SCANA Corporation - Investor Presentation · SCANA Corporation | Investor Presentation November 2017. November 2017 2 Safe Harbor Statement/Regulation G Information Statements included

1November 2017 1

SCANA Corporation| Investor Presentation

November 2017

2November 2017 2

Safe Harbor Statement/Regulation G Information

Statements included in this press release which are not statements of historical fact are intended to be, and are hereby identified as, “forward-looking statements” for purposes of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include, but are not limited to, statements concerning key earnings drivers, customer growth, environmental regulations and expenditures, leverage ratio, projections for pension fund contributions, financing activities, access to sources of capital, impacts of the adoption of new accounting rules and estimated capital and other expenditures. In some cases, forward-looking statements can be identified by terminology such as “may,” “will,” “could,” “should,” “expects,” “forecasts,” “plans,” “anticipates,” “believes,” “estimates,” “projects,” “predicts,” “potential” or “continue” or the negative of these terms or other similar terminology. Readers are cautioned that any such forward-looking statements are not guarantees of future performance and involve a number of risks and uncertainties, and that actual results could differ materially from those indicated by such forward-looking statements. Important factors that could cause actual results to differ materially from those indicated by such forward-looking statements include, but are not limited to, the following: (1) uncertainties relating to the bankruptcy filing by WEC and WECTEC, including the effect of the anticipated rejection of the EPC Contract and the determination to cease construction of the New Units; (2) the ability of SCANA and its subsidiaries (the Company) to recover through rates the costs expended on the New Units, and a reasonable return on those costs, under the abandonment provisions of the BLRA or through a general rate case or other regulatory means; (3) changes in tax laws and realization of tax benefits and credits, and the ability or inability to realize credits and deductions, particularly in light of the abandonment of construction of the New Units; (4) the information is of a preliminary nature and may be subject to further and/or continuing review and adjustment; (5) legislative and regulatory actions, particularly changes related to electric and gas services, rate regulation, regulations governing electric grid reliability and pipeline integrity, environmental regulations including any imposition of fees or taxes on carbon emitting generating facilities, the BLRA, and any actions affecting the abandonment of the New Units; (6) current and future litigation, including particularly litigation or government investigations involving the construction or abandonment of the New Units; (7) the results of short- and long-term financing efforts, including prospects for obtaining access to capital markets and other sources of liquidity, and the effect of rating agency actions on the Company’s cost of and access to capital and sources of liquidity; (8) the ability of suppliers, both domestic and international, to timely provide the labor, secure processes, components, parts, tools, equipment and other supplies needed which may be highly specialized or in short supply, at agreed upon quality and prices, for our construction program, operations and maintenance; (9) the results of efforts to ensure the physical and cyber security of key assets and processes; (10) changes in the economy, especially in areas served by subsidiaries of SCANA; (11) the impact of competition from other energy suppliers, including competition from alternate fuels in industrial markets; (12) the impact of conservation and demand side management efforts and/or technological advances on customer usage; (13) the loss of electricity sales to distributed generation, such as solar photovoltaic systems or energy storage systems; (14) growth opportunities for SCANA’s regulated and other subsidiaries; (15) the effects of weather, especially in areas where the generation and transmission facilities of SCANA and its subsidiaries are located and in areas served by SCANA’s subsidiaries; (16) changes in SCANA’s or its subsidiaries’ accounting rules and accounting policies; (17) payment and performance by counterparties and customers as contracted and when due; (18) the results of efforts to license, site, construct and finance facilities, and to receive related rate recovery, for electric generation and transmission; (19) the results of efforts to operate the Company's electric and gas systems and assets in accordance with acceptable performance standards, including the impact of additional distributed generation; (20) the availability of fuels such as coal, natural gas and enriched uranium used to produce electricity; the availability of purchased power and natural gas for distribution; the level and volatility of future market prices for such fuels and purchased power; and the ability to recover the costs for such fuels and purchased power; (21) the availability of skilled, licensed and experienced human resources to properly manage, operate, and grow the Company’s businesses; (22) labor disputes; (23) performance of SCANA’s pension plan assets and the effect(s) of associated discount rates; (24) inflation or deflation; (25) changes in interest rates; (26) compliance with regulations; (27) natural disasters, man-made mishaps and acts of terrorism that directly affect our operations or the regulations governing them; and (28) the other risks and uncertainties described from time to time in the reports filed by SCANA or SCE&G with the SEC.

SCANA and SCE&G disclaim any obligation to update any forward-looking statements.

Capitalized terms not otherwise defined herein have the meanings as set forth in the Company’s most recent periodic report filed with the Securities and Exchange Commission.

During this presentation, certain non-GAAP measures (as defined by SEC Regulation G) may be disclosed. A reconciliation of those measures to the most directly comparable GAAP measures can be found in the appendix of this presentation or on our website at www.scana.com in the Investors section under Webcasts & Presentations.

3November 2017 33

NND Abandonment Process Update

Historical Events:

• 3/29/2017 - Westinghouse filed for bankruptcy (will not honor Fixed Price Contract)

• 7/28/2017 - Settlement reached on Toshiba Parental Guaranty

• 7/31/2017 - Santee Cooper exits the project, SCE&G must abandon

• 8/15/2017 - SCE&G withdraws abandonment petition from SCPSC to accommodate legislative review

• 8/22/2017 - SCANA attends SC Senate VC Summer Nuclear Project Review Committee hearing

• 9/15/2017 - SCANA attends SC House Utility Ratepayer Protection Committee hearing

• 9/18/2017 - SCANA attends SC Senate VC Summer Nuclear Project Review Committee hearing

• 9/26/2017 - ORS files petition with SCPSC to suspend all revised rates collections

• 9/27/2017 - SCANA monetizes Toshiba Guaranty payments (92 cents on the dollar)

• 9/28/2017 - SCE&G files a motion to dismiss the ORS petition with the SCPSC

• 9/28/2017 - SCPSC defers action on ORS request for rate suspension

• 10/18/2017 - ORS files motion to amend its petition to address how SCE&G will flow the Toshiba Guaranty proceeds to customers

South Carolina Public Service Commission Hearing Schedule:

• 10/31/2017 - SCE&G, and any party supporting SCE&G, may file an initial brief in support of SCE&G’s motion to dismiss

• 11/21/2017 - ORS, and any party supporting ORS, may file a responsive brief to SCE&G’s brief

• 12/7/2017 - SCE&G, and any party supporting SCE&G, may file a reply to ORS’s responsive brief

• 12/12/2017 - Oral argument of the briefs before the SCPSC

4November 2017 44

Toshiba Guaranty

• Settlement reached on July 27, 2017 for Toshiba Guaranty:• SCE&G to receive $1.192 billion ($2.168 billion for 100%)• Payable over five years• In full satisfaction of its guaranty of obligations of Westinghouse under the EPC contract

• On September 27, 2017, SCE&G monetized the amount of the guaranty to be paid after the initial payment from Toshiba of $82.5 million ($150 million for 100%):• SCE&G received $1.016 billion ($1.847 billion for 100%)

SCE&G’s Value of Toshiba Guaranty $ 1,192

SCE&G Amounts Received:Monetization (9/27) $ 1,016Payment from Toshiba (10/2) 82Total $ 1,098

SCE&G’s Percentage of Toshiba Guaranty Received 92%

($ in millions)

5November 2017 55

Estimated Impairment Charge

New Nuclear spend as of 9/30/2017 $ 4,730Amount reflected in BLRA Revised Rates (3,510)Amount not in BLRA Revised Rates $ 1,220

Toshiba Settlement, net of estimated project liens and fees $ 1,010

Estimated Impairment Charge $ 210Taxes 78Estimated Impairment Charge, net of taxes $ 132

Note: All amounts exclude transmission costs

($ in millions)

6November 2017 66

2017 GAAP-Adjusted Weather-Normalized Earnings Guidance

$4.25

$4.35

2017 Target

$4.15

GAAP-Adjusted Weather-Normalized Earnings Guidance excludes:

• Impacts from abnormal weather

• Impairment loss representing the estimated potential disallowance associated with the new nuclear project recorded under applicable accounting guidance

7November 2017 77

CompanyRegulatory Earned ROE

Regulatory Allowed ROE

Regulatory SCE&G Electric (Non NND)(1) 8.39% 10.25%

DSM Revenues, net of Expenses 0.58%

Adjusted SCE&G Electric (Non NND)(2) 8.97%

SCE&G Gas(3) 8.84% 10.25%

PSNC Energy(4) 11.61% 9.70%

NND = New Nuclear Development(1) The Regulatory SCE&G Electric (Non NND) ROE is considered a GAAP measure.(2) The Adjusted SCE&G Electric (Non NND) ROE is considered a Non-GAAP measure.(3) For the twelve months ended 06/30/2017. (4) Amounts represent per book returns and rate base and may not reflect NCUC’s determinations

of rate base, capitalization and/or ROE.

Retail Returns

Twelve Months Ended 9/30/2017

8November 2017 88

Service Territory:• 364,000 customers • 22,600 Square Miles • 35 franchised counties

Asset Base: • 453 miles of transmission pipeline• 9192 miles distribution main• 2 LNG facilities• No cast iron main

SCE&G

Asset Base: • 546 miles of transmission pipeline• 11,322 miles distribution main• 1 LNG facility• No cast iron distribution main

Service Territory: • 555,000 customers • 12,000 square miles• 28 franchised counties• 96 cities

PSNC Energy

Gas Distribution Overview

9November 2017 99

Safety

− Top awards in safety in both American Gas and Southern Gas Association rankings for SCE&G and PSNC

Customer Service- 2016 Utility Customer Champion1

- 2017 Most Trusted Brand Champion1

Pipeline Safety

− Strong compliance record

Gas Operational Highlights

1 Awarded by Market Strategies, based on their research survey process, to SCE&G and PSNC.

10November 2017 1010

Estimated CAPEX

• Renewed focus on growing regulated gas businesses in North and South Carolina

• PSNC:• New pipeline construction for transmission and distribution• Customer growth and conversions• Pipeline integrity

• SCE&G – Gas:• New distribution growth• Customer growth and conversions• Pipeline integrity

• Updates to CAPEX and financing plan will be provided once NND abandonment is resolved.

2017E 2018E 2019E Total($ in Millions) SCE&G - Gas 74 100 106 280 PSNC Energy 332 244 192 768Total 406 344 298 1,048


GAS CAPEX Investments

11November 2017


CNG & NGVs

− Growing demand and increased supply

Increased new home construction

− New services added during 2016− Up 7.7% for PSNC − Up 6.2% for SCE&G

Growing interest in firm service for large users

− Interest driven by electric power generators and other large industrial producers

Continuing Trends for Natural Gas


Economic Trends

Economic announcements in 2017:• South Carolina Territory:

– Approximately $680 million investment – Approximately 5,700 projected jobs

• North Carolina Territory: – Approximately $288 million investment – Approximately 4,600 projected jobs

September 2017 September 2016 Variance Change

Labor Force 2,324,223 2,297,920 26,303 1.1%

Employed 2,232,795 2,185,902 46,893 2.1%

Unemployed 91,428 112,018 (20,590) (18.4)%

Unemployment Rate 3.9% 4.9% (1.0)%

SC Employment Data


Economic Trends

According to the United Van Lines’ 40th Annual National Movers Study:

• South Carolina finished in the top 5 and North Carolina in the top 10 for inbound domestic moving for the 5th consecutive year!

• Approximately 40% of the inbound moves to South Carolina were job related

November 2017


Customer Growth

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

SCE&G Electric SCE&G Gas PSNC

1.5% 1.6% 1.6% 1.6%1.3%

2.9% 2.9% 2.8% 2.9% 2.9%2.8% 2.9%2.6% 2.6% 2.6%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017SCE&G Electric SCE&G Gas PSNC Energy


Electric Sales

-3%

-2%

-1%

0%

1%

2%

3%

4%

2013 2014 2015 2016 2017

Rolling 12 Month Weather Normalized Sales

Total Retail Residential

Kilowatt-Hour Sales(In Millions of KWH)

Twelve Months Ended September 30,

2017 2016 Change

Weather Adjusted

Change

Sales:

Residential 7,626 8,003 (4.7)% 3.0%

Commercial 7,307 7,493 (2.5)% (0.3)%

Industrial 6,181 6,235 (0.9)% (0.6)%

Other 583 599 (2.8)% (0.7)%

Total Retail Sales 21,697 22,330 (2.8)% 0.8%


Electric Sales Forecast

Average per year over next 15 years

Baseline Sales 1.5%

Energy Efficiency/DSM (0.3)%

Net Territorial Sales 1.2%

Source: 2017 Integrated Resource Plan

Integrated Resource Plan

• Filed annually with the South Carolina Public Service Commission

• 2017 IRP filed February 28, 2017

• Outlines the plan to retire and/or re-tool six coal-fired units

• Retired Canadys Units 1, 2, and 3

• Converted Urquhart Unit 3 to be fired with natural gas and dismantled coal handling facilities at this unit

• Capacity (250 MWs) of the remaining two coal-fired units, McMeekin Units 1 and 2, is required to maintain system reliability until new generation is completed. Under MATS, these could not run on coal after April 15, 2016, so they have been and will continue to be fired with natural gas and any additional capacity needs will be purchased. SCE&G plans to monitor the changing natural gas economics and make a retirement decision at the appropriate time.


Solar Investments

Saluda County, SC

• As a part of Distributed Energy Resource (DER) Program and in response to SCE&G customer and other South Carolina stakeholders, SCE&G plans to add approximately 100 MWs of additional renewable energy to its system by 2021.

• In September of 2017, SCE&G was recognized by the South Carolina Clean Energy Business Alliance for leadership and success in developing solar energy programs.

• SCE&G is currently engaged in State Energy Planning currently with discussions around resource planning, renewables, energy efficiency, and alternative fuel transportation.

• Solar Projects:• SCE&G has South Carolina’s largest solar farm online with 10.2 MW in Calhoun County in August of 2017• Over 50 MW of customer-scale systems have been interconnected through September 2017. We have fully met

Act 236’s end-of-2020 goal.• Nine solar farms have come online since December 2015, totaling 55.2 MW.

18November 2017


Solar Investments

Completed Solar Projects• Leeds Avenue• Saluda 1, Saluda 2• Ridgeland/Jasper • Barnwell 2• Cameron 2• Odyssey• St Matthews• Hampton

In Progress• 6 currently

under construction

• Completion expected before year end

Cayce, SC

Charleston, SC


15%

30%44%

11%

2005

16%

38%

34%

12%

2016

17%

47%

26%

10%

2024

Renewables/HydroCoalGas Nuclear

6%8%

68%

18%

2005

Capacity

Dispatch

Generation Mix by Dispatch and Capacity

5%

34%

36%

25%

2016

8%

47%26%

19%

2024

Note: Information from the 2017 IRP updated for the abandonment of the new nuclear project.


SCE&G CO2 Emissions

10

11

12

13

14

15

16

17

18

19

20

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

M T

on

s

SCE&G Electric CO2

Actual Projected

Note: Information from the 2017 IRP updated for the abandonment of the new nuclear project.


Electric System Reliability (SAIDI)

97 9791

127

195184

50

100

150

200

2014 2015 2016

Min

ute

s

SCE&G SC Utility Peers

“Hurricane Matthew and Hurricane Irma impacted our entire service territory, knocking out power to approximately 290,000 customers and 150,000 customers, respectively. Due to our daily commitment to maintaining reliable power delivery systems, SCE&G was able to restore power after both events within 8 days for Matthew and 5 days for Irma.“

- Keller Kissam, President of SCE&G Retail Operations

System Average Interruption Duration Index (SAIDI) represents the average number of minutes that a customer is without power on the electrical system.


• Through SCANA’s new Dollars for Doers program, SCANA employees volunteered approximately 2600 hours to local charities.

• During the 2015-2016 school year, more than 30 employees taught Junior Achievement programs in 40 classrooms, reaching more than 820 students.

• Employees donated more than 8,000 pounds of food to local food pantries.

• SCANA supports programs like Senior Resources’ Meals on Wheels through employee volunteers and financial donations.

• Employee volunteers helped re-light the Morris Island Lighthouse for the first time in over a decade.

Serving our Neighbors

24November 2017 24

NND Abdonment Process Update 3

Toshiba Guaranty 4

Estimated Impairment Charge 5

2017 GAAP-Adjusted Weather-Normalized Earnings Per Share 6

Retail Returns 7

Gas Distribution Overview 8

Gas Operational Highlights 9

Estimated CAPEX 10

Gas CAPEX Investments 11

Continuing Trends for Natural Gas 12

Economic Trends 13-14

Customer Growth 15

Electric Sales 16

Integrated Resource Plan 17

Solar Investments 18-19

Generation Mix by Dispatch & Capacity 20

SCE&G CO2 Emissions 21

Electric System Reliability (SAIDI) 22

Serving Our Neighbors 23

Index

25November 2017 25

26November 2017 26

Appendix


GAAP-Adjusted Weather-Normalized EPS Guidance

Due to the significance of weather to SCE&G’s earnings and its unpredictability, SCANA is not able to provide 2017 GAAP earnings guidance.

For 2017, SCANA estimates that GAAP-Adjusted Weather-Normalized earnings per share will be $4.15 to $4.35, with an internal target of $4.25 per share. This measure excludes the impact of abnormal weather and the impairment loss associated with the new nuclear project.

Documents

SCANA Corporation - Investor Presentation · SCANA Corporation | Investor Presentation November 2017. November 2017 2 Safe Harbor Statement/Regulation G Information Statements included