SCANA Earnings Call Nuggets: IRP Filing, Georgia Retail

On Thursday, SCANA Corp (NYSE:SCG) reported its first quarter earnings and discussed the following topics in its earnings conference call. Here’s what the C-suite shared.

IRP Filing

Travis Miller – Morningstar: Can you give us a sense for some of the key issues you’ll be addressing in the IRP when you file later this month? Obviously, the nuclear plant will have a key impact, but anything else, gas prices, power prices, stuff like that impact your plans?

A Closer Look: SCANA Earnings Cheat Sheet>>

Jimmy Addison – SVP and CFO: The IRP is intended to outline where we think the system is going and growing and what our plants will do to help meet that need. It also will forecast the demand side management impacts on load. So, there will not be a significant discussion about the price of natural gas. Rather, what you’ll see is charge a lot when nuclear plants come on. It will also discuss some level of plant retirement, as it has done for the last couple of IRPs.

Travis Miller – Morningstar: Has anything changed materially since your last one that was suggest needing either new generation or needing more retirements, leading to more retirements?

Jimmy Addison – SVP and CFO: First off, the IRP has not been published yet. I think the scheduled date to publish is at the end of this month, so I don’t want to get out in front of the IRP with any changes.

Georgia Retail

Jim von Riesemann – UBS: The question really is – just a modeling question, if you don’t mind. Can you just talk about your trailing 12 month I’m coming up at 292 and what some of the drivers are to get to your 317 internal number for the year?

Stephen A. Byrne – COO and President, Generation and Transmission South Carolina Electric & Gas Company; SVP, SCANA: I have not looked Jim at the trailing 12 months through Q1 but as far as the 317 we issued that the original range back I think at the third quarter call back in October and then as we refined our plan for this year we reaffirmed that, and are reaffirming it today in spite of the $0.06 of weather versus normal that we lost in Q1 in Georgia. I think our keys to achieving that are to continue our aggressive cost control that we’ve had in place now for several years. We see the possibility of a small rate stabilization increase this fall, that’s not final yet, but that looks like there is some possibility of that, that would impact SCE&G gas business. You might remember our original assumptions we didn’t have anything in the plan for that. It looks like we may be able to likely differ the first mortgage bond financing that we have — we had scheduled for in the middle or so of the second quarter. We may be able to push that out a few more months just because of the original delay from the NRC. We also had planned to do the original issuance that we did in January, a little earlier in the month, that occurred later in the month. And also the rates on those various financings that we had in our plan are higher than we realized in January and higher than we project now on the one later this year. So, those are some of the keys to how we think we’ll make up what we realized there as a loss in the first quarter in the weather margins.

Jim von Riesemann – UBS: Switching to Georgia retail for just a second can you just talk about some of the experiences you’re seeing with your customers there, I don’t know how much of its weather, how much of it has to be the change in the gas prices et cetera and what the outlook is there?

Stephen A. Byrne – COO and President, Generation and Transmission South Carolina Electric & Gas Company; SVP, SCANA: Well, we really don’t see the outlook change from what we gathered earlier. We really think it’s a $0.22, $0.24 kind of business on an annual basis, on a weather-normal basis. Of course we had the most unusual weather here that we’ve had in probably in over 100 years this past quarter. So, we don’t see a lot of difference there. Now for the market as a whole and for our business, more cost to customers are on the fixed rate plans as opposed to the variable plans and those just have smaller margins with them.

Jim von Riesemann – UBS: Then I guess the last question is just a real more holistic question. With respect to the news build at summer now, now that you have the COL and you can actually really turn pour concrete and turn the spade et cetera, what’s keeping you up at night there?

Stephen A. Byrne – COO and President, Generation and Transmission South Carolina Electric & Gas Company; SVP, SCANA: Things at this site actually are going fairly well. Obviously, it impacts the construction, for maybe things like weather we’ve had good weather so far, so as long as we get good weather we’ll keep moving. We’ve had good interactions with Nuclear Regulatory Commission so far. Getting a license was a big deal for us. But as I think you found out in the Southern disclosures in their last call, there are some issues that are going come up that are regulatory in nature from now to the end of this project and working our ways through those is going to be very important to us. So, far, I’m pleased to say that the Nuclear Regulatory Commission is living up to its obligations so we need to do the same thing. You’ve seen an issue with reinforcing bar or rebar that’s going in the — for the base map at Southern’s. Obviously, we will be coming under that same issue, we are just a little behind them so we have perhaps little bit more time to get to resolution than they did so it is little more urgent for them. But those kinds of things are going to come up a lot of more normal course of business things, this is a new license process so when you got things in the certified design that perhaps don’t make a 100% sense to implement in the field we got to be able to work our way through those.

Jim von Riesemann – UBS: So, I guess, my takeaway is that it sounds like it still remains just a big old construction project, I don’t hear you say anything negatively about supply chain or anything so it is just status-quo otherwise.

Stephen A. Byrne – COO and President, Generation and Transmission South Carolina Electric & Gas Company; SVP, SCANA: So far we have been very pleased with the supply chain and we obviously had some concerns with the – little over year ago with the earthquake and Tsunami in Japan as some of our materials and components are coming from Japan but those deliveries have been coming. So, we haven’t experienced any supply chain issues from Japan fortunately.