SCANA Corporation’s (SCG) regulated subsidiary South Carolina Electric & Gas Company received regulatory approval for rate hikes. The Public Service Commission of South Carolina has approved an increase of $67,240,232, or approximately 2.87%, to the retail electric rates. The new rates will be effective from Oct 30, 2013.
SCE&G filed for the rate hike in May under provisions of South Carolina's Base Load Review Act (:BLRA). The BLRA effectively reduces the cost of building nuclear power plants in South Carolina by allowing the state's regulated utilities to adjust rates annually during their construction to recover related financing.
SCANA and state-owned utility Santee Cooper are currently constructing two nuclear electric-generating units at the site of the V.C. Summer Nuclear Station near Jenkinsville. The excess amount generated from the hike would go toward reducing the need for external funding for the project.
SCE&G is a regulated public utility engaged in the generation, transmission, distribution and sale of electricity to approximately 673,000 customers in South Carolina. The company also provides natural gas service to approximately 325,000 customers throughout the state.
SCANA Corp., headquartered in Cayce, South Carolina, is an energy-based holding company principally engaged, through subsidiaries, in electric and natural gas utility operations and other energy-related businesses.
The company is well positioned in a positive regulatory environment, having a low risk business with outstanding customer growth and operational efficiency. These, in turn, are favorable for stable cash flow generation and growth. Another positive for shareholders is SCANA’s utility business mix. The majority of the company’s total earnings come from the regulated electricity and natural gas utilities business.
SCANA holds a Zacks Rank #3, which is equivalent to a Hold rating for a period of one to three months. However, there are stocks in the industry that are currently performing well include Susser Petroleum Partners LP (SUSP), SM Energy Company (SM) and China Petroleum & Chemical Corp. (SNP), each with a Zacks Rank #1 (Strong Buy).