SCANA Corp. (SCG) Subsidiary SCE&G Announces Settlement Agreement
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South Carolina Electric & Gas Company (SCE&G), principal subsidiary of SCANA Corporation (NYSE: SCG), announced today that it has entered into a settlement agreement with the South Carolina Office of Regulatory Staff, the Central Electric Power Cooperative, Inc., the Electric Cooperatives of South Carolina, Inc., Frank Knapp, Jr., and South Carolina Energy Users Committee related to SCE&G's petition to update construction and capital cost schedules, including SCE&G's election of the Fixed Price Option as included in the October 2015 Amendment to its Engineering, Procurement, and Construction agreement with Westinghouse Electric Company, for the two new nuclear units under construction at the V.C. Summer Station in Jenkinsville, South Carolina. The settlement agreement is subject to approval by the Public Service Commission of South Carolina (PSC). A public hearing on SCE&G's petition is scheduled to begin on October 4, 2016.
This settlement agreement signifies that no contested issues exist among the settling parties and supports approval of the updated construction schedule, which indicates guaranteed substantial completion dates of August 2019 and August 2020 for Units 2 and 3, respectively, and inclusion of an additional $831 million in the capital cost schedule. In addition to supporting approval of the Fixed Price Option and the revised construction and capital cost schedules, the settling parties agreed to revise the allowed Return on Equity (ROE) for the new nuclear project from 10.50 percent to 10.25 percent. Under the Base Load Review Act, the revised ROE will be applied prospectively for the purpose of calculating revised rates sought on and after January 1, 2017, until such time as the new nuclear units are completed. Additionally, SCE&G agreed that it will not file future requests to amend capital cost schedules prior to January 28, 2019.
The remaining interveners, the Sierra Club, the South Carolina Coastal Conservation League, CMC Steel South Carolina, and an individual customer, were not expected to enter into the settlement agreement.
If the PSC approves the settlement agreement in its entirety, none of the settling parties may appeal the PSC's decision.
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