SCANA units in South Carolina plan tax-free deal

By Jim Brumm

WILMINGTON, North Carolina, Sept 24 (Reuters) - SCANA Corp (SCG.N) said two of its subsidiaries in South Carolina are planning to sell $85 million of tax-free debt this fall.

The offering by the U.S. energy group's units will be composed of industrial revenue bonds issued by the South Carolina Jobs-Economic Development body and will be underwritten by BB&T Capital Markets, SCANA spokesman Bryan Hatchell said on Tuesday.

In orders posted last week, the Public Service Commission of South Carolina approved the sale of bonds by Dec. 23 with maximum maturities of 40 years.

Noting the current conditions of the bond market, Hatchell said South Carolina Generating Co. (GENCO) and South Carolina Electric & Gas Co. (SCE&G) will market the bonds this fall with timing depending on market conditions.

According to Public Service Commission orders, GENCO can sell up to $50 million of bonds to help pay for scrubbers being installed at the William Electric Generating Station near Charleston, South Carolina, a 650-megawatt, coal-fired power plant operating since 1973.

The sulfur dioxide removal equipment scheduled to begin operation next year is now expected to cost more than $170 million, according to SCANA's website.

Another $9 million is being spent on a barge-offloading and coal-conveying facility at the plant to allow increased imports of low-sulfur coal from anywhere in the world.

SCE&G, SCANA's utility subsidiary, received permission to sell $35 million of bonds to pay part of the cost of scrubbers being installed at its largest power plant, the 700 megawatt Wateree Electric Generating Station located at Eastover, South Carolina, southeast of the state capitol of Columbia.

The scrubbers were expected to cost $200 million by the time they go into operation next year. Wateree began commercial operation in 1970. (Additional reporting by Michael Connor in Miami; Editing by Leslie Adler)