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

20091231-0037 FERC PDF (Unofficia1) 12/29/2009
EXHIBIT NO. SCE-13
TABLE OF CONTENTS
I. INTRODUCTION AND SUMMARY I
II. COST OF CAPITAL THEORY 7
A. THE COST OF CAPITAL AND RISK 7
B. INVESTMENT IN THE TRANSMISSION GRID 10
C. THE IMPACT OF CURRENT MACROECONOMIC CONDITIONS ON THE COST OF EQuITY 13
III. THE COMMISSION'S COST OF CAPITAL METHODOLOGY 21
A. THE PROXY GROUP 21
I. Selection of the Proxy Group 21
2. Credit Rating Restriction 23
3. Characteristics ofthe Proxy Group 26
B. THE DISCOUNTED CASH FLOW ApPROACH 27
1. The Theoretical DCF Model 27
2. The Commission's Preferred DCF Model 28
C. PROXY GROUP ESTIMATES AND THE RANGE OF REASONABLENESS 30
EXHIBIT NO. SCE-14 - APPENDIX A: RESUME
EXHIBIT NO. SCE-15 - APPENDIX B: THE FERC METHODOLOGY: SAMPLE
SELECTION
AND THE DCF
EXHIBIT NO. SCE-16 - TABLES AND WORKPAPERS