In early January SCE&G advertised its request to the Public Service Commission for a 9.52% rate increase to help pay for $700 million in federally mandated environmental improvements on SCE&G’s coal– burning power plants. The hue and cry from SCE&G customers came fast and furious. C. Dukes Scott, the executive director of the Office of Regulatory

Staff, was quoted in The

State newspaper saying he had seen “nothing even approaching” the outcry against the rate increase in his 25 years on the job in the industry. The ORG represents SCE&G customers in hearings before the PSC.

In late April the S. C. Supreme Court denied Friends of the Earth’s appeal that objected to SCE&G’s electric power rate collections during the course of construction of two Westinghouse AP 1000 nuclear reactors planned for SCE&G’s Jenkinsville site. SCANA’s pre–completion collections under the Base Load Review Act, essentially an annual rate hike of maybe more than 2% until completion of the second reactor in 2019, effectively heightened compound interest, and the annual rate increases lower overall construction cost by about $1 billion. The two reactors for $9.5 billion total are a joint venture between SCE&G and Santee Cooper.

The favorable decision in late April from the S.C. Supreme Court allowed for a favorable report to SCANA shareholders in early May.

The annual shareholders’ meeting for SCANA, parent of SCE&G, was held on May 6, just three days after the company’s May 3 announcement it was reducing its rate hike request from 9.52% to 4.88% (plus the annual 2% or so under the Base Load Review Act) to be put into effect in three incremental increases through July 2012, lowering SCANA’s projected return on common equity from 11.6% to 10.7%. SCANA also committed to the issuance of a $25 million credit to its residential and small commercial customers for the first year of the increase. Another $48 million SCANA gets from state tax credits will be credited to all customers during the first two years of the rate hike.

Good news gets around, and SCANA has been identified as a “buy” by stock pickers and advisors such as The Wal l

Street Transcript and Forbes Media Company’s

INVESTOPEDIA. Once the two new reactors are under way, projections of the sale of electric power include out–of–state customers such as the people of Florida. Florida has slowed its development of new electric power generation while its population continues to boom, so the demand for electric power continues to rise regardless.

SCANA’s dividend last year yielded more than 5%. The S&P 500 average dividend yield was 1.74%.

On The Motley Fool website, among 160,000 investors competing on the Motley Fool CAPS platform, 92% expected SCANA to outperform the stock market at large in this year’s second quarter.

SCANA’s earnings for the first quarter of 2010 were $127 million, $13 million more than the $114 million in earnings for the same time last year. The first quarter of this year experienced one of the coldest winters in decades. SCANA has proposed a weather normalization mechanism, which defers $25 million of estimated weather–related revenues from the first quarter of 2012. The $25 million of deferred weather– related revenues were identified by SCANA as available for the $25 million credit to its residential and small commercial customers. With the $25 million payback, SCANA also reduced its earnings per share by 13 cents, which then held down its return on common equity.

Meanwhile, the Westinghouse AP 1000 reactor’s altered shield building design is under review and needs approval from the Nuclear Regulatory Commission. Georgia Power, part of Atlanta– based Southern, is also building two Westinghouse AP 1000 reactors, both with the same new shield building design as SCE&G’s.

SCANA’s performance in the first quarter this year exceeded expectations, and the second quarter looks all right, but how did SCANA raise more money after the decision to reduce the rate hike? After all, its rate hike request had to be based on real needs, so a reduction in the rate hike request means the money must be raised elsewhere.

Soon after its annual shareholders’ meeting in early May, SCANA sold more than seven million shares of common stock. Just after the rate hike request reduction, just after peace was achieved with its rate payers, SCANA held its annual shareholders’ meeting on May 6 and glowed in its progress. That progress was publicized, and that progress had a favorable impression on the value of SCANA stock.

In mid–February SCANA stock was worth about $35 a share. But after all the rate request and quarterly report publicity, a share was worth about $40 on Monday, May 10, when SCANA announced the sale of 7, 150,000 shares in a new public offering. SCANA stock at mid–morning Wednesday, June 9, was selling for $35.54.

SCE&G, SCANA’s largest subsidiary by far, has about 689,000 customers throughout central, southern, and southwester portions of South Carolina. The company provides natural gas to about 313,000 customers throughout the state.

If the current reduced electric power rate hike is approved as expected, the monthly bill of a customer using 1,000 kilowatt hours of electricity would increase $3.33, going from $118.14 to $121.47, or more than 12 cents per kwh. In Austin, Texas, the cost for a kilowatt hour of electric power for a small residence averages about 6 cents.

That kind of money attracts attention, as do SCANA’s recent actions. SCANA had to get rid of the bus system under a 1930s law in order to acquire any out–of–state properties or to be acquired by an out– of–state company. SCANA had to bolster the Lake Murray dam and reduce that liability before any larger company would take an interest. SCANA had to get away from Main Street and move into its own campus on the interstate, making a convenient all–in–one Cayce compound roughly equidistant between Charlotte and its new location in Charleston.

SCANA’s done all that.

Charlotte–based Duke Energy has opened a South Carolina headquarters in Columbia, and Duke recently announced its newly created position of president of its South Carolina service region.