, S&P, 'rts affIliates and its third pany licensors do not guarantee the accuracy, adequacy, completeness or availability of any information and is not responsible for any errors or omissions or lor the results obtained from the use of such information, S&P GIVES NO EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES Of MERCHANTABILITY OR fITNESS fOR A PARTICUlAR PURPOSE OR USE. Iflno event shall S&P, its affiliates and its third pany licensors be liable for any direct, indirect. special or conseQuential damages if1 connection with subscribers or oltters ust! of the data/informatron contained here·ln. Access to the data or Information contained herein is subject 10 termination in the event any agreement with a thirdparty of information or software is terminated. Analytic services provided by Standard & Poor's Ratings Services (Ratings Servicesl are the resul! of separate aclivjtjes designed to presetve the independence and objectivity . of ratings opinions. The credit ratings and observations contained herein are solely statements of optnion and not statements of fact or recommendations to purchase, hold. or sell any !reCurities or make any other investment decisions. Accordingly. any user of the informCition contained herein should not rely Ofl aoy credit rating Of other opinion contained herein in making any investment decision. Ratings are based on information received by Ratings Services. Other divisions of Standard & Poor's may have information that is not available to Ratings Services. Standard & Poor's has established policies and procedures to maintain the confidentiality of non-public information received during the rarlngs process. Ratings Services receives compensation for its ratings. Such compensation is normally paid either by the issuers of such securities Of third parties participating in marketing the securities, lNhile Standard & Poor's reserves the right to disseminate the rating. it receives no payment for doing so. except lor subscriptions 10 its ptlbfications. Additional information about our ratings fees is available at www.standardandpoors.comtusratingsfees. Anv PasswordS/use/IDs issued by S&P to users are single user-dedicated and may ONLY be used by the individuel to whom they have been assigned. No sharing of passwords/user IDs and no simultaneous access via the same password/user 10 is perminecl. T() reprint, translate. or use tile data or information other than as provided herein. contact Client Services, 55 Water Street, New York, NY 10041; {llZ12.438.72BO or by e-mail 10; research_reQuest@standardandpoors-com. Copyright@ 1994-2009 Standard & Pools, a division of The McGraw-Hili Companies. All Rights ReselVed. Standard & Poor's Rating.Direct I April 23.2009 4
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Exhibit No. SCE-9 Page 2 of 10 8 FE
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Exhibit No. SCE-9 Page 6 of 10 ~. 4
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64 FERC ER07-169 Ameren Energy Mark
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88 Illinois Commerce Commission ER0
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EXHIBIT NO. SCE-16 "o o '" .... "w
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Table No. MJV·4 Panel B Commission
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Company American Electric Power Co
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