SCANA Corporation (SCG - Free Report) recently announced that its principal subsidiary, South Carolina Electric & Gas Company (SCE&G), has received an Order issued by the Dispute Resolution Board (“DRB”) for itself and as agent for the South Carolina Public Service Authority (“Santee Cooper” or “SCPSA”), and Westinghouse Electric Company (“WEC”).
Per the Order, the parties are to carry on work for the development of a construction milestone payment schedule. They are advised to use the milestone schedule initially prepared by the parties as well as the approach to milestone valuation that SCE&G and the SCPSA presented during the DRB hearing.
During this period, SCE&G and the SCPSA are required to make payments of $133 million and $136.5 million for the months of October and November this year, respectively, to Westinghouse. This part of the Order is based on the DRB’s findings regarding the estimated value of the work anticipated to be accomplished during these months.
If the parties do not reach a full and final resolution by Nov 3, the DRB shall conduct a further hearing and will make its decision by Nov 30, 2016.
SCANA’s operations include generation, transmission, distribution, and sale of electricity to retail and wholesale customers in South Carolina.
The company is well positioned in a positive regulatory environment. It has 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 for shareholders is SCANA’s utility business mix. The majority of the company’s total earnings come from the regulated electricity and natural gas utilities business.
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. Considerable upside potential exists for the company as the service industry recovers from recession faster than others.
Scana currently carries a Zacks Rank #3 (Hold). Some better-ranked players from the energy sector include Chevron Corporation (CVX - Free Report) , NGL Energy Partners LP (NGL - Free Report) and Evolution Petroleum Corp. (EPM - Free Report) . All these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Chevron posted a positive earnings surprise of 54.84% in the preceding quarter.
NGL Energy Partners has a mixed earnings surprise history. The partnership posted positive earnings surprise in two of the last four quarters. It reported a positive earnings surprise of 1480.0% in the preceding quarter.
In the last reported quarter, Evolution Petroleum Corp. delivered a positive earnings surprise of 350.00%. Coming to the earnings surprise history, the company beat estimates in two of the last four quarters.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>