[Federal Register Volume 68, Number 232 (Wednesday, December 3, 2003)]
[Notices]
[Pages 67706-67707]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-30054]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 35-27770]


Filings Under the Public Utility Holding Company Act of 1935, as 
Amended (``Act'')

November 26, 2003.
    Notice is hereby given that the following filing(s) has/have been 
made with the Commission pursuant to provisions of the Act and rules 
promulgated under the Act. All interested persons are referred to the 
application(s) and/or declaration(s) for complete statements of the 
proposed transaction(s) summarized below. The application(s) and/or 
declaration(s) and any amendment(s) is/are available for public 
inspection through the Commission's Branch of Public Reference.
    Interested persons wishing to comment or request a hearing on the 
application(s) and/or declaration(s) should submit their views in 
writing by December 22, 2003, to the Secretary, Securities and Exchange 
Commission, Washington, DC 20549-0609, and serve a copy on the relevant 
applicant(s) and/or declarant(s) at the address(es) specified below. 
Proof of service (by affidavit or, in the case of an attorney at law, 
by certificate) should be filed with the request. Any request for 
hearing should identify specifically the issues of facts or law that 
are disputed. A person who so requests will be notified of any hearing, 
if ordered, and will receive a copy of any notice or order issued in 
the matter. After December 22, 2003, the application(s) and/or 
declaration(s), as filed or as amended, may be granted and/or permitted 
to become effective.

SCANA Corporation, et al. (70-9533)

    SCANA Corporation (``SCANA''), a registered public-utility holding 
company under the Act, its three public-utility subsidiaries, South 
Carolina Electric & Gas Company (``SCE&G''), South Carolina Generating 
Company, Inc. (``GENCO'') and Public Service Company of North Carolina, 
Incorporated (``PSNC'') and its nonutility subsidiaries, South Carolina 
Fuel Company, Inc. (``SC Fuel''), South Carolina Pipeline Corporation 
(``SCPC''), SCG Pipeline, Inc., SCANA Energy Marketing, Inc. (``SCANA 
Marketing''), SCANA Energy Trading, LLC, SCANA Public Service Company, 
LLC, SCANA Communications, Inc., an exempt telecommunications company 
under section 34 of the Act, Servicecare, Inc. (``ServiceCare''), 
Primesouth, Inc., Palmark, Inc., SCANA Resources, Inc., SCANA 
Development Corporation, SCANA Petroleum Resources, Inc., SCANA 
Services, Inc. (``SCANA Services''), PSNC Blue Ridge Corporation, PSNC 
Cardinal Pipeline Company, LLC, and Clean Energy Enterprises Inc. 
(collectively ``Applicants''), all located at 1426 Main Street, 
Columbia, South Carolina 29201, have filed a post-effective amendment 
to their application-declaration (``Application'') under sections 12(b) 
and (c) of the Act and rules 45, 46 and 54.

[[Page 67707]]

    SCANA and PSNC now seek authorization for PSNC to pay dividends out 
of capital or unearned surplus before taking into consideration any 
impairment of goodwill recognized as a result of the merger between the 
companies (``Merger''),\1\ in addition to previous authorizations in 
prior financing orders (``Prior Orders''),\2\ which permitted PSNC to 
pay dividends out of additional paid-in-capital to the amount of its 
aggregate retained earnings immediately prior to the Merger and out of 
earnings before the amortization of goodwill.
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    \1\ By order dated February 9, 2000 (the ``Merger Order''), the 
Commission authorized SCANA, a South Carolina corporation, to 
acquire all of the issued and outstanding common stock of PSNC. See 
Holding Co. Act Release No. 27133.
    \2\ See Holding Co. Act Release Nos. 27135 and 27137 (Feb. 14, 
2000). In Holding Co. Act Release Nos. 27341 and 27476 (Jan. 31, and 
Dec. 19, 2001, respectively) the Commission issued supplemental 
orders increasing various financing limitations throughout the 
authorization period.
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    On February 9, 2000, in the Merger Order, the Commission authorized 
SCANA to acquire PSNC. SCANA registered as a holding company under the 
Act on February 11, 2000. SCANA now owns directly three public-utility 
companies, PSNC, SCE&G (which generates, transmits, distributes and 
sells electricity and purchases and sells natural gas in South 
Carolina) and GENCO (which owns and operates a 580 MW generating 
facility in Goose Creek, South Carolina and sells all of the power 
generated by the facility to SCE&G).
    In the Prior Orders,\3\ the Commission authorized SCANA, the three 
utility subsidiaries and the nonutility subsidiaries to engage, subject 
to certain limitations, in certain financing and related activities. 
Authorization for these financing related activities under the Prior 
Orders expired February 11, 2003.\4\ PSNC's authorization, however, to 
pay dividends out of capital or unearned surplus was not subject to 
this expiration date.
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    \3\ See supra note 2.
    \4\ New financing authorization was granted in Holding Co. Act 
Release No. 27649 (Feb. 12, 2003) (the ``Current Financing Order'').
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    PSNC was authorized to pay dividends out of the additional paid-in-
capital account up to the amount of its aggregate retained earnings 
immediately prior to the Merger and out of earnings before the 
amortization of the goodwill arising from the Merger.\5\ The 
authorization was granted to take into consideration (1) the 
application of the purchase method of accounting to the Merger that 
caused PSNC's retained earnings, from before the Merger, to be 
recharacterized as additional paid-in-capital and (2) the substantial 
level of goodwill resulting from the Merger, which was to be ``pushed-
down'' to PSNC and reflected as additional paid-in-capital after the 
Merger (effectively leaving PSNC with no retained earnings, the 
traditional source of dividend payments, but a balance sheet showing a 
significant equity level).
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    \5\ The only intangible in the Merger was goodwill.
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    In connection with the Merger, SCANA obtained Commission approval 
for PSNC to pay dividends (1) out of the additional paid-in-capital 
account up to the amount of its aggregate retained earnings immediately 
prior to the Merger and (2) out of earnings before the amortization of 
the goodwill arising from the Merger.\6\
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    \6\ See the Prior Orders, supra note 2.
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    In 2001, after the Merger in 2000, Statement of Financial 
Accounting Standard (``SFAS'') 142 (Goodwill and Other Intangible 
Assets) was issued. SFAS 142 eliminated the previously permitted 
amortization of goodwill and provides for, at least, an annual 
assessment to determine whether goodwill amounts are impaired. If the 
annual analysis determines that goodwill (or other intangibles) is 
impaired, the company must take an impairment charge in that year. 
SCANA did such an analysis and, as of January 1, 2002, PSNC was 
required to take an impairment charge of $230 million against the value 
of its goodwill. For the years 2000 and 2001, PSNC amortized goodwill, 
as previously authorized.
    Applicants now request that PSNC be authorized to pay dividends out 
of earnings before any deductions resulting from any impairment of 
either goodwill recognized as a result of the Merger. SCANA asserts 
that, based on anticipated earnings and dividend levels, as well as its 
estimated debt, PSNC will not have common equity below 30% over the 
next several years. Moreover, SCANA states that, through control of 
debt and dividend levels, PSNC's common equity can be maintained at a 
30% level, at least (even if PSNC were to incur additional goodwill 
impairment charges). In no case will dividends be paid if the equity of 
PSNC, as a percentage of total capital, is below 30% on a consolidated 
basis.

    For the Commission, by the Division of Investment Management, 
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 03-30054 Filed 12-2-03; 8:45 am]
BILLING CODE 8010-01-P