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

20091231-0037 FERC PDF (Unofficia1) 12/29/2009
Direct Testimony of Jimmy Addison
DocketER! 0·_-000
Page 6 of19
Exhibit No. SeE-!
Using an historical test period without updates makes it more difficult to earn the
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authorized ROE because expenses may have already increased during the rate case
(which can take months to complete), resulting in cost recovery that is too low even after
new rates are set."
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Fifth, a formula rate supports SCE&G's credit quality which will positively affect
SCE&G's cash flow and financial integrity.
7 Q.
WHAT IS SCE&G'S TRANSMISSION PLANT INVESTMENT?
8 A.
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As of December 31, 2008, SCE&G's gross transmission plant investment was
approximately $746 million, or more than twice the gross transmission plant investment
of $338 million included in the current stated rates calculation. Although SCE&G added
almost $408 million of additions to its transmission system from 1995 until the end of
2008, this investment is not reflected in the stated rates being charged its transmission
customers.
14 Q.
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WHAT ARE SCE&G'S CAPITAL IMPROVEMENT PLANS FOR THE NEXT 10
YEARS?
16 A.
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SCE&G projects that it will invest approximately $349 million in new transmission
facilities during the years 2010 through 2014. From 2015 through 2019, those
expenditures in new transmission facilities are estimated to total $653 million. By 2019,
SCE&G's gross transmission plant investment will be approximately $1.8 billion, which
is more than double what it is today.