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

20091231-0037 FERC PDF (Unofficia1) 12/29/2009
Direct Testimony of Michael J. Vilbert
Docket ERIO- -000
Page 22 of35
EXHIBIT NO. SCE-13
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be publicly-traded and have available recent price and dividend data; pay dividends; have
an investment grade credit rating; have available growth rate data from Value Line or
I/B/E/S (or comparable sources);25 and not be involved in recent. current or forecasted
merger activity for the six-month period used to calculate the dividend yield. Also, any
companies whose operations are primarily related to natural gas transmission or
distribution are excluded from the sample.
7 Q35.
8 A35.
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Please describe your selection of the Proxy Group.
I started with a universe of electric utility companies listed under the Central, East and
West Electric Utilities industry groups generated by Value Line Investment Survey. I
eliminated cooperatives, municipality-owned companies and state agencies. Of the
remaining companies, I then determined each member company's parent holding
company and eliminated those that were not publicly traded or that had no data available
from Bloomberg. Additionally, companies with either a dividend cut or substantial M&A
activity over the most recent six month period were excluded. Application of these
criteria resulted in a universe of 49 companies. Of these 49 companies, I then restricted
the sample to include only companies that own transmission assets in the southeastern
U.S. Table 2 below shows the remaining 14 companies that constitute the Full Sample.
Georgia, Alabama, Mississippi, Arkansas, Louisiana, Texas and Florida.
25 I rely upon Bloomberg for analyst forecasts of earnings growth rates instead of I1BIE/S because IIB/E/S
long-term growth rates are accessible only for subscribers to Thomson Financial. I also use Value Line
estimates.