Some utilities, at least, are trying to get it right (It can be done, after all).
Scana aims to sell less power
Company says it will continue to help customers conserve energy
By Kyle Stock
The Post and Courier
Friday, April 25, 2008
COLUMBIA — Scana Corp., the parent company of South Carolina Electric & Gas, dyed itself a deeper shade of green at its annual shareholders meeting Thursday.
The Columbia-based utility, following the lead of others in its industry, said it will continue to help its customers buy less of its power.
"Permanent irreversible reductions in electric demand are rational, save valuable resources and are clearly the right thing to do," Scana Chief Executive Officer William Timmerman told about 100 shareholders, directors and executives Thursday. "Conservation is very much on everyone's minds today."
The company announced the appointment of a new executive in charge of conservation, which it internally refers to as "demand-side management." And it is considering some aggressive "green" initiatives, including replacing its fleet of cars and trucks with hybrid vehicles, converting one of its coal plants to burn natural gas and using ponds of algae to gobble up carbon dioxide emissions.
Timmerman also said the utility has decided not to build any new coal-fired plants because of the surging price of the fuel and its relatively high emissions, which soon might be subject to a form of federal tax.
"We've just continued to push the envelope away from coal," Timmerman said. "We really did not want to create more issues for our customers by building a coal-fired plant."
Timmerman reaffirmed the company's plans to build two nuclear reactors next to a plant it co-owns with Santee Cooper near Jenkinsville. If all goes as planned, the new units would crank up in 2016 and 2019, boosting Scana generation capacity by 20 percent.
"The more we did the analysis, the more we became convinced," Timmerman said. "Nuclear became the clear choice."
For now, however, Scana has power to spare and is selling more of it than ever. The utility reported a 27 percent increase in first-quarter income Thursday, as factories and new customers sucked more electricity from its grid, despite a slowing economy and a dismal real estate market.
Scana posted income of $109 million, or 94 cents per share, in the first three months of the year, compared with $86 million, or 73 cents per share, in the first quarter of 2007. Revenue climbed 12 percent from $1.36 billion to $1.53 billion. The results handily beat analyst expectations of a profit of 76 cents per share.
"It was a solid quarter," said Chief Financial Officer Jimmy Addison. "It looks really impressive compared to a year ago, which was a miserable quarter."
Thanks to new customers and robust industrial demand, the utility sold 4.5 percent more electricity in the first quarter.
In the past year, Scana signed on 2.1 percent more electricity customers, boosting its total to 643,000 homes and businesses. Its natural gas users swelled 1.4 percent to 1.3 million.
The company reaffirmed its expectation to earn between $2.90 and $3.05 per share this year. "There's nothing out there that indicates that the inward migration to our service territories will slow," Timmerman said.
Scana also increased its annual dividend 4.5 percent to $1.84 per share.
Angie McClam, president of the Association of Scana Corp. Investors, said she was pleased with the earnings announced Thursday. "I'm real proud of Scana stock. It's holding its own," she said. "Apparently, we've got good management."
Scana's stock jumped 72 cents, or 1.9 percent, to $39.55 on the New York Stock Exchange Thursday. The shares began trading this year at $42.07.
Read more about how coal is "off the table" for SCANA/SCE&G over at The State. It makes one wonder, if Santee Cooper wasn't insulated from market forces and regulatory oversight on account of its status as a quasi-state agency (e.g. a socialist entity), would it still be pursuing a coal plant? In a state whose politics run deep with free-market conservative thought, you'd think this question would be troubling to many.