UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended SeptemberJune 30, 2017
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from _____ to _____
I.R.S. Employer | ||||||
Commission File Number | Exact name of registrant as specified in its charter | Identification Number | ||||
001-3375 | DOMINION ENERGY SOUTH CAROLINA, INC. | 57-0248695 | ||||
south carolina | ||||||
(State or other jurisdiction of incorporation or organization) | ||||||
400 OTARRE PARKWAY | ||||||
CAYCE, South Carolina | 29033 | |||||
(Address of principal executive offices) | (Zip Code) | |||||
(804) 819-2284 | ||||||
(Registrants’ telephone number) |
Securities registered pursuant to Section 12(b) of the Act:
None
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. SCANA Corporation Yes
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). SCANA Corporation Yes
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “non-accelerated filer,” “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer | ☐ | Accelerated filer | ☐ | Emerging growth company | ☐ | ||
Non-accelerated filer | ☒ | Smaller reporting company | |||||
☐ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
Dominion Energy South Carolina, Electric & Gas Company. Information contained herein relating to any individual registrant is filed by such registrant on its own behalf. South Carolina Electric & Gas Company makes no representation as to information relating to SCANA Corporation or its subsidiaries (other than South Carolina Electric & Gas Company and its consolidated affiliates).
Page | ||||||
3 | ||||||
Item 1. | 5 | |||||
Management's Discussion and Analysis of Financial Condition and Results of Operations | 26 | |||||
30 | ||||||
31 | ||||||
31 | ||||||
Item 5. | 31 | |||||
Item 6. | 32 | |||||
2
GLOSSARY OF TERMS
The following abbreviations or acronyms used in the text have the meanings set forth below unless the context requires otherwise:
Abbreviation or Acronym | Definition | |
2017 Tax Reform Act | An Act to Provide for Reconciliation Pursuant to Titles II and V of the Concurrent Resolution on the Budget for Fiscal Year 2018 (previously known as The Tax Cuts and Jobs Act) enacted on December 22, 2017 | |
ACE Rule | Affordable Clean Energy Rule | |
AFUDC | Allowance for | |
AOCI | Accumulated other comprehensive income (loss) | |
ARO | Asset retirement obligation | |
BACT | Best available control technology | |
CAA | ||
Clean Air Act | ||
CCR | Coal combustion residual | |
CEO | ||
Chief Executive Officer | ||
CERCLA | Comprehensive Environmental Response, Compensation and Liability Act of 1980, also known as Superfund | |
CFO | Chief Financial Officer | |
CO2 | Carbon dioxide | |
CUA | Capacity Use Area | |
CWA | Clean Water Act | |
DES | Dominion Energy Services, Inc. | |
DESC | The legal entity, Dominion Energy South Carolina, Inc., one or more of its consolidated | |
Dominion Energy | The legal entity, Dominion Energy, Inc., one or more of | |
Dominion Energy South Carolina | Dominion Energy South Carolina operating segment | |
DSM | Demand-side management | |
ELG Rule | Effluent limitations guidelines for the | |
EPA | U.S. Environmental Protection Agency | |
FERC | Federal Energy Regulatory Commission | |
Fuel Company | South Carolina Fuel Company, Inc. | |
GAAP | U.S. generally accepted accounting principles | |
GENCO | South Carolina Generating Company, Inc. | |
GHG | Greenhouse gas | |
kV | Kilovolt | |
MD&A | Management's Discussion and Analysis of Financial Condition and Results of Operations | |
MGD | Million gallons per day | |
MWh | Megawatt hour | |
NND Project | V. C. Summer Units 2 and 3 nuclear development project under which DESC and Santee Cooper undertook to construct two Westinghouse AP1000 Advanced Passive Safety nuclear units in Jenkinsville, South Carolina | |
NOx | Nitrogen oxide | |
Order 1000 | Order issued by FERC adopting requirements for electric transmission planning, cost allocation and development | |
PSD | Prevention of significant deterioration | |
Questar Gas | Questar Gas Company, a wholly-owned subsidiary of Dominion Energy | |
ROE | Return on equity | |
Santee Cooper | South Carolina Public Service Authority |
3
Abbreviation or Acronym | Definition | |
SCANA | The legal entity, SCANA Corporation, one or more of its consolidated subsidiaries (other than DESC) or the entirety of SCANA Corporation and its consolidated subsidiaries | |
SCANA Combination | Dominion Energy's acquisition of SCANA completed on January 1, 2019 pursuant to the terms of the SCANA Merger Agreement | |
SCANA Merger Agreement | Agreement and plan of merger entered on January 2, 2018 between Dominion Energy and SCANA | |
SCANA Merger Approval Order | Final order issued by the South Carolina Commission on December 21, 2018 setting forth its approval of the SCANA Combination | |
SCDHEC | South Carolina Department of Health and Environmental Control | |
SCDOR | South Carolina Department of Revenue | |
SEC | U.S. Securities and | |
SO2 | Sulfur dioxide | |
South Carolina | ||
Public Service Commission of South Carolina | ||
Summer | ||
V. C. Summer | ||
Toshiba | ||
Toshiba Corporation, parent company of | ||
Toshiba Settlement | Settlement Agreement dated as of July 27, 2017, by and among Toshiba, | |
VIE | Variable interest entity | |
Virginia Power | ||
The legal entity, Virginia Electric and Power Company, | ||
Westinghouse | ||
Westinghouse Electric Company LLC |
4
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Dominion Energy South Carolina, Inc.
Consolidated Balance Sheets
(Unaudited)
Millions of dollars | September 30, 2017 | December 31, 2016 | ||||||
Assets | ||||||||
Utility Plant In Service | $ | 13,767 | $ | 13,444 | ||||
Accumulated Depreciation and Amortization | (4,559 | ) | (4,446 | ) | ||||
Construction Work in Progress | 768 | 4,845 | ||||||
Nuclear Fuel, Net of Accumulated Amortization | 249 | 271 | ||||||
Goodwill, net of writedown of $230 | 210 | 210 | ||||||
Utility Plant, Net | 10,435 | 14,324 | ||||||
Nonutility Property and Investments: | ||||||||
Nonutility property, net of accumulated depreciation of $135 and $138 | 272 | 276 | ||||||
Assets held in trust, net-nuclear decommissioning | 132 | 123 | ||||||
Other investments | 77 | 76 | ||||||
Nonutility Property and Investments, Net | 481 | 475 | ||||||
Current Assets: | ||||||||
Cash and cash equivalents | 1,011 | 208 | ||||||
Receivables: | ||||||||
Customer, net of allowance for uncollectible accounts of $5 and $6 | 545 | 616 | ||||||
Income taxes | 6 | 142 | ||||||
Other | 189 | 127 | ||||||
Inventories (at average cost): | ||||||||
Fuel and gas supply | 129 | 136 | ||||||
Materials and supplies | 159 | 155 | ||||||
Prepayments | 111 | 105 | ||||||
Other current assets | 14 | 17 | ||||||
Total Current Assets | 2,164 | 1,506 | ||||||
Deferred Debits and Other Assets: | ||||||||
Regulatory assets | 6,690 | 2,130 | ||||||
Other | 249 | 272 | ||||||
Total Deferred Debits and Other Assets | 6,939 | 2,402 | ||||||
Total | $ | 20,019 | $ | 18,707 |
(millions) |
| June 30, |
|
| December 31, |
| ||
ASSETS |
|
|
|
|
|
| ||
Utility plant in service |
| $ | 15,034 |
|
| $ | 14,688 |
|
Accumulated depreciation and amortization |
|
| (5,435 | ) |
|
| (5,335 | ) |
Construction work in progress |
|
| 536 |
|
|
| 541 |
|
Nuclear fuel, net of accumulated amortization |
|
| 195 |
|
|
| 204 |
|
Utility plant, net ($707 and $719 related to VIEs) |
|
| 10,330 |
|
|
| 10,098 |
|
Nonutility Property and Investments: |
|
|
|
|
|
| ||
Nonutility property, net of accumulated depreciation |
|
| 27 |
|
|
| 20 |
|
Assets held in trust, nuclear decommissioning |
|
| 237 |
|
|
| 223 |
|
Nonutility property and investments, net |
|
| 264 |
|
|
| 243 |
|
Current Assets: |
|
|
|
|
|
| ||
Cash and cash equivalents |
|
| 1 |
|
|
| 11 |
|
Receivables: |
|
|
|
|
|
| ||
Customer, net of allowance for uncollectible accounts of $5 at both periods |
|
| 361 |
|
|
| 420 |
|
Affiliated and related party |
|
| — |
|
|
| 2 |
|
Other |
|
| 127 |
|
|
| 141 |
|
Inventories (at average cost): |
|
|
|
|
|
| ||
Fuel |
|
| 98 |
|
|
| 98 |
|
Gas stored |
|
| 33 |
|
|
| 38 |
|
Materials and supplies |
|
| 232 |
|
|
| 218 |
|
Prepayments |
|
| 114 |
|
|
| 76 |
|
Regulatory assets |
|
| 667 |
|
|
| 743 |
|
Other current assets(1) |
|
| 21 |
|
|
| 49 |
|
Current assets held for sale |
|
| — |
|
|
| 8 |
|
Total current assets ($91 and $92 related to VIEs) |
|
| 1,654 |
|
|
| 1,804 |
|
Deferred Debits and Other Assets: |
|
|
|
|
|
| ||
Regulatory assets |
|
| 3,201 |
|
|
| 3,289 |
|
Other(1) |
|
| 260 |
|
|
| 315 |
|
Total deferred debits and other assets ($27 and $23 related to VIEs) |
|
| 3,461 |
|
|
| 3,604 |
|
Total assets |
| $ | 15,709 |
|
| $ | 15,749 |
|
(1) See Note 12 for amounts attributable to affiliates.
See Notes to Condensed Consolidated Financial Statements.
5
Millions of dollars | September 30, 2017 | December 31, 2016 | ||||||
Capitalization and Liabilities | ||||||||
Common Stock - no par value, 143 million shares outstanding | $ | 2,389 | $ | 2,390 | ||||
Retained Earnings | 3,447 | 3,384 | ||||||
Accumulated Other Comprehensive Loss | (49 | ) | (49 | ) | ||||
Total Common Equity | 5,787 | 5,725 | ||||||
Long-Term Debt, net | 6,455 | 6,473 | ||||||
Total Capitalization | 12,242 | 12,198 | ||||||
Current Liabilities: | ||||||||
Short-term borrowings | 1,022 | 941 | ||||||
Current portion of long-term debt | 177 | 17 | ||||||
Accounts payable | 266 | 404 | ||||||
Customer deposits and customer prepayments | 116 | 168 | ||||||
Taxes accrued | 526 | 201 | ||||||
Interest accrued | 97 | 84 | ||||||
Dividends declared | 85 | 80 | ||||||
Derivative financial instruments | 45 | 35 | ||||||
Other | 117 | 135 | ||||||
Total Current Liabilities | 2,451 | 2,065 | ||||||
Deferred Credits and Other Liabilities: | ||||||||
Deferred income taxes, net | 1,767 | 2,159 | ||||||
Asset retirement obligations | 569 | 558 | ||||||
Pension and other postretirement benefits | 373 | 373 | ||||||
Unrecognized tax benefits | 402 | 219 | ||||||
Regulatory liabilities | 2,015 | 930 | ||||||
Other | 200 | 205 | ||||||
Total Deferred Credits and Other Liabilities | 5,326 | 4,444 | ||||||
Commitments and Contingencies (Note 9) | ||||||||
Total | $ | 20,019 | $ | 18,707 |
Dominion Energy South Carolina, Inc.
Consolidated Balance Sheets—(Continued)
(Unaudited)
(millions) |
| June 30, |
|
| December 31, |
| ||
CAPITALIZATION AND LIABILITIES |
|
|
|
|
|
| ||
Common Stock - no par value, 40.3 million shares outstanding |
| $ | 4,088 |
|
| $ | 4,088 |
|
Retained earnings |
|
| 486 |
|
|
| 418 |
|
Accumulated other comprehensive loss |
|
| (2 | ) |
|
| (2 | ) |
Total common equity |
|
| 4,572 |
|
|
| 4,504 |
|
Noncontrolling interest |
|
| 172 |
|
|
| 162 |
|
Total equity |
|
| 4,744 |
|
|
| 4,666 |
|
Long-term debt, net |
|
| 3,726 |
|
|
| 3,725 |
|
Affiliated long-term debt |
|
| — |
|
|
| 230 |
|
Finance leases |
|
| 5 |
|
|
| 6 |
|
Total long-term debt |
|
| 3,731 |
|
|
| 3,961 |
|
Total capitalization |
|
| 8,475 |
|
|
| 8,627 |
|
Current Liabilities: |
|
|
|
|
|
| ||
Short-term borrowings |
|
| 303 |
|
|
| 249 |
|
Securities due within one year |
|
| 3 |
|
|
| 4 |
|
Accounts payable |
|
| 148 |
|
|
| 297 |
|
Affiliated and related party payables |
|
| 1,362 |
|
|
| 871 |
|
Customer deposits and customer prepayments |
|
| 73 |
|
|
| 79 |
|
Taxes accrued |
|
| 129 |
|
|
| 236 |
|
Interest accrued |
|
| 74 |
|
|
| 75 |
|
Regulatory liabilities |
|
| 208 |
|
|
| 251 |
|
Reserves for litigation and regulatory proceedings |
|
| 66 |
|
|
| 94 |
|
Other |
|
| 96 |
|
|
| 115 |
|
Total current liabilities |
|
| 2,462 |
|
|
| 2,271 |
|
Deferred Credits and Other Liabilities: |
|
|
|
|
|
| ||
Deferred income taxes and investment tax credits |
|
| 1,247 |
|
|
| 1,230 |
|
Asset retirement obligations |
|
| 685 |
|
|
| 628 |
|
Pension and other postretirement benefits |
|
| 114 |
|
|
| 114 |
|
Regulatory liabilities |
|
| 2,630 |
|
|
| 2,785 |
|
Affiliated liabilities |
|
| 22 |
|
|
| 19 |
|
Other |
|
| 74 |
|
|
| 75 |
|
Total deferred credits and other liabilities |
|
| 4,772 |
|
|
| 4,851 |
|
Commitments and Contingencies (see Note 10) |
|
|
|
|
|
| ||
Total capitalization and liabilities |
| $ | 15,709 |
|
| $ | 15,749 |
|
See Notes to Condensed Consolidated Financial Statements.
6
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
Millions of dollars, except per share amounts | 2017 | 2016 | 2017 | 2016 | ||||||||||||
Operating Revenues: | ||||||||||||||||
Electric | $ | 786 | $ | 817 | $ | 2,042 | $ | 2,035 | ||||||||
Gas - regulated | 123 | 111 | 584 | 538 | ||||||||||||
Gas - nonregulated | 167 | 165 | 623 | 598 | ||||||||||||
Total Operating Revenues | 1,076 | 1,093 | 3,249 | 3,171 | ||||||||||||
Operating Expenses: | ||||||||||||||||
Fuel used in electric generation | 167 | 176 | 464 | 443 | ||||||||||||
Purchased power | 22 | 21 | 54 | 50 | ||||||||||||
Gas purchased for resale | 211 | 202 | 808 | 752 | ||||||||||||
Other operation and maintenance | 183 | 187 | 543 | 558 | ||||||||||||
Impairment loss | 210 | — | 210 | — | ||||||||||||
Depreciation and amortization | 96 | 93 | 285 | 276 | ||||||||||||
Other taxes | 67 | 66 | 200 | 192 | ||||||||||||
Total Operating Expenses | 956 | 745 | 2,564 | 2,271 | ||||||||||||
Operating Income | 120 | 348 | 685 | 900 | ||||||||||||
Other Income (Expense): | ||||||||||||||||
Other income | 28 | 15 | 61 | 46 | ||||||||||||
Other expense | (7 | ) | (7 | ) | (25 | ) | (31 | ) | ||||||||
Interest charges, net of allowance for borrowed funds used during construction of $2, $5, $16 and $14 | (95 | ) | (88 | ) | (270 | ) | (255 | ) | ||||||||
Allowance for equity funds used during construction | — | 7 | 17 | 22 | ||||||||||||
Total Other Expense | (74 | ) | (73 | ) | (217 | ) | (218 | ) | ||||||||
Income Before Income Tax Expense | 46 | 275 | 468 | 682 | ||||||||||||
Income Tax Expense | 12 | 86 | 142 | 211 | ||||||||||||
Net Income | $ | 34 | $ | 189 | $ | 326 | $ | 471 | ||||||||
Earnings Per Share of Common Stock | $ | 0.24 | $ | 1.32 | $ | 2.28 | $ | 3.29 | ||||||||
Weighted Average Common Shares Outstanding (millions) | 143 | 143 | 143 | 143 | ||||||||||||
Dividends Declared Per Share of Common Stock | $ | 0.6125 | $ | 0.5750 | $ | 1.8375 | $ | 1.7250 |
Dominion Energy South Carolina, Inc.
Consolidated Statements of Comprehensive Income
(Unaudited)
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
Millions of dollars | 2017 | 2016 | 2017 | 2016 | ||||||||||||
Net Income | $ | 34 | $ | 189 | $ | 326 | $ | 471 | ||||||||
Other Comprehensive Income (Loss), net of tax: | ||||||||||||||||
Unrealized Gains (Losses) on Cash Flow Hedging Activities: | ||||||||||||||||
Arising during period, net of tax of $-, $-, $(3) and $(3) | — | (1 | ) | (5 | ) | (4 | ) | |||||||||
Reclassified as increases to interest expense, net of tax of $1, $1, $3 and $3 | 2 | 2 | 6 | 6 | ||||||||||||
Reclassified as increases (decreases) to gas purchased for resale, net of tax of $-, $ -, $(1) and $3 | — | — | (2 | ) | 6 | |||||||||||
Net unrealized gains (losses) on cash flow hedging activities | 2 | 1 | (1 | ) | 8 | |||||||||||
Deferred cost of employee benefit plans, net of tax of $-, $-, $- and $- | 1 | — | 1 | — | ||||||||||||
Other Comprehensive Income | 3 | 1 | — | 8 | ||||||||||||
Total Comprehensive Income | $ | 37 | $ | 190 | $ | 326 | $ | 479 |
|
| Three Months Ended |
|
| Six Months Ended |
| ||||||||||
(millions) |
| 2023 |
|
| 2022 |
|
| 2023 |
|
| 2022 |
| ||||
Operating Revenue(1) |
| $ | 704 |
|
| $ | 909 |
|
| $ | 1,463 |
|
| $ | 1,758 |
|
Operating Expenses: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Fuel used in electric generation |
|
| 135 |
|
|
| 254 |
|
|
| 285 |
|
|
| 428 |
|
Purchased power(1) |
|
| 29 |
|
|
| 27 |
|
|
| 36 |
|
|
| 58 |
|
Gas purchased for resale |
|
| 45 |
|
|
| 89 |
|
|
| 127 |
|
|
| 194 |
|
Other operations and maintenance |
|
| 100 |
|
|
| 109 |
|
|
| 215 |
|
|
| 226 |
|
Other operations and maintenance - affiliated suppliers |
|
| 42 |
|
|
| 39 |
|
|
| 83 |
|
|
| 82 |
|
Impairment of assets and other charges |
|
| — |
|
|
| 4 |
|
|
| — |
|
|
| 4 |
|
Depreciation and amortization |
|
| 131 |
|
|
| 126 |
|
|
| 260 |
|
|
| 251 |
|
Other taxes(1) |
|
| 74 |
|
|
| 71 |
|
|
| 152 |
|
|
| 144 |
|
Total operating expenses |
|
| 556 |
|
|
| 719 |
|
|
| 1,158 |
|
|
| 1,387 |
|
Operating income |
|
| 148 |
|
|
| 190 |
|
|
| 305 |
|
|
| 371 |
|
Other income, net |
|
| 18 |
|
|
| 20 |
|
|
| 28 |
|
|
| 24 |
|
Interest charges, net of AFUDC of $5, $1, $9 and $2(1) |
|
| 63 |
|
|
| 53 |
|
|
| 122 |
|
|
| 105 |
|
Income before income tax expense |
|
| 103 |
|
|
| 157 |
|
|
| 211 |
|
|
| 290 |
|
Income tax expense |
|
| 22 |
|
|
| 31 |
|
|
| 33 |
|
|
| 57 |
|
Net Income and Other Comprehensive Income |
|
| 81 |
|
|
| 126 |
|
|
| 178 |
|
|
| 233 |
|
Comprehensive Income Attributable to Noncontrolling |
|
| 5 |
|
|
| 7 |
|
|
| 10 |
|
|
| 11 |
|
Comprehensive Income Available to Common Shareholder |
| $ | 76 |
|
| $ | 119 |
|
| $ | 168 |
|
| $ | 222 |
|
(1) See Note 12 for amounts attributable to affiliates.
See Notes to Condensed Consolidated Financial Statements.
7
Dominion Energy South Carolina, Inc.
Consolidated Statements of Cash Flows
(Unaudited)
|
| Six Months Ended June 30, |
| |||||
(millions) |
| 2023 |
|
| 2022 |
| ||
Operating Activities |
|
|
|
|
|
| ||
Net income |
| $ | 178 |
|
| $ | 233 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
| ||
Impairment of assets and other charges |
|
| — |
|
|
| 4 |
|
Deferred income taxes, net |
|
| 17 |
|
|
| 102 |
|
Depreciation and amortization |
|
| 260 |
|
|
| 251 |
|
Amortization of nuclear fuel |
|
| 14 |
|
|
| 19 |
|
Gains on sale of assets |
|
| (31 | ) |
|
| (16 | ) |
Other adjustments |
|
| 4 |
|
|
| 4 |
|
Changes in certain assets and liabilities: |
|
|
|
|
|
| ||
Receivables |
|
| 73 |
|
|
| (29 | ) |
Receivables - affiliated and related party |
|
| 2 |
|
|
| 13 |
|
Inventories |
|
| (9 | ) |
|
| (30 | ) |
Prepayments |
|
| (38 | ) |
|
| (23 | ) |
Regulatory assets |
|
| 109 |
|
|
| (178 | ) |
Regulatory liabilities |
|
| (209 | ) |
|
| 36 |
|
Accounts payable |
|
| (73 | ) |
|
| 66 |
|
Accounts payable - affiliated and related party |
|
| (14 | ) |
|
| 63 |
|
Taxes accrued |
|
| (107 | ) |
|
| (99 | ) |
Interest accrued |
|
| (1 | ) |
|
| (1 | ) |
Pension and other postretirement benefits |
|
| — |
|
|
| (6 | ) |
Other assets and liabilities |
|
| 89 |
|
|
| (196 | ) |
Net cash provided by operating activities |
|
| 264 |
|
|
| 213 |
|
Investing Activities |
|
|
|
|
|
| ||
Property additions and construction expenditures |
|
| (487 | ) |
|
| (346 | ) |
Proceeds from investments and sales of assets |
|
| (14 | ) |
|
| 9 |
|
Purchase of investments |
|
| (4 | ) |
|
| (1 | ) |
Other |
|
| 3 |
|
|
| 1 |
|
Net cash used in investing activities |
|
| (502 | ) |
|
| (337 | ) |
Financing Activities |
|
|
|
|
|
| ||
Dividend to parent |
|
| (100 | ) |
|
| (218 | ) |
Short-term borrowings, net |
|
| 54 |
|
|
| 190 |
|
Short-term borrowings - affiliated, net |
|
| 275 |
|
|
| 146 |
|
Other |
|
| (1 | ) |
|
| (2 | ) |
Net cash provided by financing activities |
|
| 228 |
|
|
| 116 |
|
Net decrease in cash, restricted cash and equivalents |
|
| (10 | ) |
|
| (8 | ) |
Cash, restricted cash and equivalents at beginning of period(1) |
|
| 11 |
|
|
| 54 |
|
Cash, restricted cash and equivalents at end of period(1) |
| $ | 1 |
|
| $ | 46 |
|
Supplemental Cash Flow Information |
|
|
|
|
|
| ||
Significant noncash investing and financing activities:(2) |
|
|
|
|
|
| ||
Accrued construction expenditures |
| $ | 29 |
|
| $ | 98 |
|
Operating leases |
|
| — |
|
|
| 3 |
|
Nine Months Ended September 30, | ||||||||
Millions of dollars | 2017 | 2016 | ||||||
Cash Flows From Operating Activities: | ||||||||
Net income | $ | 326 | $ | 471 | ||||
Adjustments to reconcile net income to net cash provided from operating activities: | ||||||||
Impairment loss | 210 | — | ||||||
Deferred income taxes, net | (395 | ) | 151 | |||||
Depreciation and amortization | 302 | 289 | ||||||
Amortization of nuclear fuel | 31 | 42 | ||||||
Allowance for equity funds used during construction | (17 | ) | (22 | ) | ||||
Carrying cost recovery | (27 | ) | (12 | ) | ||||
Changes in certain assets and liabilities: | ||||||||
Receivables | 79 | (8 | ) | |||||
Income taxes receivable | 136 | (306 | ) | |||||
Inventories | (58 | ) | (21 | ) | ||||
Prepayments | (6 | ) | (2 | ) | ||||
Regulatory assets | (48 | ) | (14 | ) | ||||
Regulatory liabilities | (3 | ) | 2 | |||||
Accounts payable | (22 | ) | (36 | ) | ||||
Unrecognized tax benefits | 183 | 210 | ||||||
Taxes accrued | 325 | (84 | ) | |||||
Derivative financial instruments | (3 | ) | (9 | ) | ||||
Other assets | (37 | ) | (58 | ) | ||||
Other liabilities | (49 | ) | 86 | |||||
Net Cash Provided From Operating Activities | 927 | 679 | ||||||
Cash Flows From Investing Activities: | ||||||||
Property additions and construction expenditures | (1,095 | ) | (1,178 | ) | ||||
Proceeds from monetization of guaranty settlement | 1,013 | — | ||||||
Proceeds from investments (including derivative collateral returned) | 116 | 629 | ||||||
Purchase of investments (including derivative collateral posted) | (115 | ) | (743 | ) | ||||
Payments upon interest rate derivative contract settlements | — | (88 | ) | |||||
Net Cash Used For Investing Activities | (81 | ) | (1,380 | ) | ||||
Cash Flows From Financing Activities: | ||||||||
Proceeds from issuance of long-term debt | 150 | 592 | ||||||
Repayment of long-term debt | (16 | ) | (15 | ) | ||||
Dividends | (258 | ) | (243 | ) | ||||
Short-term borrowings, net | 81 | 247 | ||||||
Net Cash (Used For) Provided From Financing Activities | (43 | ) | 581 | |||||
Net Increase (Decrease) In Cash and Cash Equivalents | 803 | (120 | ) | |||||
Cash and Cash Equivalents, January 1 | 208 | 176 | ||||||
Cash and Cash Equivalents, September 30 | $ | 1,011 | $ | 56 | ||||
Supplemental Cash Flow Information: | ||||||||
Cash for–Interest paid (net of capitalized interest of $16 and $14) | $ | 247 | $ | 235 | ||||
–Income taxes paid | 1 | 229 | ||||||
–Income taxes received | 123 | — | ||||||
Noncash Investing and Financing Activities: | ||||||||
Accrued construction expenditures | 44 | 80 | ||||||
Capital leases | 6 | 12 | ||||||
Guaranty settlement receivable | 83 | — |
See Notes to Condensed Consolidated Financial Statements.10
8
Dominion Energy South Carolina, Inc.
Consolidated Statements of Changes in Common Equity
(Unaudited)
Common Stock | Accumulated Other Comprehensive Income (Loss) | |||||||||||||||||||||||||||||
Millions | Shares | Outstanding Amount | Treasury Amount | Retained Earnings | Gains (Losses) from Cash Flow Hedges | Deferred Employee Benefit Plans | Total AOCI | Total | ||||||||||||||||||||||
Balance as of January 1, 2017 | 143 | $ | 2,402 | $ | (12 | ) | $ | 3,384 | $ | (36 | ) | $ | (13 | ) | $ | (49 | ) | $ | 5,725 | |||||||||||
Net Income | 326 | 326 | ||||||||||||||||||||||||||||
Other Comprehensive Income (Loss) | ||||||||||||||||||||||||||||||
Losses arising during the period | (5 | ) | — | (5 | ) | (5 | ) | |||||||||||||||||||||||
Losses/amortization reclassified from AOCI | 4 | 1 | 5 | 5 | ||||||||||||||||||||||||||
Total Comprehensive Income | 326 | (1 | ) | 1 | — | 326 | ||||||||||||||||||||||||
Purchase of Treasury Stock | — | — | (1 | ) | (1 | ) | ||||||||||||||||||||||||
Dividends Declared | (263 | ) | (263 | ) | ||||||||||||||||||||||||||
Balance as of September 30, 2017 | 143 | $ | 2,402 | $ | (13 | ) | $ | 3,447 | $ | (37 | ) | $ | (12 | ) | $ | (49 | ) | $ | 5,787 | |||||||||||
Balance as of January 1, 2016 | 143 | $ | 2,402 | $ | (12 | ) | $ | 3,118 | $ | (53 | ) | $ | (12 | ) | $ | (65 | ) | $ | 5,443 | |||||||||||
Net Income | 471 | 471 | ||||||||||||||||||||||||||||
Other Comprehensive Income (Loss) | ||||||||||||||||||||||||||||||
Losses arising during the period | (4 | ) | — | (4 | ) | (4 | ) | |||||||||||||||||||||||
Losses/amortization reclassified from AOCI | 12 | — | 12 | 12 | ||||||||||||||||||||||||||
Total Comprehensive Income | 471 | 8 | — | 8 | 479 | |||||||||||||||||||||||||
Dividends Declared | (247 | ) | (247 | ) | ||||||||||||||||||||||||||
Balance as of September 30, 2016 | 143 | $ | 2,402 | $ | (12 | ) | $ | 3,342 | $ | (45 | ) | $ | (12 | ) | $ | (57 | ) | $ | 5,675 |
Quarter-To-Date
|
| Common Stock |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
(millions) |
| Shares |
|
| Amount |
|
| Retained |
|
| AOCI |
|
| Noncontrolling |
|
| Total |
| ||||||
March 31, 2022 |
|
| 40 |
|
| $ | 4,016 |
|
| $ | 338 |
|
| $ | (1 | ) |
| $ | 169 |
|
| $ | 4,522 |
|
Total comprehensive income available to |
|
|
|
|
|
|
|
| 119 |
|
|
|
|
|
| 7 |
|
|
| 126 |
| |||
Capital contribution from parent |
|
|
|
| 72 |
|
|
|
|
|
|
|
|
|
|
|
| 72 |
| |||||
Dividend to parent |
|
|
|
|
|
|
|
| (100 | ) |
|
|
|
|
| (8 | ) |
|
| (108 | ) | |||
June 30, 2022 |
|
| 40 |
|
| $ | 4,088 |
|
| $ | 357 |
|
| $ | (1 | ) |
| $ | 168 |
|
| $ | 4,612 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
March 31, 2023 |
|
| 40 |
|
| $ | 4,088 |
|
| $ | 460 |
|
| $ | (2 | ) |
| $ | 167 |
|
| $ | 4,713 |
|
Total comprehensive income available to |
|
|
|
|
|
|
|
| 76 |
|
|
|
|
|
| 5 |
|
|
| 81 |
| |||
Dividend to parent |
|
|
|
|
|
|
|
| (50 | ) |
|
|
|
|
|
|
|
| (50 | ) | ||||
June 30, 2023 |
|
| 40 |
|
| $ | 4,088 |
|
| $ | 486 |
|
| $ | (2 | ) |
| $ | 172 |
|
| $ | 4,744 |
|
Year-To-Date
|
| Common Stock |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
(millions) |
| Shares |
|
| Amount |
|
| Retained |
|
| AOCI |
|
| Noncontrolling |
|
| Total |
| ||||||
December 31, 2021 |
|
| 40 |
|
| $ | 4,016 |
|
| $ | 335 |
|
| $ | (1 | ) |
| $ | 175 |
|
| $ | 4,525 |
|
Total comprehensive income available to |
|
|
|
|
|
|
|
| 222 |
|
|
|
|
|
| 11 |
|
|
| 233 |
| |||
Capital contribution from parent |
|
|
|
|
| 72 |
|
|
|
|
|
|
|
|
|
|
|
| 72 |
| ||||
Dividend to parent |
|
|
|
|
|
|
|
| (200 | ) |
|
|
|
|
| (18 | ) |
|
| (218 | ) | |||
June 30, 2022 |
|
| 40 |
|
| $ | 4,088 |
|
| $ | 357 |
|
| $ | (1 | ) |
| $ | 168 |
|
| $ | 4,612 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
December 31, 2022 |
|
| 40 |
|
| $ | 4,088 |
|
| $ | 418 |
|
| $ | (2 | ) |
| $ | 162 |
|
| $ | 4,666 |
|
Total comprehensive income available to |
|
|
|
|
|
|
|
| 168 |
|
|
|
|
|
| 10 |
|
|
| 178 |
| |||
Dividend to parent |
|
|
|
|
|
|
|
| (100 | ) |
|
|
|
|
|
|
|
| (100 | ) | ||||
June 30, 2023 |
|
| 40 |
|
| $ | 4,088 |
|
| $ | 486 |
|
| $ | (2 | ) |
| $ | 172 |
|
| $ | 4,744 |
|
See Notes to Condensed Consolidated Financial Statements.
9
Dominion Energy South Carolina, Electric & Gas Company and Affiliates
Millions of dollars | September 30, 2017 | December 31, 2016 | ||||||
Assets | ||||||||
Utility Plant In Service | $ | 11,783 | $ | 11,510 | ||||
Accumulated Depreciation and Amortization | (4,078 | ) | (3,991 | ) | ||||
Construction Work in Progress | 554 | 4,813 | ||||||
Nuclear Fuel, Net of Accumulated Amortization | 249 | 271 | ||||||
Utility Plant, Net ($740 and $756 related to VIEs) | 8,508 | 12,603 | ||||||
Nonutility Property and Investments: | ||||||||
Nonutility property, net of accumulated depreciation | 71 | 69 | ||||||
Assets held in trust, net-nuclear decommissioning | 132 | 123 | ||||||
Other investments | 2 | 3 | ||||||
Nonutility Property and Investments, Net | 205 | 195 | ||||||
Current Assets: | ||||||||
Cash and cash equivalents | 1,015 | 164 | ||||||
Receivables: | ||||||||
Customer, net of allowance for uncollectible accounts of $4 and $3 | 401 | 378 | ||||||
Affiliated companies | 8 | 16 | ||||||
Income taxes | — | 53 | ||||||
Other | 168 | 94 | ||||||
Inventories (at average cost): | ||||||||
Fuel | 78 | 83 | ||||||
Materials and supplies | 148 | 143 | ||||||
Prepayments | 98 | 88 | ||||||
Other current assets | 1 | 1 | ||||||
Total Current Assets ($57 and $85 related to VIEs) | 1,917 | 1,020 | ||||||
Deferred Debits and Other Assets: | ||||||||
Regulatory assets | 6,582 | 2,030 | ||||||
Other | 221 | 243 | ||||||
Total Deferred Debits and Other Assets ($49 and $52 related to VIEs) | 6,803 | 2,273 | ||||||
Total | $ | 17,433 | $ | 16,091 |
Notes to Condensed Consolidated Financial Statements.
Millions of dollars | September 30, 2017 | December 31, 2016 | ||||||
Capitalization and Liabilities | ||||||||
Common Stock - no par value, 40.3 million shares outstanding | $ | 2,860 | $ | 2,860 | ||||
Retained Earnings | 2,518 | 2,481 | ||||||
Accumulated Other Comprehensive Loss | (3 | ) | (3 | ) | ||||
Total Common Equity | 5,375 | 5,338 | ||||||
Noncontrolling Interest | 137 | 134 | ||||||
Total Equity | 5,512 | 5,472 | ||||||
Long-Term Debt, net | 4,990 | 5,154 | ||||||
Total Capitalization | 10,502 | 10,626 | ||||||
Current Liabilities: | ||||||||
Short-term borrowings | 945 | 804 | ||||||
Current portion of long-term debt | 173 | 12 | ||||||
Accounts payable | 154 | 247 | ||||||
Affiliated payables | 96 | 122 | ||||||
Customer deposits and customer prepayments | 74 | 126 | ||||||
Taxes accrued | 663 | 195 | ||||||
Interest accrued | 71 | 68 | ||||||
Dividends declared | 81 | 79 | ||||||
Derivative financial instruments | 41 | 28 | ||||||
Other | 69 | 55 | ||||||
Total Current Liabilities | 2,367 | 1,736 | ||||||
Deferred Credits and Other Liabilities: | ||||||||
Deferred income taxes, net | 1,505 | 1,939 | ||||||
Asset retirement obligations | 533 | 522 | ||||||
Pension and other postretirement benefits | 231 | 232 | ||||||
Unrecognized tax benefits | 402 | 236 | ||||||
Regulatory liabilities | 1,779 | 695 | ||||||
Other | 99 | 89 | ||||||
Other affiliate | 15 | 16 | ||||||
Total Deferred Credits and Other Liabilities | 4,564 | 3,729 | ||||||
Commitments and Contingencies (Note 9) | ||||||||
Total | $ | 17,433 | $ | 16,091 |
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
Millions of dollars | 2017 | 2016 | 2017 | 2016 | ||||||||||||
Operating Revenues: | ||||||||||||||||
Electric | $ | 786 | $ | 817 | $ | 2,042 | $ | 2,035 | ||||||||
Electric - nonconsolidated affiliate | 1 | 1 | 4 | 4 | ||||||||||||
Gas | 69 | 64 | 284 | 252 | ||||||||||||
Gas - nonconsolidated affiliate | — | — | 1 | 1 | ||||||||||||
Total Operating Revenues | 856 | 882 | 2,331 | 2,292 | ||||||||||||
Operating Expenses: | ||||||||||||||||
Fuel used in electric generation | 132 | 141 | 370 | 368 | ||||||||||||
Fuel used in electric generation - nonconsolidated affiliate | 35 | 35 | 94 | 75 | ||||||||||||
Purchased power | 22 | 21 | 54 | 50 | ||||||||||||
Gas purchased for resale | 39 | 36 | 147 | 117 | ||||||||||||
Gas purchased for resale - nonconsolidated affiliate | — | — | — | 9 | ||||||||||||
Other operation and maintenance | 109 | 101 | 305 | 298 | ||||||||||||
Other operation and maintenance - nonconsolidated affiliate | 45 | 51 | 141 | 156 | ||||||||||||
Impairment loss | 210 | — | 210 | — | ||||||||||||
Depreciation and amortization | 78 | 76 | 232 | 225 | ||||||||||||
Other taxes | 62 | 61 | 183 | 173 | ||||||||||||
Other taxes - nonconsolidated affiliate | 1 | 1 | 4 | 5 | ||||||||||||
Total Operating Expenses | 733 | 523 | 1,740 | 1,476 | ||||||||||||
Operating Income | 123 | 359 | 591 | 816 | ||||||||||||
Other Income (Expense): | ||||||||||||||||
Other income | 21 | 7 | 36 | 20 | ||||||||||||
Other expense | (6 | ) | (4 | ) | (17 | ) | (19 | ) | ||||||||
Interest charges, net of allowance for borrowed funds used during construction of $2, $5, $15 and $13 | (76 | ) | (70 | ) | (214 | ) | (201 | ) | ||||||||
Allowance for equity funds used during construction | (3 | ) | 6 | 13 | 19 | |||||||||||
Total Other Income (Expense) | (64 | ) | (61 | ) | (182 | ) | (181 | ) | ||||||||
Income Before Income Tax Expense | 59 | 298 | 409 | 635 | ||||||||||||
Income Tax Expense | 17 | 94 | 129 | 202 | ||||||||||||
Net Income and Total Comprehensive Income | 42 | 204 | 280 | 433 | ||||||||||||
Less Net Income and Total Comprehensive Income Attributable to Noncontrolling Interest | (3 | ) | (3 | ) | (10 | ) | (10 | ) | ||||||||
Earnings and Comprehensive Income Available to Common Shareholder | $ | 39 | $ | 201 | $ | 270 | $ | 423 | ||||||||
Dividends Declared on Common Stock | $ | 81 | $ | 76 | $ | 240 | $ | 225 |
Nine Months Ended September 30, | ||||||||
Millions of dollars | 2017 | 2016 | ||||||
Cash Flows From Operating Activities: | ||||||||
Net income | $ | 280 | $ | 433 | ||||
Adjustments to reconcile net income to net cash provided from operating activities: | ||||||||
Impairment loss | 210 | — | ||||||
Deferred income taxes, net | (434 | ) | 127 | |||||
Depreciation and amortization | 238 | 229 | ||||||
Amortization of nuclear fuel | 31 | 42 | ||||||
Allowance for equity funds used during construction | (13 | ) | (19 | ) | ||||
Carrying cost recovery | (27 | ) | (12 | ) | ||||
Changes in certain assets and liabilities: | ||||||||
Receivables | (27 | ) | (70 | ) | ||||
Receivables - affiliate | 8 | 9 | ||||||
Income tax receivable | 53 | (206 | ) | |||||
Inventories | (34 | ) | (14 | ) | ||||
Prepayments | (10 | ) | (15 | ) | ||||
Regulatory assets | (40 | ) | (6 | ) | ||||
Regulatory liabilities | (1 | ) | (3 | ) | ||||
Accounts payable | 31 | (13 | ) | |||||
Accounts payable - affiliate | (28 | ) | (13 | ) | ||||
Taxes accrued | 468 | (151 | ) | |||||
Unrecognized tax benefit | 166 | 210 | ||||||
Other assets | (29 | ) | (117 | ) | ||||
Other liabilities | (14 | ) | 64 | |||||
Net Cash Provided From Operating Activities | 828 | 475 | ||||||
Cash Flows From Investing Activities: | ||||||||
Property additions and construction expenditures | (882 | ) | (1,024 | ) | ||||
Proceeds from monetization of guaranty settlement | 1,013 | — | ||||||
Proceeds from investments (including derivative collateral returned) | 96 | 577 | ||||||
Purchase of investments (including derivative collateral posted) | (98 | ) | (699 | ) | ||||
Payments upon interest rate derivative contract settlements | — | (88 | ) | |||||
Proceeds from money pool investments | — | 9 | ||||||
Net Cash Provided From (Used For) Investing Activities | 129 | (1,225 | ) | |||||
Cash Flows From Financing Activities: | ||||||||
Proceeds from issuance of debt | — | 494 | ||||||
Repayment of long-term debt | (11 | ) | (10 | ) | ||||
Dividends | (238 | ) | (224 | ) | ||||
Contributions from parent | — | 100 | ||||||
Money pool borrowings, net | 2 | (5 | ) | |||||
Short-term borrowings, net | 141 | 294 | ||||||
Net Cash Provided From (Used For) Financing Activities | (106 | ) | 649 | |||||
Net Decrease In Cash and Cash Equivalents | 851 | (101 | ) | |||||
Cash and Cash Equivalents, January 1 | 164 | 130 | ||||||
Cash and Cash Equivalents, September 30 | $ | 1,015 | $ | 29 | ||||
Supplemental Cash Flow Information: | ||||||||
Cash for–Interest (net of capitalized interest of $15 and $13) | $ | 195 | $ | 182 | ||||
– Income taxes paid | 3 | 286 | ||||||
– Income taxes received | 143 | 9 | ||||||
Noncash Investing and Financing Activities: | ||||||||
Accrued construction expenditures | 21 | 71 | ||||||
Capital leases | 6 | 12 | ||||||
Guaranty settlement receivable | 83 | — |
(Unaudited)
Common Stock | |||||||||||||||||||||||
Millions | Shares | Amount | Retained Earnings | AOCI | Noncontrolling Interest | Total Equity | |||||||||||||||||
Balance at January 1, 2017 | 40 | $ | 2,860 | $ | 2,481 | $ | (3 | ) | $ | 134 | $ | 5,472 | |||||||||||
Earnings available to common shareholder | 270 | 10 | 280 | ||||||||||||||||||||
Total Comprehensive Income | 270 | — | 10 | 280 | |||||||||||||||||||
Cash dividend declared | (233 | ) | (7 | ) | (240 | ) | |||||||||||||||||
Balance at September 30, 2017 | 40 | $ | 2,860 | $ | 2,518 | $ | (3 | ) | $ | 137 | $ | 5,512 | |||||||||||
Balance at January 1, 2016 | 40 | $ | 2,760 | $ | 2,265 | $ | (3 | ) | $ | 129 | $ | 5,151 | |||||||||||
Earnings available to common shareholder | 423 | 10 | 433 | ||||||||||||||||||||
Total Comprehensive Income | 423 | — | 10 | 433 | |||||||||||||||||||
Capital Contributions from parent | 100 | 100 | |||||||||||||||||||||
Cash dividend declared | (219 | ) | (6 | ) | (225 | ) | |||||||||||||||||
Balance at September 30, 2016 | 40 | $ | 2,860 | $ | 2,469 | $ | (3 | ) | $ | 133 | $ | 5,459 |
The following unaudited notes to the condensed consolidated financial statements are a combined presentation. Except as otherwise indicated herein, each note applies to the Company and Consolidated SCE&G; however, Consolidated SCE&G makes no representation as to information relating solely to SCANA Corporation or its subsidiaries (other than Consolidated SCE&G).
These are interim financial statements and, due to the seasonality of each company'sDESC's business and matters that may occur during the rest of the year, including the matters described in condensed consolidated Note 9 under
Certain amounts in DESC's 2022 Consolidated Financial Statements and Notes have been reclassified to conform to the 2023 presentation for comparative purposes; however, such reclassifications did not affect DESC's net income and other comprehensive income, total assets, liabilities, equity or cash flows.
DESC is a wholly-owned subsidiary of SCANA, which is a wholly-owned subsidiary of Dominion Energy.
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Consolidation and Variable Interest Entities
DESC has determined that it has a controlling financial interest in each of GENCO and Fuel Company (which are considered to be VIEs) and, accordingly, DESC's Consolidated SCE&G's condensed consolidated financial statementsFinancial Statements include, after eliminating intercompany balances and transactions, the accounts of SCE&G,DESC, GENCO and Fuel Company. The equity interestsSee Note 2 to the Consolidated Financial Statements included in DESC’s Annual Report on Form 10-K for the year ended December 31, 2022 for a description of GENCO and Fuel Company are held solely by SCANA, SCE&G’s parent.Company.
DESC purchases shared services from DES, an affiliated VIE that provides accounting, legal, finance and certain administrative and technical services to all Dominion Energy subsidiaries, including DESC. DESC has determined that it is not the primary beneficiary of DES as it does not have either the power to direct the activities that most significantly impact its economic performance or an obligation to absorb losses and benefits which could be significant to it. See Note 12 for amounts attributable to affiliates.
Significant Accounting Policies
There have been no significant changes from Note 2 to the Consolidated Financial Statements in DESC's Annual Report on Form 10-K for the year ended December 31, 2022, except as follows.
Asset Retirement Obligations
In the second quarter of 2023, DESC revised its estimated cash flow projections for AROs associated with certain previously retired coal-fired generating units. As a result, GENCO’s and Fuel Company’s equity and results of operations are reflected as noncontrolling interest in Consolidated SCE&G’s condensed consolidated financial statements.
2.
RATE AND OTHER REGULATORY MATTERSRegulatory Matters
As a result of issues generated in the ordinary course of business, DESC is involved in various regulatory matters. Certain regulatory matters may ultimately result in a loss; however, as such matters are in an initial procedural phase, involve uncertainty as to the outcome of pending reviews or orders, and/or involve significant factual issues that need to be resolved, it is not possible for DESC to estimate a range of possible loss. For regulatory matters that DESC cannot estimate, a statement to this effect is made in the description of the matter. Other matters may have progressed sufficiently through the regulatory process such that DESC is able to estimate a range of possible loss. For regulatory matters that DESC is able to reasonably estimate a range of possible losses, an estimated range of possible loss is provided, in excess of the accrued liability (if any) for such matters. Any estimated range is based on currently available information, involves elements of judgment and significant uncertainties and may not represent DESC’s maximum possible loss exposure. The circumstances of such regulatory matters will change from time to time and actual results may
10
vary significantly from the current estimate. For current matters not specifically reported below, management does not anticipate that the outcome from such matters would have a material effect on DESC’s financial position, liquidity or results of operations.
Other Regulatory Matters
Other than the following matters, there have been no significant developments regarding the pending regulatory matters disclosed in Note 3 to the Consolidated Financial Statements in DESC's Annual Report on Form 10-K for the year ended December 31, 2022.
Electric -– Cost of Fuel
DESC's retail electric rates include a cost of fuel component approved SCE&G's participation in a DER program and recovery of related costs as a separate component of SCE&G's overall fuel factor. Under this order, SCE&G will, among other things, implement programs to encourage the development of renewable energy facilities with a total nameplate capacity of at least approximately 84.5 MW by the endSouth Carolina Commission which may be adjusted periodically to reflect changes in the price of 2020, of which half is to be customer-scale solar capacity and half is to be utility-scale solar capacity.
Electric Transmission Project
In March 2023, DESC filed an application with the South Carolina Commission requesting approval to construct and operate 19 miles of base rates230 kV transmission lines, a substation and associated facilities in Jasper County, South Carolina estimated to cost approximately $55 million. In July 2023, the South Carolina Commission voted to approve the request.
Electric – Other
DESC has approval for fuel costs. A public hearing on this matter has been scheduled for April 10, 2018.
DESC utilizes a pension costs rider approved by the South Carolina Commission which is designed to allow recovery of projected pension costs, including under-collected balances or net of over-collected balances, as applicable. The rider is typically reviewed for adjustment every 12 months with any resulting increase or decrease going into effect beginning with the first billing cycle in May 2017.
Natural Gas Base Rate Case
In March 2023, DESC filed the Request with the SCPSC asking for an order directing SCE&G to immediately suspend all revised rates collections from customers which had been previously approved by the SCPSC pursuant to the authority of the BLRA. In its request, the ORS relied upon the opinion from the Office of Attorney General to assert that it is not just and reasonable or in
11
Regulatory Assets and Regulatory Liabilities
Rate-regulated utilities recognize in their financial statements certain revenues and expenses in different periods than do other enterprises. As a result, the Company and Consolidated SCE&G haveDESC has recorded regulatory assets and regulatory liabilities which are summarized in the following tables.table. Except for certain unrecovered nuclear projectNND Project costs and certain other unrecovered plant,costs referenced herein, substantially all regulatory assets are either explicitly excluded from rate base or are effectively excluded from rate base due to their being offset by related liabilities.
|
| June 30, |
|
| December 31, |
| ||
(millions) |
| 2023 |
|
| 2022 |
| ||
Regulatory assets: |
|
|
|
|
|
| ||
NND Project costs(1) |
| $ | 138 |
|
| $ | 138 |
|
AROs(2) |
|
| 44 |
|
|
| 8 |
|
Deferred employee benefit plan costs(3) |
|
| 11 |
|
|
| 4 |
|
Other unrecovered plant(4) |
|
| 18 |
|
|
| 17 |
|
DSM programs(5) |
|
| 20 |
|
|
| 21 |
|
Cost of fuel and purchased gas under-collections(6) |
|
| 375 |
|
|
| 508 |
|
Other |
|
| 61 |
|
|
| 47 |
|
Regulatory assets - current |
|
| 667 |
|
|
| 743 |
|
NND Project costs(1) |
|
| 2,018 |
|
|
| 2,088 |
|
AROs(2) |
|
| 384 |
|
|
| 381 |
|
Deferred employee benefit plan costs(3) |
|
| 148 |
|
|
| 161 |
|
Interest rate hedges(7) |
|
| 169 |
|
|
| 169 |
|
Other unrecovered plant(4) |
|
| 51 |
|
|
| 58 |
|
DSM programs(5) |
|
| 42 |
|
|
| 41 |
|
Environmental remediation costs(8) |
|
| 37 |
|
|
| 37 |
|
Deferred storm damage costs(9) |
|
| 41 |
|
|
| 43 |
|
Deferred transmission operating costs(10) |
|
| 74 |
|
|
| 75 |
|
Derivatives(11) |
|
| 104 |
|
|
| 105 |
|
Other(12) |
|
| 133 |
|
|
| 131 |
|
Regulatory assets - noncurrent |
|
| 3,201 |
|
|
| 3,289 |
|
Total regulatory assets |
| $ | 3,868 |
|
| $ | 4,032 |
|
Regulatory liabilities: |
|
|
|
|
|
| ||
Monetization of guaranty settlement(13) |
| $ | 67 |
|
| $ | 67 |
|
Income taxes refundable through future rates(14) |
|
| 34 |
|
|
| 34 |
|
Reserve for refunds to electric utility customers(15) |
|
| 92 |
|
|
| 100 |
|
Derivatives(11) |
|
| 15 |
|
|
| 43 |
|
Other |
|
| — |
|
|
| 7 |
|
Regulatory liabilities - current |
|
| 208 |
|
|
| 251 |
|
Monetization of guaranty settlement(13) |
|
| 669 |
|
|
| 702 |
|
Income taxes refundable through future rates(14) |
|
| 858 |
|
|
| 871 |
|
Asset removal costs(16) |
|
| 607 |
|
|
| 596 |
|
Reserve for refunds to electric utility customers(15) |
|
| 274 |
|
|
| 325 |
|
Derivatives(11) |
|
| 218 |
|
|
| 276 |
|
Other |
|
| 4 |
|
|
| 15 |
|
Regulatory liabilities - noncurrent |
|
| 2,630 |
|
|
| 2,785 |
|
Total regulatory liabilities |
| $ | 2,838 |
|
| $ | 3,036 |
|
The Company | Consolidated SCE&G | |||||||||||||||
Millions of dollars | September 30, 2017 | December 31, 2016 | September 30, 2017 | December 31, 2016 | ||||||||||||
Regulatory Assets: | ||||||||||||||||
Unrecovered nuclear project costs | $ | 4,520 | — | $ | 4,520 | — | ||||||||||
Accumulated deferred income taxes | 315 | $ | 316 | 307 | $ | 307 | ||||||||||
AROs and related funding | 424 | 425 | 401 | 403 | ||||||||||||
Deferred employee benefit plan costs | 321 | 342 | 290 | 309 | ||||||||||||
Deferred losses on interest rate derivatives | 632 | 620 | 632 | 620 | ||||||||||||
Other unrecovered plant | 108 | 117 | 108 | 117 | ||||||||||||
DSM Programs | 58 | 59 | 58 | 59 | ||||||||||||
Carrying costs on deferred tax assets related to nuclear construction | 46 | 32 | 46 | 32 | ||||||||||||
Pipeline integrity management costs | 47 | 33 | 7 | 6 | ||||||||||||
Environmental remediation costs | 30 | 32 | 25 | 26 | ||||||||||||
Deferred storm damage costs | 22 | 20 | 22 | 20 | ||||||||||||
Deferred costs related to uncertain tax position | 28 | 15 | 28 | 15 | ||||||||||||
Other | 139 | 119 | 138 | 116 | ||||||||||||
Total Regulatory Assets | $ | 6,690 | $ | 2,130 | $ | 6,582 | $ | 2,030 |
Regulatory Liabilities: | ||||||||||||||||
Monetization of guaranty settlement | $ | 1,095 | — | $ | 1,095 | — | ||||||||||
Asset removal costs | 764 | $ | 755 | 535 | $ | 529 | ||||||||||
Deferred gains on interest rate derivatives | 135 | 151 | 135 | 151 | ||||||||||||
Other | 21 | 24 | 14 | 15 | ||||||||||||
Total Regulatory Liabilities | $ | 2,015 | $ | 930 | $ | 1,779 | $ | 695 |
12
Regulatory assets have been recorded based on the probability of their recovery. All regulatory assets represent incurred costs that may be deferred under GAAP for regulated operations. The South Carolina Commission or FERC has reviewed and approved through specific orders certain of the items shown as regulatory assets. In addition, regulatory assets include, but are not limited to, certain costs which have not been specifically approved for recovery by one of these regulatory agencies. While such costs are not currently being recovered, management believes that they would be allowable under existing rate-making concepts embodied in rate orders or applicable state law and expects to recover these costs through rates in future periods.
3. REVENUE RECOGNITION
DESC has disaggregated operating revenues by customer class as follows:
|
| Quarter-to-Date |
|
| Quarter-to-Date |
|
| Year-to-Date |
|
| Year-to-Date |
| ||||||||||||||||||||
(millions) |
| Electric |
|
| Gas |
|
| Electric |
|
| Gas |
|
| Electric |
|
| Gas |
|
| Electric |
|
| Gas |
| ||||||||
Customer class: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Residential |
| $ | 266 |
|
| $ | 43 |
|
| $ | 332 |
|
| $ | 45 |
|
| $ | 528 |
|
| $ | 152 |
|
| $ | 632 |
|
| $ | 154 |
|
Commercial |
|
| 208 |
|
|
| 25 |
|
|
| 245 |
|
|
| 35 |
|
|
| 395 |
|
|
| 67 |
|
|
| 446 |
|
|
| 83 |
|
Industrial |
|
| 97 |
|
|
| 15 |
|
|
| 135 |
|
|
| 43 |
|
|
| 188 |
|
|
| 37 |
|
|
| 243 |
|
|
| 74 |
|
Other |
|
| 34 |
|
|
| 6 |
|
|
| 62 |
|
|
| 6 |
|
|
| 73 |
|
|
| 10 |
|
|
| 100 |
|
|
| 12 |
|
Revenues from contracts with customers |
|
| 605 |
|
|
| 89 |
|
|
| 774 |
|
|
| 129 |
|
|
| 1,184 |
|
|
| 266 |
|
|
| 1,421 |
|
|
| 323 |
|
Other revenues |
|
| 9 |
|
|
| 1 |
|
|
| 6 |
|
|
| — |
|
|
| 12 |
|
|
| 1 |
|
|
| 14 |
|
|
| — |
|
Total Operating Revenues |
| $ | 614 |
|
| $ | 90 |
|
| $ | 780 |
|
| $ | 129 |
|
| $ | 1,196 |
|
| $ | 267 |
|
| $ | 1,435 |
|
| $ | 323 |
|
Contract liabilities represent the obligation to transfer goods or services to a customer for which consideration has already been received from the customer. DESC had contract liability balances of $7 million and $12 million at June 30, 2023 and December 31,
13
2022, respectively. During the six months ended June 30, 2023 and 2022, DESC recognized revenue of $8 million and $4 million, respectively, from the beginning contract liability balances as DESC fulfilled its obligations to provide service to its customers. Contract liabilities are recorded in customer deposits and customer prepayments in the Consolidated Balance Sheets.
Balances and activity related to contract costs deferred as regulatory assets were as follows:
|
| Regulatory Assets |
| |||||
(millions) |
| June 30, 2023 |
|
| December 31, 2022 |
| ||
Beginning balance |
| $ | 9 |
|
| $ | 11 |
|
Amortization |
|
| — |
|
|
| (2 | ) |
Ending balance |
| $ | 9 |
|
| $ | 9 |
|
4. EQUITY
For all periods presented, DESC's authorized shares of common stock, authorized as of September 30, 2017 and December 31, 2016.
In June 2017, PSNCMay 2022, Dominion Energy issued $150$72 million of 4.18% senior notes dueshares of Dominion Energy common stock to partially satisfy DESC’s remaining obligation under a settlement agreement with the SCDOR discussed in Note 10. In connection with this transaction, DESC recorded an equity contribution from Dominion Energy in the second quarter of 2022.
There have been no material changes to the dividend restrictions affecting DESC described in Note 5 to the Consolidated Financial Statements in DESC’s Annual Report on Form 10-K for the year ended December 31, 2022.
5. LONG-TERM AND SHORT-TERM DEBT
DESC’s short-term financing is supported through its access as co-borrower to Dominion Energy’s $6.0 billion joint revolving credit facility, which can be used for working capital, as support for the combined commercial paper programs of DESC, Dominion Energy, Virginia Power and Questar Gas, and for other general corporate purposes. Other than the items discussed below, there have been no significant changes from Note 6 to the Consolidated Financial Statements in DESC's Annual Report on Form 10-K for the year ended December 31, 2022.
At June 30, 2047. Proceeds2023, DESC's share of commercial paper and letters of credit outstanding under its joint credit facility with Dominion Energy, was as follows:
(millions) |
| Maximum Facility Sub-Limit |
|
| Outstanding |
|
| Outstanding |
| |||
Joint revolving credit facility(1) |
| $ | 1,000 |
|
| $ | 303 |
|
| $ | — |
|
In March 2023, FERC granted DESC authority through March 2025 to issue short-term debt,indebtedness (pursuant to finance capital expenditures, and for general corporate purposes.
DESC, GENCO and for general corporate purposes.
September 30, 2017 (Millions of dollars) | Total | SCANA | Consolidated SCE&G | PSNC Energy | ||||||||||||
Lines of credit: | + | |||||||||||||||
Five-year, expiring December 2020 | $ | 1,300.0 | $ | 400.0 | $ | 700.0 | $ | 200.0 | ||||||||
Fuel Company five-year, expiring December 2020 | 500.0 | — | 500.0 | — | ||||||||||||
Three-year, expiring December 2018 | 200.0 | — | 200.0 | — | ||||||||||||
Total committed long-term | 2,000.0 | 400.0 | 1,400.0 | 200.0 | ||||||||||||
Outstanding commercial paper (270 or fewer days) | 1,022.1 | 33.0 | 944.8 | 44.3 | ||||||||||||
Weighted average interest rate | 1.78 | % | 1.49 | % | 1.49 | % | ||||||||||
Letters of credit supported by LOC | 3.3 | 3.0 | 0.3 | — | ||||||||||||
Available | $ | 974.6 | $ | 364.0 | $ | 454.9 | $ | 155.7 |
December 31, 2016 (Millions of dollars) | Total | SCANA | Consolidated SCE&G | PSNC Energy | ||||||||||||
Lines of credit: | ||||||||||||||||
Five-year, expiring December 2020 | $ | 1,300.0 | $ | 400.0 | $ | 700.0 | $ | 200.0 | ||||||||
Fuel Company five-year, expiring December 2020 | 500.0 | — | 500.0 | — | ||||||||||||
Three-year, expiring December 2018 | 200.0 | — | 200.0 | — | ||||||||||||
Total committed long-term | 2,000.0 | 400.0 | 1,400.0 | 200.0 | ||||||||||||
Outstanding commercial paper (270 or fewer days) | 940.5 | 64.4 | 804.3 | 71.8 | ||||||||||||
Weighted average interest rate | 1.43 | % | 1.04 | % | 1.07 | % | ||||||||||
Letters of credit supported by LOC | 3.3 | 3.0 | 0.3 | — | ||||||||||||
Available | $ | 1,056.2 | $ | 332.6 | $ | 595.4 | $ | 128.2 |
14
DESC is obligated with respect to an aggregate of $67.8$68 million of industrial revenue bonds which are secured by letters of credit issued by TD Bank N.A.credit. These letters of credit expire, subject to renewal, in the fourth quarter of 2019.2023.
6. INCOME TAXES
For continuing operations, including noncontrolling interests, the statutory U.S. federal income tax returns which include Consolidated SCE&G, and the Company and its subsidiaries file various applicable state and localrate reconciles to DESC’s effective income tax returns.rate as follows:
Six Months Ended June 30, |
| 2023 |
|
| 2022 |
| ||
U.S. statutory rate |
|
| 21.0 | % |
|
| 21.0 | % |
Increases (reductions) resulting from: |
|
|
|
|
|
| ||
State taxes, net of federal benefit |
|
| 4.1 |
|
|
| 4.0 |
|
Reversal of excess deferred income taxes |
|
| (4.0 | ) |
|
| (5.0 | ) |
Allowance for equity funds used during construction |
|
| — |
|
|
| (0.2 | ) |
Settlements of uncertain tax positions |
|
| (5.0 | ) |
|
| — |
|
Other, net |
|
| (0.1 | ) |
|
| — |
|
Effective tax rate |
|
| 16.0 | % |
|
| 19.8 | % |
As of the Company’s federal returns through 2004, and the Company’s federal returns through 2007 are closed for additional assessment. The IRS is currently examining SCANA's open federal returns through 2015 as a result of claims discussed below. With few exceptions, the Company, including Consolidated SCE&G, is no longer subject to state and localJune 30, 2023, DESC’s effective tax rate reflects an income tax examinations bybenefit of $11 million from the effective settlement of a position that management believed was reasonably possible to occur. Otherwise, there have been no material changes in DESC’s unrecognized tax authorities for years before 2010.
7. DERIVATIVE FINANCIAL INSTRUMENTS
DESC’s accounting policies, objectives, and construction activities of the New Units,strategies for using derivative instruments are discussed in its 2015 and 2016 income tax returns. These claims followed the issuance of final IRS regulations in 2014 regarding such treatment with respect to expenditures related to the design and construction of pilot models.
Cash collateral, as presented in the examination progressed without resolution,table below, is used to offset derivative assets and liabilities. Certain of DESC’s derivative instruments contain credit-related contingent provisions. These provisions require DESC to provide collateral upon the Companyoccurrence of specific events, primarily a credit rating downgrade. If the credit-related contingent features underlying the instruments that are in a liability position and Consolidated SCE&G evaluatednot fully collateralized with cash were fully triggered as of June 30, 2023 and recorded adjustmentsDecember 31, 2022, DESC would have been required to unrecognized tax benefits; however, nonepost $2 million and $1 million, respectively, of these changes materially affected the Company's and Consolidated SCE&G's effective tax rate. In October 2016, the examination of the amended tax returns progressedadditional collateral to the IRS Office of Appeals. In addition, the IRS has begun an examination of SCANA's 2013 through 2015 income tax returns.
The table below presents derivative balances by type of financial instrument, if the gross amounts recognized in the Consolidated Balance Sheets were netted with derivative instruments and net of receivables related to the uncertain tax positions). If recognized, $17 million of the tax benefit would affect the Company’s and Consolidated SCE&G's effective tax rates (see discussion below regarding deferral of benefits related to 2015 forward). These unrecognized tax benefitscash collateral received or paid. DESC’s commodity derivative assets are not expectedsubject to increase significantly withina master netting agreement or similar arrangement.
|
| June 30, 2023 |
|
| December 31, 2022 |
| ||||||||||||||||||||||||||
|
| Gross Amounts Not Offset in the Consolidated |
|
| Gross Amounts Not Offset in the Consolidated |
| ||||||||||||||||||||||||||
(millions) |
| Gross |
|
| Financial |
|
| Cash |
|
| Net |
|
| Gross |
|
| Financial |
|
| Cash |
|
| Net |
| ||||||||
Interest rate contracts: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Over-the-counter |
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | 1 |
|
| $ | — |
|
| $ | — |
|
| $ | 1 |
|
Total derivatives |
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | 1 |
|
| $ | — |
|
| $ | — |
|
| $ | 1 |
|
15
|
| June 30, 2023 |
|
| December 31, 2022 |
| ||||||||||||||||||||||||||
|
| Gross Amounts Not Offset in the Consolidated |
|
| Gross Amounts Not Offset in the Consolidated |
| ||||||||||||||||||||||||||
(millions) |
| Gross |
|
| Financial |
|
| Cash |
|
| Net |
|
| Gross |
|
| Financial |
|
| Cash |
|
| Net |
| ||||||||
Interest rate contracts: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Over-the-counter |
| $ | 3 |
|
| $ | — |
|
| $ | 1 |
|
| $ | 2 |
|
| $ | 2 |
|
| $ | — |
|
| $ | 1 |
|
| $ | 1 |
|
Total derivatives |
| $ | 3 |
|
| $ | — |
|
| $ | 1 |
|
| $ | 2 |
|
| $ | 2 |
|
| $ | — |
|
| $ | 1 |
|
| $ | 1 |
|
Volumes
The following table presents the next 12 months, although other uncertain taxvolume of derivative activity at June 30, 2023. These volumes are based on open derivative positions may be identified or taken, particularly with respect toand represent the abandonmentcombined absolute value of their long and short positions.
|
| Current |
|
| Noncurrent |
| ||
Electricity (MWh in millions): |
|
|
|
|
|
| ||
Fixed price |
|
| 2 |
|
|
| 23 |
|
Interest rate(1)(in millions) |
| $ | — |
|
| $ | 71 |
|
16
Fair Value and Gains and Losses on Derivative Instruments
The following tables present the constructionfair values of the New Units during 2017. It is reasonably possible that these known unrecognized tax benefits may decrease by $457 million within the next 12 months. No other material changesderivatives and where they are presented in the status of the Company’s or Consolidated SCE&G's tax positions have occurred through September 30, 2017.Balance Sheets:
(millions) |
| Fair Value - |
|
| Fair Value - |
|
| Total Fair Value |
| |||
At June 30, 2023 |
|
|
|
|
|
|
|
|
| |||
ASSETS |
|
|
|
|
|
|
|
|
| |||
Current Assets |
|
|
|
|
|
|
|
|
| |||
Commodity |
| $ | — |
|
| $ | 12 |
|
| $ | 12 |
|
Total current derivative assets(1) |
|
| — |
|
|
| 12 |
|
|
| 12 |
|
Noncurrent Assets |
|
|
|
|
|
|
|
|
| |||
Commodity |
|
| — |
|
|
| 155 |
|
|
| 155 |
|
Total noncurrent derivative assets(2) |
|
| — |
|
|
| 155 |
|
|
| 155 |
|
Total derivative assets |
| $ | — |
|
| $ | 167 |
|
| $ | 167 |
|
LIABILITIES |
|
|
|
|
|
|
|
|
| |||
Noncurrent Liabilities |
|
|
|
|
|
|
|
|
| |||
Interest rate |
|
| — |
|
|
| 3 |
|
|
| 3 |
|
Total noncurrent derivative liabilities(3) |
|
| — |
|
|
| 3 |
|
|
| 3 |
|
Total derivative liabilities |
| $ | — |
|
| $ | 3 |
|
| $ | 3 |
|
At December 31, 2022 |
|
|
|
|
|
|
|
|
| |||
ASSETS |
|
|
|
|
|
|
|
|
| |||
Current Assets |
|
|
|
|
|
|
|
|
| |||
Commodity |
| $ | — |
|
| $ | 41 |
|
| $ | 41 |
|
Total current derivative assets(1) |
|
| — |
|
|
| 41 |
|
|
| 41 |
|
Noncurrent Assets |
|
|
|
|
|
|
|
|
| |||
Commodity |
|
| — |
|
|
| 210 |
|
|
| 210 |
|
Interest rate |
|
| — |
|
|
| 1 |
|
|
| 1 |
|
Total noncurrent derivative assets(2) |
|
| — |
|
|
| 211 |
|
|
| 211 |
|
Total derivative assets |
| $ | — |
|
| $ | 252 |
|
| $ | 252 |
|
LIABILITIES |
|
|
|
|
|
|
|
|
| |||
Noncurrent Liabilities |
|
|
|
|
|
|
|
|
| |||
Interest rate |
|
| 2 |
|
|
| — |
|
|
| 2 |
|
Total noncurrent derivative liabilities(3) |
|
| 2 |
|
|
| — |
|
|
| 2 |
|
Total derivative liabilities |
| $ | 2 |
|
| $ | — |
|
| $ | 2 |
|
The following tables present the level of market, credit, liquidity and operational and administrative risks. SCANA’s Board of Directors has delegated to a Risk Management Committee the authority to set risk limits, establish policies and procedures for risk management and measurement, and oversee and review the risk management process and infrastructure for SCANA and each of its subsidiaries. The Risk Management Committee, which is comprised of certain officers, including the Risk Management Officer and other senior officers, apprises the Audit Committee of the Board of Directors with regard to the management of risk and brings to their attention significant areas of concern. Written policies define the physical and financial transactions that are approved, as well as the authorization requirements and limits for transactions.
Commodity and Other Energy Management Contracts (in MMBTU) | |||||||||
Hedge designation | Gas Distribution | Gas Marketing | Total | ||||||
As of September 30, 2017 | |||||||||
Commodity contracts | 8,330,000 | 16,723,000 | 25,053,000 | ||||||
Energy management contracts (a) | — | 46,346,530 | 46,346,530 | ||||||
Total (a) | 8,330,000 | 63,069,530 | 71,399,530 | ||||||
As of December 31, 2016 | |||||||||
Commodity contracts | 4,510,000 | 11,947,000 | 16,457,000 | ||||||
Energy management contracts (a) | — | 67,447,223 | 67,447,223 | ||||||
Total (a) | 4,510,000 | 79,394,223 | 83,904,223 |
Interest Rate Swaps | ||||||||||||||||
The Company | Consolidated SCE&G | |||||||||||||||
Millions of dollars | September 30, 2017 | December 31, 2016 | September 30, 2017 | December 31, 2016 | ||||||||||||
Designated as hedging instruments | $ | 111.2 | $ | 115.6 | $ | 36.4 | $ | 36.4 | ||||||||
Not designated as hedging instruments | 1,285.0 | 1,285.0 | 1,285.0 | 1,285.0 |
Fair Values of Derivative Instruments | ||||||||||||||||||
The Company | Consolidated SCE&G | |||||||||||||||||
Millions of dollars | Balance Sheet Location | Asset | Liability | Asset | Liability | |||||||||||||
As of September 30, 2017 | ||||||||||||||||||
Designated as hedging instruments | ||||||||||||||||||
Interest rate contracts | ||||||||||||||||||
Derivative financial instruments | — | $ | 3 | — | $ | 1 | ||||||||||||
Other deferred credits and other liabilities | — | 25 | — | 9 | ||||||||||||||
Commodity contracts | ||||||||||||||||||
Prepayments | — | 1 | — | — | ||||||||||||||
Derivative financial instruments | $ | 1 | 1 | — | — | |||||||||||||
Total | $ | 1 | $ | 30 | — | $ | 10 | |||||||||||
Not designated as hedging instruments | ||||||||||||||||||
Interest rate contracts | ||||||||||||||||||
Other deferred debits and other assets | $ | 56 | — | $ | 56 | — | ||||||||||||
Derivative financial instruments | — | $ | 40 | — | $ | 40 | ||||||||||||
Other deferred credits and other liabilities | — | 4 | — | 4 | ||||||||||||||
Commodity contracts | ||||||||||||||||||
Prepayments | 1 | — | — | — | ||||||||||||||
Energy management contracts | ||||||||||||||||||
Prepayments | 2 | 1 | — | — | ||||||||||||||
Other current assets | 2 | — | — | — | ||||||||||||||
Other deferred debits and other assets | 1 | — | — | — | ||||||||||||||
Derivative financial instruments | — | 2 | — | — | ||||||||||||||
Other deferred credits and other liabilities | — | 1 | — | — | ||||||||||||||
Total | $ | 62 | $ | 48 | $ | 56 | $ | 44 | ||||||||||
As of December 31, 2016 | ||||||||||||||||||
Designated as hedging instruments | ||||||||||||||||||
Interest rate contracts | ||||||||||||||||||
Derivative financial instruments | — | $ | 4 | — | $ | 1 | ||||||||||||
Other deferred credits and other liabilities | — | 24 | — | 8 | ||||||||||||||
Commodity contracts | ||||||||||||||||||
Prepayments | $ | 5 | — | — | — | |||||||||||||
Other current assets | 1 | — | — | — | ||||||||||||||
Total | $ | 6 | $ | 28 | — | $ | 9 | |||||||||||
Not designated as hedging instruments | ||||||||||||||||||
Interest rate contracts | ||||||||||||||||||
Other deferred debits and other assets | $ | 71 | — | $ | 71 | — | ||||||||||||
Derivative financial instruments | — | $ | 27 | — | $ | 27 | ||||||||||||
Other deferred credits and other liabilities | — | 3 | — | 3 | ||||||||||||||
Commodity contracts | ||||||||||||||||||
Other current assets | 3 | — | — | — | ||||||||||||||
Energy management contracts | ||||||||||||||||||
Prepayments | 6 | 2 | — | — | ||||||||||||||
Other current assets | 2 | 1 | — | — | ||||||||||||||
Other deferred debits and other assets | 2 | — | — | — | ||||||||||||||
Derivative financial instruments | — | 4 | — | — | ||||||||||||||
Other deferred credits and other liabilities | — | 2 | — | — | ||||||||||||||
Total | $ | 84 | $ | 39 | $ | 71 | $ | 30 |
Derivatives in Cash Flow Hedging Relationships
(millions) | Increase (Decrease) in Derivatives Subject to Regulatory Treatment(1) |
| |||||
Three Months Ended June 30, | 2023 |
|
| 2022 |
| ||
Derivative type and location of gains (losses): |
|
|
|
|
| ||
Interest rate | $ | 1 |
|
| $ | 3 |
|
Total | $ | 1 |
|
| $ | 3 |
|
Six Months Ended June 30, |
|
|
|
|
| ||
Derivative type and location of gains (losses): |
|
|
|
|
| ||
Interest rate | $ | — |
|
| $ | 8 |
|
Total | $ | — |
|
| $ | 8 |
|
The Company and Consolidated SCE&G: | ||||||||||||||||||
Loss Deferred in Regulatory Accounts | Loss Reclassified from Deferred Accounts into Income | |||||||||||||||||
Millions of dollars | 2017 | 2016 | Location | 2017 | 2016 | |||||||||||||
Three Months Ended September 30, | ||||||||||||||||||
Interest rate contracts | — | $ | (1 | ) | Interest expense | — | $ | (1 | ) | |||||||||
Nine Months Ended September 30, | ||||||||||||||||||
Interest rate contracts | $ | (1 | ) | $ | (6 | ) | Interest expense | $ | (1 | ) | $ | (2 | ) |
The Company: | ||||||||||||||||||
Gain (Loss) Recognized in OCI, net of tax | Gain (Loss) Reclassified from AOCI into Income, net of tax | |||||||||||||||||
Millions of dollars | 2017 | 2016 | Location | 2017 | 2016 | |||||||||||||
Three Months Ended September 30, | ||||||||||||||||||
Interest rate contracts | — | $ | 1 | Interest expense | $ | (2 | ) | $ | (2 | ) | ||||||||
Commodity contracts | — | (2 | ) | Gas purchased for resale | — | — | ||||||||||||
Total | — | $ | (1 | ) | $ | (2 | ) | $ | (2 | ) | ||||||||
Nine Months Ended September 30, | ||||||||||||||||||
Interest rate contracts | $ | (1 | ) | $ | (4 | ) | Interest expense | $ | (6 | ) | $ | (6 | ) | |||||
Commodity contracts | (4 | ) | — | Gas purchased for resale | 2 | (6 | ) | |||||||||||
Total | $ | (5 | ) | $ | (4 | ) | $ | (4 | ) | $ | (12 | ) |
Derivatives Not designated as Hedging Instruments | |||||||||||
The Company and Consolidated SCE&G: | |||||||||||
Millions of dollars | Loss Deferred in Regulatory Accounts | Location | Loss Reclassified from Deferred Accounts into Income | ||||||||
Three Months Ended September 30, 2017 | |||||||||||
Interest rate contracts | $ | (6 | ) | Interest Expense | $ | (1 | ) | ||||
Nine Months Ended September 30, 2017 | |||||||||||
Interest rate contracts | $ | (30 | ) | Interest Expense | $ | (2 | ) | ||||
Three Months Ended September 30, 2016 | |||||||||||
Interest rate contracts | $ | (24 | ) | Other Income | $ | (1 | ) | ||||
Nine Months Ended September 30, 2016 | |||||||||||
Interest rate contracts | $ | (268 | ) | Other Income | $ | (1 | ) |
Derivative Contracts with Credit Contingent Features | ||||||||||||||||
The Company | Consolidated SCE&G | |||||||||||||||
Millions of dollars | September 30, 2017 | December 31, 2016 | September 30, 2017 | December 31, 2016 | ||||||||||||
in Net Liability Position | ||||||||||||||||
Aggregate fair value of derivatives in net liability position | $ | 67.1 | $ | 50.3 | $ | 47.7 | $ | 30.3 | ||||||||
Fair value of collateral already posted | 31.0 | 29.2 | 10.3 | 9.2 | ||||||||||||
Additional cash collateral or letters of credit in the event credit-risk-related contingent features were triggered | $ | 36.1 | $ | 21.1 | $ | 37.4 | $ | 21.1 | ||||||||
in Net Asset Position | ||||||||||||||||
Aggregate fair value of derivatives in net asset position | $ | 49.0 | $ | 62.9 | $ | 49.0 | $ | 62.0 | ||||||||
Fair value of collateral already posted | — | — | — | — | ||||||||||||
Additional cash collateral or letters of credit in the event credit-risk-related contingent features were triggered | $ | 49.0 | $ | 62.9 | $ | 49.0 | $ | 62.0 |
17
Derivatives Not Designated as Hedging Instruments
(millions) |
| Amount of Gain (Loss) Recognized in Income on Derivatives(1) |
| |||||
Three Months Ended June 30, |
| 2023 |
|
| 2022 |
| ||
Derivative type and location of gains (losses): |
|
|
|
|
|
| ||
Commodity contracts: |
|
|
|
|
|
| ||
Purchased power |
| $ | (1 | ) |
| $ | 15 |
|
Interest rate contracts: |
|
|
|
|
|
| ||
Interest charges |
|
| (1 | ) |
|
| — |
|
Total |
| $ | (2 | ) |
| $ | 15 |
|
Six Months Ended June 30, |
|
|
|
|
|
| ||
Derivative type and location of gains (losses): |
|
|
|
|
|
| ||
Commodity contracts: |
|
|
|
|
|
| ||
Purchased power |
| $ | — |
|
| $ | 18 |
|
Interest rate contracts: |
|
|
|
|
|
| ||
Interest charges |
|
| (1 | ) |
|
| (1 | ) |
Total |
| $ | (1 | ) |
| $ | 17 |
|
8. FAIR VALUE MEASUREMENTS, INCLUDING DERIVATIVES
DESC’s fair value measurements are made in accordance with the policies discussed in Note 2 to derivatives of $9.0 million atthe Consolidated Financial Statements in DESC’s Annual Report on Form 10-K for the year ended December 31, 2016, if all the contingent features underlying these instruments had been fully triggered.
Derivative Assets | The Company | Consolidated SCE&G | ||||||||||||||||||
Millions of dollars | Interest Rate Contracts | Commodity Contracts | Energy Management Contracts | Total | Interest Rate Contracts | |||||||||||||||
As of September 30, 2017 | ||||||||||||||||||||
Gross Amounts of Recognized Assets | $ | 56 | $ | 2 | $ | 5 | $ | 63 | $ | 56 | ||||||||||
Gross Amounts Offset in Statement of Financial Position | — | (1 | ) | (2 | ) | (3 | ) | — | ||||||||||||
Net Amounts Presented in Statement of Financial Position | 56 | 1 | 3 | 60 | 56 | |||||||||||||||
Gross Amounts Not Offset - Financial Instruments | (7 | ) | — | — | (7 | ) | (7 | ) | ||||||||||||
Gross Amounts Not Offset - Cash Collateral Received | — | — | — | — | — | |||||||||||||||
Net Amount | $ | 49 | $ | 1 | $ | 3 | $ | 53 | $ | 49 | ||||||||||
Balance sheet location | ||||||||||||||||||||
Prepayments | $ | 1 | — | |||||||||||||||||
Other current assets | 2 | — | ||||||||||||||||||
Other deferred debits and other assets | 57 | $ | 56 | |||||||||||||||||
Total | $ | 60 | $ | 56 | ||||||||||||||||
As of December 31, 2016 | ||||||||||||||||||||
Gross Amounts of Recognized Assets | $ | 71 | $ | 9 | $ | 10 | $ | 90 | $ | 71 | ||||||||||
Gross Amounts Offset in Statement of Financial Position | — | — | (4 | ) | (4 | ) | — | |||||||||||||
Net Amounts Presented in Statement of Financial Position | 71 | 9 | 6 | 86 | 71 | |||||||||||||||
Gross Amounts Not Offset - Financial Instruments | (9 | ) | — | — | (9 | ) | (9 | ) | ||||||||||||
Gross Amounts Not Offset - Cash Collateral Received | — | — | — | — | — | |||||||||||||||
Net Amount | $ | 62 | $ | 9 | $ | 6 | $ | 77 | $ | 62 | ||||||||||
Balance sheet location | ||||||||||||||||||||
Prepayments | $ | 9 | — | |||||||||||||||||
Other current assets | 5 | — | ||||||||||||||||||
Other deferred debits and other assets | 72 | $ | 71 | |||||||||||||||||
Total | $ | 86 | $ | 71 |
Derivative Liabilities | The Company | Consolidated SCE&G | ||||||||||||||||||
Millions of dollars | Interest Rate Contracts | Commodity Contracts | Energy Management Contracts | Total | Interest Rate Contracts | |||||||||||||||
As of September 30, 2017 | ||||||||||||||||||||
Gross Amounts of Recognized Liabilities | $ | 72 | $ | 2 | $ | 4 | $ | 78 | $ | 54 | ||||||||||
Gross Amounts Offset in Statement of Financial Position | — | (1 | ) | (2 | ) | (3 | ) | — | ||||||||||||
Net Amounts Presented in Statement of Financial Position | 72 | 1 | 2 | 75 | 54 | |||||||||||||||
Gross Amounts Not Offset - Financial Instruments | (7 | ) | — | — | (7 | ) | (7 | ) | ||||||||||||
Gross Amounts Not Offset - Cash Collateral Posted | (30 | ) | — | (1 | ) | (31 | ) | (10 | ) | |||||||||||
Net Amount | $ | 35 | $ | 1 | $ | 1 | $ | 37 | $ | 37 | ||||||||||
Balance sheet location | ||||||||||||||||||||
Prepayments | $ | 1 | — | |||||||||||||||||
Derivative financial instruments | 45 | $ | 41 | |||||||||||||||||
Other deferred credits and other liabilities | 29 | 13 | ||||||||||||||||||
Total | $ | 75 | $ | 54 | ||||||||||||||||
As of December 31, 2016 | ||||||||||||||||||||
Gross Amounts of Recognized Liabilities | $ | 58 | — | $ | 9 | $ | 67 | $ | 39 | |||||||||||
Gross Amounts Offset in Statement of Financial Position | — | — | (3 | ) | (3 | ) | — | |||||||||||||
Net Amounts Presented in Statement of Financial Position | 58 | — | 6 | 64 | 39 | |||||||||||||||
Gross Amounts Not Offset - Financial Instruments | (9 | ) | — | — | (9 | ) | (9 | ) | ||||||||||||
Gross Amounts Not Offset - Cash Collateral Posted | (29 | ) | — | — | (29 | ) | (9 | ) | ||||||||||||
Net Amount | $ | 20 | — | $ | 6 | $ | 26 | $ | 21 | |||||||||||
Balance sheet location | ||||||||||||||||||||
Derivative financial instruments | $ | 35 | $ | 28 | ||||||||||||||||
Other deferred credits and other liabilities | 29 | 11 | ||||||||||||||||||
Total | $ | 64 | $ | 39 |
The Company values available for sale securities using quoted prices from a national stock exchange, such as the NASDAQ, where the securities are actively traded. For commodity derivative and energy management assets and liabilities, the Company uses unadjusted NYMEX prices to determine fair value, and considers such measures of fair value to be Level 1 for exchange traded instruments and Level 2 for over-the-counter instruments. The Company’s and Consolidated SCE&G's interest rate swap agreements are valued using discounted cash flow models with independently sourced data. Fair value measurements, and the level within the fair value hierarchy
As of September 30, 2017 | As of December 31, 2016 | |||||||||||||||||||||||
The Company | Consolidated SCE&G | The Company | Consolidated SCE&G | |||||||||||||||||||||
Millions of dollars | Level 1 | Level 2 | Level 2 | Level 1 | Level 2 | Level 2 | ||||||||||||||||||
Assets: | ||||||||||||||||||||||||
Available for sale securities | $ | 19 | — | — | $ | 14 | — | — | ||||||||||||||||
Held to maturity securities | — | $ | 7 | — | — | $ | 7 | — | ||||||||||||||||
Interest rate contracts | — | 56 | $ | 56 | — | 71 | $ | 71 | ||||||||||||||||
Commodity contracts | 1 | 1 | — | 8 | 1 | — | ||||||||||||||||||
Energy management contracts | 2 | 3 | — | 6 | 4 | — | ||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||
Interest rate contracts | — | 72 | 54 | — | 58 | 39 | ||||||||||||||||||
Commodity contracts | 1 | 1 | — | — | — | — | ||||||||||||||||||
Energy management contracts | 1 | 5 | — | 2 | 10 | — |
|
| Fair Value |
|
| Valuation Techniques |
| Unobservable Input |
|
| Range |
| Weighted | |
Assets |
|
|
|
|
|
|
|
|
|
|
|
| |
Physical forwards: |
|
|
|
|
|
|
|
|
|
|
|
| |
Electricity |
| $ | 167 |
|
| Discounted cash flow |
| Market price (per MWh) | (2) |
| 25-98 |
| 47 |
Total assets |
| $ | 167 |
|
|
|
|
|
|
|
|
|
|
Sensitivity of the fair value amounts into or out of Levels 1, 2 or 3 duringmeasurements to changes in the periods presented. Consolidated SCE&G had no Level 1 orsignificant unobservable inputs is as follows:
Significant Unobservable Inputs | Position | Change to Input | Impact on Fair Value Measurement | |||
Market price | Buy | Increase (decrease) | Gain (loss) | |||
Market price | Sell | Increase (decrease) | Loss (gain) |
18
Recurring Fair Value Measurements
The following table presents DESC’s assets and liabilities that are measured at fair value on a recurring basis for each hierarchy level, including both current and noncurrent portions:
(millions) |
| Level 1 |
|
| Level 2 |
|
| Level 3 |
|
| Total |
| ||||
At June 30, 2023 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Assets |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Commodity |
| $ | — |
|
| $ | — |
|
| $ | 167 |
|
| $ | 167 |
|
Total assets |
| $ | — |
|
| $ | — |
|
| $ | 167 |
|
| $ | 167 |
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Interest rate |
| $ | — |
|
| $ | 3 |
|
| $ | — |
|
| $ | 3 |
|
Total liabilities |
| $ | — |
|
| $ | 3 |
|
| $ | — |
|
| $ | 3 |
|
At December 31, 2022 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Assets |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Commodity |
| $ | — |
|
| $ | — |
|
| $ | 251 |
|
| $ | 251 |
|
Interest rate |
|
| — |
|
|
| 1 |
|
|
| — |
|
|
| 1 |
|
Total assets |
| $ | — |
|
| $ | 1 |
|
| $ | 251 |
|
| $ | 252 |
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Interest rate |
| $ | — |
|
| $ | 2 |
|
| $ | — |
|
| $ | 2 |
|
Total liabilities |
| $ | — |
|
| $ | 2 |
|
| $ | — |
|
| $ | 2 |
|
The following table presents the net change in DESC's assets and liabilities measured at fair value on a recurring basis and included in the Level 3 fair value measurementscategory.
|
| Three Months Ended |
|
| Six Months Ended |
| ||||||||||
|
| June 30, |
|
| June 30, |
| ||||||||||
|
| 2023 |
|
| 2022 |
|
| 2023 |
|
| 2022 |
| ||||
(millions) |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Beginning balance |
| $ | 188 |
|
| $ | 225 |
|
| $ | 251 |
|
| $ | 148 |
|
Total realized and unrealized gains (losses): |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Included in earnings: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Purchased power |
|
| (1 | ) |
|
| 15 |
|
|
| — |
|
|
| 18 |
|
Included in regulatory assets/liabilities |
|
| (21 | ) |
|
| 70 |
|
|
| (84 | ) |
|
| 147 |
|
Settlements |
|
| 1 |
|
|
| (15 | ) |
|
| — |
|
|
| (18 | ) |
Ending balance |
| $ | 167 |
|
| $ | 295 |
|
| $ | 167 |
|
| $ | 295 |
|
There are no unrealized gains and losses included in earnings in the Level 3 fair value category related to assets/liabilities still held at the reporting date for either period presented,the three and there were no transferssix months ended June 30, 2023 and 2022.
Fair Value of Financial Instruments
Substantially all of DESC’s financial instruments are recorded at fair value, with the exception of the instruments described below, which are reported at historical cost. Estimated fair values have been determined using available market information and valuation methodologies considered appropriate by management. The carrying amount of financial instruments classified within current assets and current liabilities are representative of fair value amounts into or outbecause of Levels 1, 2 or 3 during the periods presented.Financialshort-term nature of these instruments. For financial instruments for whichthat are not recorded at fair value, the carrying amount may not equalamounts and estimated fair value werevalues are as follows:
|
| June 30, 2023 |
|
| December 31, 2022 |
| ||||||||||
(millions) |
| Carrying Amount |
|
| Estimated Fair Value(1) |
|
| Carrying Amount |
|
| Estimated Fair Value(1) |
| ||||
Long-term debt(2) |
| $ | 3,726 |
|
| $ | 3,645 |
|
| $ | 3,725 |
|
| $ | 3,614 |
|
Affiliated long-term debt(3) |
|
| 230 |
|
|
| 230 |
|
|
| 230 |
|
|
| 230 |
|
Long-Term Debt | September 30, 2017 | December 31, 2016 | ||||||||||||||
Millions of dollars | Carrying Amount | Estimated Fair Value | Carrying Amount | Estimated Fair Value | ||||||||||||
The Company | $ | 6,632.4 | $ | 7,462.9 | $ | 6,489.8 | $ | 7,183.3 | ||||||||
Consolidated SCE&G | 5,162.5 | 5,836.9 | 5,166.0 | 5,752.3 |
19
9. EMPLOYEE BENEFIT PLANS
In DESC’s Consolidated Statements of short-term borrowings approximate fair value,Comprehensive Income, the service cost component of net periodic benefit (credit) cost is reflected in other operations and are based on quoted prices from dealersmaintenance expense with the non-service cost components reflected in the commercial paper market. The resulting fair value is considered to be Level 2.
(millions) |
| Pension Benefits |
|
| Other Postretirement Benefits |
| ||||||||||
Three Months Ended June 30, |
| 2023 |
|
| 2022 |
|
| 2023 |
|
| 2022 |
| ||||
Service cost |
| $ | 2 |
|
| $ | 2 |
|
| $ | 1 |
|
| $ | 1 |
|
Interest cost |
|
| 8 |
|
|
| 6 |
|
|
| 2 |
|
|
| 1 |
|
Expected return on assets |
|
| (9 | ) |
|
| (13 | ) |
|
| — |
|
|
| — |
|
Amortization of actuarial losses |
|
| 3 |
|
|
| — |
|
|
| (1 | ) |
|
| — |
|
Net periodic benefit cost (credit) |
| $ | 4 |
|
| $ | (5 | ) |
| $ | 2 |
|
| $ | 2 |
|
Six Months Ended June 30, |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Service cost |
| $ | 4 |
|
| $ | 4 |
|
| $ | 1 |
|
| $ | 1 |
|
Interest cost |
|
| 16 |
|
|
| 11 |
|
|
| 4 |
|
|
| 3 |
|
Expected return on assets |
|
| (17 | ) |
|
| (25 | ) |
|
| — |
|
|
| — |
|
Amortization of actuarial losses |
|
| 6 |
|
|
| — |
|
|
| (2 | ) |
|
| — |
|
Net periodic benefit cost (credit) |
| $ | 9 |
|
| $ | (10 | ) |
| $ | 3 |
|
| $ | 4 |
|
The Company | Pension Benefits | Other Postretirement Benefits | ||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Three months ended September 30, | ||||||||||||||||
Service cost | $ | 5.7 | $ | 4.4 | $ | 1.0 | $ | 0.8 | ||||||||
Interest cost | 9.2 | 9.8 | 2.8 | 3.0 | ||||||||||||
Expected return on assets | (13.4 | ) | (13.8 | ) | — | — | ||||||||||
Prior service cost amortization | 0.4 | 1.0 | — | 0.1 | ||||||||||||
Amortization of actuarial losses | 4.4 | 3.7 | — | 0.2 | ||||||||||||
Net periodic benefit cost | $ | 6.3 | $ | 5.1 | $ | 3.8 | $ | 4.1 |
Nine months ended September 30, | ||||||||||||||||
Service cost | $ | 16.3 | $ | 15.5 | $ | 3.4 | $ | 3.3 | ||||||||
Interest cost | 28.0 | 29.5 | 8.6 | 9.1 | ||||||||||||
Expected return on assets | (41.0 | ) | (41.9 | ) | — | — | ||||||||||
Prior service cost amortization | 1.2 | 3.0 | — | 0.2 | ||||||||||||
Amortization of actuarial losses | 12.2 | 11.1 | 0.8 | 0.4 | ||||||||||||
Net periodic benefit cost | $ | 16.7 | $ | 17.2 | $ | 12.8 | $ | 13.0 |
Consolidated SCE&G | Pension Benefits | Other Postretirement Benefits | ||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Three months ended September 30, | ||||||||||||||||
Service cost | $ | 4.8 | $ | 3.6 | $ | 0.8 | $ | 0.7 | ||||||||
Interest cost | 7.8 | 8.3 | 2.3 | 2.5 | ||||||||||||
Expected return on assets | (11.4 | ) | (11.7 | ) | — | — | ||||||||||
Prior service cost amortization | 0.3 | 0.8 | — | 0.1 | ||||||||||||
Amortization of actuarial losses | 3.7 | 3.2 | — | 0.1 | ||||||||||||
Net periodic benefit cost | $ | 5.2 | $ | 4.2 | $ | 3.1 | $ | 3.4 |
Nine months ended September 30, | ||||||||||||||||
Service cost | $ | 13.6 | $ | 12.7 | $ | 2.8 | $ | 2.7 | ||||||||
Interest cost | 24.0 | 25.0 | 7.1 | 7.5 | ||||||||||||
Expected return on assets | (35.0 | ) | (35.5 | ) | — | — | ||||||||||
Prior service cost amortization | 1.0 | 2.5 | — | 0.2 | ||||||||||||
Amortization of actuarial losses | 10.4 | 9.4 | 0.6 | 0.3 | ||||||||||||
Net periodic benefit cost | $ | 14.0 | $ | 14.1 | $ | 10.5 | $ | 10.7 |
During the three and six months ended June 30, 2023, DESC made no contributions to theits pension trust is expected for the foreseeable future based on current market conditions and assumptions, nor is a limitation on benefit payments expecteddoes not expect to apply. SCE&Gmake any such contributions in 2023. DESC recovers current pension costs through either a rate rider that may be adjusted annually for retail electric operations or through cost of service rates for gas operations. PSNC Energy recovers pension costs
10. COMMITMENTS AND CONTINGENCIES
As a result of issues generated in the ordinary course of business, DESC is involved in legal proceedings before various courts and is periodically subject to governmental examinations (including by regulatory authorities), inquiries and investigations. Certain legal proceedings and governmental examinations involve demands for unspecified amounts of damages, are in an initial procedural phase, involve uncertainty as to the outcome of pending appeals or motions, or involve significant factual issues that need to be resolved, such that it is not possible for DESC to estimate a range of possible loss. For such matters that DESC cannot estimate, a statement to this effect is made in the description of the matter. Other matters may have progressed sufficiently through costthe litigation or investigative processes such that DESC is able to estimate a range of service rates.
Environmental Matters
DESC is subject to costs resulting from a number of federal, state and financial position.
From a regulatory perspective, DESC continually monitors and evaluates its current and projected emission levels and strives to comply with all state and federal regulations regarding those emissions. DESC participates in the bankruptcy process (including WEC SO2 and WECTEC's public announcements that they could not perform under the termsNOX emission allowance programs with respect to coal plant emissions and also has constructed additional pollution control equipment at its coal-fired electric generating plants. These actions are expected to address many of the EPC Contract), the EPC Contract would likely be rejectedrules and that the benefit of the fixed-price terms provided by the EPC Contract would be lost. As such, any cost overruns that would have been absorbed by the Consortium would become the responsibility of SCE&G and Santee Cooper. Additionally, these cost increases and other costs identified by SCE&G would not be fully recoverable from the Consortium or from Toshiba under its payment guaranty or the related Toshiba Settlement Agreement,regulations discussed below, and such costs would likely substantially exceed the amount of the Consortium's payment obligations guaranteed by Toshiba. SCE&G also considered that even the newly revised substantial completion dates identified by WEC of April and December 2020 for Unit 2 and Unit 3, respectively, would not be met, which would result in the nuclear production tax credits discussed below not being earned under current law.
Air
The CAA, as agent for Santee Cooper, filed with the Bankruptcy Court Proofs of Claim for unliquidated damages against each of WEC and WECTEC. The Proofs of Claim are based upon the anticipatory repudiation and material breach by the Consortium of the EPC Contract, and assert against WEC and WECTEC any and all claims that are based thereon or that may be related thereto. These claims were sold to Citibank on September 27, 2017 as part of the monetization transaction discussed below. Notwithstanding the sale of the claims, SCE&G and Santee Cooper remain responsible for any claims that may be made by WEC and WECTEC against them relating to the EPC Contract.
20
states may choose to develop regulatory programs that are more restrictive. Many of DESC’s facilities are subject to the project. Also in September 2017, the state's Office of Attorney General, the Speaker of the House of Representatives, and the Chair and Vice-Chair of the South Carolina House Utility Ratepayer Protection Committee requested that SLED conduct a criminal investigation into the handling of the new nuclear project by SCANA and SCE&G. In October 2017, the staff of the SEC's Division of Enforcement also issued a subpoena for documents related to an investigation they are conducting related to the new nuclear project. The Company and Consolidated SCE&G intend to fully cooperate with these investigations. Also in connection with the abandonment of the new nuclear project, various state or local governmental authorities may attempt to challenge, reverse or revoke one or more previously-approved tax or economic development incentives, benefits or exemptions and may attempt to apply such action retroactively. No assurance can be given as to the timing or outcome of these matters.
ACE Rule
In July 2019, the EPA published the final rule informally referred to SCE&G. It is possible that the outcome of regulatory or legal proceedings could result in requiring SCE&G's share of these proceeds to be placed in escrow pending their final disposition. Such a requirement would significantly harm the Company's and Consolidated SCE&G's results of operations, cash flows and financial condition.
Carbon Regulations
In August 2016, the EPA issued a draft rule proposing to reaffirm that a source’s obligation to obtain a PSD or Title V permit for GHGs is triggered only if such permitting requirements are first triggered by non-GHG, or conventional, pollutants that are regulated by the New Source Review program, and exceed a significant emissions rate of 75,000 tons per year of CO2 equivalent emissions. Until the EPA ultimately takes final action on this rulemaking, DESC cannot predict the groundsimpact to its results of operations, financial condition and/or cash flows.
In December 2018, the EPA proposed revised Standards of Performance for Greenhouse Gas Emissions from New, Modified, and Reconstructed Stationary Sources. The proposed rule would amend the previous determination that it exceeds the EPA's statutory authority. The EPA is further considering the scope of any potential replacement rule and plans to formally solicit information on systemsbest system of emission reduction that arefor newly constructed coal-fired steam generating units is no longer partial carbon capture and storage. Instead, the proposed revised best system of emission reduction for this source category is the most efficient demonstrated steam cycle (e.g., supercritical steam conditions for large units and subcritical steam conditions for small units) in accordcombination with best operating practices. The proposed revision to the EPA's interpretationperformance standards for coal-fired steam generating units remains pending. Until the EPA ultimately takes final action on this rulemaking, DESC cannot predict the impact to its results of its statutory authority. operations, financial condition and/or cash flows.
Water
The CompanyCWA, as amended, is a comprehensive program requiring a broad range of regulatory tools including a permit program to authorize and Consolidated SCE&G expect any costs incurredregulate discharges to surface waters with strong enforcement mechanisms. DESC must comply with such rule to be recoverable through rates.
Regulation 316(b)
In October 2014, the CAIR and requires a totalfinal regulations under Section 316(b) of 28 states to reduce annual SO
Effluent Limitations Guidelines
In September 2015, the EPA released a final rule to revise the ELG Rule. The final rule established updated standards for wastewater discharges that apply primarily at coal and oil steam generating stations. Affected facilities are expectedrequired to convert from wet to dry or closed cycle coal ash management, improve existing wastewater treatment systems and/or install new wastewater treatment
21
technologies in order to meet the new discharge limits. In April 2017, the EPA granted two separate petitions for reconsideration of the final ELG Rule and stayed future compliance dates in the rule. Also in April 2017, the U.S. Court of Appeals for the Fifth Circuit granted the EPA’s request for a stay of the pending consolidated litigation challenging the rule while the EPA addresses the petitions for reconsideration. In September 2017, the EPA signed a rule to postpone the earliest compliance dates for certain waste streams regulations in the final ELG Rule from November 2018 to November 2020; however, the latest date for compliance for these regulations was December 2023. In October 2020, the EPA released the final rule that extends the latest dates for compliance. Individual facilities’ compliance dates will vary based on circumstances and the determination by state regulators and may range from 2021 to 2028. While the impacts of this rule could be material to DESC’s results of operations, financial condition and/or cash flows, as DESC expects that wastewater treatment technology retrofits and modifications at the Williams and Wateree generating stations will be required, the existing regulatory framework in South Carolina provides rate recovery mechanisms that could substantially mitigate any such impacts for DESC.
Capacity Use Area
In November 2019, a new CUA was established in the counties surrounding the Cope Generating Station (Western Capacity Use Area) under the South Carolina Groundwater Use and Reporting Regulation. Under the regulation any groundwater well in a CUA that withdraws above three million gallons per month must be permitted. The Cope Generating Station is located within this new Western Capacity Use Area. Cope has been using four deep groundwater wells for cooling water and other house loads since 1996. Prior to designation of the new Western Capacity Use Area, the wells at Cope Station were only required to be recoverable through rates.
Waste Management and Remediation
The EPA's final ruleoperations of DESC are subject to a variety of state and federal laws and regulations governing the management and disposal of solid and hazardous waste, and release of hazardous substances associated with current and/or historical operations. The CERCLA, as amended, and similar state laws, may impose joint, several and strict liability for CCR became effective in the fourth quartercleanup on potentially responsible parties who owned, operated or arranged for disposal at facilities affected by a release of 2015. This rule regulates CCRhazardous substances. In addition, many states have created programs to incentivize voluntary remediation of sites where historical releases of hazardous substances are identified and property owners or responsible parties decide to initiate cleanups.
From time to time, DESC may be identified as a non-hazardous waste under Subtitle Dpotentially responsible party in connection with the alleged release of the Resource Conservationhazardous substances or wastes at a site. Under applicable federal and Recovery Act and imposes certain requirements on ash storage ponds and other CCR management facilities at SCE&G's and GENCO's coal-fired generating facilities. SCE&G and GENCO have already closed or have begun the process of closure of all of their ash storage ponds and have previously recognized AROsstate laws, DESC could be responsible for such ash storage ponds under existing requirements. The Company and Consolidated SCE&G do not expect the incremental compliance costs associated with this rulethe investigation or remediation of impacted sites, or subject to contribution claims by other responsible parties for their costs incurred at such sites. DESC also may identify, evaluate and remediate other potentially impacted sites under voluntary state programs. Remediation costs may be significant and expectsubject to recover such costs in future rates.
DESC has four decommissioned MGPmanufactured gas plant sites in South Carolina which contain residues of by-product chemicals. These sitesthat are in various stagesstates of investigation, remediation and monitoring under work plans approved by, DHEC andor under review by, the SCDHEC or the EPA. SCE&GDESC anticipates that major remediation activities at all these sites will continue at least through 2018 and will2025 with a remaining estimated cost an additional $9.9 million, which is accrued in Other within Deferred Credits and Other Liabilities on the condensed consolidated balance sheet. SCE&Gof $20 million. DESC expects to recover any costcosts arising from the remediation of MGPwork at all four sites through rates. At Septemberrate recovery mechanisms and as of June 30, 2017,2023, deferred amounts, net of amounts previously recovered through rates and insurance settlements, totaled $24.7$38 million and are included in regulatory assets.
In December 2016, legislation was enacted that creates a framework for EPA-approved state CCR permit programs. In August 2017, the EPA issued interim guidance outlining the framework for state CCR program approval. The EPA has enforcement authority until state programs are approved. The EPA and states with approved programs both will have authority to enforce CCR requirements under their respective rules and programs. In September 2017, the EPA agreed to reconsider portions of the CCR rule in response to two petitions for reconsideration. In March 2018, the EPA proposed certain changes to the CCR rule related to issues remanded as part of the pending litigation and other issues the EPA is reconsidering. Several of the proposed changes would allow states with approved CCR permit programs additional flexibility in implementing their programs. In July 2018, the EPA promulgated the first phase of
22
changes to the CCR rule. In August 2018, the U.S. Court of Appeals for the D.C. Circuit issued its decision in the pending challenges of the CCR rule, vacating and remanding to the EPA three provisions of the rule. Until this matter is resolved and all phases of the CCR rule are promulgated, DESC is unable to precisely estimate potential incremental impacts or costs related to existing coal ash sites in connection with future implementation of the final CCR rule. In May 2023, the EPA released a proposed rule addressing one of the previously remanded provisions of the CCR rule to regulate inactive surface impoundments located at retired generating stations that contained CCR and liquids after October 2015, and certain other inactive or previously closed surface impoundments, landfills or other areas that contain accumulations of CCR. Until the EPA ultimately takes final action on this rulemaking, DESC is unable to predict whether or to what extent the new rules will ultimately require additional controls. While such amounts may be material to DESC’s results of operations, measure profitability usingfinancial condition and/or cash flows, the existing regulatory framework in South Carolina provides rate recovery mechanisms that could substantially mitigate any such impacts.
Claims and Litigation
The following describes certain legal proceedings involving DESC relating primarily to events occurring before closing of the SCANA Combination. In addition, certain legal matters which have been resolved are discussed in Note 12 to the Consolidated Financial Statements in DESC’s Annual Report on Form 10-K for the year ended December 31, 2022. No reference to, or disclosure of, any proceeding, item or matter described below shall be construed as an admission or indication that such proceeding, item or matter is material. For certain of these matters, and unless otherwise noted therein, DESC is unable to estimate a reasonable range of possible loss and the related financial statement impacts, but for any such matter there could be a material impact to its results of operations, financial condition and/or cash flows. For the matters for which DESC is able to reasonably estimate a probable loss, the Consolidated Balance Sheets at June 30, 2023 and December 31, 2022 include reserves of $66 million and $94 million, respectively, and insurance receivables of $72 million and $68 million, respectively, included within other receivables. These balances at June 30, 2023 and December 31, 2022 include $62 million and $68 million, respectively, of offsetting reserves and insurance receivables related to personal injury or wrongful death cases which are currently pending. During both the three and six months ended June 30, 2023 and 2022, charges included in DESC’s Consolidated Statements of Comprehensive Income were inconsequential.
Governmental Proceedings and Investigations
In June 2018, DESC received a notice of proposed assessment of approximately $410 million, excluding interest, from the SCDOR following its audit of DESC’s sales and use tax returns for the periods September 1, 2008 through December 31, 2017. The proposed assessment, which includes 100% of the NND Project, is based on the SCDOR’s position that DESC’s sales and use tax exemption for the NND Project does not apply because the facility will not become operational. In December 2020, the parties reached an agreement in principle in the amount of $165 million to resolve this matter. In June 2021, the parties executed a settlement agreement which allows DESC to fund the settlement amount through a combination of cash, shares of Dominion Energy common stock or real estate with an initial payment of at least $43 million in shares of Dominion Energy common stock. In August 2021, Dominion Energy issued 0.6 million shares of its common stock to satisfy DESC’s obligation for the initial payment under the settlement agreement. In May 2022, Dominion Energy issued an additional 0.9 million shares of its common stock to partially satisfy DESC’s remaining obligation under the settlement agreement. In June 2022, DESC requested approval from the South Carolina Commission to transfer certain real estate with a total settlement value of $51 million to satisfy its remaining obligation under the settlement agreement. In July 2022, the South Carolina Commission voted to approve the request and issued its final order in August 2022. In September 2022, DESC transferred certain non-utility property with a fair value of $28 million to the SCDOR under the settlement agreement. In December 2022, DESC transferred additional utility property with a fair value of $3 million to the SCDOR. In October 2022, DESC filed for approval to transfer the remaining real estate with FERC which was received in November 2022. In March 2023, DESC transferred utility property with a fair value of $10 million to the SCDOR resulting in a gain of $9 million ($7 million after-tax), recorded in other income, net in DESC's Consolidated Statements of Comprehensive Income for the six months ended June 30, 2023. In June 2023, DESC transferred the remaining utility property with a fair value of $11 million to the SCDOR resulting in a gain of $11 million ($8 million after-tax), recorded in other income, net in DESC's Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2023. In July 2023, DESC made a less than $1 million cash payment to the SCDOR to fully satisfy its remaining obligation, including applicable interest, under the settlement agreement.
Nuclear Operations
Nuclear Insurance
There have been no significant changes regarding DESC’s nuclear insurance as described in Note 12 to the Consolidated Financial Statements in DESC’s Annual Report on Form 10-K for the year ended December 31, 2022.
23
11. OPERATING SEGMENTS
The Corporate and Other segment includes specific items attributable to DESC’s operating income; therefore,segment that are not included in profit measures evaluated by executive management in assessing the segment’s performance or in allocating resources.
In the six months ended June 30, 2023, DESC reported after-tax net income is not allocated to the Electric Operations and Gas Distribution segments. The Gas Marketing segment measures profitability using net income.
The Company | ||||||||||||||||
Millions of dollars | External Revenue | Intersegment Revenue | Operating Income | Net Income | ||||||||||||
Three Months Ended September 30, 2017 | ||||||||||||||||
Electric Operations | $ | 786 | $ | 1 | $ | 126 | n/a | |||||||||
Gas Distribution | 123 | — | (7 | ) | n/a | |||||||||||
Gas Marketing | 167 | 35 | n/a | $ | 1 | |||||||||||
All Other | — | 90 | — | (7 | ) | |||||||||||
Adjustments/Eliminations | — | (126 | ) | 1 | 40 | |||||||||||
Consolidated Total | $ | 1,076 | $ | — | $ | 120 | $ | 34 |
Nine Months Ended September 30, 2017 | ||||||||||||||||
Electric Operations | $ | 2,042 | $ | 4 | $ | 549 | n/a | |||||||||
Gas Distribution | 584 | 1 | 109 | n/a | ||||||||||||
Gas Marketing | 623 | 93 | n/a | $ | 17 | |||||||||||
All Other | — | 286 | — | (14 | ) | |||||||||||
Adjustments/Eliminations | — | (384 | ) | 27 | 323 | |||||||||||
Consolidated Total | $ | 3,249 | $ | — | $ | 685 | $ | 326 |
Three Months Ended September 30, 2016 | ||||||||||||||||
Electric Operations | $ | 817 | $ | 1 | $ | 364 | n/a | |||||||||
Gas Distribution | 111 | — | (14 | ) | n/a | |||||||||||
Gas Marketing | 165 | 35 | n/a | $ | (1 | ) | ||||||||||
All Other | — | 100 | — | (7 | ) | |||||||||||
Adjustments/Eliminations | — | (136 | ) | (2 | ) | 197 | ||||||||||
Consolidated Total | $ | 1,093 | $ | — | $ | 348 | $ | 189 |
Nine Months Ended September 30, 2016 | ||||||||||||||||
Electric Operations | $ | 2,035 | $ | 4 | $ | 784 | n/a | |||||||||
Gas Distribution | 538 | 1 | 79 | n/a | ||||||||||||
Gas Marketing | 598 | 83 | n/a | $ | 23 | |||||||||||
All Other | — | 302 | — | (14 | ) | |||||||||||
Adjustments/Eliminations | — | (390 | ) | 37 | 462 | |||||||||||
Consolidated Total | $ | 3,171 | $ | — | $ | 900 | $ | 471 |
Consolidated SCE&G | ||||||||||||
Millions of dollars | External Revenue | Operating Income | Earnings Available to Common Shareholder | |||||||||
Three Months Ended September 30, 2017 | ||||||||||||
Electric Operations | $ | 787 | $ | 125 | n/a | |||||||
Gas Distribution | 69 | (2 | ) | n/a | ||||||||
Adjustments/Eliminations | — | — | $ | 39 | ||||||||
Consolidated Total | $ | 856 | $ | 123 | $ | 39 |
Nine Months Ended September 30, 2017 | ||||||||||||
Electric Operations | $ | 2,046 | $ | 549 | n/a | |||||||
Gas Distribution | 285 | 42 | n/a | |||||||||
Adjustments/Eliminations | — | — | $ | 270 | ||||||||
Consolidated Total | $ | 2,331 | $ | 591 | $ | 270 |
Three Months Ended September 30, 2016 | ||||||||||||
Electric Operations | $ | 818 | $ | 364 | n/a | |||||||
Gas Distribution | 64 | (5 | ) | n/a | ||||||||
Adjustments/Eliminations | — | — | $ | 201 | ||||||||
Consolidated Total | $ | 882 | $ | 359 | $ | 201 |
Nine Months Ended September 30, 2016 | ||||||||||||
Electric Operations | $ | 2,039 | $ | 784 | n/a | |||||||
Gas Distribution | 253 | 32 | n/a | |||||||||
Adjustments/Eliminations | — | — | $ | 423 | ||||||||
Consolidated Total | $ | 2,292 | $ | 816 | $ | 423 |
Segment Assets | The Company | Consolidated SCE&G | ||||||||||||||
September 30, | December 31, | September 30, | December 31, | |||||||||||||
Millions of dollars | 2017 | 2016 | 2017 | 2016 | ||||||||||||
Electric Operations | $ | 12,294 | $ | 11,929 | $ | 12,294 | $ | 11,929 | ||||||||
Gas Distribution | 3,080 | 2,892 | 856 | 825 | ||||||||||||
Gas Marketing | 187 | 230 | n/a | n/a | ||||||||||||
All Other | 970 | 1,124 | n/a | n/a | ||||||||||||
Adjustments/Eliminations | 3,488 | 2,532 | 4,283 | 3,337 | ||||||||||||
Consolidated Total | $ | 20,019 | $ | 18,707 | $ | 17,433 | $ | 16,091 |
The net of the total purchases and total sales are recordedincome for specific items attributable to DESC’s operating segment in Other expenses2023 primarily related to a $31 million ($23 million after-tax) benefit related to real estate transactions, including gains on the consolidated statementstransfer of income (forproperty to satisfy litigation associated with the Company) and of comprehensive income (for Consolidated SCE&G).
(millions) |
| External |
|
| Comprehensive |
| ||
Three Months Ended June 30, 2023 |
|
|
|
|
|
| ||
Dominion Energy South Carolina |
| $ | 704 |
|
| $ | 63 |
|
Corporate and Other |
|
| — |
|
|
| 13 |
|
Consolidated Total |
| $ | 704 |
|
| $ | 76 |
|
|
|
|
|
|
| |||
Three Months Ended June 30, 2022 |
|
|
|
|
|
| ||
Dominion Energy South Carolina |
| $ | 909 |
|
| $ | 119 |
|
Corporate and Other |
|
| — |
|
|
| — |
|
Consolidated Total |
| $ | 909 |
|
| $ | 119 |
|
|
|
|
|
|
| |||
Six Months Ended June 30, 2023 |
|
|
|
|
|
| ||
Dominion Energy South Carolina |
| $ | 1,463 |
|
| $ | 149 |
|
Corporate and Other |
|
| — |
|
|
| 19 |
|
Consolidated total |
| $ | 1,463 |
|
| $ | 168 |
|
|
|
|
|
|
|
| ||
Six Months Ended June 30, 2022 |
|
|
|
|
|
| ||
Dominion Energy South Carolina |
| $ | 1,758 |
|
| $ | 223 |
|
Corporate and Other |
|
| — |
|
|
| (1 | ) |
Consolidated total |
| $ | 1,758 |
|
| $ | 222 |
|
24
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
Millions of Dollars | 2017 | 2016 | 2017 | 2016 | ||||||||||||
Purchases from Canadys Refined Coal, LLC | $ | 47.5 | $ | 41.8 | $ | 144.9 | $ | 138.6 | ||||||||
Sales to Canadys Refined Coal, LLC | 47.2 | 41.6 | 144.0 | 137.8 |
Millions of Dollars | September 30, 2017 | December 31, 2016 | ||||||
Receivable from Canadys Refined Coal, LLC | $ | 7.6 | $ | 16.0 | ||||
Payable to Canadys Refined Coal, LLC | 7.7 | 16.1 |
12. AFFILIATED AND RELATED PARTY TRANSACTIONS
DES, on behalf of itself and its parent company, provides the following services to Consolidated SCE&G,DESC, which are rendered at direct or allocated cost: information systems, telecommunications, customer support, marketing and sales, human resources, corporate compliance, purchasing, financial, risk management, public affairs, legal, investor relations, gas supply and capacity management, strategic planning, general administrative and retirement benefits. In addition, SCANA Services processes and pays invoices for Consolidated SCE&G and is reimbursed. Costs for these services include amounts capitalized. Amounts expensed are primarily recorded in Other operationother operations and maintenance - nonconsolidated affiliateaffiliated suppliers and Other expenses onother income, net in the consolidated statementsConsolidated Statements of comprehensive income.
DESC transacts with affiliates for certain quantities of electricity in the ordinary course of business. DESC also enters into certain commodity derivative contracts with affiliates. DESC uses these contracts, which are principally comprised of forward commodity purchases, to manage commodity price risks associated with purchases of electricity. See Note 7 for additional information.
|
| Three Months Ended |
|
| Six Months Ended |
| ||||||||||
(millions) |
| 2023 |
|
| 2022 |
|
| 2023 |
|
| 2022 |
| ||||
Direct and allocated costs from DES(1) |
| $ | 55 |
|
| $ | 51 |
|
| $ | 112 |
|
| $ | 106 |
|
Operating Revenues - Electric from sales to affiliate |
|
| 1 |
|
|
| 1 |
|
|
| 2 |
|
|
| 2 |
|
Operating Expenses - Other taxes from affiliate |
|
| 2 |
|
|
| 2 |
|
|
| 5 |
|
|
| 5 |
|
Purchases of electricity from solar affiliates |
|
| 4 |
|
|
| 5 |
|
|
| 6 |
|
|
| 7 |
|
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
Millions of Dollars | 2017 | 2016 | 2017 | 2016 | ||||||||||||
Purchases from SCANA Energy | $ | 35.3 | $ | 34.8 | $ | 93.4 | $ | 83.1 | ||||||||
Direct and Allocated Costs from SCANA Services | 78.1 | 80.4 | 233.6 | 236.4 |
(millions) |
| June 30, 2023 |
|
| December 31, 2022 |
| ||
Payable to Dominion Energy |
| $ | 1 |
|
| $ | 1 |
|
Payable to DES |
|
| 17 |
|
|
| 22 |
|
Payable to SCANA Corporation |
|
| 7 |
|
|
| 7 |
|
Payable to Public Service Company of North Carolina, Incorporated |
|
| 7 |
|
|
| 12 |
|
Payable to solar affiliates |
|
| 2 |
|
|
| — |
|
Derivative assets with affiliates(1) |
|
| 33 |
|
|
| 51 |
|
Millions of Dollars | September 30, 2017 | December 31, 2016 | ||||||
Payable to SCANA Energy | $ | 10.7 | $ | 8.8 | ||||
Payable to SCANA Services | 45.3 | 63.5 |
Borrowings from an affiliate are described in condensed consolidated Note 4. SCE&G's participation5.
13. OTHER INCOME, NET
Components of other income, net are as follows:
|
| Three Months Ended June 30, |
|
| Six Months Ended June 30, |
| ||||||||||
(millions) |
| 2023 |
|
| 2022 |
|
| 2023 |
|
| 2022 |
| ||||
Other income |
| $ | 1 |
|
| $ | 1 |
|
| $ | 3 |
|
| $ | 3 |
|
Other expense |
|
| (5 | ) |
|
| — |
|
|
| (7 | ) |
|
| 1 |
|
Gains on sales of assets(1) |
|
| 22 |
|
|
| 17 |
|
|
| 32 |
|
|
| 17 |
|
Allowance for equity funds used during construction |
|
| — |
|
|
| 2 |
|
|
| — |
|
|
| 3 |
|
Other income, net |
| $ | 18 |
|
| $ | 20 |
|
| $ | 28 |
|
| $ | 24 |
|
(1) Includes amounts recognized in SCANA's noncontributory defined benefit pension planconnection with the transfer of property to satisfy litigation. See Note 10 for additional information.
In the second quarter of 2023, DESC completed the sale of certain utility property in South Carolina, as approved by the South Carolina Commission in February 2023, for total cash consideration of $11 million. In connection with the sale, DESC recognized a gain of $11 million ($8 million after-tax) for the three and unfunded postretirement health caresix months ended June 30, 2023.
In June 2022, DESC completed the sale of certain utility property in South Carolina, as approved by the South Carolina Commission in May 2022, for total cash consideration of $16 million. In connection with the sale, DESC recognized a gain of $16 million ($12 million after-tax) for the three and life insurance programs is described in condensed consolidated Note 8.six months ended June 30, 2022.
25
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
MD&A provides management’s narrative analysis of its consolidated results of operation and other information described therein. Such information is presented hereunder specifically for Consolidated SCE&G, but may be presented alongside information presented for the Company generally. Consolidated SCE&G makes no representation as to information relating solely to SCANA and its subsidiaries (other than Consolidated SCE&G).
Forward-Looking Statements
This report contains statements concerning DESC’s expectations, plans, objectives, future financial performance and Resultsother statements that are not historical facts. These statements are “forward-looking statements.” In most cases, the reader can identify these forward-looking statements by such words as “anticipate,” “estimate,” “forecast,” “expect,” “believe,” “should,” “could,” “plan,” “may,” “continue,” “target” or other similar words.
DESC makes forward-looking statements with full knowledge that risks and uncertainties exist that may cause actual results to differ materially from predicted results. Factors that may cause actual results to differ are often presented with the forward-looking statements themselves. Additionally, other factors may cause actual results to differ materially from those indicated in any forward-looking statement. These factors include but are not limited to:
26
Additionally, other risks that could cause actual results to differ from predicted results are set forth in Part I. Item 1A. Risk Factors in DESC’s Annual Report on Form 10-K for the year ended December 31, 2016. The2022.
DESC’s forward-looking statements are based on beliefs and assumptions using information available at the time the statements are made. DESC cautions the reader not to place undue reliance on its forward-looking statements because the assumptions, beliefs, expectations and projections about future events may, and often do, differ materially from actual results. DESC undertakes no obligation to update any forward-looking statement to reflect developments occurring after the statement is made.
Results of Operations
Presented below is a summary of DESC’s results:
|
| Second Quarter |
|
| Year-To-Date |
| ||||||||||||||||||
(millions) |
| 2023 |
|
| 2022 |
|
| $ Change |
|
| 2023 |
|
| 2022 |
|
| $ Change |
| ||||||
Net income |
| $ | 81 |
|
| $ | 126 |
|
| $ | (45 | ) |
| $ | 178 |
|
| $ | 233 |
|
| $ | (55 | ) |
Overview
Second Quarter 2023 vs. 2022
Net income decreased 36%, primarily due to a decrease in sales to electric utility customers attributable to weather.
Year-To-Date 2023 vs. 2022
Net income decreased 24%, primarily due to a decrease in sales to electric utility customers attributable to weather.
27
Analysis of Consolidated Operations
Presented below are selected amounts related to DESC’s results of operations:
|
| Second Quarter |
|
| Year-To-Date |
| ||||||||||||||||||
(millions) |
| 2023 |
|
| 2022 |
|
| $ Change |
|
| 2023 |
|
| 2022 |
|
| $ Change |
| ||||||
Operating revenues |
| $ | 704 |
|
| $ | 909 |
|
| $ | (205 | ) |
| $ | 1,463 |
|
| $ | 1,758 |
|
| $ | (295 | ) |
Fuel used in electric generation |
|
| 135 |
|
|
| 254 |
|
|
| (119 | ) |
|
| 285 |
|
|
| 428 |
|
|
| (143 | ) |
Purchased power |
|
| 29 |
|
|
| 27 |
|
|
| 2 |
|
|
| 36 |
|
|
| 58 |
|
|
| (22 | ) |
Gas purchased for resale |
|
| 45 |
|
|
| 89 |
|
|
| (44 | ) |
|
| 127 |
|
|
| 194 |
|
|
| (67 | ) |
Other operations and maintenance |
|
| 142 |
|
|
| 148 |
|
|
| (6 | ) |
|
| 298 |
|
|
| 308 |
|
|
| (10 | ) |
Impairment of assets and other charges |
|
| — |
|
|
| 4 |
|
|
| (4 | ) |
|
| — |
|
|
| 4 |
|
|
| (4 | ) |
Depreciation and amortization |
|
| 131 |
|
|
| 126 |
|
|
| 5 |
|
|
| 260 |
|
|
| 251 |
|
|
| 9 |
|
Other taxes |
|
| 74 |
|
|
| 71 |
|
|
| 3 |
|
|
| 152 |
|
|
| 144 |
|
|
| 8 |
|
Other income, net |
|
| 18 |
|
|
| 20 |
|
|
| (2 | ) |
|
| 28 |
|
|
| 24 |
|
|
| 4 |
|
Interest charges |
|
| 63 |
|
|
| 53 |
|
|
| 10 |
|
|
| 122 |
|
|
| 105 |
|
|
| 17 |
|
Income tax expense |
|
| 22 |
|
|
| 31 |
|
|
| (9 | ) |
|
| 33 |
|
|
| 57 |
|
|
| (24 | ) |
An analysis of DESC’s results of operations follows:
Second Quarter 2023 vs. 2022
Operating revenues decreased 23%, primarily reflecting:
Third Quarter | Year to Date | |||||||||||||||
The Company | 2017 | 2016 | 2017 | 2016 | ||||||||||||
Earnings per share | $ | 0.24 | $ | 1.32 | $ | 2.28 | $ | 3.29 | ||||||||
Consolidated SCE&G | ||||||||||||||||
Net income (millions of dollars) | $ | 41.8 | $ | 204.0 | $ | 279.7 | $ | 432.9 |
The Company | Consolidated SCE&G | |||||||||||||||||||||||||||||||
Third Quarter | Year to Date | Third Quarter | Year to Date | |||||||||||||||||||||||||||||
Millions of dollars | 2017 | 2016 | 2017 | 2016 | 2017 | 2016 | 2017 | 2016 | ||||||||||||||||||||||||
Operating revenues | $ | 787.3 | $ | 818.4 | $ | 2,045.9 | $ | 2,038.5 | $ | 787.3 | $ | 818.4 | $ | 2,045.9 | $ | 2,038.5 | ||||||||||||||||
Fuel used in electric generation | 166.5 | 176.4 | 464.1 | 442.9 | 166.5 | 176.4 | 464.1 | 442.9 | ||||||||||||||||||||||||
Purchased power | 22.3 | 21.0 | 54.1 | 49.6 | 22.3 | 21.0 | 54.1 | 49.6 | ||||||||||||||||||||||||
Other operation and maintenance | 133.1 | 130.0 | 382.5 | 389.9 | 136.6 | 133.6 | 393.2 | 400.1 | ||||||||||||||||||||||||
Impairment loss | 210.0 | — | 210.0 | — | 210.0 | — | 210.0 | — | ||||||||||||||||||||||||
Depreciation and amortization | 73.8 | 71.9 | 219.9 | 213.4 | 70.8 | 68.8 | 211.0 | 204.7 | ||||||||||||||||||||||||
Other taxes | 56.4 | 55.4 | 166.8 | 159.0 | 55.9 | 54.9 | 165.0 | 157.5 | ||||||||||||||||||||||||
Operating Income | $ | 125.2 | $ | 363.7 | $ | 548.5 | $ | 783.7 | $ | 125.2 | $ | 363.7 | $ | 548.5 | $ | 783.7 |
Fuel used in electric generation and purchased power expenses decreased 47%, primarily due to lower sales volumesdecreased fuel costs associated with the effects of weather of $10.3 million, residentialelectric utility retail customers ($106 million) and commercial average use of $1.3 milliona decrease in fuel costs associated with off-system sales ($12 million), which are offset in operating revenue and industrial usage of $0.7 million. These decreases weredo not impact net income.
Gas purchased for resale decreased 49%, primarily due to a decrease in costs associated with gas utility customers, which are offset in operating revenue and do not impact net income.
Other operations and maintenance decreased 4%, primarily due to a decrease in outside services ($9 million), partially offset by an increase in salaries, wages and benefits and administrative expenses ($7 million).
Other income, net decreased 10%, primarily due to higher sales volumes associated with residentialnon-service costs related to pension and commercial customer growthother postretirement benefits ($9 million) and a decrease on the sale of $1.6 million, higher fuel handling expensescertain utility property ($5 million), partially offset by a gain on the transfer of $1.2 million and higher fuel prices of $1.4 million.
Interest charges increased 19%, primarily due to higher non-labor electric generation costs of $2.0 millioninterest rates on intercompany borrowings and the recognition of nuclear abandonment-related severance costs of $12.3 million. These increases were partially offset by lower other labor costs of $12.6 million,commercial paper borrowings.
Income tax expense decreased 29%, primarily due to lower incentive compensationpre-tax income.
Year-To-Date 2023 vs. 2022
Operating revenues decreased 17%, primarily reflecting:
28
Fuel used in electric generation decreased 33%, primarily due to decreased fuel costs associated with electric utility retail customers ($130 million) and a decrease in fuel costs associated with off-system sales ($12 million), which are offset in operating revenue and do not impact net income.
Purchased power decreased 38%, primarily due to a decrease in costs associated with electric utility customers, which are offset in operating revenue and do not impact net income.
Gas purchased powerfor resale decreased 35%, primarily due to a decrease in costs associated with gas utility customers, which are offset in operating revenue and do not impact net income.
Other operations and maintenance decreased 3%, primarily due to a decrease in outside services ($13 million), partially offset by an increase in salaries, wages and benefits and administrative expenses ($5 million).
Other income, net increased 17%, primarily due to a gain on the transfer of certain utility property ($20 million), partially offset by higher non-service costs related to pension and other postretirement benefits ($10 million) and a decrease on the sale of certain utility property ($5 million).
Interest charges increased 16%, primarily due to higher fuel prices of $45.7 million, higher fuel handling expenses of $1.7 million and increased sales volumes associated with residentialinterest rates on intercompany borrowings and commercial customer growth of $4.4 million. These increases werepaper borrowings ($29 million), partially offset by lower interest expense due to lower sales volumes associated with the effects of weather of $20.9 million, residential and commercial average use of $3.6 million and lower industrial usage of $2.3 million.
Income tax expense decreased due to lower other labor costs of $16.4 million,42%, primarily due to lower incentive compensation costs. These lower other labor costs were partially offset by higher non-labor electric generation costs of $2.0 millionpre-tax income ($20 million) and the recognition of nuclear abandonment-related severance costs of $12.3 million.
Third Quarter | Year to Date | |||||||||||
Classification | 2017 | 2016 | 2017 | 2016 | ||||||||
Residential | 2,384 | 2,648 | 5,936 | 6,450 | ||||||||
Commercial | 2,159 | 2,259 | 5,663 | 5,861 | ||||||||
Industrial | 1,652 | 1,676 | 4,676 | 4,760 | ||||||||
Other | 163 | 171 | 444 | 462 | ||||||||
Total Retail Sales | 6,358 | 6,754 | 16,719 | 17,533 | ||||||||
Wholesale | 257 | 276 | 699 | 725 | ||||||||
Total Sales | 6,615 | 7,030 | 17,418 | 18,258 |
The Company | Consolidated SCE&G | |||||||||||||||||||||||||||||||
Third Quarter | Year to Date | Third Quarter | Year to Date | |||||||||||||||||||||||||||||
Millions of dollars | 2017 | 2016 | 2017 | 2016 | 2017 | 2016 | 2017 | 2016 | ||||||||||||||||||||||||
Operating revenues | $ | 123.4 | $ | 111.9 | $ | 585.7 | $ | 539.3 | $ | 68.3 | $ | 64.0 | $ | 285.1 | $ | 253.2 | ||||||||||||||||
Gas purchased for resale | 57.8 | 51.2 | 254.1 | 238.2 | 38.5 | 36.5 | 146.5 | 126.0 | ||||||||||||||||||||||||
Other operation and maintenance | 39.8 | 42.9 | 126.2 | 129.7 | 16.9 | 18.4 | 52.9 | 54.1 | ||||||||||||||||||||||||
Depreciation and amortization | 21.4 | 20.8 | 63.3 | 60.9 | 7.4 | 6.8 | 21.6 | 20.3 | ||||||||||||||||||||||||
Other taxes | 10.5 | 10.4 | 32.4 | 31.3 | 7.2 | 7.0 | 21.6 | 20.3 | ||||||||||||||||||||||||
Operating Income (Loss) | $ | (6.1 | ) | $ | (13.4 | ) | $ | 109.7 | $ | 79.2 | $ | (1.7 | ) | $ | (4.7 | ) | $ | 42.5 | $ | 32.5 |
The Company | Consolidated SCE&G | |||||||||||||||||||||||
Third Quarter | Year to Date | Third Quarter | Year to Date | |||||||||||||||||||||
Classification (in thousands) | 2017 | 2016 | 2017 | 2016 | 2017 | 2016 | 2017 | 2016 | ||||||||||||||||
Residential | 2,196 | 2,073 | 21,958 | 27,055 | 742 | 696 | 6,690 | 8,473 | ||||||||||||||||
Commercial | 4,537 | 4,363 | 19,113 | 20,748 | 2,381 | 2,295 | 8,783 | 9,361 | ||||||||||||||||
Industrial | 4,644 | 4,493 | 14,723 | 14,380 | 4,289 | 4,141 | 13,289 | 12,762 | ||||||||||||||||
Transportation | 14,865 | 15,171 | 38,313 | 37,089 | 1,516 | 1,252 | 4,602 | 3,747 | ||||||||||||||||
Total | 26,242 | 26,100 | 94,107 | 99,272 | 8,928 | 8,384 | 33,364 | 34,343 |
Third Quarter | Year to Date | |||||||||||||||
Millions of dollars | 2017 | 2016 | 2017 | 2016 | ||||||||||||
Operating revenues | $ | 202.1 | $ | 199.8 | $ | 716.4 | $ | 681.5 | ||||||||
Net income (Loss) | 0.7 | (1.0 | ) | 16.9 | 22.9 |
The Company | Consolidated SCE&G | |||||||||||||||||||||||||||||||
Third Quarter | Year to Date | Third Quarter | Year to Date | |||||||||||||||||||||||||||||
Millions of dollars | 2017 | 2016 | 2017 | 2016 | 2017 | 2016 | 2017 | 2016 | ||||||||||||||||||||||||
Other operation and maintenance | $ | 183.1 | $ | 186.6 | $ | 543.1 | $ | 557.9 | $ | 153.5 | $ | 152.0 | $ | 446.1 | $ | 454.2 | ||||||||||||||||
Impairment loss | 210.0 | — | 210.0 | — | 210.0 | — | 210.0 | — | ||||||||||||||||||||||||
Depreciation and amortization | 95.7 | 93.2 | 284.7 | 276.1 | 78.2 | 75.6 | 232.6 | 225.0 | ||||||||||||||||||||||||
Other taxes | 67.2 | 66.3 | 200.2 | 191.8 | 63.1 | 62.0 | 186.6 | 177.8 |
The Company | Consolidated SCE&G | |||||||||||||||||||||||||||||||
Third Quarter | Year to Date | Third Quarter | Year to Date | |||||||||||||||||||||||||||||
Millions of dollars | 2017 | 2016 | 2017 | 2016 | 2017 | 2016 | 2017 | 2016 | ||||||||||||||||||||||||
Other income | $ | 28.4 | $ | 15.8 | $ | 61.0 | $ | 46.4 | $ | 20.8 | $ | 7.3 | $ | 36.1 | $ | 19.6 | ||||||||||||||||
Other expense | (7.0 | ) | (7.1 | ) | (25.4 | ) | (31.5 | ) | (6.2 | ) | (4.6 | ) | (17.3 | ) | (18.8 | ) | ||||||||||||||||
AFC - equity funds | (0.6 | ) | 6.9 | 17.6 | 21.6 | (3.5 | ) | 6.4 | 12.7 | 18.7 |
29
Millions of dollars | 2017 | 2018 | 2019 | |||||||||
SCE&G - Gas | $ | 74 | $ | 100 | $ | 106 | ||||||
PSNC Energy | 332 | 244 | 192 | |||||||||
Total | $ | 406 | $ | 344 | $ | 298 |
Expected Maturity | 2017 | 2018 | 2019 | 2020 | ||||||||||
Futures - Long | ||||||||||||||
Settlement Price (a) | 3.10 | 3.15 | 3.07 | — | ||||||||||
Contract Amount (b) | 21.4 | 45.9 | 6.9 | — | ||||||||||
Fair Value (b) | 20.1 | 45.4 | 7.1 | — | ||||||||||
Futures - Short | ||||||||||||||
Settlement Price (a) | 3.09 | 3.16 | — | — | ||||||||||
Contract Amount (b) | 6.7 | 8.0 | — | — | ||||||||||
Fair Value (b) | 6.0 | 7.7 | — | — | ||||||||||
Options - Purchased Call (Long) | ||||||||||||||
Strike Price (a) | — | 2.54 | — | — | ||||||||||
Contract Amount (b) | — | 19.1 | — | — | ||||||||||
Fair Value (b) | — | 1.0 | — | — | ||||||||||
Swaps - Commodity | ||||||||||||||
Pay fixed/receive variable (b) | 6.3 | 20.4 | 5.3 | 1.0 | ||||||||||
Average pay rate (a) | 3.3022 | 3.2285 | 2.9381 | 2.8950 | ||||||||||
Average received rate (a) | 3.1043 | 3.1288 | 2.9703 | 2.8219 | ||||||||||
Fair value (b) | 5.9 | 19.8 | 5.4 | 0.9 | ||||||||||
Pay variable/receive fixed (b) | 6.3 | 25.5 | 8.0 | 0.9 | ||||||||||
Average pay rate (a) | 3.0973 | 3.0822 | 2.9796 | 2.8397 | ||||||||||
Average received rate (a) | 3.1848 | 3.1643 | 2.9499 | 2.9499 | 2.8973 | |||||||||
Fair value (b) | 6.5 | 26.1 | 8.0 | 0.9 | ||||||||||
Swaps - Basis | ||||||||||||||
Pay variable/receive variable (b) | 7.1 | 8.0 | 0.3 | — | ||||||||||
Average pay rate (a) | 3.0073 | 3.2222 | 3.2311 | — | ||||||||||
Average received rate (a) | 2.9666 | 3.1828 | 3.1441 | — | ||||||||||
Fair value (b) | 7.0 | 7.9 | 0.3 | — | ||||||||||
(a) Weighted average, in dollars | ||||||||||||||
(b) Millions of dollars |
ITEM 4. CONTROLS AND PROCEDURES
Senior management of
There were effective. There has been no change in internal control over financial reportingchanges that occurred during the last fiscal quarter ended
30
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
From time to time, DESC is party to various legal, proceedings through September 30, 2017. The Company and Consolidated SCE&G intend to vigorously contest the lawsuits which have been filed against them. For developments related to theseenvironmental or other regulatory proceedings, subsequentincluding in the ordinary course of business. SEC regulations require disclosure of certain environmental matters when a governmental authority is a party to September 30, 2017, if any, see Notethe proceedings and such proceedings involve potential monetary sanctions that DESC reasonably believes will exceed a specified threshold. Pursuant to the SEC regulations, DESC uses a threshold of $1 million for such proceedings.
See the following for discussions on various legal, environmental and other regulatory proceedings to which DESC is a party, which information is incorporated herein by reference:
ITEM 1A. RISK FACTORS
DESC’s business is influenced by many factors that are difficult to predict, involve uncertainties that may materially affect actual results and are often beyond its control. A number of these risk factors from the Registrants' combinedhave been identified in DESC’s Annual Report on Form 10-K for the year ended December 31, 2016, and combined Quarterly Report on Form 10-Q for2022, which should be taken into consideration when reviewing the quarter ended June 30, 2017,information contained in this report. There have been updated and are restated below in their entirety.
Issuer Purchases of Equity Securities | ||||||||||||
(a) | (b) | (c) | (d) | |||||||||
Period | Total number of shares (or units) purchased | Average price paid per share (or unit) | Total number of shares (or units) purchased as part of publicly announced plans or programs | Maximum number (or approximate dollar value) of shares (or units) that may yet be purchased under the plans or programs | ||||||||
July 1 - 31 | 5,935 | $ | 65.16 | 5,935 | ||||||||
August 1 - 31 | — | — | — | |||||||||
September 1 - 30 | — | — | — | |||||||||
Total | 5,935 | 5,935 | * |
ITEM 5. OTHER INFORMATION
During the last fiscal quarter, none of interest to investors on SCANA’s website at www.scana.com (which is not intended to be an active hyperlink; the information on SCANA’s website is not a part of this reportDESC’s directors or any other report or document that SCANA or SCE&G files with or furnishes to the SEC). On SCANA’s homepage, there is a yellow box containing links to the Nuclear Development and Other Investor Information sections of the website. The Nuclear Development section contains a yellow box
31
ITEM 6. EXHIBITS
Exhibit No. | Description | |
3.1 | ||
3.2 | ||
4.1 | Dominion Energy South Carolina, Inc. agrees to furnish to the U.S. Securities and Exchange Commission upon request any instrument with respect to long-term debt as to which the total amount of securities authorized does not exceed 10% of its total consolidated assets. | |
31.a | ||
31.b | ||
32.a | ||
101 | The following financial statements from Dominion Energy South Carolina, Inc.’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2023, filed on August 4, 2023, formatted in iXBRL (Inline eXtensible Reporting Language): (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Comprehensive Income, (iii) Consolidated Statements of Cash Flows, (iv) Consolidated Statements of Changes in Common Equity, and (v) the Notes to Consolidated Financial Statements. | |
104 | Cover Page Interactive Data File (formatted in iXBRL (Inline eXtensible Reporting Language) and contained in Exhibit 101). |
32
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, each of the registrantsregistrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. The signature of each registrant shall be deemed to relate only to matters having reference to such registrant and any subsidiaries thereof.
DOMINION ENERGY SOUTH CAROLINA, INC. | |||
(Registrant) | |||
By: | /s/ Michele L. Cardiff | ||
Date: August 4, 2023 | Michele L. Cardiff | ||
Senior Vice President, Controller and | |||
33