File No. 70-9533
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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POST-EFFECTIVE AMENDMENT NO. 5 TO
APPLICATION-DECLARATION
ON FORM U-1
UNDER THE
PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
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SCANA CORPORATION PRIMESOUTH, INC.
SOUTH CAROLINA ELECTRIC & GAS COMPANY PALMARK, INC.
SOUTH CAROLINA GENERATING COMPANY, INC. PALMETTO LIME, LLC
SOUTH CAROLINA FUEL COMPANY, INC. SCANA RESOURCES, INC.
SOUTH CAROLINA PIPELINE CORPORATION SCANA DEVELOPMENT CORPORATION
SCG PIPELINE, INC. SCANA PETROLEUM RESOURCES, INC.
SCANA ENERGY MARKETING, INC. SCANA SERVICES, INC.
SCANA ENERGY TRADING, LLC PUBLIC SERVICE COMPANY OF NORTH
SCANA PUBLIC SERVICE COMPANY, LLC CAROLINA, INCORPORATED
S CANA PROPANE GAS, INC. CARDINAL PIPELINE COMPANY, LLC
SCANA PROPANE STORAGE, INC. PINE NEEDLE LNG COMPANY, LLC
SCANA COMMUNICATIONS, INC. CLEAN ENERGY ENTERPRISES, INC.
SERVICECARE, INC. 1426 Main Street
Columbia, South Carolina 29201
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(Name of companies filing this statement and
address of principal executive offices)
SCANA CORPORATION
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(Name of top registered holding company parent)
Kevin B. Marsh
H. Thomas Arthur
SCANA CORPORATION
1426 Main Street
Columbia, South Carolina 29201
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(Name and address of agent for service)
The Commission is requested to mail copies of all orders,
notices and communications to:
William S. Lamb, Esq.
LeBoeuf, Lamb, Greene & MacRae, L.L.P.
125 West 55th Street
New York, New York 10019
SCANA Corporation ("SCANA") (a holding company registered as such under the
Public Utility Holding Company Act of 1935, as amended (the "Act"), and the
companies set forth on the cover page hereto (collectively, the "Applicants")
hereby file this post-effective amendment to their application/declaration on
Form U-1 relating to certain financing transactions (the
"Application/Declaration") under the Act primarily in order to revise certain
authorized financing amounts contained in the orders relating thereto, Holding
Co. Act Release No. 27137 (February 14, 2000) and Holding Co. Act Release No.
27341 (January 31, 2001) (collectively, the "Financing Orders").
ITEM 1. DESCRIPTION OF PROPOSED TRANSACTIONS
The Financing Orders permitted, among other things, the issuance by PSNC of
$150 million in long-term debt, subject to certain parameters set forth in
section A below. The aggregate financing amount authorized in the Financing
Orders is $3.55 billion.
The Applicants hereby submit this Application/Declaration for the
authorization and approval under sections 6(a), 7, 9(a), 10 and 12 of the Act
and Rules 43, 45, 53 and 54 to increase their authorized aggregate financing
amount to $3.85 billion from $3.55 billion by obtaining authorization for PSNC
to issue an aggregate of $450 million in long-term debt (including the amount
previously authorized) through February 11, 2003 (the "Authorization Period").
The increase described herein reflects a more complete analysis of the
financial needs of the SCANA system in light of current market developments. Any
financing transactions undertaken pursuant to this authorization will remain
subject to the safeguards provided by the financing parameters set forth in the
Financing Orders and described in Section A below as well as the capitalization
commitments set forth in the Holding Co. Act Release No. 27133 (Feb. 9, 2000)
(the "Merger Order"). All other amounts authorized by the Financing Orders that
are not specifically discussed herein shall remain unchanged.
In addition, pursuant to the Financing Orders, SCANA is notifying the
Commission that SCANA formed a nonutility subsidiary, SCG Pipeline, Inc., on
April 10, 2001, and wishes to add SCG Pipeline, Inc. as a participant in the
SCANA system Nonutility Money Pool. SCG Pipeline, Inc. qualifies as an
energy-related company within the meaning of Rule 58(b)(ix). Information
regarding SCANA's investment in SCG Pipeline, Inc. is included in quarterly
U-9C-3 filings and information on any Nonutility Money Pool activity by SCG
Pipeline, Inc. will be reported in quarterly U-6B-2 filings.
A. Parameters for Financing Orders
The following general terms are applicable, where appropriate, to the
financing transactions set forth herein:
1. Effective Cost of Money on Borrowings
The effective cost of money on long-term debt borrowings occurring pursuant
to the authorization granted under this Application/Declaration will not exceed
300 basis points over the comparable term U.S. Treasury securities.
2. Maturity of Debt
The maturity of indebtedness will not exceed 50 years.
3. Issuance Expenses
The underwriting fees, commissions or other similar remuneration paid in
connection with the non-competitive issue, sale or distribution of a security
pursuant to this Application/Declaration will not exceed 5% of the principal or
total amount of the security being issued.
4. Use of Proceeds
The proceeds from the sale of securities authorized pursuant to this
Application/Declaration will be used for general corporate purposes including
(i) the financing, in part, of the capital expenditures of PSNC (ii) the
financing of working capital requirements of PSNC, (iii) the acquisition,
retirement or redemption pursuant to Rule 42 of securities previously issued by
PSNC without the need for prior Commission approval, and (iv) other lawful
purposes, including direct or indirect investment in companies authorized under
the Merger U-1 and in Rule 58 companies. The Applicants represent that no such
financing proceeds will be used to acquire a new subsidiary unless such
financing is consummated in accordance with an order of the Commission or an
available exemption under the Act.
5. Equity Capitalizations
As provided in the Financing Orders, SCANA represents that, at all times
during the Authorization Period, its common equity (as reflected in its most
recent 10-K or 10-Q filed with the Commission pursuant to the 1934 Act) as well
as that of SCE&G and PSNC will be at least 30% of their respective consolidated
capitalizations (common equity, preferred stock and debt (long and short-term)).
B. Description of Transaction
Subject to the parameters above, as well as the other conditions set forth
in the Financing Orders, the Applicants hereby request authorization for PSNC to
issue up to $450 million in long-term debt securities during the Authorization
Period. Such long-term debt securities would be comprised of medium-term notes
under the indenture attached hereto as Exhibit B-1 or institutional debt. Any
long-term debt security would have such designation, aggregate principal amount,
maturity and interest rate(s) or methods of determining the same, terms of
payment of interest, redemption provisions, sinking fund terms and other terms
and conditions as PSNC may determine at the time of issuance. PSNC will not
issue any new long-term debt unless its outstanding long-term debt is rated
"investment grade" by at least one nationally recognized statistical rating
organization. This authorization is required because issuances of such
securities by PSNC technically do not qualify for the exemption provided in Rule
52 of the Act. Pursuant to Rule 52, most securities issuances by public utility
subsidiaries of registered holding companies, such as PSNC, are exempt from
prior Commission approval provided, among other things, "the issue and sale of
the security have been expressly authorized by the state commission of the state
in which the subsidiary is organized and doing business". The Rule 52 exemption
is designed to give effect to the Commission's belief that "registered holding
company systems should have a greater ability to engage in routine financings
without the regulatory burden of prior Commission authorization, and that this
may be done without jeopardizing the interests the Act is designed to protect."
(Holding Co. Act Release No. 26311 (June 20, 1995))
The interests that the Act is designed to protect will not be jeopardized
by these debt issuances despite the fact that they do not fit within the safe
harbor of the Rule 52 exemption. PSNC is a public utility company franchised to
serve a 28-county area in North Carolina, transporting, distributing and selling
natural gas to approximately 362,000 residential, commercial and industrial
customers in North Carolina. In accordance with the Amended and Restated
Agreement and Plan of Merger among SCANA, PSNC, Merger Sub I and Merger Sub II
and as set out in detail in the Merger Order, PSNC was merged with and into
Merger Sub II, a South Carolina corporation, with Merger Sub II surviving as a
wholly owned subsidiary of SCANA and changing its name to PSNC. Thus, PSNC is
currently incorporated in the State of South Carolina although it conducts its
gas distribution activities entirely within the State of North Carolina. Under
South Carolina law, the South Carolina Public Service Commission (the "SCPSC")
jurisdiction with respect to securities issuances is limited to utility
companies operating in the State of South Carolina. Therefore, PSNC is unable to
obtain authorization from the state in which it is organized since the SCPSC
does not have any legislatively approved interest in such issuances. However,
with respect to North Carolina, the only state in which PSNC operates as a
utility and has ratepayers, PSNC has received and has filed with the Commission
the North Carolina Utilities Commission (the "NCUC") orders authorizing the sale
of $150 million and $300 million in long-term debt securities (See Exhibits D-1
and D-2).
Attached as Annex A hereto is the pro forma capital structure of SCANA and
PSNC taking into account the above amended financing request.
C. Certificates of Notification
SCANA will include in the quarterly Rule 24 certificates that it is
required to file pursuant to the Financing Order the amount and terms of any
long-term debt issued by PSNC pursuant to the authorization sought hereunder as
well as copies of any additional note or agreement executed and delivered
pursuant thereto.
D. Involvement of SCANA and its Affiliates with Exempt Wholesale
Generators and Foreign Utility Companies
Neither SCANA nor any subsidiary thereof presently has, or as a consequence
of the proposed transactions will have, an interest in any exempt wholesale
generator ("EWG") or foreign utility company ("FUCO"), as those terms are
defined in sections 32 and 33 of the Act, respectively. None of the proceeds
from the proposed transactions will be used to acquire any securities of, or any
interest in, an EWG or FUCO. Moreover, neither SCANA nor any of its subsidiaries
is, or as a consequence of the proposed transactions will become, a party to,
and such entities do not and will not have any rights under, a service, sales or
construction contract with any affiliated EWGs or FUCOs except in accordance
with the rules and regulations promulgated by the Commission with respect
thereto. Rule 53(a) states that in determining whether to approve the issue or
sale of a security by a registered holding company for the purposes of financing
the acquisition of an EWG or issue a guarantee in favor of an EWG, the
Commission shall not make a finding that such security is not reasonably adapted
to the earning power of such company or to the security structure of such
company or companies in the same holding company system, or that the
circumstances are such as to constitute the making of such guarantee an improper
risk, if certain conditions are met, including that the aggregate investment
does not exceed 50 percent of the system's consolidated retained earnings. This
Application/Declaration is not requesting authorization to issue a security for
the purposes of financing the acquisition of an EWG nor is it requesting
authority to issue a guarantee in favor of an EWG. Rule 54 provides that in
determining whether to approve the issue or sale of a security by a registered
holding company for purposes other than financing the acquisition of an EWG or
issuing a guarantee in favor of an EWG or for other transactions by a registered
holding company or subsidiaries other than with respect to EWGs or FUCOs, the
Commission shall not consider the effect of the capitalization or earnings of
any subsidiary which is an EWG or FUCO upon the registered holding company
system if Rules 53 (a), (b) and (c) are satisfied. Because SCANA does not have
any direct or indirect subsidiaries that are EWGs or FUCOs, it is not requesting
any relief under Rule 54 in this Application/Declaration. Finally, as stated
above, SCANA and its subsidiaries currently have no investment in EWGs or FUCOs;
it follows that the SCANA's aggregate investment in such entities is currently
0% of consolidated retained earnings.
ITEM 2. FEES, COMMISSIONS AND EXPENSES
The fees, commissions and expenses of the Applicants which are expected to
be paid or incurred, directly or indirectly, in connection with the transactions
described above are estimated as follows:
Legal fees............................................... $10,000
Miscellaneous............................................ $ 4,000
Total.................................................... $14,000
ITEM 3. APPLICABLE STATUTORY PROVISIONS
Sections 6(a), 7, 9(a), 10 and 12 of the Act and Rules 43 and 45 are
considered applicable to the proposed transactions.
To the extent that the proposed transaction is considered by the Commission
to require authorization, approval or exemption under any section of the Act or
provision of rules or regulations other than those specifically referred to
herein, request for such authorization, approval or exemption is hereby made.
ITEM 4. REGULATORY APPROVALS
The NCUC has jurisdiction over issuances of securities by PSNC, other than
the issuance of notes with a maturity of two years or less or renewals thereof
for a six-year or shorter period.
Other than as set forth in the foregoing paragraph, no state or federal
commission other than the Commission has jurisdiction with respect to any of the
proposed transactions described in this Application-Declaration.
ITEM 5. PROCEDURE
The requisite notice under Rule 23 with respect to the filing of this
Application-Declaration was issued and published on November 13, 2001, such
notice specifying December 3, 2001 as the date by which comments may be entered
and after which an order granting and permitting this Application-Declaration to
become effective may be entered by the Commission.
The Applicants respectfully request that appropriate and timely action be
taken by the Commission in this matter. No recommended decision by a hearing
officer or other responsible officer of the Commission is necessary or required
in this matter. The Division of Investment Management of the Commission may
assist in the preparation of the Commission's decision in this matter. There
should be no thirty-day waiting period between the issuance and effective date
of any order issued by the Commission in this matter, and it is respectfully
requested that any such order be made effective immediately upon the entry
thereof.
ITEM 6. EXHIBITS AND FINANCIAL STATEMENTS
a) Exhibits
Exhibit No. Description of Exhibit
B-1 Indenture dated January 1, 1996 between PSNC and First
Union National Bank of North Carolina, as Trustee, as
supplemented by three Supplemental Indentures dated
respectively as of January 1, 1996, December 15, 1996
and February 10, 2000 (Filed as Exhibits 4.08, 4.09,
4.10 and 4.11, respectively, to Registration Statement
No. 333-45206 and incorporated by reference herein)
B-2 Fourth Supplemental Indenture dated as of February 12,
2001, to Indenture referred to in Exhibit B-1 (Filed as
Exhibit 4.28 in Form 10-K for the year ended December
31, 2000 and incorporated by reference herein)
C-1 PSNC's Registration Statement No. 333-68516 filed with
the Commission on August 28, 2001 and incorporated by
reference herein
D-1 NCUC Order Regarding $150 million of PSNC Debt Issuance
(previously filed)
D-2 NCUC Order Regarding $300 million of PSNC Debt Issuance
F-1 Opinion of Counsel
F-2 "Past Tense" Opinion of Counsel (to be filed by
amendment).
G-1 SCANA's 10-K for the year ended December 31, 2000 filed
with the Commission on March 27, 2001 and amended on
April 27, 2001, May 2, 2001 and October 1, 2001 (File
No. 1-8809) and incorporated by reference herein
G-2 SCANA's 10-Q for the period ended March 31, 2001 filed
with the Commission on May 14, 2001 (File No. 1-8809)
and incorporated by reference herein
G-3 SCANA's 10-Q for the period ended June 30, 2001 filed
with the Commission on August 13, 2001 and amended on
October 1, 2001 (File No. 1-8809) and incorporated by
reference herein
G-4 SCANA's 10-Q for the period ended September 30, 2001
filed with the Commission on November 14, 2001 (File
No. 1-8809) and incorporated by reference herein
H-1 Proposed Form of Notice (Previously filed)
b) Financial Statements
No. Description of Financial Statements
FS-1 SCANA's Consolidated Condensed Balance Sheet as of
December 31, 2000 (Filed with the Commission with
SCANA's 10-K for the year ended December 31, 2000 (File
No. 1-8809) and incorporated by reference herein).
FS-2 SCANA's Unaudited Pro Forma Condensed Consolidated
Balance Sheets as of September 30, 2001
FS-3 SCANA's Consolidated Statement of Earnings for the year
ended December 31, 2000 (Filed with the Commission with
SCANA's 10-K for the year ended December 31, 2000 (File
No. 1-8809) and incorporated by reference herein).
FS-4 SCANA's Unaudited Pro Forma Condensed Consolidated
Statement of Earnings as of September 30, 2001
FS-5 Notes to SCANA's Unaudited Pro Forma Condensed
Consolidated Financial Statements as of September 30,
2001
ITEM 7. INFORMATION AS TO ENVIRONMENTAL EFFECTS
None of the matters that are the subject of this Application/Declaration
involve a "major federal action" nor do they "significantly affect the quality
of the human environment" as those terms are used in Section 102(2)(C) of the
National Environmental Policy Act. None of the proposed transactions that are
the subject of this Application/Declaration will result in changes in the
operation of the Applicants that will have an impact on the environment. The
Applicants are not aware of any federal agency which has prepared or is
preparing an environmental impact statement with respect to the transactions
proposed herein.
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.
Dated: December 18, 2001
SCANA CORPORATION
By: /s/ H. Thomas Arthur
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Name: H. Thomas Arthur
Title: Senior Vice President and
General Counsel
ANNEX A
SCANA Corporation
Historical and Pro Forma Capital Structure
September 30, 2001
(Dollar in Millions)
Maximum Additional % of Total
% of Total Financing Financing Pro Forma Capitalization
Actual Capitalization Adjustments Pro Forma Adjustments as adjusted as adjusted
Common stock equity $ 2,131 36.9% $ 748 (1) $ 2,879 $ 2,879 32.1%
Preferred stock equity $ 116 2.0% $ 116 $ 116 1.3%
SCE&G Obligated Mandatorily $ 50 0.8% $ 50 $ 50 0.6%
Redeemable Preferred Securities
of SCE&G's Subsidiary Trust I,
holding solely $50 million
principal amount of 7.55%
Junior Subordinated Debentures
of SCE&G, due 2027
Debt (long and short-term) $ 3,484 60.3% $ 800 (1)
$ 450 (2)
$ 281 (2)
$ 200 (2)
$ 400 (3) $ 5,615
$ 300 (4) $ 5,915 66.0%
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$ 5,781 100.0% $ 2,879 $ 8,660 $ 300 $ 8,960 100.0%
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Public Service Co of North Carolina, Incorporated
Historical and Pro Forma Capital Structure
September 30, 2001
(Dollar Amounts in Millions)
Maximum Additional % of Total
% of Total Financing Financing Pro Forma Capitalization
Actual Capitalization Adjustments Pro Forma Adjustments as adjusted as adjusted
Common stock equity $ 706 70.2% $ 706 $ 706 46.9%
Debt (long and short-term) $ 299 29.8% $ 200 (2) $ 499 $ 300 (4) $ 799 53.1%
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Total $1,005 100.0% $ 200 $ 1,205 $ 300 $ 1,505 100.0%
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See Notes to Historical and Pro Forma Capital Structure.
NOTES TO HISTORICAL AND PRO FORMA CAPITAL STRUCTURE
1. To record increased capitalization of $1,548 million ($800 debt and $748
million of common stock) to reflect the maximum amount originally
authorized by the PUHCA order of February 2000 and amended by the PUHCA
order of January 2001, computed as follows, assuming issue costs of 5%.
Current financing authority $ 2,450 million
Debt issued to finance acquisition 700 million
Debt issued for other purposes 202 million
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Remaining financing authority $ 1,548 million
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2. To record increased short-term debt to reflect the maximum amount
originally authorized by the PUHCA order of February 2000 and amended by
the PUHCA order of January 2001, computed as follows:
SCANA SCE&G PSNC
Current financing authority $ 450 million $ 300 million $ 200 million
Debt issued 0 million 19 million 0 million
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Remaining financing authority $ 450 million $ 281 million $ 200 million
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3. To record issuance of long-term debt of $400 million by SCE&G as approved
by the South Carolina Public Service Commission. Issuance costs were
computed using 5%.
4. To record increased long-term debt to reflect the authorization requested
in this U-1 amendment, computed as follows, assuming issue costs of 5%:
Current financing authority $ 150 million
Debt issued 150 million
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Remaining available financing authority $ - million
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Current financing authority $ 150 million
Additional authority requested 300 million
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Authority if request approved $ 450 million
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Remaining available financing authority
if request approved $ 300 million
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