As filed with the Securities and Exchange Commission on June 7, 2002
File No. 70
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM U-1 APPLICATION-DECLARATION
UNDER
THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
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SCANA CORPORATION
SCANA SERVICES, INC.
SCANA RESOURCES, INC.
SCANA ENERGY MARKETING, INC.
SOUTH CAROLINA ELECTRIC & GAS COMPANY
PUBLIC SERVICE COMPANY OF NORTH CAROLINA
1426 Main Street
Columbia, South Carolina 29201
(Name of company or companies filing this statement and address of principal
executive offices)
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SCANA CORPORATION
(Name of top registered holding company parent of each applicant or declarant)
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Kevin B. Marsh
H. Thomas Arthur
SCANA CORPORATION
1426 Main Street
Columbia, South Carolina 29201
(Name and address of agent for service)
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The Commission is requested to send copies of all notices, orders and
communications in connection with this Application-Declaration to:
William J. Harmon
Michael G. Strohmeier
Jones, Day, Reavis & Pogue
77 West Wacker, Suite 3500
Chicago, IL 60601
(312) 782-3939
TABLE OF CONTENTS
Item 1. Description of the Proposed Transaction.............................1
A. Introduction and General Request............................1
1. Introduction.......................................1
2. General Request....................................1
B. Description of the Parties to the Transaction...............1
C. Detailed Description of Approval Sought.....................1
D. Rule 54.....................................................3
Item 2. Fees, Commissions and Expenses......................................3
Item 3. Applicable Statutory Provisions.....................................4
Item 4. Regulatory Approvals................................................4
Item 5. Procedure...........................................................4
Item 6. Exhibits and Financial Statements...................................4
A. Exhibits....................................................4
B. Financial Statements........................................5
Item 7. Information as to Environmental Effects.............................5
Signature ....................................................................6
ITEM 1. Description of the Proposed Transaction
A. Introduction and General Request
1. Introduction
SCANA Corporation ("SCANA"), a South Carolina corporation and holding
company registered under the Public Utility Holding Company Act of 1935, as
amended (the "Act"), seeks authorization and approval of the Securities and
Exchange Commission (the "Commission") to expand the energy-related products and
services currently provided by its non-utility subsidiary SCANA Resources, Inc.
("SCANA Resources") for customers including certain customers of SCANA's
electric utility company South Carolina Electric & Gas Company ("SCE&G"), its
gas utility company Public Service Company of North Carolina ("PSNC") and its
gas marketer SCANA Energy Marketing, Inc. ("Energy Marketing"). Certain aspects
of such services will be conducted by SCANA Services, Inc. ("SCANA Services").
SCANA, SCANA Resources, SCE&G, PSNC, Energy Marketing and SCANA Services are
hereinafter collectively referred to as the "Applicants".
2. General Request
Applicants seek authorization and approval of the Commission for SCANA
Resources to expand its service to residential customers to provide bill payment
protection.
B. Description of the Parties to the Transaction
SCE&G, a South Carolina corporation and wholly-owned subsidiary of
SCANA, is a regulated public utility company engaged in the generation,
transmission, distribution and sale of electricity to nearly 540,000 retail and
wholesale customers and in the purchase and sale of natural gas to approximately
267,000 retail customers central and southern South Carolina.
PSNC, a South Carolina corporation and wholly-owned subsidiary of
SCANA, is a regulated public utility company engaged in the transport,
distribution and sale of natural gas to approximately 370,000 customers in 95
cities and communities in the north, central, Piedmont and western area of North
Carolina.
SCANA Resources is a South Carolina corporation and wholly-owned
subsidiary of SCANA. SCANA Resources conducts energy-related businesses and
provides energy-related services such as the development of remote electric and
gas meter reading technology; the development of efficient gas heating and
cooling equipment; the offerings via e-commerce of gas and electricity to
commercial customers in selected markets; the offering of commercial, energy
efficient lighting installation; and the installation and maintenance of
standby, electric generators for fiber optic systems.
SCANA Services, a South Carolina corporation and wholly-owned
subsidiary of SCANA, provides administrative, management and other services to
the subsidiaries and business units within the SCANA system.
Energy Marketing, a South Carolina corporation and wholly-owned
subsidiary of SCANA, markets electricity, natural gas and other light
hydrocarbons primarily in the southeastern United States, Energy Marketing also
provides energy-related risk management services to products and customers.
Through its SCANA Energy division, Energy Marketing markets natural gas in
Georgia's deregulated retail natural gas market.
C. Detailed Description of Approval Sought
SCANA Resources has provided various services related to the energy
industry for several years. In the order approving the merger between SCANA and
PSNC(1), the Commission agreed that the businesses conducted by SCANA Resources,
in accordance with prior Commission precedent, are retainable.
SCANA Resources now desires to develop a new energy-related service and
provide bill payment protection to customers including customers of SCE&G, PSNC
and Energy Marketing in North Carolina, South Carolina and Georgia. SCANA
Resources is planning to offer to its customers insurance covering their monthly
electric and/or gas bills, including bills from SCE&G, PSNC and Energy
Marketing, up to $250 a month for up to six months should the customer become
unemployed or twelve months should the customer become disabled. Monthly
benefits will be paid directly to the customer who may use the funds to pay
bills from SCE&G, PSNC and Energy Marketing. The customer is also insured in the
event of accidental death in the amount of $10,000. SCANA Resources expects to
provide such service through a contractual agreement with a third party,
unaffiliated licensed insurance company. Customers will be required to pay a
fixed monthly fee for the bill payment protection that will be assessed with
their monthly utility bill. The utility (including SCE&G, PSNC or Energy
Marketing) will collect the premium and remit it to SCANA Resources. SCANA
Resources in turn will remit the premiums to the insurance company, less SCANA
Resources' fee.
Certain aspects of the services may be administered by SCANA Services.
All intercompany services that are subject to Rules 80 through 95 under the Act
will be provided in accordance with Rules 90 and 91 under the Act.
Although bill payment protection does not fit squarely within Rule
58(b)(1)(vii), or any of the other Rule 58 exemptions, we believe there is ample
Commission precedent for permitting this type of service. In particular, in
Cinergy Corp., Public Utility Holding Co. Act Release No. 26662 (February 7,
1997), Cinergy Corp. was authorized to form a new nonutility subsidiary company,
Cinergy Solutions, Inc., which, directly or indirectly, would market a wide
variety of energy-related products to nonassociate customers, including "utility
bill insurance - utility bill payment protection, for a monthly fee for a
specified number of months, in the event the customer becomes unemployed,
disabled or dies."(2) Similarly, in Columbia Energy Group, Public Utility
Holding Co. Act Release No. 26498 (March 25, 1996), Columbia Energy Group was
authorized to offer certain consumer programs, including "bill payment insurance
for up to
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(1) SCANA Corporation, Public Utility Holding Co. Act Release No. 27133
(Feb. 9, 2000) (the "Merger Order").
(2) See also, Conectiv, Inc., Public Utility Holding Co. Act Release No.
26832 (Feb. 25, 1998) (permitting, inter alia, the retention of Solutions
"utility bill insurance" services).
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$400 a month for six months if the customer becomes unemployed, disabled or
dies." Ameren Corporation was also authorized to retain Union Electric
Development Company and CIPSCO Investment Company, both of which are providing
bill payment insurance to their customers, when it acquired Union Electric
Company and Central Illinois Public Service Company in 1997(3) and was more
recently was authorized to form special-purpose subsidiaries to engage in such
activities.(4)
Finally, Applicants believe that the request is limited in scope and
would enable SCE&G, PSNC, Energy Marketing and SCANA Resources to better serve
the needs of their customers and to protect the SCANA companies as well as their
customers from temporary hardships.
Therefore, Applicants respectfully request authority to provide bill
payment protection to customers as described herein.
D. Rule 54.
Rule 54 under the Act provides that in determining whether to approve
certain transactions other than those involving exempt wholesale generators
("EWGs") or foreign utility companies ("FUCOs"), as defined in the Act, the
Commission will not consider the effect of the capitalization or earnings of any
subsidiary which is an EWG or FUCO if Rule 53(a), (b) and (c) under the Act are
satisfied. Neither SCANA nor any of its subsidiaries presently has, or as a
consequence of the proposed transaction will have, an interest in any EWG or
FUCO. Consequently, all applicable requirements of Rule 53 (a) - (c) under the
Act are satisfied as required by Rule 54 under the Act.
ITEM 2. Fees, Commissions and Expenses
Estimated Legal Fees and Expenses $5,000
Estimated Miscellaneous Expenses $10,000
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Total $15,000
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(3) See Ameren Corporation, Public Utility Holding Company Act Release
No. 26809 (Dec. 30, 1997).
(4) See Ameren Corporation, Public Utility Holding Company Act Release
No. 27053 (July 23, 1999).
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ITEM 3. Applicable Statutory Provisions
Sections 9(a), 10 and 11 of the Act and Rules 54, 90 and 91 are
considered applicable to the proposed expansion of services as requested by
Applicants. To the extent that the proposed transactions are considered by the
Commission to required authorization, exemption or approval under any section of
the Act or the rules and regulations other than those set forth above, request
for such authorization, exemption or approval is hereby made.
ITEM 4. Regulatory Approvals
No state or federal regulatory agency other than the Commission under
the Act has jurisdiction over the proposed transactions.
ITEM 5. Procedure
The Applicants hereby request that there be no hearing on this
Application-Declaration and that the Commission issue its order as soon as
practicable after the filing hereof. The Commission issued and published the
requisite notice under Rule 23 with respect to this Application-Declaration
dated June __, 2002; such notice specifying June __, 2002 as the date by which
comments may be entered and the date on which an order of the Commission
granting and permitting the Application/Declaration to become effective may be
entered by the Commission. The Applicants hereby (i) waive a recommended
decision by a hearing officer, (ii) waive a recommended decision by any other
responsible officer or the Commission, (iii) consent that the Division of
Investment Management may assist in the preparation of the Commission's decision
and (iv) waive a 30-day waiting period between the issuance of the Commission's
order and the date on which it is to become effective.
ITEM 6. Exhibits and Financial Statements
A. Exhibits
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EXHIBIT NO. DESCRIPTION OF DOCUMENT METHOD OF FILING
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A Inapplicable NA
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B Inapplicable NA
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C Inapplicable NA
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D Inapplicable NA
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E Inapplicable NA
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F-1 Preliminary opinion of counsel to SCANA Filed by amendment
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F-2 Past tense opinion of counsel to SCANA Filed by amendment
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G Form of Notice of filing Filed herewith
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B. Financial Statements
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STATEMENT NO. DESCRIPTION METHOD OF FILING
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FS-1 Consolidated Balance Sheet of SCANA Corporation Incorporated by reference to the
as of March 31, 2002 filing of SCANA Corporation on
Form 10-Q for the period ended
March 31, 2002
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FS-2 Consolidated Statement of Income of SCANA Incorporated by reference to the
Corporation for the period ended March 31, 2002 filing of SCANA Corporation on
Form 10-Q for the period ended
March 31, 2002
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ITEM 7. Information as to Environmental Effects
The proposed transaction involves neither a "major federal action" nor
"significantly affects the quality of the human environment" as those terms are
used in Section 102(2)(C) of the National Environmental Policy Act, 42 U.S.C.
Sec. 4321 et seq. No federal agency is preparing an environmental impact
statement with respect to this matter.
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SIGNATURE
Pursuant to the requirements of the Public Utility Holding Company Act
of 1935, the Applicants have duly caused this Application/ Declaration to be
signed on their behalf by the undersigned thereunto duly authorized.
Date: June 7, 2002
SCANA CORPORATION
By /s/ H. Thomas Arthur
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Name: H. Thomas Arthur
Title: Senior Vice President and
General Counsel
SCANA SERVICES, INC.
SCANA RESOURCES, INC.
SCANA ENERGY MARKETING, INC.
SOUTH CAROLINA ELECTRIC & GAS COMPANY
PUBLIC SERVICE COMPANY OF NORTH CAROLINA
BY SCANA CORPORATION
By /s/ H. Thomas Arthur
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Name: H. Thomas Arthur
Title: Senior Vice President and
General Counsel
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