Yahoo Finance SCANA's Subsidiary Files for 5.3% Cut in Natural Gas Rates
SCANA Corporation’s SCG principal subsidiary, South Carolina Electric & Gas Company (SCE&G), has filed with the Public Service Commission of South Carolina and the South Carolina Office of Regulatory Staff for an overall cut in retail natural gas base rates.
The company has requested the authority for a reduction of $22.6 million or 5.29% of the base rates. The lower corporate tax rate under tax reform and the company’s operating results are likely to lower the rate.
The appeal was made by SCE&G under the terms of the Natural Gas Rate Stabilization Act, a South Carolina law. The law intends to develop and maintain natural gas service infrastructure to meet the requirements of customers.
If accepted, the rate decline will be effective with the first billing cycle of November. Subsequently, bills of residential natural gas customers are expected to fall about 7.4% or $4.09 per month, based on average annual usage.
Based in South Carolina, SCANA is involved in generation, transmission, distribution and sale of electricity to retail as well as wholesale customers. The company is well positioned in a positive regulatory environment, courtesy of a low risk business with outstanding customer growth and operational efficiency. These in turn are favorable for stable cash flow generation and growth.
Another positive factor for shareholders is SCANA’s utility business mix. The company’s service areas enjoy supportive legislative and regulatory environments. SCANA is a stable, relatively strong and regulated integrated electric utility, supported by favorable regional demographics and electric utility rate. The company will benefit from considerable upside potential since the service industry revived faster from the recession.
Price Performance
In the past three months, SCANA’s shares have lost 4.6% compared with the industry’s 1.7% decline.
Zacks Rank & Other Key Picks
SCANA currently carries a Zacks Rank #2 (Buy).
A few other top-ranked players in the same sector are Occidental Petroleum Corporation OXY,China Petroleum and Chemical Corporation SNP and CVR Refining, LP CVRR. These stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Occidental Petroleum is an international oil and gas exploration and production company. It pulled off an average positive earnings surprise of 30.2% in the last four quarters.
Sinopec is one of the largest petroleum and petrochemical companies in Asia. The company delivered an average positive earnings surprise of 492.8% in the last four quarters.
Sugar Land, TX-based CVR Refining is an independent downstream energy partnership with refining and associated logistics properties in the Midcontinent United States. The company delivered an average positive earnings surprise of 7.05% in the last four quarters.
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