SCANA CORP (Form: 10-Q, Received: 11/03/2017 10:38:14)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q



x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2017



Commission	Registrant, State of Incorporation,	I.R.S. Employer
File Number	Address and Telephone Number	Identification No.
1-8809	SCANA Corporation (a South Carolina corporation)	57-0784499
1-3375	South Carolina Electric & Gas Company (a South Carolina corporation)	57-0248695
	100 SCANA Parkway, Cayce, South Carolina 29033
	(803) 217-9000

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. SCANA Corporation Yes x No o South Carolina Electric & Gas Company Yes x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). SCANA Corporation Yes x No o South Carolina Electric & Gas Company Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act.



SCANA Corporation	Large accelerated filer x	Accelerated filer o	Non-accelerated filer o	Smaller reporting company o	Emerging growth company o
South Carolina Electric & Gas Company	Large accelerated filer o	Accelerated filer o	Non-accelerated filer x	Smaller reporting company o	Emerging growth company o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

SCANA Corporation o South Carolina Electric & Gas Company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

SCANA Corporation Yes o No x South Carolina Electric & Gas Company Yes o No x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.



	Description of	Shares Outstanding
Registrant	Common Stock	at October 31, 2017
SCANA Corporation	Without Par Value	142,616,254
South Carolina Electric & Gas Company	Without Par Value	40,296,147 (a)

(a) Held beneficially and of record by SCANA Corporation.

This combined Form 10-Q is separately filed by SCANA Corporation and South Carolina Electric & Gas Company. Information contained herein relating to any individual registrant is filed by such registrant on its own behalf. South Carolina Electric & Gas Company makes no representation as to information relating to SCANA Corporation or its subsidiaries (other than South Carolina Electric & Gas Company and its consolidated affiliates).

South Carolina Electric & Gas Company meets the conditions set forth in General Instruction H(1)(a) and (b) of Form 10-Q and therefore is filing this Form with the reduced disclosure format allowed under General Instruction H(2).

TABLE OF CONTENTS



			Page
Cautionary Statement Regarding Forward-Looking Information			3

Definitions			4

PART I. FINANCIAL INFORMATION
Item 1. Financial Statements			6
	SCANA Corporation		6
		Condensed Consolidated Balance Sheets	6
		Condensed Consolidated Statements of Income	8
		Condensed Consolidated Statements of Comprehensive Income	9
		Condensed Consolidated Statements of Cash Flows	10
		Condensed Consolidated Statements of Changes in Common Equity	11
	South Carolina Electric & Gas Company		12
		Condensed Consolidated Balance Sheets	12
		Condensed Consolidated Statements of Comprehensive Income	14
		Condensed Consolidated Statements of Cash Flows	15
		Condensed Consolidated Statements of Changes in Equity	16
	Notes to Condensed Consolidated Financial Statements		17

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations			44

Item 3. Quantitative and Qualitative Disclosures About Market Risk			54

Item 4. Controls and Procedures			55

PART II. OTHER INFORMATION

Item 1. Legal Proceedings			56

Item 1A. Risk Factors			58

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			69

Item 5. Other Information			69

Item 6. Exhibits			70

Signatures			71

Exhibit Index			72

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

Statements included in this Quarterly Report on Form 10-Q which are not statements of historical fact are intended to be, and are hereby identified as, “forward-looking statements” for purposes of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include, but are not limited to, statements concerning key earnings drivers, customer growth, environmental regulations and expenditures, leverage ratio, projections for pension fund contributions, financing activities, access to sources of capital, impacts of the adoption of new accounting rules and estimated capital and other expenditures. In some cases, forward-looking statements can be identified by terminology such as “may,” “will,” “could,” “should,” “expects,” “forecasts,” “plans,” “anticipates,” “believes,” “estimates,” “projects,” “predicts,” “potential” or “continue” or the negative of these terms or other similar terminology. Readers are cautioned that any such forward-looking statements are not guarantees of future performance and involve a number of risks and uncertainties, and that actual results could differ materially from those indicated by such forward-looking statements. Important factors that could cause actual results to differ materially from those indicated by such forward-looking statements include, but are not limited to, the following:

(1) uncertainties relating to the bankruptcy filing by WEC and WECTEC, including the effect of the anticipated rejection of the EPC Contract and the determination to cease construction of the New Units; (2) the ability of SCANA and its subsidiaries (the Company) to recover through rates the costs expended on the New Units, and a reasonable return on those costs, under the abandonment provisions of the BLRA or through a general rate case or other regulatory means; (3) changes in tax laws and realization of tax benefits and credits, and the ability or inability to realize credits and deductions, particularly in light of the abandonment of construction of the New Units; (4) the information is of a preliminary nature and may be subject to further and/or continuing review and adjustment; (5) legislative and regulatory actions, particularly changes related to electric and gas services, rate regulation, regulations governing electric grid reliability and pipeline integrity, environmental regulations including any imposition of fees or taxes on carbon emitting generating facilities, the BLRA, and any actions affecting the abandonment of the New Units; (6) current and future litigation, including particularly litigation or government investigations or actions involving or arising from the construction or abandonment of the New Units; (7) the results of short- and long-term financing efforts, including prospects for obtaining access to capital markets and other sources of liquidity, and the effect of rating agency actions on the Company’s cost of and access to capital and sources of liquidity; (8) the ability of suppliers, both domestic and international, to timely provide the labor, secure processes, components, parts, tools, equipment and other supplies needed which may be highly specialized or in short supply, at agreed upon quality and prices, for our construction program, operations and maintenance; (9) the results of efforts to ensure the physical and cyber security of key assets and processes; (10) changes in the economy, especially in areas served by subsidiaries of SCANA; (11) the impact of competition from other energy suppliers, including competition from alternate fuels in industrial markets; (12) the impact of conservation and demand side management efforts and/or technological advances on customer usage; (13) the loss of electricity sales to distributed generation, such as solar photovoltaic systems or energy storage systems; (14) growth opportunities for SCANA’s regulated and other subsidiaries; (15) the effects of weather, especially in areas where the generation and transmission facilities of SCANA and its subsidiaries are located and in areas served by SCANA’s subsidiaries; (16) changes in SCANA’s or its subsidiaries’ accounting rules and accounting policies; (17) payment and performance by counterparties and customers as contracted and when due; (18) the results of efforts to license, site, construct and finance facilities, and to receive related rate recovery, for electric generation and transmission; (19) the results of efforts to operate the Company's electric and gas systems and assets in accordance with acceptable performance standards, including the impact of additional distributed generation; (20) the availability of fuels such as coal, natural gas and enriched uranium used to produce electricity; the availability of purchased power and natural gas for distribution; the level and volatility of future market prices for such fuels and purchased power; and the ability to recover the costs for such fuels and purchased power; (21) the availability of skilled, licensed and experienced human resources to properly manage, operate, and grow the Company’s businesses; (22) labor disputes; (23) performance of SCANA’s pension plan assets and the effect(s) of associated discount rates; (24) inflation or deflation; (25) changes in interest rates; (26) compliance with regulations; (27) natural disasters, man-made mishaps and acts of terrorism that directly affect our operations or the regulations governing them; and (28) the other risks and uncertainties described from time to time in the reports filed by SCANA or SCE&G with the SEC.

SCANA and SCE&G disclaim any obligation to update any forward-looking statements.

DEFINITIONS

The following abbreviations used in the text have the meanings set forth below unless the context requires otherwise:



TERM	MEANING
AFC	Allowance for Funds Used During Construction
ANI	American Nuclear Insurers
AOCI	Accumulated Other Comprehensive Income (Loss)
ARO	Asset Retirement Obligation
Abandonment Petition	Petition filed with the SCPSC on August 1, 2017 which included SCE&G's plan of abandonment of the New Units.
Bankruptcy Court	U.S. Bankruptcy Court for the Southern District of New York
BLRA	Base Load Review Act
CAA	Clean Air Act, as amended
CAIR	Clean Air Interstate Rule
CCR	Coal Combustion Residuals
CEO	Chief Executive Officer
CFO	Chief Financial Officer
CFTC	Commodity Futures Trading Commission
Citibank	Citibank, N.A.
CO ₂	Carbon Dioxide
COL	Combined Construction and Operating License
Company	SCANA, together with its consolidated subsidiaries
Consolidated SCE&G	SCE&G and its consolidated affiliates
Consortium	A consortium consisting of WEC and WECTEC
Court of Appeals	United States Court of Appeals for the District of Columbia
CSAPR	Cross-State Air Pollution Rule
CUT	Customer Usage Tracker (decoupling mechanism)
CWA	Clean Water Act
DCGT	Dominion Carolina Gas Transmission LLC
DER	Distributed Energy Resource
DHEC	South Carolina Department of Health and Environmental Control
District Court	United States District Court for the District of South Carolina
Dodd-Frank	Dodd-Frank Wall Street Reform and Consumer Protection Act
DSM Programs	Electric Demand Side Management Programs
ELG Rule	Federal effluent limitation guidelines for steam electric generating units
EMANI	European Mutual Association for Nuclear Insurance
EPA	United States Environmental Protection Agency
EPC Contract	Engineering, Procurement and Construction Agreement dated May 23, 2008, as amended by the October 2015 Amendment
FASB	Financial Accounting Standards Board
FERC	United States Federal Energy Regulatory Commission
Fluor	Fluor Corporation
Fuel Company	South Carolina Fuel Company, Inc.
GAAP	Accounting principles generally accepted in the United States of America
GENCO	South Carolina Generating Company, Inc.
GHG	Greenhouse Gas
GWh	Gigawatt hour
Interim Assessment Agreement	Interim Assessment Agreement dated March 28, 2017, as amended, among SCE&G, Santee Cooper, WEC and WECTEC
IRC	Internal Revenue Code of 1986, as amended
IRS	Internal Revenue Service
Level 1	A fair value measurement using unadjusted quoted prices in active markets for identical assets or liabilities
Level 2	A fair value measurement using observable inputs other than those for Level 1, including quoted prices for similar (not identical) assets or liabilities or inputs that are derived from observable market data by correlation or other means



Level 3	A fair value measurement using unobservable inputs, including situations where there is little, if any, market activity for the asset or liability
LOC	Lines of Credit
MATS	Mercury and Air Toxics Standards
MGP	Manufactured Gas Plant
MMBTU	Million British Thermal Units
MW or MWh	Megawatt or Megawatt-hour
NAAQS	National Ambient Air Quality Standards
NASDAQ	The NASDAQ Stock Market, Inc.
NCUC	North Carolina Utilities Commission
NEIL	Nuclear Electric Insurance Limited
New Units	Nuclear Unit 2 and Unit 3 at Summer Station
NO _X	Nitrogen Oxide
NPDES	National Pollutant Discharge Elimination System
NRC	United States Nuclear Regulatory Commission
NSPS	New Source Performance Standards
NYMEX	New York Mercantile Exchange
OCI	Other Comprehensive Income
October 2015 Amendment	Amendment, dated October 27, 2015, to the EPC Contract
ORS	South Carolina Office of Regulatory Staff
PGA	Purchased Gas Adjustment
PHMSA	United States Pipeline Hazardous Materials Safety Administration
Price-Anderson	Price-Anderson Indemnification Act
PSNC Energy	Public Service Company of North Carolina, Incorporated
Registrants	SCANA and SCE&G
Request	Request for Rate Relief filed by the ORS on September 26, 2017
ROE	Return on Equity
RSA	Natural Gas Rate Stabilization Act
RTO/ISO	Regional Transmission Organization/Independent System Operator
Santee Cooper	South Carolina Public Service Authority
SCANA	SCANA Corporation, the parent company
SCANA Energy	SCANA Energy Marketing, Inc.
SCANA Services	SCANA Services, Inc.
SCE&G	South Carolina Electric & Gas Company
SCEUC	South Carolina Energy Users Committee
SCPSC	Public Service Commission of South Carolina
SEC	United States Securities and Exchange Commission
SIP	State Implementation Plan
SLED	South Carolina Law Enforcement Division
SO ₂	Sulfur Dioxide
Summer Station	V. C. Summer Nuclear Station
Supreme Court	United States Supreme Court
Toshiba	Toshiba Corporation, parent company of WEC
Toshiba Settlement	Settlement Agreement dated as of July 27, 2017, by and among Toshiba, SCE&G and Santee Cooper
Unit 1	Nuclear Unit 1 at Summer Station
Unit 2	Nuclear Unit 2 at Summer Station
Unit 3	Nuclear Unit 3 at Summer Station
VIE	Variable Interest Entity
Vogtle Units	Two nuclear units being constructed by the Consortium for another group of utilities
WEC	Westinghouse Electric Company LLC
WECTEC	WECTEC Global Project Services, Inc. (formerly known as Stone & Webster, Inc.), a wholly-owned subsidiary of WEC
Williams Station	A.M. Williams Generating Station, owned by GENCO
WNA	Weather Normalization Adjustment

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

SCANA Corporation and Subsidiaries

Condensed Consolidated Balance Sheets

(Unaudited)



Millions of dollars	September 30, 2017			December 31, 2016
Assets
Utility Plant In Service	$	13,767		$	13,444
Accumulated Depreciation and Amortization	(4,559		)	(4,446		)
Construction Work in Progress	768			4,845
Nuclear Fuel, Net of Accumulated Amortization	249			271
Goodwill, net of writedown of $230	210			210
Utility Plant, Net	10,435			14,324
Nonutility Property and Investments:
Nonutility property, net of accumulated depreciation of $135 and $138	272			276
Assets held in trust, net-nuclear decommissioning	132			123
Other investments	77			76
Nonutility Property and Investments, Net	481			475
Current Assets:
Cash and cash equivalents	1,011			208
Receivables:
Customer, net of allowance for uncollectible accounts of $5 and $6	545			616
Income taxes	6			142
Other	189			127
Inventories (at average cost):
Fuel and gas supply	129			136
Materials and supplies	159			155
Prepayments	111			105
Other current assets	14			17
Total Current Assets	2,164			1,506
Deferred Debits and Other Assets:
Regulatory assets	6,690			2,130
Other	249			272
Total Deferred Debits and Other Assets	6,939			2,402
Total	$	20,019		$	18,707

See Notes to Condensed Consolidated Financial Statements.

Table of Contents



Millions of dollars	September 30, 2017			December 31, 2016
Capitalization and Liabilities
Common Stock - no par value, 143 million shares outstanding	$	2,389		$	2,390
Retained Earnings	3,447			3,384
Accumulated Other Comprehensive Loss	(49		)	(49		)
Total Common Equity	5,787			5,725
Long-Term Debt, net	6,455			6,473
Total Capitalization	12,242			12,198
Current Liabilities:
Short-term borrowings	1,022			941
Current portion of long-term debt	177			17
Accounts payable	266			404
Customer deposits and customer prepayments	116			168
Taxes accrued	526			201
Interest accrued	97			84
Dividends declared	85			80
Derivative financial instruments	45			35
Other	117			135
Total Current Liabilities	2,451			2,065
Deferred Credits and Other Liabilities:
Deferred income taxes, net	1,767			2,159
Asset retirement obligations	569			558
Pension and other postretirement benefits	373			373
Unrecognized tax benefits	402			219
Regulatory liabilities	2,015			930
Other	200			205
Total Deferred Credits and Other Liabilities	5,326			4,444
Commitments and Contingencies (Note 9)
Total	$	20,019		$	18,707

See Notes to Condensed Consolidated Financial Statements.

Table of Contents

SCANA Corporation and Subsidiaries

Condensed Consolidated Statements of Income

(Unaudited)



	Three Months Ended						Nine Months Ended
	September 30,						September 30,
Millions of dollars, except per share amounts	2017			2016			2017			2016
Operating Revenues:
Electric	$	786		$	817		$	2,042		$	2,035
Gas - regulated	123			111			584			538
Gas - nonregulated	167			165			623			598
Total Operating Revenues	1,076			1,093			3,249			3,171
Operating Expenses:
Fuel used in electric generation	167			176			464			443
Purchased power	22			21			54			50
Gas purchased for resale	211			202			808			752
Other operation and maintenance	183			187			543			558
Impairment loss	210			—			210			—
Depreciation and amortization	96			93			285			276
Other taxes	67			66			200			192
Total Operating Expenses	956			745			2,564			2,271
Operating Income	120			348			685			900
Other Income (Expense):
Other income	28			15			61			46
Other expense	(7		)	(7		)	(25		)	(31		)
Interest charges, net of allowance for borrowed funds used during construction of $2, $5, $16 and $14	(95		)	(88		)	(270		)	(255		)
Allowance for equity funds used during construction	—			7			17			22
Total Other Expense	(74		)	(73		)	(217		)	(218		)
Income Before Income Tax Expense	46			275			468			682
Income Tax Expense	12			86			142			211
Net Income	$	34		$	189		$	326		$	471

Earnings Per Share of Common Stock	$	0.24		$	1.32		$	2.28		$	3.29
Weighted Average Common Shares Outstanding (millions)	143			143			143			143
Dividends Declared Per Share of Common Stock	$	0.6125		$	0.5750		$	1.8375		$	1.7250

See Notes to Condensed Consolidated Financial Statements.

Table of Contents

SCANA Corporation and Subsidiaries

Condensed Consolidated Statements of Comprehensive Income

(Unaudited)



	Three Months Ended September 30,					Nine Months Ended September 30,
Millions of dollars	2017		2016			2017			2016
Net Income	$	34	$	189		$	326		$	471
Other Comprehensive Income (Loss), net of tax:
Unrealized Gains (Losses) on Cash Flow Hedging Activities:
Arising during period, net of tax of $-, $-, $(3) and $(3)	—		(1		)	(5		)	(4		)
Reclassified as increases to interest expense, net of tax of $1, $1, $3 and $3	2		2			6			6
Reclassified as increases (decreases) to gas purchased for resale, net of tax of $-, $ -, $(1) and $3	—		—			(2		)	6
Net unrealized gains (losses) on cash flow hedging activities	2		1			(1		)	8
Deferred cost of employee benefit plans, net of tax of $-, $-, $- and $-	1		—			1			—
Other Comprehensive Income	3		1			—			8
Total Comprehensive Income	$	37	$	190		$	326		$	479

See Notes to Condensed Consolidated Financial Statements.

Table of Contents

SCANA Corporation and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(Unaudited)



	Nine Months Ended September 30,
Millions of dollars	2017			2016
Cash Flows From Operating Activities:
Net income	$	326		$	471
Adjustments to reconcile net income to net cash provided from operating activities:
Impairment loss	210			—
Deferred income taxes, net	(395		)	151
Depreciation and amortization	302			289
Amortization of nuclear fuel	31			42
Allowance for equity funds used during construction	(17		)	(22		)
Carrying cost recovery	(27		)	(12		)
Changes in certain assets and liabilities:
Receivables	79			(8		)
Income taxes receivable	136			(306		)
Inventories	(58		)	(21		)
Prepayments	(6		)	(2		)
Regulatory assets	(48		)	(14		)
Regulatory liabilities	(3		)	2
Accounts payable	(22		)	(36		)
Unrecognized tax benefits	183			210
Taxes accrued	325			(84		)
Derivative financial instruments	(3		)	(9		)
Other assets	(37		)	(58		)
Other liabilities	(49		)	86
Net Cash Provided From Operating Activities	927			679
Cash Flows From Investing Activities:
Property additions and construction expenditures	(1,095		)	(1,178		)
Proceeds from monetization of guaranty settlement	1,013			—
Proceeds from investments (including derivative collateral returned)	116			629
Purchase of investments (including derivative collateral posted)	(115		)	(743		)
Payments upon interest rate derivative contract settlements	—			(88		)
Net Cash Used For Investing Activities	(81		)	(1,380		)
Cash Flows From Financing Activities:
Proceeds from issuance of long-term debt	150			592
Repayment of long-term debt	(16		)	(15		)
Dividends	(258		)	(243		)
Short-term borrowings, net	81			247
Net Cash (Used For) Provided From Financing Activities	(43		)	581
Net Increase (Decrease) In Cash and Cash Equivalents	803			(120		)
Cash and Cash Equivalents, January 1	208			176
Cash and Cash Equivalents, September 30	$	1,011		$	56
Supplemental Cash Flow Information:
Cash for–Interest paid (net of capitalized interest of $16 and $14)	$	247		$	235
–Income taxes paid	1			229
–Income taxes received	123			—
Noncash Investing and Financing Activities:
Accrued construction expenditures	44			80
Capital leases	6			12
Guaranty settlement receivable	83			—

See Combined Notes to Condensed Consolidated Financial Statements.

SCANA Corporation and Subsidiaries

Condensed Consolidated Statements of Changes in Common Equity

(Unaudited)



	Common Stock									Accumulated Other Comprehensive Income (Loss)
Millions	Shares	Outstanding Amount		Treasury Amount			Retained Earnings			Gains (Losses) from Cash Flow Hedges			Deferred Employee Benefit Plans			Total AOCI			Total
Balance as of January 1, 2017	143	$	2,402	$	(12	)	$	3,384		$	(36	)	$	(13	)	$	(49	)	$	5,725
Net Income							326												326
Other Comprehensive Income (Loss)
Losses arising during the period										(5		)	—			(5		)	(5		)
Losses/amortization reclassified from AOCI										4			1			5			5
Total Comprehensive Income							326			(1		)	1			—			326
Purchase of Treasury Stock	—	—		(1		)													(1		)
Dividends Declared							(263		)										(263		)
Balance as of September 30, 2017	143	$	2,402	$	(13	)	$	3,447		$	(37	)	$	(12	)	$	(49	)	$	5,787

Balance as of January 1, 2016	143	$	2,402	$	(12	)	$	3,118		$	(53	)	$	(12	)	$	(65	)	$	5,443
Net Income							471												471
Other Comprehensive Income (Loss)
Losses arising during the period										(4		)	—			(4		)	(4		)
Losses/amortization reclassified from AOCI										12			—			12			12
Total Comprehensive Income							471			8			—			8			479
Dividends Declared							(247		)										(247		)
Balance as of September 30, 2016	143	$	2,402	$	(12	)	$	3,342		$	(45	)	$	(12	)	$	(57	)	$	5,675

Dividends declared per share of common stock were $1.8375 and $1.7250 for September 30, 2017 and 2016, respectively.

See Notes to Condensed Consolidated Financial Statements.

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South Carolina Electric & Gas Company and Affiliates

Condensed Consolidated Balance Sheets

(Unaudited)



Millions of dollars	September 30, 2017			December 31, 2016
Assets
Utility Plant In Service	$	11,783		$	11,510
Accumulated Depreciation and Amortization	(4,078		)	(3,991		)
Construction Work in Progress	554			4,813
Nuclear Fuel, Net of Accumulated Amortization	249			271
Utility Plant, Net ($740 and $756 related to VIEs)	8,508			12,603
Nonutility Property and Investments:
Nonutility property, net of accumulated depreciation	71			69
Assets held in trust, net-nuclear decommissioning	132			123
Other investments	2			3
Nonutility Property and Investments, Net	205			195
Current Assets:
Cash and cash equivalents	1,015			164
Receivables:
Customer, net of allowance for uncollectible accounts of $4 and $3	401			378
Affiliated companies	8			16
Income taxes	—			53
Other	168			94
Inventories (at average cost):
Fuel	78			83
Materials and supplies	148			143
Prepayments	98			88
Other current assets	1			1
Total Current Assets ($57 and $85 related to VIEs)	1,917			1,020
Deferred Debits and Other Assets:
Regulatory assets	6,582			2,030
Other	221			243
Total Deferred Debits and Other Assets ($49 and $52 related to VIEs)	6,803			2,273
Total	$	17,433		$	16,091

See Notes to Condensed Consolidated Financial Statements.

Table of Contents



Millions of dollars	September 30, 2017			December 31, 2016
Capitalization and Liabilities
Common Stock - no par value, 40.3 million shares outstanding	$	2,860		$	2,860
Retained Earnings	2,518			2,481
Accumulated Other Comprehensive Loss	(3		)	(3		)
Total Common Equity	5,375			5,338
Noncontrolling Interest	137			134
Total Equity	5,512			5,472
Long-Term Debt, net	4,990			5,154
Total Capitalization	10,502			10,626
Current Liabilities:
Short-term borrowings	945			804
Current portion of long-term debt	173			12
Accounts payable	154			247
Affiliated payables	96			122
Customer deposits and customer prepayments	74			126
Taxes accrued	663			195
Interest accrued	71			68
Dividends declared	81			79
Derivative financial instruments	41			28
Other	69			55
Total Current Liabilities	2,367			1,736
Deferred Credits and Other Liabilities:
Deferred income taxes, net	1,505			1,939
Asset retirement obligations	533			522
Pension and other postretirement benefits	231			232
Unrecognized tax benefits	402			236
Regulatory liabilities	1,779			695
Other	99			89
Other affiliate	15			16
Total Deferred Credits and Other Liabilities	4,564			3,729
Commitments and Contingencies (Note 9)
Total	$	17,433		$	16,091

See Notes to Condensed Consolidated Financial Statements.

Table of Contents

South Carolina Electric & Gas Company and Affiliates

Condensed Consolidated Statements of Comprehensive Income

(Unaudited)



	Three Months Ended						Nine Months Ended
	September 30,						September 30,
Millions of dollars	2017			2016			2017			2016
Operating Revenues:
Electric	$	786		$	817		$	2,042		$	2,035
Electric - nonconsolidated affiliate	1			1			4			4
Gas	69			64			284			252
Gas - nonconsolidated affiliate	—			—			1			1
Total Operating Revenues	856			882			2,331			2,292
Operating Expenses:
Fuel used in electric generation	132			141			370			368
Fuel used in electric generation - nonconsolidated affiliate	35			35			94			75
Purchased power	22			21			54			50
Gas purchased for resale	39			36			147			117
Gas purchased for resale - nonconsolidated affiliate	—			—			—			9
Other operation and maintenance	109			101			305			298
Other operation and maintenance - nonconsolidated affiliate	45			51			141			156
Impairment loss	210			—			210			—
Depreciation and amortization	78			76			232			225
Other taxes	62			61			183			173
Other taxes - nonconsolidated affiliate	1			1			4			5
Total Operating Expenses	733			523			1,740			1,476
Operating Income	123			359			591			816
Other Income (Expense):
Other income	21			7			36			20
Other expense	(6		)	(4		)	(17		)	(19		)
Interest charges, net of allowance for borrowed funds used during construction of $2, $5, $15 and $13	(76		)	(70		)	(214		)	(201		)
Allowance for equity funds used during construction	(3		)	6			13			19
Total Other Income (Expense)	(64		)	(61		)	(182		)	(181		)
Income Before Income Tax Expense	59			298			409			635
Income Tax Expense	17			94			129			202
Net Income and Total Comprehensive Income	42			204			280			433
Less Net Income and Total Comprehensive Income Attributable to Noncontrolling Interest	(3		)	(3		)	(10		)	(10		)
Earnings and Comprehensive Income Available to Common Shareholder	$	39		$	201		$	270		$	423

Dividends Declared on Common Stock	$	81		$	76		$	240		$	225

See Notes to Condensed Consolidated Financial Statements.

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South Carolina Electric & Gas Company and Affiliates

Condensed Consolidated Statements of Cash Flows

(Unaudited)



	Nine Months Ended September 30,
Millions of dollars	2017			2016
Cash Flows From Operating Activities:
Net income	$	280		$	433
Adjustments to reconcile net income to net cash provided from operating activities:
Impairment loss	210			—
Deferred income taxes, net	(434		)	127
Depreciation and amortization	238			229
Amortization of nuclear fuel	31			42
Allowance for equity funds used during construction	(13		)	(19		)
Carrying cost recovery	(27		)	(12		)
Changes in certain assets and liabilities:
Receivables	(27		)	(70		)
Receivables - affiliate	8			9
Income tax receivable	53			(206		)
Inventories	(34		)	(14		)
Prepayments	(10		)	(15		)
Regulatory assets	(40		)	(6		)
Regulatory liabilities	(1		)	(3		)
Accounts payable	31			(13		)
Accounts payable - affiliate	(28		)	(13		)
Taxes accrued	468			(151		)
Unrecognized tax benefit	166			210
Other assets	(29		)	(117		)
Other liabilities	(14		)	64
Net Cash Provided From Operating Activities	828			475
Cash Flows From Investing Activities:
Property additions and construction expenditures	(882		)	(1,024		)
Proceeds from monetization of guaranty settlement	1,013			—
Proceeds from investments (including derivative collateral returned)	96			577
Purchase of investments (including derivative collateral posted)	(98		)	(699		)
Payments upon interest rate derivative contract settlements	—			(88		)
Proceeds from money pool investments	—			9
Net Cash Provided From (Used For) Investing Activities	129			(1,225		)
Cash Flows From Financing Activities:
Proceeds from issuance of debt	—			494
Repayment of long-term debt	(11		)	(10		)
Dividends	(238		)	(224		)
Contributions from parent	—			100
Money pool borrowings, net	2			(5		)
Short-term borrowings, net	141			294
Net Cash Provided From (Used For) Financing Activities	(106		)	649
Net Decrease In Cash and Cash Equivalents	851			(101		)
Cash and Cash Equivalents, January 1	164			130
Cash and Cash Equivalents, September 30	$	1,015		$	29

Supplemental Cash Flow Information:
Cash for–Interest (net of capitalized interest of $15 and $13)	$	195		$	182
– Income taxes paid	3			286
– Income taxes received	143			9
Noncash Investing and Financing Activities:
Accrued construction expenditures	21			71
Capital leases	6			12
Guaranty settlement receivable	83			—

See Notes to Condensed Consolidated Financial Statements .

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South Carolina Electric & Gas Company and Affiliates

Condensed Consolidated Statements of Changes in Common Equity

(Unaudited)



	Common Stock
Millions	Shares	Amount		Retained Earnings			AOCI			Noncontrolling Interest			Total Equity
Balance at January 1, 2017	40	$	2,860	$	2,481		$	(3	)	$	134		$	5,472
Earnings available to common shareholder				270						10			280
Total Comprehensive Income				270			—			10			280
Cash dividend declared				(233		)				(7		)	(240		)
Balance at September 30, 2017	40	$	2,860	$	2,518		$	(3	)	$	137		$	5,512

Balance at January 1, 2016	40	$	2,760	$	2,265		$	(3	)	$	129		$	5,151
Earnings available to common shareholder				423						10			433
Total Comprehensive Income				423			—			10			433
Capital Contributions from parent		100											100
Cash dividend declared				(219		)				(6		)	(225		)
Balance at September 30, 2016	40	$	2,860	$	2,469		$	(3	)	$	133		$	5,459

See Notes to Condensed Consolidated Financial Statements.

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SCANA Corporation and Subsidiaries

South Carolina Electric & Gas Company and Affiliates

Notes to Condensed Consolidated Financial Statements

(Unaudited)

The following unaudited notes to the condensed consolidated financial statements are a combined presentation. Except as otherwise indicated herein, each note applies to the Company and Consolidated SCE&G; however, Consolidated SCE&G makes no representation as to information relating solely to SCANA Corporation or its subsidiaries (other than Consolidated SCE&G).

The following condensed notes should be read in conjunction with the Notes to Consolidated Financial Statements appearing in each company's Annual Report on Form 10-K for the year ended December 31, 2016 , which also were a combined presentation. These are interim financial statements and, due to the seasonality of each company's business and matters that may occur during the rest of the year, including the matters described in condensed consolidated Note 9 under Impairment Considerations , the amounts reported in the Condensed Consolidated Statements of Income and Condensed Consolidated Statements of Comprehensive Income are not necessarily indicative of amounts expected for the full year. In the opinion of management of the respective companies, the information furnished herein reflects all adjustments, all of a normal recurring nature, which are necessary for a fair statement of the results for the interim periods reported. In addition, the preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.


1.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Consolidation and Variable Interest Entities

The condensed consolidated financial statements of the Company include, after eliminating intercompany balances and transactions, the accounts of the parent holding company and each of its subsidiaries, including Consolidated SCE&G. Accordingly, discussions regarding the Company's financial results necessarily include the results of Consolidated SCE&G.

SCE&G has determined that it has a controlling financial interest in each of GENCO and Fuel Company (which are considered to be VIEs) and, accordingly, Consolidated SCE&G's condensed consolidated financial statements include the accounts of SCE&G, GENCO and Fuel Company. The equity interests in GENCO and Fuel Company are held solely by SCANA, SCE&G’s parent. As a result, GENCO’s and Fuel Company’s equity and results of operations are reflected as noncontrolling interest in Consolidated SCE&G’s condensed consolidated financial statements.

GENCO owns a coal-fired electric generating station with a 605 MW net generating capacity (summer rating). GENCO’s electricity is sold, pursuant to a FERC-approved tariff, solely to SCE&G under the terms of a power purchase agreement and related operating agreement. The effects of these transactions are eliminated in consolidation. Substantially all of GENCO’s property (carrying value of approximately $491 million ) serves as collateral for its long-term borrowings. Fuel Company acquires, owns and provides financing for SCE&G’s nuclear fuel, certain fossil fuels and emission and other environmental allowances. See also condensed consolidated Note 4.

Income Statement Presentation

Revenues and expenses arising from regulated businesses and, in the case of the Company, the retail natural gas marketing business (including those activities of segments described in condensed consolidated Note 10) are presented within Operating Income, and all other activities are presented within Other Income (Expense).

Asset Management and Supply Service Agreement

PSNC Energy, a subsidiary of SCANA, utilizes an asset management and supply service agreement with a counterparty for certain natural gas storage facilities. Such counterparty held, through an agency relationship, 45% and 40% of PSNC Energy’s natural gas inventory at September 30, 2017 and December 31, 2016, respectively, with a carrying value of $14.1 million and $9.8 million , respectively. Under the terms of this agreement, PSNC Energy receives storage asset management fees of which 75% are credited to customers. This agreement expires on March 31, 2019.

Table of Contents

Earnings Per Share

The Company computes basic earnings per share by dividing net income by the weighted average number of common shares outstanding for the period. When applicable, the Company computes diluted earnings per share using this same formula, after giving effect to securities considered to be dilutive potential common stock utilizing the treasury stock method.

New Accounting Matters

In May 2014, the FASB issued accounting guidance for revenue arising from contracts with customers that supersedes most prior revenue recognition guidance, including industry-specific guidance. This new revenue recognition model calls for a five-step analysis in determining when and how revenue is recognized, and will require revenue recognition to depict the transfer of promised goods or services to customers, based on the transfer of control, in an amount that reflects the consideration a company expects to receive in exchange for those goods or services. In addition, the new guidance requires disclosure of the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The analysis of contracts with customers to which the guidance might be applicable is continuing, and activities of the FASB's Transition Resource Group for Revenue Recognition are being monitored, particularly as they relate to the treatment of contributions in aid of construction, alternative revenue programs and the collectability of revenue of utilities subject to rate regulation. An evaluation of the enhanced disclosure requirements is also underway, including the preliminary drafting of the disclosures that are required under the new standard, identifying performance obligations, determining the appropriate disaggregation of revenue and assessing the availability of information necessary to comply with the requirements. The Company and Consolidated SCE&G will adopt this guidance using the modified retrospective method and will recognize a cumulative effect adjustment, if any, to retained earnings on January 1, 2018 upon adoption. Comparative periods will not be restated. The Company and Consolidated SCE&G do not anticipate that its adoption will have a material impact on recognition patterns in their respective financial statements, but its adoption is expected to result in additional disclosures and may result in income statement presentation changes, particularly with respect to alternate revenue programs of utility operations.

In July 2015, the FASB issued accounting guidance intended to simplify the measurement of inventory cost by requiring most inventory to be measured at the lower of cost and net realizable value. The Company and Consolidated SCE&G adopted this guidance in the first quarter of 2017, and its adoption did not have any impact on their respective financial statements.

In January 2016, the FASB issued accounting guidance that will change how entities measure certain equity investments and financial liabilities, among other things. The Company and Consolidated SCE&G expect to adopt this guidance when required in the first quarter of 2018 and do not anticipate that its adoption will have a significant impact on their respective financial statements.

In February 2016, the FASB issued accounting guidance related to the recognition, measurement and presentation of leases. The guidance applies a right-of-use model and, for lessees, requires all leases with a duration over 12 months to be recorded on the balance sheet, with the rights of use treated as assets and the payment obligations treated as liabilities. Further,

and without consideration of any regulatory accounting requirements which may apply, depending primarily on the nature of the assets and the relative consumption of them, lease costs will be recognized either through the separate amortization of the right-of-use asset and the recognition of the interest cost related to the payment obligation, or through the recording of a combined straight-line rental expense. For lessors, the guidance calls for the recognition of income either through the derecognition of assets and subsequent recording of interest income on lease amounts receivable, or through the recognition of rental income on a straight-line basis, also depending on the nature of the assets and relative consumption. The guidance is effective for years beginning in 2019, and the Company and Consolidated SCE&G do not anticipate that its adoption will impact their respective financial statements other than increasing amounts reported for assets and liabilities on the balance sheet and changing the place on their respective income statements on which certain expenses are recorded. No impact on net income is expected. The identification and analysis of leasing and related contracts to which the guidance might be applicable has begun. In addition, the Company and Consolidated SCE&G have begun implementation of a third party software tool that will assist with initial adoption and ongoing compliance. Specifically, preliminary system configuration has been completed and data from certain leases are being entered.

In June 2016, the FASB issued accounting guidance requiring the use of a current expected credit loss impairment model for certain financial instruments. The new model is applicable to trade receivables and most debt instruments, among other financial instruments, and in certain instances may result in certain impairment losses being recognized earlier than under current guidance. The Company and Consolidated SCE&G must adopt this guidance beginning in 2020, including interim

periods, though the guidance may be adopted in 2019. The Company and Consolidated SCE&G have not determined when this guidance will be adopted or what impact it will have on their respective financial statements.

In August 2016, the FASB issued accounting guidance to reduce diversity in cash flow classification related to certain transactions. The Company and Consolidated SCE&G expect to adopt this guidance when required in the first quarter of 2018 and do not anticipate that its adoption will impact their respective financial statements.

In October 2016, the FASB issued accounting guidance related to the tax effects of intra-entity asset transfers of assets other than inventory. An entity will be required to recognize the income tax consequences of such a transfer in the period it occurs. The Company and Consolidated SCE&G adopted this guidance in the first quarter 2017 and it had no impact on their respective financial statements.

In November 2016, the FASB issued accounting guidance related to the presentation of restricted cash on the statement of cash flows. The guidance is effective for years beginning in 2018, and the Company and Consolidated SCE&G do not anticipate that its adoption will impact their respective financial statements.

In January 2017, the FASB issued accounting guidance to simplify the accounting for goodwill impairment. The guidance removes Step 2 of the goodwill impairment test. The guidance is effective for years beginning in 2020, though early adoption after January 1, 2017 is allowed. The Company and Consolidated SCE&G have not determined when this guidance will be adopted but do not anticipate that its adoption will have a material impact on their respective financial statements.

In March 2017, the FASB issued accounting guidance to change the required presentation of net periodic pension and postretirement benefit costs. Under the new guidance, the net periodic pension and postretirement benefit costs are to be separated into their service cost components and other components. The service cost components are to be presented in the same line item (or items) as other compensation costs arising from services rendered by employees during the period. The other components are to be reported in the income statement separately from the service cost component and outside operating income. Only the service cost component is eligible for capitalization in assets. This guidance is required to be applied on a retrospective basis for the presentation of the service cost component and the other components, and on a prospective basis for the capitalization of only the service cost component. The Company and Consolidated SCE&G will adopt the guidance when required in the first quarter of 2018 and, due to regulatory overlay, do not anticipate that its adoption will have a material impact on their respective financial statements. Non-service cost components which otherwise would have been capitalizable in assets under current accounting guidance will instead be deferred within regulatory assets.

In August 2017, the FASB issued accounting guidance to simplify the application of hedge accounting. Among other things, the new guidance will enable more hedging strategies to qualify for hedge accounting, will allow entities more time to perform an initial assessment of hedge effectiveness, and will permit an entity to perform a qualitative assessment of effectiveness for certain hedges instead of a quantitative one. For cash flow hedges that are highly effective, all changes in the fair value of the derivative hedging instrument will be recorded in other comprehensive income and will be reclassified to earnings in the same period that the hedged item impacts earnings. Fair value hedges will continue to be recorded in current earnings, and any ineffectiveness will impact the income statement. In addition, changes in the fair value of a derivative will be recorded in the same income statement line as the earnings effect of the hedged item, and additional disclosures will be required related to the effect of hedging on individual income statement line items. The guidance must be applied to all outstanding instruments using a modified retrospective method, with any cumulative effect adjustment recorded to opening retained earnings as of the beginning of the first period in which the guidance becomes effective. The Company and Consolidated SCE&G expect to adopt this guidance when required in the first quarter of 2019, though early adoption is permitted, and have not determined what impact such adoption will have on their respective financial statements.

2. RATE AND OTHER REGULATORY MATTERS

Rate Matters

Electric - Cost of Fuel

By order dated July 15, 2015, the SCPSC approved SCE&G's participation in a DER program and recovery of related costs as a separate component of SCE&G's overall fuel factor. Under this order, SCE&G will, among other things, implement programs to encourage the development of renewable energy facilities with a total nameplate capacity of at least approximately 84.5 MW by the end of 2020, of which half is to be customer-scale solar capacity and half is to be utility-scale solar capacity.

By order dated April 27, 2017, the SCPSC approved a settlement agreement among SCE&G, the ORS and the SCEUC, to increase the total fuel cost component of retail electric rates. SCE&G agreed to set its base fuel component to produce a projected under recovery of $61.0 million over a 12-month period beginning with the first billing cycle of May 2017. SCE&G also agreed to recover, over a 12-month period beginning with the first billing cycle of May 2017, projected DER program costs of approximately $16.5 million . Additionally, deferral of carrying costs will be allowed for base fuel component under-collected balances as they occur.

In October 2017, the SCPSC initiated its 2018 annual review of base rates for fuel costs. A public hearing on this matter has been scheduled for April 10, 2018.

Electric - Base Rates

Pursuant to an SCPSC order, SCE&G removes from rate base certain deferred income tax assets arising from capital expenditures related to the New Units and accrues carrying costs on those amounts during periods in which they are not included in rate base. Such carrying costs are determined at SCE&G’s weighted average long-term borrowing rate and are recorded as a regulatory asset and other income. Carrying costs during the three and nine months ended September 30, 2017 totaled $4.9 million and $13.6 million , respectively. During the three and nine months ended September 30, 2016, carrying costs totaled $3.5 million and $10.0 million , respectively. Under this SCPSC order, when these deferred income tax assets are fully offset by related deferred income tax liabilities, the carrying cost accruals will cease, and the regulatory asset will begin to be amortized. See also condensed consolidated Note 9.

By order dated March 1, 2017, the SCPSC approved SCE&G’s request to decrease its pension costs rider. The change in the pension rider will decrease annual revenue by approximately $11.9 million . The pension rider is designed to allow SCE&G to recover projected pension costs, net of the previously over-collected balance, over a 12-month period, beginning with the first billing cycle in May 2017.

In January 2017, SCE&G requested in its annual DSM Programs filing to recover $37.0 million of costs and net lost revenues associated with DSM programs, along with an incentive to invest in such programs. On April 28, 2017, the SCPSC approved SCE&G's request effective beginning with the first billing cycle in May 2017.

Electric - BLRA

On June 22, 2017, the Friends of the Earth and the Sierra Club filed a complaint against SCE&G with the SCPSC, requesting that the SCPSC initiate a formal proceeding to direct SCE&G to immediately cease and desist from expending any further capital costs related to the construction of the New Units; to determine the prudence of acts and omissions by SCE&G in connection with the construction of the New Units; to review and determine the prudence of abandonment of the New Units and of the available least cost efficiency and renewable energy alternatives; and to remedy, abate and make due reparations for the rates charged to ratepayers related to the construction of the New Units. SCE&G filed its answer to the complaint and a motion to dismiss the complaint on July 19, 2017. On October 4, 2017, the SCPSC ordered proceedings under this complaint to be coordinated with proceedings for the Request filed on September 26, 2017, described below, and allowed discovery to proceed. On October 13, 2017, SCE&G filed with the SCPSC a petition for rehearing and reconsideration of the order as well as a response to the SCPSC's request for briefing concerning coordination of proceedings under this complaint with proceedings for the Request. On November 1, 2017, the SCPSC denied SCE&G's petition for rehearing and reconsideration.

On August 1, 2017, SCE&G filed the Abandonment Petition with the SCPSC which sought recovery of costs expended on the construction of the New Units, including certain costs incurred subsequent to SCE&G's last revised rates update, other costs under the abandonment provisions of the BLRA, and affirmation of SCE&G's decision to abandon construction of the New Units, among other things. Subsequently, SCE&G management met with various stakeholders and members of the South Carolina General Assembly, including legislative leaders, to discuss the abandonment of the new nuclear project and to hear their concerns. In response to those concerns, and to allow adequate time for governmental officials to conduct their reviews, SCE&G voluntarily withdrew the Abandonment Petition on August 15, 2017. See additional discussion at condensed consolidated Note 9.

the public interest to allow SCE&G to continue collecting revised rates. Further, the ORS noted the existence of an allegation that SCE&G failed to disclose information that should have been disclosed and that would have appeared to provide a basis for challenging prior requests, and asserted that SCE&G should not be allowed to continue to benefit from nondisclosure. The ORS also asked for an order that, if the BLRA is found to be unconstitutional or the General Assembly amends or revokes the BLRA, then SCE&G should make credits to future bills or refunds to customers for prior revised rates collections.

On September 28, 2017, citing numerous legal deficiencies in the Request, SCE&G filed a Motion to Dismiss the request by the ORS and a Request for Briefing Schedule and Hearing on Motion to Dismiss. On September 28, 2017, the SCPSC deferred action on the ORS' request and ordered a hearing officer to establish a briefing schedule and hearing date on SCE&G's motion. The hearing has been scheduled for December 12, 2017, and the parties who have filed to intervene in the matter or have filed a letter in support of the request by the ORS include the Governor, the state's Office of Attorney General and Speaker of the House of Representatives, the Electric Cooperatives of South Carolina, the SCEUC, certain large industrial customers, and several environmental groups. SCE&G intends to vigorously contest the request by the ORS, but cannot give any assurance as to the timing or outcome of this matter.

On October 17, 2017, the ORS filed a motion with the SCPSC to amend the Request, in which the ORS asked the SCPSC to consider the most prudent manner by which SCE&G will enable its customers to realize the value of the monetized Toshiba Settlement payments and other payments made by Toshiba towards satisfaction of its obligations to SCE&G. On October 27, 2017, SCE&G filed its response in opposition to, and its motion to strike, the motion by the ORS to amend the Request.

Gas - SCE&G

By order dated October 4, 2017, the SCPSC approved, as adjusted by the ORS, SCE&G’s quarterly monitoring report for the 12-month period ended March 31, 2017, and an overall increase of approximately $8.6 million , or 2.2% , to its natural gas rates under the terms of the RSA. The rate adjustment was effective for the first billing cycle in November 2017.

SCE&G’s natural gas tariffs include a PGA that provides for the recovery of actual gas costs incurred, including transportation costs. SCE&G’s gas rates are calculated using a methodology which may adjust the cost of gas monthly based on a 12-month rolling average, and its gas purchasing policies and practices are reviewed annually by the SCPSC. SCE&G’s annual PGA hearing for the 12-month period ending July 31, 2017, is scheduled for November 9, 2017.

Gas - PSNC Energy

The NCUC has authorized PSNC Energy to use a tracker mechanism to recover the incurred capital investment and associated costs of complying with federal standards for pipeline integrity and safety requirements that are not in current base rates. PSNC Energy has filed biannual applications to adjust its rates for this purpose, and the NCUC has approved those applications for the incremental annual revenue requirements, as follows:



Application Filed	Rates Effective	Incremental Increase
February 15, 2017	March 1, 2017	$1.9 million
August 16, 2017	September 1, 2017	$0.7 million

Regulatory Assets and Regulatory Liabilities

Rate-regulated utilities recognize in their financial statements certain revenues and expenses in different periods than do other enterprises. As a result, the Company and Consolidated SCE&G have recorded regulatory assets and regulatory liabilities which are summarized in the following tables. Except for certain unrecovered nuclear project costs and other unrecovered plant, substantially all regulatory assets are either explicitly excluded from rate base or are effectively excluded from rate base due to their being offset by related liabilities.



	The Company				Consolidated SCE&G
Millions of dollars	September 30, 2017		December 31, 2016		September 30, 2017		December 31, 2016
Regulatory Assets:
Unrecovered nuclear project costs	$	4,520	—		$	4,520	—
Accumulated deferred income taxes	315		$	316	307		$	307
AROs and related funding	424		425		401		403
Deferred employee benefit plan costs	321		342		290		309
Deferred losses on interest rate derivatives	632		620		632		620
Other unrecovered plant	108		117		108		117
DSM Programs	58		59		58		59
Carrying costs on deferred tax assets related to nuclear construction	46		32		46		32
Pipeline integrity management costs	47		33		7		6
Environmental remediation costs	30		32		25		26
Deferred storm damage costs	22		20		22		20
Deferred costs related to uncertain tax position	28		15		28		15
Other	139		119		138		116
Total Regulatory Assets	$	6,690	$	2,130	$	6,582	$	2,030



Regulatory Liabilities:
Monetization of guaranty settlement	$	1,095	—		$	1,095	—
Asset removal costs	764		$	755	535		$	529
Deferred gains on interest rate derivatives	135		151		135		151
Other	21		24		14		15
Total Regulatory Liabilities	$	2,015	$	930	$	1,779	$	695

Regulatory assets for unrecovered nuclear project costs have been recorded based on such amounts not being probable of loss, whereas the other regulatory assets have been recorded based on the probability of their recovery. All regulatory assets represent incurred costs that may be deferred under applicable GAAP for regulated operations. The SCPSC, the NCUC or the FERC has reviewed and approved through specific orders certain of the items shown as regulatory assets. Other regulatory assets include, but are not limited to, certain costs which have not been specifically approved for recovery by one of these regulatory agencies, including unrecovered nuclear project costs that are the subject of future regulatory proceedings as further discussed in condensed consolidated Note 9. In recording such costs as regulatory assets, management believes the costs would be allowable under existing rate-making concepts that are embodied in rate orders or current state law. The costs are currently not being recovered, but are expected to be recovered through rates in future periods. In the future, as a result of deregulation, changes in state law, other changes in the regulatory environment or changes in accounting requirements, the Company or Consolidated SCE&G could be required to write off all or a portion of its regulatory assets and liabilities. Such an event could have a material effect on the Company's and Consolidated SCE&G's financial statements in the period the write-off would be recorded.

Unrecovered nuclear project costs represents expenditures by SCE&G that have been reclassified from construction work in progress as a result of the decision to stop construction of the New Units and to pursue recovery of costs under the abandonment provisions of the BLRA or through a general rate case or other regulatory means, net of an estimated impairment loss of $210 million . See additional discussion at condensed consolidated Note 9.

Accumulated deferred income tax liabilities that arise from utility operations that have not been included in customer rates are recorded as a regulatory asset. A substantial portion of these regulatory assets relate to depreciation and are expected to be recovered over the remaining lives of the related property which may range up to approximately 85 years. Similarly, accumulated deferred income tax assets arising from deferred investment tax credits are recorded as a regulatory liability.

AROs and related funding represents the regulatory asset associated with the legal obligation to decommission and dismantle Unit 1 and conditional AROs related to generation, transmission and distribution properties, including gas pipelines. These regulatory assets are expected to be recovered over the related property lives and periods of decommissioning which may range up to approximately 110 years.

Employee benefit plan costs of the regulated utilities have historically been recovered as they have been recorded under GAAP. Deferred employee benefit plan costs represent amounts of pension and other postretirement benefit costs which were accrued as liabilities and treated as regulatory assets pursuant to FERC guidance, and costs deferred pursuant to specific SCPSC regulatory orders. In 2013, SCE&G began recovering through utility rates approximately $63 million of deferred pension costs for electric operations over approximately 30 years and approximately $14 million of deferred pension costs for gas operations over approximately 14 years. The remainder of the deferred benefit costs are expected to be recovered through utility rates, primarily over average service periods of participating employees, or up to approximately 11 years.

Deferred losses or gains on interest rate derivatives represent (i) the effective portions of changes in fair value and payments made or received upon settlement of certain interest rate derivatives designated as cash flow hedges and (ii) the changes in fair value and payments made or received upon settlement of certain other interest rate derivatives not so designated. The amounts recorded with respect to (i) are expected to be amortized to interest expense over the lives of the underlying debt through 2043. The amounts recorded with respect to (ii) are expected to be similarly amortized to interest expense through 2065 except when such amounts are applied otherwise at the direction of the SCPSC.

Other unrecovered plant represents the carrying value of coal-fired generating units, including related materials and supplies inventory, retired from service prior to being fully depreciated. Pursuant to SCPSC approval, SCE&G is amortizing these amounts through cost of service rates over the units' previous estimated remaining useful lives through approximately 2025. Unamortized amounts are included in rate base and are earning a current return.

DSM Programs represent SCE&G's deferred costs associated with electric demand reduction programs, and such deferred costs are currently being recovered over approximately five years through an approved rate rider.

Carrying costs on deferred tax assets related to new nuclear construction are calculated on accumulated deferred income tax assets associated with the New Units which are not part of electric rate base using the weighted average long-term debt cost of capital. These carrying costs will be amortized over ten years beginning when these deferred tax assets are fully offset by related deferred tax liabilities. See also condensed consolidated Note 9.

Pipeline integrity management costs represent operating and maintenance costs incurred to comply with federal regulatory requirements related to natural gas pipelines. PSNC Energy will recover costs incurred as of June 30, 2016 totaling $20.3 million over a five -year period beginning November 2016. PSNC Energy is continuing to defer pipeline integrity costs, and as of September 30, 2017 costs of $21.6 million have been deferred pending future approval of rate recovery. SCE&G amortizes $1.9 million of such costs annually.

Environmental remediation costs represent costs associated with the assessment and clean-up of sites currently or formerly owned by SCE&G or PSNC Energy, and are expected to be recovered over periods of up to approximately 17 years.

Deferred storm damage costs represent costs incurred in excess of amounts previously collected through SCE&G’s SCPSC-approved storm damage reserve, and for which SCE&G expects to receive future recovery through customer rates.

Deferred costs related to uncertain tax position primarily represent the estimated amounts of domestic production activities deductions foregone as a result of the deduction of certain research and experimentation expenditures for income tax purposes, net of related tax credits, as well as accrued interest expense and other costs arising from this uncertain tax position. SCE&G's current customer rates reflect the availability of domestic production activities deductions. These net deferred costs are expected to be recovered through utility rates following ultimate resolution of the claims. See also condensed consolidated Note 5.

Various other regulatory assets are expected to be recovered through rates over varying periods through 2047.

Monetization of guaranty settlement represents proceeds received under or arising from the monetization of the Toshiba Settlement, net of certain expenses. SCE&G expects the SCPSC to approve the use of these net proceeds for the benefit of customers in a future filing. See additional discussion at condensed consolidated Note 9.

Asset removal costs represent estimated net collections through depreciation rates of amounts to be incurred for the removal of assets in the future.

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3. COMMON EQUITY

SCANA had 200 million shares of common stock authorized as of September 30, 2017 and December 31, 2016.

Authorized shares of SCE&G common stock were 50 million as of September 30, 2017 and December 31, 2016. Authorized shares of SCE&G preferred stock were 20 million , of which 1,000 shares, no par value, were issued and outstanding as of September 30, 2017 and December 31, 2016. All issued and outstanding shares of SCE&G's common and preferred stock are held by SCANA.

4. LONG-TERM DEBT AND LIQUIDITY

Long-term Debt

In June 2017, PSNC Energy issued $150 million of 4.18% senior notes due June 30, 2047. Proceeds from this sale were used to repay short-term debt, to finance capital expenditures, and for general corporate purposes.

On November 1, 2016, Consolidated SCE&G paid at maturity $100 million related to a nuclear fuel financing which had an imputed interest rate of 0.78% .

In June 2016, SCE&G issued $425 million of 4.1% first mortgage bonds due June 15, 2046. In addition, in June 2016 SCE&G issued $75 million of 4.5% first mortgage bonds due June 1, 2064, which constituted a reopening of $300 million of 4.5% first mortgage bonds issued in May 2014. Proceeds from these sales were used to repay short-term debt primarily incurred as a result of SCE&G’s construction program, to finance capital expenditures, and for general corporate purposes.

In June 2016, PSNC Energy issued $100 million of 4.13% senior notes due June 22, 2046. Proceeds from this sale were used to repay short-term debt, to finance capital expenditures, and for general corporate purposes.

Substantially all electric utility plant is pledged as collateral in connection with long-term debt.

Liquidity

Credit agreements are used for general corporate purposes, including liquidity support for each company's commercial paper program and working capital needs and, in the case of Fuel Company, to finance or refinance the purchase of nuclear fuel, certain fossil fuels, and emission and other environmental allowances. Committed long-term facilities are revolving lines of credit under credit agreements with a syndicate of banks. Committed LOC, outstanding LOC advances, commercial paper, and LOC-supported letter of credit obligations were as follows:



September 30, 2017 (Millions of dollars)	Total		SCANA			Consolidated SCE&G			PSNC Energy
Lines of credit:	+
Five-year, expiring December 2020	$	1,300.0	$	400.0		$	700.0		$	200.0
Fuel Company five-year, expiring December 2020	500.0		—			500.0			—
Three-year, expiring December 2018	200.0		—			200.0			—
Total committed long-term	2,000.0		400.0			1,400.0			200.0
Outstanding commercial paper (270 or fewer days)	1,022.1		33.0			944.8			44.3
Weighted average interest rate			1.78		%	1.49		%	1.49		%
Letters of credit supported by LOC	3.3		3.0			0.3			—
Available	$	974.6	$	364.0		$	454.9		$	155.7



December 31, 2016 (Millions of dollars)	Total		SCANA			Consolidated SCE&G			PSNC Energy
Lines of credit:
Five-year, expiring December 2020	$	1,300.0	$	400.0		$	700.0		$	200.0
Fuel Company five-year, expiring December 2020	500.0		—			500.0			—
Three-year, expiring December 2018	200.0		—			200.0			—
Total committed long-term	2,000.0		400.0			1,400.0			200.0
Outstanding commercial paper (270 or fewer days)	940.5		64.4			804.3			71.8
Weighted average interest rate			1.43		%	1.04		%	1.07		%
Letters of credit supported by LOC	3.3		3.0			0.3			—
Available	$	1,056.2	$	332.6		$	595.4		$	128.2

Portions of the proceeds received under or arising from the monetization of the Toshiba Settlement in late September and early October 2017 have been utilized to repay maturing commercial paper balances, which short-term borrowings had been incurred for the construction of the New Units prior to the decision to stop their construction (see condensed consolidated Note 9). Should the SCPSC or a court direct that these proceeds be refunded to customers in the near-term, or direct that such funds be escrowed or otherwise made unavailable to SCE&G, it is anticipated that SCE&G would reissue commercial paper or draw on its credit facilities to fund such requirement. However, were the SCPSC to rule in favor of the ORS in response to the Request that SCE&G suspend collections from customers of amounts previously authorized under the BLRA, or were other actions of the SCPSC or others taken in order to significantly restrict SCE&G’s access to revenues or impose additional adverse refund obligations on SCE&G, the Company’s and Consolidated SCE&G's assessments regarding the recoverability of all or a portion of the remaining balance of unrecovered nuclear project costs (see condensed consolidated Note 2) would be adversely impacted. Further, the recognition of significant additional impairment losses with respect to unrecovered nuclear project costs could increase the Company’s and Consolidated SCE&G’s debt to total capitalization to a level which may limit their ability to borrow under their commercial paper programs or under their credit facilities. Borrowing costs for long-term debt issuances could also be impacted.

Each of the Company and Consolidated SCE&G is obligated with respect to an aggregate of $67.8 million of industrial revenue bonds which are secured by letters of credit issued by TD Bank N.A. These letters of credit expire, subject to renewal, in the fourth quarter of 2019.

Consolidated SCE&G participates in a utility money pool with SCANA and another regulated subsidiary of SCANA. Money pool borrowings and investments bear interest at short-term market rates. Consolidated SCE&G’s interest income and expense from money pool transactions were not significant for any period presented. Consolidated SCE&G had outstanding money pool borrowings due to an affiliate of $31 million at September 30, 2017, and $29 million at December 31, 2016. On its condensed consolidated balance sheet, Consolidated SCE&G includes such amounts within Affiliated payables.


5.	INCOME TAXES

The Company files consolidated federal income tax returns which include Consolidated SCE&G, and the Company and its subsidiaries file various applicable state and local income tax returns.

The IRS has completed examinations of the Company’s federal returns through 2004, and the Company’s federal returns through 2007 are closed for additional assessment. The IRS is currently examining SCANA's open federal returns through 2015 as a result of claims discussed below. With few exceptions, the Company, including Consolidated SCE&G, is no longer subject to state and local income tax examinations by tax authorities for years before 2010.

During 2013 and 2014, SCANA amended certain of its income tax returns to claim additional tax-defined research and experimentation deductions (under IRC Section 174) and credits (under IRC Section 41) and to reflect related impacts on other items such as domestic production activities deductions (under IRC Section 199). SCANA also made similar claims in filing its original 2013 and 2014 returns in 2014 and 2015, respectively. In 2016 and 2017, SCANA claimed significant research and experimentation deductions and credits (offset by reductions in its domestic production activities deductions), related to the design and construction activities of the New Units, in its 2015 and 2016 income tax returns. These claims followed the issuance of final IRS regulations in 2014 regarding such treatment with respect to expenditures related to the design and construction of pilot models.

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The IRS examined the claims in the amended returns, and as the examination progressed without resolution, the Company and Consolidated SCE&G evaluated and recorded adjustments to unrecognized tax benefits; however, none of these changes materially affected the Company's and Consolidated SCE&G's effective tax rate. In October 2016, the examination of the amended tax returns progressed to the IRS Office of Appeals. In addition, the IRS has begun an examination of SCANA's 2013 through 2015 income tax returns.

These income tax deductions and credits are considered to be uncertain tax positions, and under relevant accounting guidance, estimates of the amounts of related tax benefits which may not be sustained upon examination by the taxing authorities are required to be recorded as unrecognized tax benefits in the financial statements. As of September 30, 2017, the Company and Consolidated SCE&G have recorded an unrecognized tax benefit of $457 million ( $402 million net of the impact of state deductions on federal returns and net of receivables related to the uncertain tax positions). If recognized, $17 million of the tax benefit would affect the Company’s and Consolidated SCE&G's effective tax rates (see discussion below regarding deferral of benefits related to 2015 forward). These unrecognized tax benefits are not expected to increase significantly within the next 12 months, although other uncertain tax positions may be identified or taken, particularly with respect to the abandonment of the construction of the New Units during 2017. It is reasonably possible that these known unrecognized tax benefits may decrease by $457 million within the next 12 months. No other material changes in the status of the Company’s or Consolidated SCE&G's tax positions have occurred through September 30, 2017.

In connection with the research and experimentation deduction and credit claims reflected on the 2015 and 2016 income tax returns and similar claims made in determining 2017’s taxable income, and under the terms of an order of the SCPSC, the Company and Consolidated SCE&G have recorded regulatory assets for estimated foregone domestic production activities deductions, offset by estimated tax credits, and expect that such (net) deferred costs, along with any interest (see below) and other related deferred costs, will be recoverable through customer rates in future years (see condensed consolidated Note 2). SCE&G's current customer rates reflect the availability of domestic production activities deductions.

Also under the terms of an order of the SCPSC, estimated interest expense accrued with respect to the unrecognized tax benefits related to the research and experimentation deductions in the 2015 and 2016 income tax returns has been deferred as a regulatory asset and is expected to be recoverable through customer rates in future years. See also condensed consolidated Note 2. Otherwise, the Company and Consolidated SCE&G recognize interest accrued related to unrecognized tax benefits within interest expense or interest income and recognize tax penalties within other expenses. Amounts recorded for such interest income, interest expense or tax penalties have not been material for any period presented.

Effective January 1, 2017, the State of North Carolina reduced its corporate income tax rate from 4% to 3% . During the second quarter of 2017, the State of North Carolina passed legislation that will lower the state corporate income tax rate from 3% to 2.5% effective January 1, 2019. In connection with these changes in tax rates, related state deferred taxes were remeasured, with the change in their balances being credited to a regulatory liability. These changes in income tax rates did not and are not expected to have a material impact on the Company’s financial position, results of operations or cash flows.


6.	DERIVATIVE FINANCIAL INSTRUMENTS

Derivative instruments are recognized either as assets or liabilities in the statement of financial position and are measured at fair value. Changes in the fair value of derivative instruments are recognized either in earnings, as a component of other comprehensive income (loss) or, for regulated operations, within regulatory assets or regulatory liabilities, depending upon the intended use of the derivative and the resulting designation.

Policies and procedures, and in some cases risk limits, are established to control the level of market, credit, liquidity and operational and administrative risks. SCANA’s Board of Directors has delegated to a Risk Management Committee the authority to set risk limits, establish policies and procedures for risk management and measurement, and oversee and review the risk management process and infrastructure for SCANA and each of its subsidiaries. The Risk Management Committee, which is comprised of certain officers, including the Risk Management Officer and other senior officers, apprises the Audit Committee of the Board of Directors with regard to the management of risk and brings to their attention significant areas of concern. Written policies define the physical and financial transactions that are approved, as well as the authorization requirements and limits for transactions.

Commodity Derivatives

The Company uses derivative instruments to hedge forward purchases and sales of natural gas, which create market risks of different types. Instruments designated as cash flow hedges are used to hedge risks associated with fixed price

obligations in a volatile market and risks associated with price differentials at different delivery locations. Instruments designated as fair value hedges are used to mitigate exposure to fluctuating market prices created by fixed prices of stored natural gas. The basic types of financial instruments utilized are exchange-traded instruments, such as NYMEX futures contracts or options, and over-the-counter instruments such as options and swaps, which are typically offered by energy companies and financial institutions. Cash settlements of commodity derivatives are classified as operating activities in the consolidated statements of cash flows.

PSNC Energy hedges natural gas purchasing activities using over-the-counter options and NYMEX futures and options. PSNC Energy’s tariffs include a provision for the recovery of actual gas costs incurred, including any costs of hedging. PSNC Energy records premiums, transaction fees, margin requirements and any realized gains or losses from its hedging program in deferred accounts as a regulatory asset or liability for the under- or over-recovery of gas costs. These derivative financial instruments are not designated as hedges for accounting purposes.

Unrealized gains and losses on qualifying cash flow hedges of nonregulated operations are deferred in AOCI. When the hedged transactions affect earnings, previously recorded gains and losses are reclassified from AOCI to cost of gas. The effects of gains or losses resulting from these hedging activities are either offset by the recording of the related hedged transactions or are included in gas sales pricing decisions made by the business unit.

As an accommodation to certain customers, SCANA Energy, as part of its energy management services, offers fixed price supply contracts which are accounted for as derivatives. These sales contracts are offset by the purchase of supply futures and swaps which are also accounted for as derivatives. Neither the sales contracts nor the related supply futures and swaps are designated as hedges for accounting purposes.

Interest Rate Swaps

Interest rate swaps may be used to manage interest rate risk and exposure to changes in fair value attributable to changes in interest rates on certain debt issuances. In cases in which swaps designated as cash flow hedges are used to synthetically convert variable rate debt to fixed rate debt, periodic payments to or receipts from swap counterparties related to these derivatives are recorded within interest expense.

Forward starting swap agreements that are designated as cash flow hedges may be used in anticipation of the issuance of debt. Except as described in the following paragraph, the effective portions of changes in fair value and payments made or received upon termination of such agreements for regulated subsidiaries are recorded in regulatory assets or regulatory liabilities. For SCANA and its nonregulated subsidiaries, such amounts are recorded in AOCI. Such amounts are amortized to interest expense over the term of the underlying debt. Ineffective portions of fair value changes are recognized in income.

Pursuant to regulatory orders, interest rate derivatives entered into by SCE&G after October 2013 are not designated as cash flow hedges, and fair value changes and settlement amounts related to them are recorded as regulatory assets and liabilities. Settlement losses or gains on swaps will be amortized to interest expense over the lives of subsequent debt issuances or may be applied as otherwise directed by the SCPSC.

Cash payments made or received upon termination of these financial instruments are classified as investing activities for cash flow statement purposes.

Quantitative Disclosures Related to Derivatives

The Company was party to natural gas derivative contracts outstanding in the following quantities:



	Commodity and Other Energy Management Contracts (in MMBTU)

Hedge designation	Gas Distribution	Gas Marketing	Total
As of September 30, 2017
Commodity contracts	8,330,000	16,723,000	25,053,000
Energy management contracts (a)	—	46,346,530	46,346,530
Total (a)	8,330,000	63,069,530	71,399,530

As of December 31, 2016
Commodity contracts	4,510,000	11,947,000	16,457,000
Energy management contracts (a)	—	67,447,223	67,447,223
Total (a)	4,510,000	79,394,223	83,904,223

(a) Includes amounts related to basis swap contracts totaling 4,954,667 MMBTU in 2017 and 730,721 MMBTU in 2016.

The aggregate notional amounts of the interest rate swaps were as follows:



Interest Rate Swaps
	The Company				Consolidated SCE&G
Millions of dollars	September 30, 2017		December 31, 2016		September 30, 2017		December 31, 2016
Designated as hedging instruments	$	111.2	$	115.6	$	36.4	$	36.4
Not designated as hedging instruments	1,285.0		1,285.0		1,285.0		1,285.0

The following table shows the fair value and balance sheet location of derivative instruments. Although derivatives subject to master netting arrangements are netted on the balance sheet, the fair values presented below are shown gross and cash collateral on the derivatives has not been netted against the fair values shown.



Fair Values of Derivative Instruments
		The Company				Consolidated SCE&G
Millions of dollars	Balance Sheet Location	Asset		Liability		Asset		Liability
As of September 30, 2017
Designated as hedging instruments
Interest rate contracts
	Derivative financial instruments	—		$	3	—		$	1
	Other deferred credits and other liabilities	—		25		—		9
Commodity contracts
	Prepayments	—		1		—		—
	Derivative financial instruments	$	1	1		—		—
Total		$	1	$	30	—		$	10

Not designated as hedging instruments
Interest rate contracts
	Other deferred debits and other assets	$	56	—		$	56	—
	Derivative financial instruments	—		$	40	—		$	40
	Other deferred credits and other liabilities	—		4		—		4
Commodity contracts
	Prepayments	1		—		—		—
Energy management contracts
	Prepayments	2		1		—		—
	Other current assets	2		—		—		—
	Other deferred debits and other assets	1		—		—		—
	Derivative financial instruments	—		2		—		—
	Other deferred credits and other liabilities	—		1		—		—
Total		$	62	$	48	$	56	$	44

As of December 31, 2016
Designated as hedging instruments
Interest rate contracts
	Derivative financial instruments	—		$	4	—		$	1
	Other deferred credits and other liabilities	—		24		—		8
Commodity contracts
	Prepayments	$	5	—		—		—
	Other current assets	1		—		—		—
Total		$	6	$	28	—		$	9

Not designated as hedging instruments
Interest rate contracts
	Other deferred debits and other assets	$	71	—		$	71	—
	Derivative financial instruments	—		$	27	—		$	27
	Other deferred credits and other liabilities	—		3		—		3
Commodity contracts
	Other current assets	3		—		—		—
Energy management contracts
	Prepayments	6		2		—		—
	Other current assets	2		1		—		—
	Other deferred debits and other assets	2		—		—		—
	Derivative financial instruments	—		4		—		—
	Other deferred credits and other liabilities	—		2		—		—
Total		$	84	$	39	$	71	$	30

The effect of derivative instruments on the consolidated statements of income is as follows:

Derivatives in Cash Flow Hedging Relationships



The Company and Consolidated SCE&G:
	Loss Deferred in Regulatory Accounts							Loss Reclassified from Deferred Accounts into Income
	Loss Deferred in Regulatory Accounts							Loss Reclassified from Deferred Accounts into Income
Millions of dollars	2017			2016			Location	2017			2016
Three Months Ended September 30,
Interest rate contracts	—			$	(1	)	Interest expense	—			$	(1	)
Nine Months Ended September 30,
Interest rate contracts	$	(1	)	$	(6	)	Interest expense	$	(1	)	$	(2	)



The Company:
	Gain (Loss) Recognized in OCI, net of tax							Gain (Loss) Reclassified from AOCI into Income, net of tax
	Gain (Loss) Recognized in OCI, net of tax							Gain (Loss) Reclassified from AOCI into Income, net of tax
Millions of dollars	2017			2016			Location	2017			2016
Three Months Ended September 30,
Interest rate contracts	—			$	1		Interest expense	$	(2	)	$	(2	)
Commodity contracts	—			(2		)	Gas purchased for resale	—			—
Total	—			$	(1	)		$	(2	)	$	(2	)

Nine Months Ended September 30,
Interest rate contracts	$	(1	)	$	(4	)	Interest expense	$	(6	)	$	(6	)
Commodity contracts	(4		)	—			Gas purchased for resale	2			(6		)
Total	$	(5	)	$	(4	)		$	(4	)	$	(12	)

As of September 30, 2017, the Company expects that during the next 12 months reclassifications from AOCI to earnings arising from cash flow hedges will include approximately $0.8 million as an increase to gas cost, assuming natural gas markets remain at their current levels, and approximately $6.6 million as an increase to interest expense. As of September 30, 2017, all of the Company’s commodity cash flow hedges settle by their terms before the end of the fourth quarter of 2019.

As of September 30, 2017, each of the Company and Consolidated SCE&G expects that during the next 12 months reclassifications from regulatory accounts to earnings arising from cash flow hedges designated as hedging instruments will include approximately $1.6 million as an increase to interest expense.

Hedge Ineffectiveness

For the Company and Consolidated SCE&G, ineffectiveness on interest rate hedges designated as cash flow hedges was insignificant during all periods presented.



Derivatives Not designated as Hedging Instruments

The Company and Consolidated SCE&G:
Millions of dollars	Loss Deferred in Regulatory Accounts			Location	Loss Reclassified from Deferred Accounts into Income
Three Months Ended September 30, 2017
Interest rate contracts	$	(6	)	Interest Expense	$	(1	)
Nine Months Ended September 30, 2017
Interest rate contracts	$	(30	)	Interest Expense	$	(2	)
Three Months Ended September 30, 2016
Interest rate contracts	$	(24	)	Other Income	$	(1	)
Nine Months Ended September 30, 2016
Interest rate contracts	$	(268	)	Other Income	$	(1	)

As of September 30, 2017, each of the Company and Consolidated SCE&G expects that during the next 12 months reclassifications from regulatory accounts to earnings arising from derivatives not designated as hedges will include $3.2 million as an increase to interest expense.

Credit Risk Considerations

Certain derivative contracts contain credit contingent features. These features may include (i) material adverse change clauses or payment acceleration clauses that could result in immediate payments or (ii) the requirement for posting of letters of credit or termination of the derivative contract before maturity if specific events occur, such as a credit rating downgrade below investment grade or failure to post collateral. The Company’s and Consolidated SCE&G's credit ratings have come under pressure during the third quarter of 2017, through credit rating downgrades and continued negative outlooks, following the Company’s decision to terminate construction of the New Units and the credit ratings agencies' assessment of a deterioration of the regulatory support environment following that decision. The triggering of credit contingent features, through credit downgrades or otherwise, could result in more stringent collateral requirements.



Derivative Contracts with Credit Contingent Features
	The Company				Consolidated SCE&G
Millions of dollars	September 30, 2017		December 31, 2016		September 30, 2017		December 31, 2016
in Net Liability Position
Aggregate fair value of derivatives in net liability position	$	67.1	$	50.3	$	47.7	$	30.3
Fair value of collateral already posted	31.0		29.2		10.3		9.2
Additional cash collateral or letters of credit in the event credit-risk-related contingent features were triggered	$	36.1	$	21.1	$	37.4	$	21.1

in Net Asset Position
Aggregate fair value of derivatives in net asset position	$	49.0	$	62.9	$	49.0	$	62.0
Fair value of collateral already posted	—		—		—		—
Additional cash collateral or letters of credit in the event credit-risk-related contingent features were triggered	$	49.0	$	62.9	$	49.0	$	62.0

In addition, for fixed price supply contracts offered to certain of SCANA Energy's customers, the Company could have called on letters of credit in the amount of $1.3 million related to $5.0 million in commodity derivatives that are in a net asset position at September 30, 2017, compared to letters of credit in the amount of $1.5 million related to derivatives of $9.0 million at December 31, 2016, if all the contingent features underlying these instruments had been fully triggered.

Information related to the offsetting of derivative assets and derivative liabilities follows:



Derivative Assets	The Company												Consolidated SCE&G
Millions of dollars	Interest Rate Contracts			Commodity Contracts			Energy Management Contracts			Total			Interest Rate Contracts
As of September 30, 2017
Gross Amounts of Recognized Assets	$	56		$	2		$	5		$	63		$	56
Gross Amounts Offset in Statement of Financial Position	—			(1		)	(2		)	(3		)	—
Net Amounts Presented in Statement of Financial Position	56			1			3			60			56
Gross Amounts Not Offset - Financial Instruments	(7		)	—			—			(7		)	(7		)
Gross Amounts Not Offset - Cash Collateral Received	—			—			—			—			—
Net Amount	$	49		$	1		$	3		$	53		$	49
Balance sheet location
Prepayments										$	1		—
Other current assets										2			—
Other deferred debits and other assets										57			$	56
Total										$	60		$	56

As of December 31, 2016
Gross Amounts of Recognized Assets	$	71		$	9		$	10		$	90		$	71
Gross Amounts Offset in Statement of Financial Position	—			—			(4		)	(4		)	—
Net Amounts Presented in Statement of Financial Position	71			9			6			86			71
Gross Amounts Not Offset - Financial Instruments	(9		)	—			—			(9		)	(9		)
Gross Amounts Not Offset - Cash Collateral Received	—			—			—			—			—
Net Amount	$	62		$	9		$	6		$	77		$	62
Balance sheet location
Prepayments										$	9		—
Other current assets										5			—
Other deferred debits and other assets										72			$	71
Total										$	86		$	71



Derivative Liabilities	The Company												Consolidated SCE&G
Millions of dollars	Interest Rate Contracts			Commodity Contracts			Energy Management Contracts			Total			Interest Rate Contracts
As of September 30, 2017
Gross Amounts of Recognized Liabilities	$	72		$	2		$	4		$	78		$	54
Gross Amounts Offset in Statement of Financial Position	—			(1		)	(2		)	(3		)	—
Net Amounts Presented in Statement of Financial Position	72			1			2			75			54
Gross Amounts Not Offset - Financial Instruments	(7		)	—			—			(7		)	(7		)
Gross Amounts Not Offset - Cash Collateral Posted	(30		)	—			(1		)	(31		)	(10		)
Net Amount	$	35		$	1		$	1		$	37		$	37
Balance sheet location
Prepayments										$	1		—
Derivative financial instruments										45			$	41
Other deferred credits and other liabilities										29			13
Total										$	75		$	54

As of December 31, 2016
Gross Amounts of Recognized Liabilities	$	58		—			$	9		$	67		$	39
Gross Amounts Offset in Statement of Financial Position	—			—			(3		)	(3		)	—
Net Amounts Presented in Statement of Financial Position	58			—			6			64			39
Gross Amounts Not Offset - Financial Instruments	(9		)	—			—			(9		)	(9		)
Gross Amounts Not Offset - Cash Collateral Posted	(29		)	—			—			(29		)	(9		)
Net Amount	$	20		—			$	6		$	26		$	21
Balance sheet location
Derivative financial instruments										$	35		$	28
Other deferred credits and other liabilities										29			11
Total										$	64		$	39


7.	FAIR VALUE MEASUREMENTS, INCLUDING DERIVATIVES

The Company values available for sale securities using quoted prices from a national stock exchange, such as the NASDAQ, where the securities are actively traded. For commodity derivative and energy management assets and liabilities, the Company uses unadjusted NYMEX prices to determine fair value, and considers such measures of fair value to be Level 1 for exchange traded instruments and Level 2 for over-the-counter instruments. The Company’s and Consolidated SCE&G's interest rate swap agreements are valued using discounted cash flow models with independently sourced data. Fair value measurements, and the level within the fair value hierarchy in which the measurements fall, were as follows:



	As of September 30, 2017						As of December 31, 2016
	The Company				Consolidated SCE&G		The Company				Consolidated SCE&G
Millions of dollars	Level 1		Level 2		Level 2		Level 1		Level 2		Level 2
Assets:
Available for sale securities	$	19	—		—		$	14	—		—
Held to maturity securities	—		$	7	—		—		$	7	—
Interest rate contracts	—		56		$	56	—		71		$	71
Commodity contracts	1		1		—		8		1		—
Energy management contracts	2		3		—		6		4		—
Liabilities:
Interest rate contracts	—		72		54		—		58		39
Commodity contracts	1		1		—		—		—		—
Energy management contracts	1		5		—		2		10		—

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The Company had no Level 3 fair value measurements for either period presented, and there were no transfers of fair value amounts into or out of Levels 1, 2 or 3 during the periods presented. Consolidated SCE&G had no Level 1 or Level 3 fair value measurements for either period presented, and there were no transfers of fair value amounts into or out of Levels 1, 2 or 3 during the periods presented.

Financial instruments for which the carrying amount may not equal estimated fair value were as follows:



Long-Term Debt	September 30, 2017				December 31, 2016
Millions of dollars	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
The Company	$	6,632.4	$	7,462.9	$	6,489.8	$	7,183.3
Consolidated SCE&G	5,162.5		5,836.9		5,166.0		5,752.3

Fair values of long-term debt instruments are based on net present value calculations using independently sourced market data that incorporate a developed discount rate using similarly rated long-term debt, along with benchmark interest rates. As such, the aggregate fair values presented above are considered to be Level 2. Early settlement of long-term debt may not be possible or may not be considered prudent.

Carrying values of short-term borrowings approximate fair value, and are based on quoted prices from dealers in the commercial paper market. The resulting fair value is considered to be Level 2.


8.	EMPLOYEE BENEFIT PLANS

Components of net periodic benefit cost recorded by the Company and Consolidated SCE&G were as follows:



The Company	Pension Benefits						Other Postretirement Benefits
	2017			2016			2017		2016
Three months ended September 30,
Service cost	$	5.7		$	4.4		$	1.0	$	0.8
Interest cost	9.2			9.8			2.8		3.0
Expected return on assets	(13.4		)	(13.8		)	—		—
Prior service cost amortization	0.4			1.0			—		0.1
Amortization of actuarial losses	4.4			3.7			—		0.2
Net periodic benefit cost	$	6.3		$	5.1		$	3.8	$	4.1



Nine months ended September 30,
Service cost	$	16.3		$	15.5		$	3.4	$	3.3
Interest cost	28.0			29.5			8.6		9.1
Expected return on assets	(41.0		)	(41.9		)	—		—
Prior service cost amortization	1.2			3.0			—		0.2
Amortization of actuarial losses	12.2			11.1			0.8		0.4
Net periodic benefit cost	$	16.7		$	17.2		$	12.8	$	13.0



Consolidated SCE&G	Pension Benefits						Other Postretirement Benefits
	2017			2016			2017		2016
Three months ended September 30,
Service cost	$	4.8		$	3.6		$	0.8	$	0.7
Interest cost	7.8			8.3			2.3		2.5
Expected return on assets	(11.4		)	(11.7		)	—		—
Prior service cost amortization	0.3			0.8			—		0.1
Amortization of actuarial losses	3.7			3.2			—		0.1
Net periodic benefit cost	$	5.2		$	4.2		$	3.1	$	3.4

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Nine months ended September 30,
Service cost	$	13.6		$	12.7		$	2.8	$	2.7
Interest cost	24.0			25.0			7.1		7.5
Expected return on assets	(35.0		)	(35.5		)	—		—
Prior service cost amortization	1.0			2.5			—		0.2
Amortization of actuarial losses	10.4			9.4			0.6		0.3
Net periodic benefit cost	$	14.0		$	14.1		$	10.5	$	10.7

No significant contribution to the pension trust is expected for the foreseeable future based on current market conditions and assumptions, nor is a limitation on benefit payments expected to apply. SCE&G recovers current pension costs through either a rate rider that may be adjusted annually for retail electric operations or through cost of service rates for gas operations. PSNC Energy recovers pension costs through cost of service rates.


9.	COMMITMENTS AND CONTINGENCIES

Nuclear Insurance

Under Price-Anderson, SCE&G (for itself and on behalf of Santee Cooper, a one-third owner of Unit 1) maintains agreements of indemnity with the NRC that, together with private insurance, cover third-party liability arising from any nuclear incident occurring at SCE&G's nuclear power plant. Price-Anderson provides funds up to $13.4 billion for public liability claims that could arise from a single nuclear incident. Each nuclear plant is insured against this liability to a maximum of $450 million by ANI with the remaining coverage provided by a mandatory program of deferred premiums that could be assessed, after a nuclear incident, against all owners of commercial nuclear reactors. Each reactor licensee is liable for up to $127.3 million per reactor owned for each nuclear incident occurring at any reactor in the United States, provided that not more than $18.9 million of the liability per reactor would be assessed per year. SCE&G’s maximum assessment, based on its two-thirds ownership of Unit 1, would be $84.8 million per incident, but not more than $12.6 million per year. Both the maximum assessment per reactor and the maximum yearly assessment are adjusted for inflation at least every five years.

SCE&G currently maintains insurance policies (for itself and on behalf of Santee Cooper) with NEIL. The policies provide coverage to Unit 1 for property damage and outage costs up to $2.75 billion resulting from an event of nuclear origin and up to $2.33 billion resulting from an event of a non-nuclear origin, and provide coverage up to $500 million for accidental property damage occurring at the New Units. The NEIL policies in aggregate, are subject to a maximum loss of $2.75 billion for any single loss occurrence. The NEIL policies permit retrospective assessments under certain conditions to cover insurer’s losses. Based on the current annual premium, SCE&G’s portion of the retrospective premium assessment would not exceed $45.4 million . SCE&G currently maintains an excess property insurance policy (for itself and on behalf of Santee Cooper) with EMANI. The policy provides coverage to Unit 1 for property damage and outage costs up to $415 million resulting from an event of a non-nuclear origin. The EMANI policy permits retrospective assessments under certain conditions to cover insurer's losses. Based on the current annual premium, SCE&G's portion of the retrospective premium assessment would not exceed $1.9 million .

To the extent that insurable claims for property damage, decontamination, repair and replacement and other costs and expenses arising from an incident at Unit 1 exceed the policy limits of insurance, or to the extent such insurance becomes unavailable in the future, and to the extent that SCE&G's rates would not recover the cost of any purchased replacement power, SCE&G will retain the risk of loss as a self-insurer. SCE&G has no reason to anticipate a serious nuclear or other incident. However, if such an incident were to occur, it likely would have a material impact on the Company’s and Consolidated SCE&G's results of operations, cash flows and financial position.

New Nuclear Project

SCE&G, on behalf of itself and as agent for Santee Cooper, entered into the EPC Contract with the Consortium in 2008 for the design and construction of the New Units. SCE&G's ownership share in the New Units is 55% . As discussed below, various difficulties were encountered in connection with the project. The ability of the Consortium to adhere to established budgets and construction schedules was affected by many variables, including unanticipated difficulties encountered in connection with project engineering and the construction of project components, constrained financial resources of the contractors, regulatory, legal, training and construction processes associated with securing approvals, permits and licenses and necessary amendments to them within projected timeframes, the availability of labor and materials at estimated costs, the

efficiency of project labor and weather. There were also contractor and supplier performance issues, difficulties in timely meeting critical regulatory requirements, contract disputes, and changes in key contractors or subcontractors. These matters, and others more fully discussed below, were the subject of a comprehensive analysis performed by the Company and Santee Cooper (see Contractor Bankruptcy Proceedings and Related Uncertainties below). Based on the results of this analysis, and in light of Santee Cooper's decision to suspend construction on the New Units, on July 31, 2017, the Company determined to stop the construction of the New Units and to pursue recovery of costs incurred in connection with such construction under the abandonment provisions of the BLRA or through a general rate case or other regulatory means.

EPC Contract and BLRA Matters

The construction of the New Units and SCE&G’s related recovery of financing costs through rates has been subject to review and approval by the SCPSC as provided for in the BLRA. Under the BLRA, the SCPSC approved, among other things, a milestone schedule and a capital costs estimates schedule for the New Units. This approval constituted a final and binding determination that the New Units were used and useful for utility purposes, and that the capital costs associated with the New Units were prudent utility costs and expenses and were properly included in rates, so long as the New Units were constructed or were being constructed within the parameters of the approved milestone schedule, including specified contingencies, and the approved capital costs estimates schedule. Subject to the same conditions, the BLRA provides that SCE&G may apply to the SCPSC annually for an order to recover through revised rates SCE&G’s weighted average cost of capital applied to all or part of the outstanding balance of construction work in progress concerning the New Units. As of September 30, 2017, financing costs on $3.8 billion of SCE&G's construction costs for the New Units, including related transmission assets, have been reflected in rates under the BLRA. SCE&G's costs related to the New Units as of September 30, 2017, excluding transmission assets of approximately $300 million which are expected to be placed in service and after recognizing the estimated impairment loss described in Impairment Considerations below, totaled $4.5 billion . As a result of the decision to stop construction of the New Units, this amount has been reclassified from construction work in progress into regulatory assets in the third quarter of 2017. See further discussion below.

The SCPSC granted initial approval of the construction schedule and related forecasted capital costs in 2009. The NRC issued COLs in March 2012. In November 2012, and again in September 2015 and November 2016 (see discussion below), the SCPSC approved SCE&G's requested updates to the milestone schedule, revised contractual substantial completion dates, and increases in capital and other costs. As further discussed below, approval by the SCPSC of cost recovery under the abandonment provisions of the BLRA or through a general rate case or other regulatory means will be required as a consequence of the Company’s determination on July 31, 2017 to cease construction of the New Units.

October 2015 Amendment and WEC's Engagement of Fluor

On October 27, 2015, SCE&G, Santee Cooper and the Consortium amended the EPC Contract. The amendment became effective in December 2015, at which time Fluor began serving as a subcontracted construction manager for the Consortium. The October 2015 Amendment provided SCE&G and Santee Cooper an option to fix the total amount to be paid to the Consortium for its entire scope of work on the project (excluding a limited amount of work within the time and materials component of the contract price) after June 30, 2015 at $6.082 billion (SCE&G’s 55% portion being approximately $3.345 billion ). This total amount to be paid would be reduced by amounts paid since June 30, 2015. SCE&G, on behalf of itself and as agent for Santee Cooper, executed the fixed price option, subject to SCPSC approval, on July 1, 2016.

Among other things, the October 2015 Amendment revised the contractual guaranteed substantial completion dates of Unit 2 and Unit 3 to August 31, 2019 and 2020, respectively, and provided for development of a revised construction milestone payment schedule. In February 2017, WEC notified the Company and Consolidated SCE&G that the contractual guaranteed substantial completion dates of August 2019 and 2020 for Unit 2 and Unit 3, respectively, which were reflected in the October 2015 Amendment, would not be met. Instead, WEC provided further revised estimated substantial completion dates of April 2020 and December 2020.

November 2016 SCPSC Order

In May 2016, SCE&G petitioned the SCPSC for approval of the updated construction and capital cost schedules for the New Units which had been developed in connection with the October 2015 Amendment. On November 9, 2016, the SCPSC approved a settlement agreement among SCE&G, ORS and certain other parties concerning this petition. The SCPSC also approved SCE&G's election of the fixed price option.

The construction schedule approved by the SCPSC in November 2016 provided for contractual guaranteed substantial completion dates of August 31, 2019 and August 31, 2020 for Unit 2 and Unit 3, respectively, and the approved capital cost

schedule included incremental capital costs totaling $831 million . Under such approved capital cost schedule, SCE&G’s total project capital cost would be approximately $6.8 billion including owner’s costs and transmission, or $7.7 billion with escalation and AFC. In addition, the SCPSC approved revising SCE&G’s allowed ROE for new nuclear construction from 10.5% to 10.25% , with this revised ROE being applied prospectively for the purpose of calculating revised rates sought by SCE&G under the BLRA on and after January 1, 2017.

On February 28, 2017, the SCPSC issued its order denying Petitions for Rehearing which had been filed by certain parties that were not included in the settlement, and that order was not appealed.

Contractor Bankruptcy Proceedings and Related Uncertainties

On March 29, 2017, WEC and WECTEC, the two members of the Consortium, and certain of their affiliates filed petitions for protection under Chapter 11 of the U.S. Bankruptcy Code, citing a liquidity crisis arising from project contract losses attributable to the New Units and the Vogtle Units as a material factor that caused them to seek protection under the bankruptcy laws. As part of such filing, WEC and WECTEC publicly announced their inability to complete the New Units under the terms of the EPC Contract.

In connection with the bankruptcy filing, SCE&G, Santee Cooper, WEC and WECTEC entered into an Interim Assessment Agreement under which engineering and construction continued on the project and under which SCE&G and Santee Cooper were provided the right to discuss project status with Fluor and other subcontractors and vendors and to obtain from them relevant project information and documents that had been previously contractually unavailable in order for SCE&G and Santee Cooper to perform comprehensive analyses regarding whether or how to proceed with the project. As part of the Interim Assessment Agreement, and to avoid an immediate rejection of the EPC Contract upon the filing of the bankruptcy case, WEC and WECTEC required SCE&G and Santee Cooper to make estimated weekly payments to WEC, WECTEC, subcontractors and vendors, irrespective of the fixed price provisions of the EPC Contract, to permit the time to conduct analyses. SCE&G and Santee Cooper agreed to pay specified costs incurred by the Consortium, Fluor, other subcontractors and vendors for work performed or services rendered while the Interim Assessment Agreement remained in effect.

During the period of the Interim Assessment Agreement, as amended and extended, SCE&G and Santee Cooper evaluated the various elements of the new nuclear project, including forecasted costs and completion dates, while construction continued and SCE&G and Santee Cooper continued to make payments for such work.

As part of its evaluation, SCE&G considered that, as a result of the bankruptcy process (including WEC and WECTEC's public announcements that they could not perform under the terms of the EPC Contract), the EPC Contract would likely be rejected and that the benefit of the fixed-price terms provided by the EPC Contract would be lost. As such, any cost overruns that would have been absorbed by the Consortium would become the responsibility of SCE&G and Santee Cooper. Additionally, these cost increases and other costs identified by SCE&G would not be fully recoverable from the Consortium or from Toshiba under its payment guaranty or the related Toshiba Settlement Agreement, discussed below, and such costs would likely substantially exceed the amount of the Consortium's payment obligations guaranteed by Toshiba. SCE&G also considered that even the newly revised substantial completion dates identified by WEC of April and December 2020 for Unit 2 and Unit 3, respectively, would not be met, which would result in the nuclear production tax credits discussed below not being earned under current law.

On September 1, 2017, SCE&G, for itself and as agent for Santee Cooper, filed with the Bankruptcy Court Proofs of Claim for unliquidated damages against each of WEC and WECTEC. The Proofs of Claim are based upon the anticipatory repudiation and material breach by the Consortium of the EPC Contract, and assert against WEC and WECTEC any and all claims that are based thereon or that may be related thereto. These claims were sold to Citibank on September 27, 2017 as part of the monetization transaction discussed below. Notwithstanding the sale of the claims, SCE&G and Santee Cooper remain responsible for any claims that may be made by WEC and WECTEC against them relating to the EPC Contract.

Toshiba Settlement and Subsequent Monetization

Payment and performance obligations under the EPC Contract are joint and several obligations of WEC and WECTEC, and in connection with the October 2015 Amendment, Toshiba, WEC’s parent company, reaffirmed its guaranty of WEC’s payment obligations.

In April of 2017, following WEC’s and WECTEC’s bankruptcy petitions, Toshiba announced that it had recorded an impairment charge of approximately $6.2 billion relating to its nuclear power systems business, leaving it with negative shareholders’ equity. Toshiba also disclosed that, although these conditions and events raised substantial doubt, it believed that

its responses to such conditions, including the sale of a portion of its computer memory business as then anticipated by Toshiba, would enable it to continue to operate as a going concern. However, there could be no assurance that such sales or other actions would be successful.

As discussed above, Toshiba provided a parental guaranty for WEC’s payment obligations under the EPC Contract. In satisfaction of such guaranty obligations, on July 27, 2017, the Toshiba Settlement was executed under which Toshiba was to begin making periodic settlement payments from October 2017 through September 2022 in the total amount of approximately $2.2 billion ( $1.2 billion for SCE&G’s 55% share). The $2.2 billion is subject to offset for payments by WEC that have the effect of satisfying the liens on the project discussed below.

On September 27, 2017, the scheduled payments under the Toshiba Settlement, exclusive of the payment due in October 2017, were purchased by Citibank for a one-time upfront payment of $1.847 billion (approximately $1.016 billion for SCE&G's 55% share), including amounts related to the contractor liens discussed below. The initial payment was then received from Toshiba on October 2, 2017, as scheduled, in the amount of $150 million ( $82.5 million for SCE&G's 55% share). The purchase agreement provides that SCE&G and Santee Cooper (each according to its pro rata share) would indemnify Citibank for its losses arising from misrepresentations or covenant defaults under the purchase agreement. SCE&G and Santee Cooper have also assigned their claims under the WEC bankruptcy process to Citibank, and have agreed to use commercially reasonable efforts to cooperate with Citibank and provide reasonable support necessary for its enforcement of those claims. The proceeds received under or arising from the monetization of the Toshiba Settlement are reflected as a regulatory liability on the accompanying condensed consolidated balance sheets, as the net value of the proceeds will be utilized to benefit SCE&G's customers in a manner to be determined by the SCPSC. See further discussion in condensed consolidated Note 4.

A number of subcontractors and vendors to the Consortium have alleged non-payment by the Consortium for amounts owed for work performed on the New Units and have filed liens on property in Fairfield County, South Carolina, where the New Units were to be located. SCE&G is contesting the filed liens. SCE&G estimates that the aggregate amount of claims for which subcontractor and vendor liens have been filed was, as of September 30, 2017, approximately $302 million (SCE&G’s 55% portion being approximately $166 million ). Payments under the Toshiba Settlement described above are subject to reduction if WEC pays creditors holding these liens directly. Under these circumstances, SCE&G and Santee Cooper, each in its pro rata share, would be required to make Citibank whole for the reduction. An estimate of amounts that may be necessary to satisfy project liens has been incorporated into the estimate of impairment loss described below.

Determination to Stop Construction and Related Regulatory, Political and Legal Developments

The BLRA provides that, in the event of abandonment prior to plant completion, costs incurred, including AFC, and a return on those costs, may be recoverable through rates, if the SCPSC determines that the decision to abandon the New Units was prudent. Based on the evaluation previously discussed, and in light of Santee Cooper's decision to suspend construction, on July 31, 2017, the Company determined to stop the construction of the New Units and to pursue recovery of costs incurred in connection with such construction under the abandonment provisions of the BLRA or through a general rate case or other regulatory means. On July 31, 2017, SCE&G gave WEC a five-day notice of termination of the Interim Assessment Agreement and notified WEC of its determination to stop construction of the New Units.

On August 1, 2017, SCE&G senior management provided an allowable ex parte briefing to the SCPSC regarding the project and this decision, and SCE&G also filed the Abandonment Petition with the SCPSC. Through the Abandonment Petition, SCE&G had sought recovery of such costs expended on the construction of the New Units, including certain costs incurred subsequent to SCE&G's last revised rates update, and certain other costs under the abandonment provisions of the BLRA. The Abandonment Petition included SCE&G's plan of abandonment and certain proposed actions which would mitigate related customer rate increases, including a proposal to return to customers the net value of proceeds received by SCE&G under or arising from the monetization of the Toshiba Settlement. Subsequently, SCE&G’s management met with various stakeholders and members of the South Carolina General Assembly, including legislative leaders, to discuss the abandonment of the new nuclear project and to hear their concerns. In response to those concerns, and to allow for adequate time for governmental officials to conduct their reviews, SCE&G voluntarily withdrew the Abandonment Petition from the SCPSC on August 15, 2017.

In August 2017, special committees of the South Carolina General Assembly, both in the House and in the Senate, began conducting public hearings regarding the decision to abandon the new nuclear project. Members of SCE&G's senior management, along with representatives from Santee Cooper, the ORS and other interested parties, testified before these committees. The reviews being conducted by each of these committees are continuing, and neither the Company nor Consolidated SCE&G can predict when their reviews will be complete or what actions, if any, may be proposed or taken, including legislative actions related to the BLRA.

In September 2017, the Company was served with a subpoena issued by the United States Attorney’s Office for the District of South Carolina seeking documents relating to the new nuclear project. The subpoena requires the Company to produce a broad range of documents related to the project. Also in September 2017, the state's Office of Attorney General, the Speaker of the House of Representatives, and the Chair and Vice-Chair of the South Carolina House Utility Ratepayer Protection Committee requested that SLED conduct a criminal investigation into the handling of the new nuclear project by SCANA and SCE&G. In October 2017, the staff of the SEC's Division of Enforcement also issued a subpoena for documents related to an investigation they are conducting related to the new nuclear project. The Company and Consolidated SCE&G intend to fully cooperate with these investigations. Also in connection with the abandonment of the new nuclear project, various state or local governmental authorities may attempt to challenge, reverse or revoke one or more previously-approved tax or economic development incentives, benefits or exemptions and may attempt to apply such action retroactively. No assurance can be given as to the timing or outcome of these matters.

On September 26, 2017, the South Carolina Office of Attorney General issued an opinion stating, among other things, that "as applied, portions of the BLRA are constitutionally suspect," including the abandonment provisions. Also on September 26, 2017, the ORS filed the Request with the SCPSC asking for an order directing SCE&G to immediately suspend all revised rates collections from customers which were previously approved by the SCPSC pursuant to the authority of the BLRA. In the Request, the ORS relied upon the opinion from the Office of Attorney General to assert that it is not just and reasonable or in the public interest to allow SCE&G to continue collecting revised rates. Further, the ORS noted the existence of an allegation that SCE&G failed to disclose information that should have been disclosed and that would have appeared to provide a basis for challenging prior requests, and asserted that SCE&G should not be allowed to continue to benefit from nondisclosure. The ORS also asked for an order that, if the BLRA is found to be unconstitutional or the General Assembly amends or revokes the BLRA, then SCE&G should make credits to future bills or refunds to customers for prior revised rates collections. SCE&G estimates that revised rates collections currently total approximately $445 million annually, and the amounts accumulated through September 30, 2017 total approximately $1.8 billion .

On September 28, 2017, citing numerous legal deficiencies in the Request, SCE&G filed a Motion to Dismiss the Request and a Request for Briefing Schedule and Hearing on Motion to Dismiss. On September 28, 2017, the SCPSC deferred action on the Request and ordered a hearing officer to establish a briefing schedule and hearing date on SCE&G's motion. The hearing has been scheduled for December 12, 2017, and the parties who have filed to intervene in the matter or have filed a letter in support of the request by the ORS include the Governor, the state's Office of Attorney General and Speaker of the House of Representatives, the Electric Cooperatives of South Carolina, the SCEUC, certain large industrial customers, and several environmental groups. SCE&G intends to vigorously contest the request by the ORS, but cannot give any assurance as to the timing or outcome of this matter.

On October 17, 2017, the ORS filed with the SCPSC a motion to amend its Request, in which the ORS asked the SCPSC to consider the most prudent manner by which SCE&G will enable its customers to realize the value of the monetized Toshiba Settlement payments and other payments made by Toshiba towards satisfaction of its obligations to SCE&G. It is possible that the outcome of regulatory or legal proceedings could result in requiring SCE&G's share of these proceeds to be placed in escrow pending their final disposition. Such a requirement would significantly harm the Company's and Consolidated SCE&G's results of operations, cash flows and financial condition.

See also Claims and Litigation for more discussion of legal matters related to the new nuclear project.

Impairment Considerations

Under the current regulatory construct in South Carolina, pursuant to the BLRA or through a general rate case or other regulatory means, the ability of SCE&G to recover costs incurred in connection with the New Units, and a reasonable return on them, will be subject to review and approval by the SCPSC. In light of the contentious nature of ongoing reviews by legislative committees and others, and given the Request being considered by the SCPSC that could result in the suspension of rates being currently collected under the BLRA, as well as the return of such amounts previously collected, there is significant uncertainty as to SCE&G’s ultimate ability to fully recover its costs of the New Units and a return on them from its customers. The Company and Consolidated SCE&G have contested the specific challenges described above and do not currently anticipate that any of the $1.8 billion in revenue previously collected will be subject to refund. The Company and Consolidated SCE&G believe that the issues related to the recovery of the cost of the New Units and related to the rates currently being collected under the BLRA for financing costs should both be resolved in future proceedings before the SCPSC. However, based on the considerations described above, the Company and Consolidated SCE&G have determined that a disallowance of recovery of part of the cost of the abandoned plant is both probable and reasonably estimable under applicable accounting guidance. A pre-tax impairment loss of $210 million has been recorded as of September 30, 2017. This estimate represents costs in the amount

of approximately $1.2 billion that have been expended on the project, exclusive of transmission costs, but which have not yet been determined to be prudent by the SCPSC in a revised rates proceeding under the BLRA, offset by the amount of approximately $1.0 billion , which amount represents the recovery of the Toshiba Settlement proceeds that are in excess of amounts from that settlement that the Company and Consolidated SCE&G estimate may be necessary to satisfy certain project liens. A full recovery of and a full return on the remaining balance of unrecovered nuclear project costs of approximately $4.5 billion is currently anticipated to be provided; however, it is reasonably possible that a change in this assessment and the estimated impairment loss could occur in the near term and the change could be material. The impact of any such change cannot be reasonably estimated.

Nuclear Production Tax Credits

In August 2014, the IRS notified SCE&G that, subject to a national megawatt capacity limitation, the electricity to be produced by each of the New Units would qualify for nuclear production tax credits under Section 45J of the IRC to the extent that such New Unit was operational before January 1, 2021 and other eligibility requirements were met. These nuclear production tax credits (related to SCE&G's 55% share of both New Units) could have totaled as much as approximately $1.4 billion . Due to the Company's determination to abandon the construction of the New Units, no such production tax credits will be earned.

Claims and Litigation

Following the Company’s decision to stop construction of the New Units, numerous lawsuits seeking class action status have been filed on behalf of customers and shareholders against SCANA, SCE&G, or both, and in certain cases some of their officers and/or directors. The plaintiffs allege various causes of action, including but not limited to waste, breach of fiduciary duty, negligence, unfair trade practices, unjust enrichment, conspiracy, fraud, constructive fraud, misrepresentation and negligent misrepresentation, promissory estoppel, constructive trust, and money had and received, among other causes of action. Plaintiffs generally seek compensatory and consequential damages and such further relief as the court deems just and proper. In addition, certain plaintiffs seek a declaration that SCE&G may not charge its customers for past and continuing costs of the nuclear project. Certain plaintiffs also seek to freeze or appoint a receiver for certain of SCE&G’s assets, including all money SCE&G has received under the Toshiba payment guaranty and related settlement agreement and money to be collected from customers for the new nuclear project.

In addition, lawsuits seeking class action status have been filed on behalf of investors in District Court against SCANA and certain of its executive officers. The plaintiffs allege, among other things, that defendants violated Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder (i.e., employment of manipulative and deceptive devices), and one suit alleges violations of the Racketeer Influenced and Corrupt Organizations Act. The plaintiffs in each of these suits seek compensatory and consequential damages and such further relief as the court deems proper.

While the Company and Consolidated SCE&G intend to vigorously contest the lawsuits which have been filed against them, they cannot predict the timing or outcome of these matters or others that may arise, and adverse outcomes from some of these matters would not be covered by insurance. The Company and Consolidated SCE&G cannot provide any estimate or range of potential loss for these matters at this time, and therefore, no accrual for these potential losses has been included in the condensed consolidated financial statements. Such outcomes could have a material adverse effect on the Company's and Consolidated SCE&G's results of operations, cash flows and financial condition.

Environmental

On August 3, 2015, the EPA issued its final rule on emission guidelines for states to follow in developing plans to address GHG emissions from existing units. The rule includes state-specific goals for reducing national CO ₂ emissions by 32% from 2005 levels by 2030, and establishes a phased-in compliance approach beginning in 2022. The rule gives each state from one to three years to issue its SIP, which will ultimately define the specific compliance methodology that will be applied to existing units in that state. On February 9, 2016, the Supreme Court stayed the rule pending disposition of a petition of review of the rule in the Court of Appeals. As a result of an Executive Order on March 28, 2017, the EPA placed the rule under

review and the Court of Appeals agreed to hold the case in abeyance. On October 10, 2017, the Administrator of the EPA signed a notice proposing to repeal the rule on the grounds that it exceeds the EPA's statutory authority. The EPA is further considering the scope of any potential replacement rule and plans to formally solicit information on systems of emission reduction that are in accord with the EPA's interpretation of its statutory authority. The Company and Consolidated SCE&G expect any costs incurred to comply with such rule to be recoverable through rates.

In July 2011, the EPA issued the CSAPR to reduce emissions of SO ₂ and NO _X from power plants in the eastern half of the United States. The CSAPR replaces the CAIR and requires a total of 28 states to reduce annual SO ₂ emissions and annual and ozone season NO _X emissions to assist in attaining the ozone and fine particle NAAQS. The rule establishes an emissions cap for SO ₂ and NO _X and limits the trading for emission allowances by separating affected states into two groups with no trading between the groups. The State of South Carolina has chosen to remain in the CSAPR program, even though recent court rulings exempted the state. This allows the state to remain compliant with regional haze standards. Air quality control installations that SCE&G and GENCO have already completed have positioned them to comply with the existing allowances set by the CSAPR. Any costs incurred to comply with CSAPR are expected to be recoverable through rates.

In April 2012, the EPA's MATS rule containing new standards for mercury and other specified air pollutants became effective. The MATS rule has been the subject of ongoing litigation even while it remains in effect. Rulings on this litigation are not expected to have an impact on SCE&G or GENCO due to plant retirements, conversions, and enhancements. SCE&G and GENCO are in compliance with the MATS rule and expect to remain in compliance.

The CWA provides for the imposition of effluent limitations that require treatment for wastewater discharges. Under the CWA, compliance with applicable limitations is achieved under state-issued NPDES permits such that, as a facility’s NPDES permit is renewed, any new effluent limitations would be incorporated. The ELG Rule had become effective on January 4, 2016, after which state regulators could modify facility NPDES permits to match more restrictive standards, which would require facilities to retrofit with new wastewater treatment technologies. Compliance dates varied by type of wastewater, and some were based on a facility's five-year permit cycle and thus could range from 2018 to 2023. However, the ELG Rule is under reconsideration by the EPA and has been stayed administratively. The EPA has decided to conduct a new rulemaking that could result in revisions to certain flue gas desulfurization wastewater and bottom ash transport water requirements in the ELG Rule. Accordingly, in September 2017 the EPA finalized a rule that resets compliance dates under the ELG Rule to a range from November 1, 2020 to December 31, 2023. The EPA indicates that the new rulemaking process may take up to three years to complete, such that any revisions to the ELG Rule likely would not be final until the summer of 2020. While the Company and Consolidated SCE&G expect that wastewater treatment technology retrofits will be required at Williams and Wateree Stations, any costs incurred to comply with the ELG Rule are expected to be recoverable through rates.

The CWA Section 316(b) Existing Facilities Rule became effective in October 2014. This rule establishes national requirements for the location, design, construction and capacity of cooling water intake structures at existing facilities that reflect the best technology available for minimizing the adverse environmental impacts of impingement and entrainment. SCE&G and GENCO are conducting studies and implementing plans as required by the rule to determine appropriate intake structure modifications to ensure compliance with this rule. Any costs incurred to comply with this rule are expected to be recoverable through rates.

The EPA's final rule for CCR became effective in the fourth quarter of 2015. This rule regulates CCR as a non-hazardous waste under Subtitle D of the Resource Conservation and Recovery Act and imposes certain requirements on ash storage ponds and other CCR management facilities at SCE&G's and GENCO's coal-fired generating facilities. SCE&G and GENCO have already closed or have begun the process of closure of all of their ash storage ponds and have previously recognized AROs for such ash storage ponds under existing requirements. The Company and Consolidated SCE&G do not expect the incremental compliance costs associated with this rule to be significant and expect to recover such costs in future rates.

SCE&G is responsible for four decommissioned MGP sites in South Carolina which contain residues of by-product chemicals. These sites are in various stages of investigation, remediation and monitoring under work plans approved by DHEC and the EPA. SCE&G anticipates that major remediation activities at all these sites will continue at least through 2018 and will cost an additional $9.9 million , which is accrued in Other within Deferred Credits and Other Liabilities on the condensed consolidated balance sheet. SCE&G expects to recover any cost arising from the remediation of MGP sites through rates. At September 30, 2017, deferred amounts, net of amounts previously recovered through rates and insurance settlements, totaled $24.7 million and are included in regulatory assets.

Table of Contents


10.	SEGMENT OF BUSINESS INFORMATION

Regulated operations measure profitability using operating income; therefore, net income is not allocated to the Electric Operations and Gas Distribution segments. The Gas Marketing segment measures profitability using net income.

The Company's Gas Distribution segment is comprised of the local distribution operations of SCE&G and PSNC Energy which meet the criteria for aggregation. All Other includes the parent company, a services company and other nonreportable segments that were insignificant for all periods presented.



The Company
Millions of dollars	External Revenue		Intersegment Revenue			Operating Income			Net Income
Three Months Ended September 30, 2017
Electric Operations	$	786	$	1		$	126		n/a
Gas Distribution	123		—			(7		)	n/a
Gas Marketing	167		35			n/a			$	1
All Other	—		90			—			(7		)
Adjustments/Eliminations	—		(126		)	1			40
Consolidated Total	$	1,076	$	—		$	120		$	34



Nine Months Ended September 30, 2017
Electric Operations	$	2,042	$	4		$	549	n/a
Gas Distribution	584		1			109		n/a
Gas Marketing	623		93			n/a		$	17
All Other	—		286			—		(14		)
Adjustments/Eliminations	—		(384		)	27		323
Consolidated Total	$	3,249	$	—		$	685	$	326



Three Months Ended September 30, 2016
Electric Operations	$	817	$	1		$	364		n/a
Gas Distribution	111		—			(14		)	n/a
Gas Marketing	165		35			n/a			$	(1	)
All Other	—		100			—			(7		)
Adjustments/Eliminations	—		(136		)	(2		)	197
Consolidated Total	$	1,093	$	—		$	348		$	189



Nine Months Ended September 30, 2016
Electric Operations	$	2,035	$	4		$	784	n/a
Gas Distribution	538		1			79		n/a
Gas Marketing	598		83			n/a		$	23
All Other	—		302			—		(14		)
Adjustments/Eliminations	—		(390		)	37		462
Consolidated Total	$	3,171	$	—		$	900	$	471



Consolidated SCE&G
Millions of dollars	External Revenue		Operating Income			Earnings Available to Common Shareholder
Three Months Ended September 30, 2017
Electric Operations	$	787	$	125		n/a
Gas Distribution	69		(2		)	n/a
Adjustments/Eliminations	—		—			$	39
Consolidated Total	$	856	$	123		$	39



Nine Months Ended September 30, 2017
Electric Operations	$	2,046	$	549	n/a
Gas Distribution	285		42		n/a
Adjustments/Eliminations	—		—		$	270
Consolidated Total	$	2,331	$	591	$	270



Three Months Ended September 30, 2016
Electric Operations	$	818	$	364		n/a
Gas Distribution	64		(5		)	n/a
Adjustments/Eliminations	—		—			$	201
Consolidated Total	$	882	$	359		$	201



Nine Months Ended September 30, 2016
Electric Operations	$	2,039	$	784	n/a
Gas Distribution	253		32		n/a
Adjustments/Eliminations	—		—		$	423
Consolidated Total	$	2,292	$	816	$	423



Segment Assets	The Company				Consolidated SCE&G
	September 30,		December 31,		September 30,		December 31,
Millions of dollars	2017		2016		2017		2016
Electric Operations	$	12,294	$	11,929	$	12,294	$	11,929
Gas Distribution	3,080		2,892		856		825
Gas Marketing	187		230		n/a		n/a
All Other	970		1,124		n/a		n/a
Adjustments/Eliminations	3,488		2,532		4,283		3,337
Consolidated Total	$	20,019	$	18,707	$	17,433	$	16,091

11. AFFILIATED TRANSACTIONS

The Company and Consolidated SCE&G:

SCE&G owns 40% of Canadys Refined Coal, LLC, which is involved in the manufacturing and sale of refined coal to reduce emissions. SCE&G accounts for this investment using the equity method. The net of the total purchases and total sales are recorded in Other expenses on the consolidated statements of income (for the Company) and of comprehensive income (for Consolidated SCE&G).



	Three Months Ended September 30,				Nine Months Ended September 30,
Millions of Dollars	2017		2016		2017		2016
Purchases from Canadys Refined Coal, LLC	$	47.5	$	41.8	$	144.9	$	138.6
Sales to Canadys Refined Coal, LLC	47.2		41.6		144.0		137.8



Millions of Dollars	September 30, 2017		December 31, 2016
Receivable from Canadys Refined Coal, LLC	$	7.6	$	16.0
Payable to Canadys Refined Coal, LLC	7.7		16.1

Consolidated SCE&G:

SCE&G purchases natural gas and related pipeline capacity from SCANA Energy to serve its retail gas customers and certain electric generation requirements.

SCANA Services, on behalf of itself and its parent company, provides the following services to Consolidated SCE&G, which are rendered at direct or allocated cost: information systems, telecommunications, customer support, marketing and sales, human resources, corporate compliance, purchasing, financial, risk management, public affairs, legal, investor relations, gas supply and capacity management, strategic planning, general administrative, and retirement benefits. In addition, SCANA Services processes and pays invoices for Consolidated SCE&G and is reimbursed. Costs for these services include amounts capitalized. Amounts expensed are recorded in Other operation and maintenance - nonconsolidated affiliate and Other expenses on the consolidated statements of comprehensive income.



	Three Months Ended September 30,				Nine Months Ended September 30,
Millions of Dollars	2017		2016		2017		2016
Purchases from SCANA Energy	$	35.3	$	34.8	$	93.4	$	83.1
Direct and Allocated Costs from SCANA Services	78.1		80.4		233.6		236.4



Millions of Dollars	September 30, 2017		December 31, 2016
Payable to SCANA Energy	$	10.7	$	8.8
Payable to SCANA Services	45.3		63.5

Consolidated SCE&G's money pool borrowings from an affiliate are described in condensed consolidated Note 4. SCE&G's participation in SCANA's noncontributory defined benefit pension plan and unfunded postretirement health care and life insurance programs is described in condensed consolidated Note 8.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS

OF OPERATIONS

Pursuant to General Instruction H of Form 10-Q, SCE&G is permitted to omit certain information related to itself and its consolidated affiliates called for by Item 2 of Part I of Form 10-Q, and instead provide a management’s narrative analysis of its consolidated results of operation and other information described therein. Such information is presented hereunder specifically for Consolidated SCE&G, but may be presented alongside information presented for the Company generally. Consolidated SCE&G makes no representation as to information relating solely to SCANA and its subsidiaries (other than Consolidated SCE&G).

RESULTS OF OPERATIONS

FOR THE THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2017

AS COMPARED TO THE CORRESPONDING PERIODS IN 2016

The following discussion should be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations appearing in SCANA’s and SCE&G’s Annual Report on Form 10-K for the year ended December 31, 2016. The results of operations of the Company include those of the parent holding company and each of its subsidiaries, including Consolidated SCE&G. Accordingly, discussions regarding the Company's results of operations necessarily include those of Consolidated SCE&G.

Earnings

Earnings were as follows:



	Third Quarter				Year to Date
The Company	2017		2016		2017		2016
Earnings per share	$	0.24	$	1.32	$	2.28	$	3.29

Consolidated SCE&G
Net income (millions of dollars)	$	41.8	$	204.0	$	279.7	$	432.9

Third Quarter

The Company's earnings per share and Consolidated SCE&G's net income reflect lower operating income from Electric Operations, which includes an impairment loss associated with the abandonment of the New Units, partially offset by improved operating income from Gas Distribution. These and other results are discussed below.

Year to Date

The Company's earnings per share and Consolidated SCE&G's net income reflect lower operating income from Electric Operations, which includes an impairment loss associated with the abandonment of the New Units, partially offset by higher operating income from Gas Distribution. The Company's earnings per share also reflects lower net income from Gas Marketing. These and other results are discussed below.

Matters Impacting Future Results

The Company's decision on July 31, 2017 to stop construction of the New Units and to pursue recovery of the cost of the abandoned plants could have significant impacts on the Company's and Consolidated SCE&G's future earnings, cash flows and financial position, including those related to the ultimate recovery of regulatory assets and the sustainability of their tax positions. The Company and Consolidated SCE&G continue to believe the decision to abandon was prudent and that costs incurred with respect to the project were prudent, have contested specific challenges to this decision, and believe that the issues related to the recovery of the cost of the New Units and related to the rates currently being collected under the BLRA for financing costs should both be resolved in future proceedings before the SCPSC. However, based on the events of the third quarter, including the contentious nature of ongoing reviews by legislative committees and others, and given the Request being considered by the SCPSC that could result in the suspension of rates currently being collected under the BLRA, as well as the return of such amounts previously collected, there is significant uncertainty as to SCE&G's ultimate ability to fully recover its costs of the New Units and a return on them from its customers.

The Company and Consolidated SCE&G have determined that a disallowance of recovery of part of the cost of the abandoned plant is both probable and reasonably estimable under applicable accounting guidance. A pre-tax impairment loss of approximately $210 million, the estimated amount which might be anticipated to be disallowed from rate recovery, has been recorded as of September 30, 2017. This estimate represents costs in the amount of $1.2 billion that have been expended on the project, exclusive of transmission costs, but which have not yet been determined to be prudent by the SCPSC in a revised rates proceeding under the BLRA, offset by the amount of approximately $1.0 billion, which amount represents the recovery of the Toshiba Settlement proceeds that are in excess of amounts from that settlement that the Company and Consolidated SCE&G estimate may be necessary to satisfy project liens. It is reasonably possible that a change in this estimate will occur in the near term and could be material; however, such a change cannot be reasonably estimated.

These matters impacting future results are further discussed under Impact of Abandonment of New Nuclear Project within LIQUIDITY AND CAPITAL RESOURCES, in Note 2 and Note 9 to the condensed consolidated financial statements, in OTHER MATTERS and in Part II, Item 1A. Risk Factors.

Dividends Declared

SCANA's Board of Directors declared the following dividends on common stock during 2017:



Declaration Date	Payment Date	Record Date	Dividend Per Share
February 16, 2017	April 1, 2017	March 10, 2017	$0.6125
April 27, 2017	July 1, 2017	June 12, 2017	$0.6125
August 3, 2017	October 1, 2017	September 11, 2017	$0.6125
October 26, 2017	January 1, 2018	December 12, 2017	$0.6125

When a dividend payment date falls on a weekend or holiday, the payment is made the following business day.

Electric Operations

Electric Operations for the Company and for Consolidated SCE&G is comprised of the electric operations of SCE&G, GENCO and Fuel Company. Electric Operations operating income (including transactions with affiliates) was as follows:



	The Company								Consolidated SCE&G
	Third Quarter				Year to Date				Third Quarter				Year to Date
Millions of dollars	2017		2016		2017		2016		2017		2016		2017		2016
Operating revenues	$	787.3	$	818.4	$	2,045.9	$	2,038.5	$	787.3	$	818.4	$	2,045.9	$	2,038.5
Fuel used in electric generation	166.5		176.4		464.1		442.9		166.5		176.4		464.1		442.9
Purchased power	22.3		21.0		54.1		49.6		22.3		21.0		54.1		49.6
Other operation and maintenance	133.1		130.0		382.5		389.9		136.6		133.6		393.2		400.1
Impairment loss	210.0		—		210.0		—		210.0		—		210.0		—
Depreciation and amortization	73.8		71.9		219.9		213.4		70.8		68.8		211.0		204.7
Other taxes	56.4		55.4		166.8		159.0		55.9		54.9		165.0		157.5
Operating Income	$	125.2	$	363.7	$	548.5	$	783.7	$	125.2	$	363.7	$	548.5	$	783.7

Electric operations can be significantly impacted by the effects of weather. SCE&G estimates the effects on its electric business of actual temperatures in its service territory as compared to historical averages to develop an estimate of electric revenue and fuel costs attributable to the effects of abnormal weather. Results in both 2017 and 2016 reflect milder than normal weather in the first quarter and warmer than normal weather in the second and third quarters. The summer of 2016 was exceptionally warmer than normal.

Third Quarter

•

Operating revenues decreased due to the effects of weather of $49.7 million, lower residential and commercial average use of $6.6 million and lower collections under the rate rider for pension costs of $3.8 million. The lower pension rider collections had no impact on net income as they were fully offset by the recognition, within other operation and maintenance expenses, of lower pension costs. These decreases were partially offset due to base rate increases under the BLRA of $19.0 million, residential and commercial growth of $8.3 million and higher fuel cost recovery of $1.4 million.

•

Fuel used in electric generation and purchased power expenses decreased due to lower sales volumes associated with the effects of weather of $10.3 million, residential and commercial average use of $1.3 million and industrial usage of $0.7 million. These decreases were partially offset due to higher sales volumes associated with residential and commercial customer growth of $1.6 million, higher fuel handling expenses of $1.2 million and higher fuel prices of $1.4 million.

•

Other operation and maintenance expenses increased due to higher non-labor electric generation costs of $2.0 million and the recognition of nuclear abandonment-related severance costs of $12.3 million. These increases were partially offset by lower other labor costs of $12.6 million, primarily due to lower incentive compensation costs and lower pension costs associated with the lower pension rider collections.


•	Impairment loss represents the estimate of the probable disallowance of recovery associated with the abandonment of the New Units.


•	Depreciation and amortization increased primarily due to net plant additions.


•	Other taxes increased primarily due to higher property taxes associated with net plant additions.

Year to Date

•

Operating revenues increased due to base rate increases under the BLRA of $50.1 million, residential and commercial growth of $23.0 million, industrial growth and usage of $3.6 million, revenue recognized under the DER program of $3.4 million and higher fuel cost recovery of $45.7 million. These revenue increases were partially offset by the effects of weather of $102.1 million and lower residential and commercial average use of $16.4 million.

•

Fuel used in electric generation and purchased power expenses increased due to higher fuel prices of $45.7 million, higher fuel handling expenses of $1.7 million and increased sales volumes associated with residential and commercial customer growth of $4.4 million. These increases were partially offset due to lower sales volumes associated with the effects of weather of $20.9 million, residential and commercial average use of $3.6 million and lower industrial usage of $2.3 million.


•	Other operation and maintenance expenses decreased due to lower other labor costs of $16.4 million, primarily due to lower incentive compensation costs. These lower other labor costs were partially offset by higher non-labor electric generation costs of $2.0 million and the recognition of nuclear abandonment-related severance costs of $12.3 million.


•	Impairment loss represents the estimate of the probable disallowance of recovery associated with the abandonment of the New Units.


•	Depreciation and amortization increased primarily due to net plant additions.


•	Other taxes increased primarily due to higher property taxes associated with net plant additions.

Sales volumes (in GWh) related to the electric operations above, by class, were as follows:



	Third Quarter		Year to Date
Classification	2017	2016	2017	2016
Residential	2,384	2,648	5,936	6,450
Commercial	2,159	2,259	5,663	5,861
Industrial	1,652	1,676	4,676	4,760
Other	163	171	444	462
Total Retail Sales	6,358	6,754	16,719	17,533
Wholesale	257	276	699	725
Total Sales	6,615	7,030	17,418	18,258

Third Quarter and Year to Date

Retail and wholesale sales volumes decreased primarily due to the effects of weather.

Gas Distribution

Gas Distribution is comprised of the local distribution operations of SCE&G, and for the Company, also includes PSNC Energy. Gas Distribution operating income (including transactions with affiliates) was as follows:



	The Company										Consolidated SCE&G
	Third Quarter						Year to Date				Third Quarter						Year to Date
Millions of dollars	2017			2016			2017		2016		2017			2016			2017		2016
Operating revenues	$	123.4		$	111.9		$	585.7	$	539.3	$	68.3		$	64.0		$	285.1	$	253.2
Gas purchased for resale	57.8			51.2			254.1		238.2		38.5			36.5			146.5		126.0
Other operation and maintenance	39.8			42.9			126.2		129.7		16.9			18.4			52.9		54.1
Depreciation and amortization	21.4			20.8			63.3		60.9		7.4			6.8			21.6		20.3
Other taxes	10.5			10.4			32.4		31.3		7.2			7.0			21.6		20.3
Operating Income (Loss)	$	(6.1	)	$	(13.4	)	$	109.7	$	79.2	$	(1.7	)	$	(4.7	)	$	42.5	$	32.5

The effect of abnormal weather conditions on gas distribution operating income is mitigated by the WNA at SCE&G and the CUT at PSNC Energy, as further described in Note 1 of the consolidated financial statements in SCANA's and SCE&G's Form 10-K for December 31, 2016. The WNA and the CUT do not affect sales volumes.

Third Quarter

•

Operating revenues increased at SCE&G primarily due to increased base rates under the RSA effective November 2016 of $0.6 million, customer growth of $1.8 million and higher average use of $1.2 million. In addition to these factors, operating revenues at the Company increased due to PSNC Energy's gas cost recovery of $3.0 million, a rate increase effective November 2016 of $1.8 million, higher industrial revenue of $1.3 million and customer growth of $1.0 million.


•	Gas purchased for resale at SCE&G increased primarily due to firm customer growth of $1.2 million and higher average use of $1.2 million. In addition to these factors, gas purchased for resale at the Company increased primarily due to PSNC Energy's higher commodity charges of $3.5 million and higher CUT of $1.6 million, partially offset by a refund of deferred income taxes of $0.7 million.


•	Other operation and maintenance expenses decreased primarily due to lower labor costs of $3.8 million at PSNC Energy and $1.7 million at SCE&G, primarily due to lower incentive compensation costs. These increases were partially offset by higher non-labor costs at PSNC Energy.


•	Depreciation and amortization increased primarily due to net plant additions.


•	Other taxes increased primarily due to higher property taxes associated with net plant additions.

Year to Date

•

Operating revenues increased at SCE&G primarily due to increased base rates under the RSA effective November 2016 of $3.5 million, customer growth of $8.1 million and higher gas cost recovery of $16.4 million. In addition to these factors, operating revenues at the Company increased due to PSNC Energy's higher gas cost recovery and CUT of $33.4 million, a rate increase effective November 2016 of $14.7 million and customer growth of $6.9 million. These increases were partially offset by milder weather and lower average use of $33.1 million and an excess deferred income tax refund of $4.2 million at PSNC Energy.

•

Gas purchased for resale at SCE&G increased primarily due to higher gas prices of $21.2 million and increased sales volumes associated with firm customer growth of $4.7 million. These increases were partially offset by lower sales volumes due to weather of $5.1 million. This overall increase was partially offset at the Company by PSNC Energy's lower fixed gas costs of $6.3 million, milder weather of $16.6 million and an excess deferred income tax refund of $4.2 million partially offset by higher commodity charges of $23.7 million.


•	Other operation and maintenance expenses decreased primarily due to lower labor costs of $7.5 million at PSNC Energy and $3.1 million at SCE&G, primarily due to lower incentive compensation costs. These decreases were partially offset by higher non-labor costs of $1.9 million at SCE&G and $4.8 million at PSNC Energy.


•	Depreciation and amortization increased primarily due to net plant additions.


•	Other taxes increased primarily due to higher property taxes associated with net plant additions.

Sales volumes (in MMBTU) related to gas distribution above by class, including transportation, were as follows:



	The Company				Consolidated SCE&G
	Third Quarter		Year to Date		Third Quarter		Year to Date
Classification (in thousands)	2017	2016	2017	2016	2017	2016	2017	2016
Residential	2,196	2,073	21,958	27,055	742	696	6,690	8,473
Commercial	4,537	4,363	19,113	20,748	2,381	2,295	8,783	9,361
Industrial	4,644	4,493	14,723	14,380	4,289	4,141	13,289	12,762
Transportation	14,865	15,171	38,313	37,089	1,516	1,252	4,602	3,747
Total	26,242	26,100	94,107	99,272	8,928	8,384	33,364	34,343

Third Quarter

Residential and commercial firm sales volumes increased primarily due to customer growth. Industrial sales volumes increased primarily due to customer growth and average use at SCE&G. Transportation volumes at PSNC Energy decreased primarily due to a decline in natural gas fired electric generation, partially offset by a significant customer expansion, and increased at SCE&G due to higher transport volumes for industrial interruptible customers.

Year to Date

Residential and commercial firm sales volumes decreased primarily due to the effects of weather and lower average use, partially offset by customer growth. Industrial sales volumes increased at SCE&G primarily due to customer growth, higher average use and fewer curtailments in 2017 and decreased at PSNC Energy primarily due to the effects of weather. Transportation volumes increased at SCE&G primarily due to higher transport volumes for industrial interruptible customers and firm customers shifting from system supply to transportation only service and increased at PSNC Energy primarily due to a significant customer expansion mostly offset by a decline in natural gas fired electric generation as well as the effects of milder weather.

Gas Marketing

Gas Marketing is comprised of the Company's nonregulated marketing operation, SCANA Energy, which operates in the southeast and includes Georgia’s retail natural gas market. Gas Marketing operating revenues and net income were as follows:



	Third Quarter					Year to Date
Millions of dollars	2017		2016			2017		2016
Operating revenues	$	202.1	$	199.8		$	716.4	$	681.5
Net income (Loss)	0.7		(1.0		)	16.9		22.9

Third Quarter

Revenues increased primarily due to higher commodity pricing. Net income increased primarily due to lower operating expenses.

Year to Date

Revenue increased primarily due to higher commodity pricing. Net income decreased primarily due to milder winter weather.

Other Operating Expenses

Other operating expenses were as follows:



	The Company								Consolidated SCE&G
	Third Quarter				Year to Date				Third Quarter				Year to Date
Millions of dollars	2017		2016		2017		2016		2017		2016		2017		2016
Other operation and maintenance	$	183.1	$	186.6	$	543.1	$	557.9	$	153.5	$	152.0	$	446.1	$	454.2
Impairment loss	210.0		—		210.0		—		210.0		—		210.0		—
Depreciation and amortization	95.7		93.2		284.7		276.1		78.2		75.6		232.6		225.0
Other taxes	67.2		66.3		200.2		191.8		63.1		62.0		186.6		177.8

Changes in other operating expenses are primarily attributable to the electric operations and gas distribution segments and are addressed in their respective operating income discussions.

Other Income (Expense)

Other income (expense) includes the results of certain incidental non-utility activities of regulated subsidiaries, the activities of certain non-regulated subsidiaries and AFC. AFC is a utility accounting practice whereby a portion of the cost of both equity and borrowed funds used to finance construction (which is shown on the condensed consolidated balance sheet as construction work in progress) is capitalized. An equity portion of AFC is included in nonoperating income and a debt portion of AFC is included in interest charges (credits), both of which have the effect of increasing reported net income. Components of other income (expense) and AFC were as follows:



	The Company												Consolidated SCE&G
	Third Quarter						Year to Date						Third Quarter						Year to Date
Millions of dollars	2017			2016			2017			2016			2017			2016			2017			2016
Other income	$	28.4		$	15.8		$	61.0		$	46.4		$	20.8		$	7.3		$	36.1		$	19.6
Other expense	(7.0		)	(7.1		)	(25.4		)	(31.5		)	(6.2		)	(4.6		)	(17.3		)	(18.8		)
AFC - equity funds	(0.6		)	6.9			17.6			21.6			(3.5		)	6.4			12.7			18.7

Third Quarter

Other income at the Company and at Consolidated SCE&G increased $10.9 million due to the accrual of carrying costs on unrecovered nuclear project costs and by $1.9 million due to SCPSC-approved carrying cost recovery on certain other deferred items. AFC decreased, and was negative for the quarter, due to an adjustment to a revised (lower) AFC rate as a result of removing new nuclear related capital costs from the average construction work in progress balance used to determine the annual AFC rate following the abandonment decision.

Year to Date

Other income at the Company and at Consolidated SCE&G increased $10.9 million due to the accrual of carrying costs on unrecovered nuclear project costs and by $4.6 million due to SCPSC-approved carrying cost recovery on certain other deferred items. Other income and other expense at the Company decreased due to lower billings to DCGT for transition services provided at cost following the sale of Carolina Gas Transmission Corporation in 2015. AFC decreased due to an adjustment to a revised (lower) AFC rate as a result of removing new nuclear related capital costs from the average construction work in progress balance used to determine the annual AFC rate following the abandonment decision.

Interest Expense

Interest charges increased primarily due to increased borrowings.

Income Taxes

Income tax expense was lower primarily due to lower income before income taxes primarily attributable to the impairment loss.

LIQUIDITY AND CAPITAL RESOURCES

Impact of Abandonment of New Nuclear Project

Toshiba provided a parental guaranty for WEC’s payment obligations under the EPC Contract. In satisfaction of such guaranty obligations, on July 27, 2017, the Toshiba Settlement was executed under which Toshiba was to begin making periodic settlement payments from October 2017 through September 2022 in the total amount of approximately $2.2 billion ($1.2 billion for SCE&G's 55% share), including certain amounts with respect to contractor liens. These payments were to occur even if the project were abandoned. On September 27, 2017, the Toshiba Settlement, exclusive of the payment due in October 2017, was sold to Citibank for $1.847 billion (approximately $1.016 billion for SCE&G's 55% share), including amounts related to the contractor liens. The October payment was then received from Toshiba on October 2, 2017, as scheduled, in the amount of $150 million ($82.5 million for SCE&G's 55% share).

On September 26, 2017, the South Carolina Office of Attorney General issued an opinion stating, among other things, that "as applied, portions of the BLRA are constitutionally suspect," including the abandonment provisions. Also on September 26, 2017, the ORS filed the Request with the SCPSC asking for an order directing SCE&G to immediately suspend all revised rates collections from customers which were previously approved by the SCPSC pursuant to the authority of the BLRA. In the Request, the ORS relied upon the opinion from the Office of Attorney General to assert that it is not just and reasonable or in the public interest to allow SCE&G to continue collecting revised rates. Further, the ORS noted the existence of an allegation that SCE&G failed to disclose information that should have been disclosed and that would have appeared to provide a basis for challenging prior requests, and asserted that SCE&G should not be allowed to continue to benefit from nondisclosure. The ORS also asked for an order that, if the BLRA is found to be unconstitutional or the General Assembly amends or revokes the BLRA, then SCE&G should make credits to future bills or refunds to customers for prior revised rates collections. SCE&G estimates that revised rates collections currently total approximately $445 million annually, and the amounts accumulated as of September 30, 2017 total approximately $1.8 billion.

On September 28, 2017, citing numerous legal deficiencies in the Request, SCE&G filed a Motion to Dismiss the request by the ORS and a Request for Briefing Schedule and Hearing on Motion to Dismiss. On September 28, 2017, the SCPSC deferred action on the Request and ordered a hearing officer to establish a briefing schedule and hearing date on SCE&G's motion. The hearing has been scheduled for December 12, 2017, and the parties who have filed to intervene in the matter or have filed a letter in support of the request by the ORS include the Governor, the state's Office of Attorney General and Speaker of the House of Representatives, the Electric Cooperatives of South Carolina, the SCEUC, certain large industrial customers, and several environmental groups. SCE&G intends to vigorously contest the request by the ORS, but cannot give any assurance as to the timing or outcome of this matter. If the ORS ultimately prevails in the Request, however, the liquidity and capital resources of the Company and Consolidated SCE&G would be materially adversely affected.

Pending the outcome of the Request, which may include consideration of how the proceeds received under or arising from the monetization of the Toshiba Settlement will be utilized for the benefit of customers, portions of those proceeds have been utilized to repay maturing commercial paper balances. These short-term borrowings had been incurred for the construction of the New Units prior to the decision to stop their construction (see condensed consolidated Note 9). Should the SCPSC or a court direct that these proceeds be refunded to customers in the near-term, or direct that such funds be escrowed or otherwise made unavailable to SCE&G, it is anticipated that SCE&G would reissue commercial paper or draw on its credit facilities to fund such requirement. However, were the SCPSC to rule in favor of the ORS in response to the Request that SCE&G suspend collections from customers of amounts previously authorized under the BLRA, or were other actions of the SCPSC or others taken in order to significantly restrict SCE&G’s access to revenues or impose additional adverse refund

obligations on SCE&G, the Company’s and Consolidated SCE&G's assessments regarding the recoverability of all or a portion of the remaining balance of unrecovered nuclear project costs (see condensed consolidated Note 2) would be adversely impacted. Further, the recognition of significant additional impairment losses with respect to unrecovered nuclear project costs could increase the Company’s and Consolidated SCE&G’s debt to total capitalization to a level which may limit their ability to borrow under their commercial paper programs or under their credit facilities. Borrowing costs for long-term debt issuances could also be impacted.

For additional background on the new nuclear project and further details on the matters described above, see Note 9 to the condensed consolidated financial statements under New Nuclear Project - Toshiba Settlement and Subsequent Monetization

and Determination to Stop Construction and Related Regulatory, Political and Legal Developments, and also see OTHER MATTERS.

In the first quarter of 2017, credit ratings agencies placed SCANA and SCE&G’s credit ratings on negative outlook or watch status due to adverse developments relating to the new nuclear project. In the third quarter of 2017, two agencies lowered their ratings for SCANA and its rated subsidiaries, citing a decline in the regulatory environment as a principal reason for the downgrades, and both agencies maintained their negative outlook or watch status. Any actions taken by regulators or legislators that are viewed as adverse, including a requirement that SCE&G make credits to future bills or refunds to customers for prior revised rates collections, or deterioration of the rated companies’ commonly monitored financial credit metrics and additional adverse developments with respect to the new nuclear project could further negatively affect their debt ratings. If these rating agencies were to further lower any of these ratings, particularly any further decreases resulting in below investment grade ratings for long-term debt instruments, borrowing costs on new issuances would increase, which could adversely impact financial results or limit or eliminate refinancing opportunities, and the potential pool of investors and funding sources could decrease.

In addition, further ratings downgrades may result in lower collateral thresholds being applied to the Company's and Consolidated SCE&G's interest rate and commodity derivatives, or the removal of such thresholds altogether. This action would have the effect of requiring the Company to post additional collateral for derivative instruments with unfavorable fair values. Such further ratings downgrades would also significantly increase the cash required to be on deposit under certain gas supply and other agreements. See further discussion under the heading Credit Risk Considerations in Note 6 to the condensed consolidated financial statements.

Significant Tax Deductions and Credits

The Company and Consolidated SCE&G have claimed significant research and experimentation tax deductions and credits related to the design and construction activities of the New Units. A significant portion of these claims followed the issuance of final IRS regulations in 2014 regarding such treatment with respect to expenditures related to the design and construction of pilot models. See Note 5 in the condensed consolidated financial statements. (See also Uncertain Income Tax Positions within the Critical Accounting Policies and Estimates section of Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations and Note 5 to the consolidated financial statements in the Registrants’ Form 10-K for the year ended December 31, 2016.)

These tax claims primarily involve the timing of recognition of tax deductions rather than permanent tax attributes. The permanent attributes (net), as well as most of the interest accruals required to be recorded with respect to them, have been deferred within regulatory assets. As such, these claims have not had, and are not expected to have in the future, significant direct effects on the Company’s and Consolidated SCE&G’s results of operations. Nonetheless, the claims have contributed significantly to the Company’s and Consolidated SCE&G’s cash flows. Also, the claims have provided a significant source of capital and have lessened the level of debt and equity financing that the Company and Consolidated SCE&G have needed to raise in the financial markets. Similar benefits may be provided by claims for abandonment losses following the Company's determination to stop construction of the New Units.

The claims made to date are under examination, and may be considered controversial, by the IRS. Tax deductions which may be claimed in connection with the determination to abandon the construction of the New Units may also be considered controversial; therefore, it is also expected that the IRS will examine future tax returns. To the extent that any of these claims are not sustained on examination or through any subsequent appeal, the Company and Consolidated SCE&G will be required to repay any cash received for tax benefit claims which are ultimately disallowed, along with interest on those amounts. Such amounts could be significant and could adversely affect the Company's and Consolidated SCE&G's liquidity, cash flows and financial condition. In certain circumstances, which management considers to be remote, penalties for underpayment of income taxes could also be assessed. Additionally, in such circumstances, the Company and Consolidated

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SCE&G may need to access the capital markets to fund those tax and interest payments, which could in turn adversely impact their ability to access financial markets for other purposes.

Other Considerations

The Company anticipates that its cash obligations will be met through internally-generated funds and additional short- and long-term borrowings. The Company expects that, barring a future impairment of the capital markets and absent further negative credit ratings actions described above, it has or can obtain adequate sources of financing to meet its projected cash requirements for the foreseeable future, including the cash requirements for refinancing maturing long-term debt. The Company’s ratio of earnings to fixed charges for the nine and 12 months ended September 30, 2017 was 2.64 and 2.72, respectively. Consolidated SCE&G’s ratio of earnings to fixed charges for the nine and 12 months ended September 30, 2017 was 2.78 and 2.80, respectively.

The Company is obligated with respect to an aggregate of $67.8 million of industrial revenue bonds which are secured by letters of credit issued by TD Bank N.A. The letters of credit expire, subject to renewal, in the fourth quarter of 2019.

At September 30, 2017, the Company had net available liquidity of approximately $2.0 billion , comprised of cash on hand (including proceeds received under or arising from the monetization of the Toshiba Settlement described above) and available amounts under lines of credit. The credit agreements total an aggregate of $2.0 billion, of which $200 million is scheduled to expire in December 2018 and the remainder is scheduled to expire in December 2020. The Company regularly monitors the commercial paper and short-term credit markets to optimize the timing of repayment of outstanding balances on its draws, if any, from the credit facilities. The Company’s long term debt portfolio has a weighted average maturity of approximately 20 years at a weighted average effective interest rate of 5.8%. All of the long-term debt bears interest at fixed rates or is swapped to fixed. To further preserve liquidity, the Company rigorously reviews its projected capital expenditures and operating costs and adjusts them where possible without impacting safety and core customer service.

In October 2016, SCE&G's authority from FERC to issue short-term indebtedness and to assume liabilities as a guarantor (pursuant to Section 204 of the Federal Power Act) was renewed. SCE&G may issue, with maturity dates of one year or less, unsecured promissory notes, commercial paper and direct loans in amounts not to exceed $1.6 billion outstanding and may enter into guaranty agreements in favor of lenders, banks, and dealers in commercial paper in amounts not to exceed $600 million. Likewise, GENCO's authority from FERC to issue indebtedness with maturity dates of one year or less not to exceed $200 million outstanding was renewed in October 2016. The authority described herein will expire in October 2018.

Cash provided from operating activities increased primarily due to receipt of income tax refunds in 2017, contrasted with income tax payments in 2016.

Cash flows from investing activities in 2017 were primarily related to the proceeds received under or arising from the monetization of the Toshiba Settlement described above offset by capital expenditures. In 2016, similar levels of capital expenditures were made in addition to funding of collateral deposit requirements with respect to interest rate swaps as interest rates changed.

Cash flows from financing activities in 2017 and 2016 included normal dividend payments and increases in commercial paper balances, as well as proceeds from the issuance of debt.

On November 1, 2016, Consolidated SCE&G paid at maturity $100 million related to a nuclear fuel financing which had an imputed interest rate of 0.78%

In June 2017, PSNC Energy issued $150 million of 4.18% senior notes due June 30, 2047. In June 2016, PSNC Energy issued $100 million of 4.13% senior notes due June 22, 2046. Proceeds from these sales were used to repay short-term debt, to finance capital expenditures, and for general corporate purposes.

Capital Expenditures

Estimates of capital expenditures for construction and nuclear fuel are subject to continuing review and adjustment. As discussed in Note 2 and Note 9 of the condensed consolidated financial statements, the Company's July 31, 2017 decision to stop construction of the new nuclear project is the subject of ongoing reviews by legislative committees and others. No update to estimated capital expenditures for SCE&G - Electric Operations is available until these ongoing reviews have developed further.

Estimated capital expenditures for SCE&G - Gas and for PSNC Energy are as follows:

Estimated Annual Capital Expenditures



Millions of dollars	2017		2018		2019
SCE&G - Gas	$	74	$	100	$	106
PSNC Energy	332		244		192
Total	$	406	$	344	$	298

OTHER MATTERS

For information related to environmental matters, nuclear generation, and claims and litigation, see Note 9 of the condensed consolidated financial statements. For information related to the Company's and Consolidated SCE&G's unrecognized tax benefits, see Note 5 of the condensed consolidated financial statements.

Accounting for Plant Abandonments

On July 31, 2017, the Company determined to stop construction of the New Units and to pursue recovery of costs incurred in connection with their construction under the abandonment provisions of the BLRA. The BLRA provides that, in the event of abandonment prior to plant completion, costs incurred, including AFC, and a return on those costs may be recoverable through rates, if the SCPSC determines that the decision to abandon the New Units was prudent. In order to effect that recovery, the utility must initiate a proceeding by filing a petition with the SCPSC. Under the provisions of the BLRA, this petition would be heard by the SCPSC and ruled upon within six months.

SCE&G filed the Abandonment Petition on August 1, 2017, wherein it had sought recovery of costs expended on the project, including certain costs incurred subsequent to SCE&G's last revised rates update and certain other costs. The Abandonment Petition was voluntarily withdrawn by SCE&G on August 15, 2017. For additional information concerning the Company's abandonment decision and discussion of the reasons for the withdrawal of this petition, see Note 9 to the condensed consolidated financial statements under New Nuclear Project - Determination to Stop Construction and Related Regulatory, Political and Legal Developments . SCE&G expects to file a new petition under the abandonment provisions of the BLRA or to pursue recovery of costs through a general rate case or other regulatory means once the reviews being performed by the South Carolina House Utility Ratepayer Protection Committee, the South Carolina Senate's V.C. Summer Nuclear Project Review Committee and others have had sufficient opportunity to conclude and uncertainties involving an ORS request are known. See Note 2 and Note 9 to the condensed consolidated financial statements.

SCE&G intends to seek recovery of all amounts expended to date on the project, which costs had been capitalized within the Construction Work in Progress caption on the condensed consolidated balance sheet. Such capitalized costs totaled approximately $4.7 billion, against which an impairment loss of $210 million was recorded, and the remainder was reclassified as a regulatory asset as of September 30, 2017. The impairment loss is described below.

An application under the abandonment provisions of the BLRA and the regulatory process contemplated thereby have never been pursued or legally challenged. As a result, and in light of the contentious nature of the ongoing reviews by the South Carolina House Utility Ratepayer Protection Committee, the South Carolina Senate's V.C. Summer Nuclear Project Review Committee and others, it is uncertain whether SCE&G will be able to successfully recover such abandoned costs, and a reasonable return on them. Additionally, anticipated appeals of any ruling by the SCPSC could be protracted. Further, should the regulatory construct in South Carolina change in such a manner that relief is sought through other legal proceedings or through regulatory proceedings outside the provisions of the BLRA, such as in a general rate case, other uncertainties may arise.

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GAAP requires that an entity determine whether recovery of any of the costs of an abandoned plant may be disallowed, and if so, the entity must recognize a loss to the extent the disallowance is probable and the amount is reasonably estimable. The entity must also determine whether any amount being recovered represents a full return on the abandoned plant. To the extent that a full return is not provided for, a loss must be recognized.

The Company and Consolidated SCE&G believe that the issues related to the recovery of the cost of the New Units and rates currently being collected under the BLRA for financing costs should be resolved in a future proceeding before the SCPSC. However, based on the considerations described above, the Company and Consolidated SCE&G have determined that a disallowance of recovery of part of the cost of the abandoned plant is both probable and reasonably estimable under applicable accounting guidance. A pre-tax impairment loss of $210 million, the estimated amount which might be anticipated to be disallowed from rate recovery, has been recorded as of September 30, 2017. This estimate represents costs in the amount of approximately $1.2 billion that have been expended on the project, exclusive of transmission costs, but which have not yet been determined to be prudent by the SCPSC in a revised rates proceeding under the BLRA, offset by the amount of approximately $1.0 billion, which amount represents the recovery of the Toshiba Settlement proceeds that are in excess of amounts from that settlement that the Company and Consolidated SCE&G estimate may be necessary to satisfy project liens.

These conclusions will be reevaluated as legislative and other reviews of the project develop, discovery and data request activities occur, or any settlement negotiations progress. If the Company and Consolidated SCE&G determine that an additional loss is probable and such loss or range of loss can be reasonably estimated, an additional impairment charge will be recognized.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

SCANA:

Interest Rate Risk - Interest rates on all outstanding long-term debt are fixed either through the issuance of fixed rate debt or through the use of interest rate derivatives. The Company is not aware of any facts or circumstances that would significantly affect exposures on existing indebtedness in the near future.

For further discussion of changes in long-term debt and interest rate derivatives, including changes in the Company's market risk exposures relative to interest rate risk, see the Liquidity and Capital Resources section in Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations and Notes 2, 4, 6 and 7 of the condensed consolidated financial statements.

Commodity price risk - The Company uses derivative instruments to hedge forward purchases and sales of natural gas, which create market risks of different types. See Note 6 and 7 of the condensed consolidated financial statements. The following tables provide information about the Company’s financial instruments, which are limited to financial positions of SCANA Energy and PSNC Energy, that are sensitive to changes in natural gas prices. Weighted average settlement prices are per 10,000 MMBTU. Fair value represents quoted market prices for these or similar instruments.

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Expected Maturity	2017	2018		2019	2020
Futures - Long
Settlement Price (a)	3.10	3.15		3.07	—
Contract Amount (b)	21.4	45.9		6.9	—
Fair Value (b)	20.1	45.4		7.1	—

Futures - Short
Settlement Price (a)	3.09	3.16		—	—
Contract Amount (b)	6.7	8.0		—	—
Fair Value (b)	6.0	7.7		—	—

Options - Purchased Call (Long)
Strike Price (a)	—	2.54		—	—
Contract Amount (b)	—	19.1		—	—
Fair Value (b)	—	1.0		—	—

Swaps - Commodity
Pay fixed/receive variable (b)	6.3	20.4		5.3	1.0
Average pay rate (a)	3.3022	3.2285		2.9381	2.8950
Average received rate (a)	3.1043	3.1288		2.9703	2.8219
Fair value (b)	5.9	19.8		5.4	0.9

Pay variable/receive fixed (b)	6.3	25.5		8.0	0.9
Average pay rate (a)	3.0973	3.0822		2.9796	2.8397
Average received rate (a)	3.1848	3.1643	2.9499	2.9499	2.8973
Fair value (b)	6.5	26.1		8.0	0.9

Swaps - Basis
Pay variable/receive variable (b)	7.1	8.0		0.3	—
Average pay rate (a)	3.0073	3.2222		3.2311	—
Average received rate (a)	2.9666	3.1828		3.1441	—
Fair value (b)	7.0	7.9		0.3	—

(a) Weighted average, in dollars
(b) Millions of dollars


ITEM 4.	CONTROLS AND PROCEDURES

As of September 30, 2017 , management for each of the Registrants has evaluated, with the participation of the CEO and CFO, (a) the effectiveness of the design and operation of disclosure controls and procedures and (b) any change in internal control over financial reporting. Based on this evaluation, the CEO and CFO concluded that, as of September 30, 2017 , these disclosure controls and procedures were effective. There has been no change in internal control over financial reporting during the quarter ended September 30, 2017 that has materially affected or is reasonably likely to materially affect internal control over financial reporting for either of the Registrants.

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PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

SCANA and SCE&G:

The following describes certain legal proceedings through September 30, 2017. The Company and Consolidated SCE&G intend to vigorously contest the lawsuits which have been filed against them. For developments related to these or other proceedings subsequent to September 30, 2017, if any, see Note 2 and Note 9 to the condensed consolidated financial statements. No reference to, or disclosure of, any proceeding, item or matter described below shall be construed as an admission or indication that such proceeding, item or matter is material or that such proceeding, items or matter is required to be referred to or disclosed in this Form 10-Q.

On August 11, 2017, a purported class action was filed against SCE&G by plaintiff LeBrian Cleckley (the “Cleckley Lawsuit”), on behalf of himself and all others similarly situated, in the State Court of Common Pleas in Richland County, South Carolina (the “Richland County Court”). The plaintiff alleges, among other things, that SCE&G was negligent and unjustly enriched and breached alleged fiduciary and contractual duties by failing to properly manage the V.C. Summer construction project. The plaintiff seeks to recover, on behalf of the purported class, unspecified damages and attorneys’ fees, specific performance of the alleged implied contract to construct the now abandoned project, and any other relief the court deems proper.

On August 14, 2017, a purported class action was filed against SCE&G by plaintiff Richard Lightsey, on behalf of himself and all others similarly situated, in the State Court of Common Pleas in Hampton County. The plaintiff makes substantially similar allegations as those alleged in the Cleckley Lawsuit and, in addition, alleges that SCE&G committed unfair trade practices and violated state anti-trust laws. The plaintiff seeks a declaratory judgment that SCE&G may not charge its customers for any past or continuing costs of the V.C. Summer construction project. The plaintiff also seeks compensatory, punitive and statutory treble damages, attorneys’ fees, and any other relief the court deems proper. On August 25, 2017, SCE&G filed a motion to transfer venue to Lexington County, South Carolina.

On August 28, 2017, a purported class action was filed against SCANA and SCE&G by plaintiff Edwinda Goodman, on behalf of herself and all others similarly situated, in the State Court of Common Pleas in Fairfield County (the “Fairfield County Court”). The plaintiff makes substantially similar allegations as those alleged in the Cleckley Lawsuit and, in addition, alleges that SCE&G committed fraud and misrepresentation in failing to properly manage the V.C. Summer construction project. The plaintiff seeks to have the defendants’ assets frozen and all monies recovered from Toshiba and other sources be placed in a constructive trust for the benefit of ratepayers. The plaintiff also seeks compensatory, punitive and treble damages, attorneys’ fees, and any other relief the court deems proper.

On September 7, 2017, a purported class action was filed against Santee Cooper, SCE&G and Palmetto Electric Cooperative, Inc. by plaintiff Jessica Cook, on behalf of herself and all others similarly situated, in the Richland County Court. The plaintiff makes substantially similar allegations as the Cleckley Lawsuit and the Lightsey Lawsuit. The plaintiff seeks a declaratory judgment that defendants may not charge the purported class for reimbursement for past or future costs of the V.C. Summer Nuclear construction project, as well as other compensatory and statutory treble damages, attorneys’ fees, and any other relief the court deems proper.

Also on September 7, 2017, a purported class action was filed against Santee Cooper and SCANA by plaintiffs Hope Brown and Thomas Lott, on behalf of themselves and all others similarly situated, in the Richland County Court. The plaintiffs allege, among other things, that SCE&G conspired with Santee Cooper to unlawfully deprive plaintiffs of their property rights guaranteed under the United States and South Carolina Constitutions and were unjustly enriched by the V.C. Summer Nuclear construction project. The plaintiffs seek disgorgement of all monies spent by defendants on the project, as well as other compensatory and punitive damages, attorneys’ fees, and any other relief the court deems proper.

On September 25, 2017, a purported class action was filed against SCANA by plaintiff Christine Delmater, on behalf of herself and all others similarly situated, in United States District Court for the District of South Carolina (the “Federal District Court”). The plaintiff alleges, among other things, that SCE&G violated provisions of the Racketeer Influenced and Corrupt Organizations Act (“RICO”) 18 U.S.C. §1961, was negligent, breached alleged contractual duties, and was unjustly enriched by failing to properly manage the V.C. Summer construction project. The plaintiff seeks compensatory and consequential damages, and any other relief the court deems proper.

Also on September 25, 2017, a purported class action was filed against Kevin Marsh, Gregory Aliff, James Bennett, John Cecil, Sharon Decker, Maybank Hagood, Lynne Miller, James Roquemore, Maceo Sloan, Alfredo Trujillo, Jimmy Addison, Stephen Byrne, and SCANA by plaintiff John Crangle, on behalf of himself and all others similarly situated, in the

Richland County Court. The plaintiff alleges, among other things, that the defendants breached their fiduciary duties to shareholders by their gross mismanagement of the V.C. Summer construction project, and that the defendants Marsh, Addison, and Byrne were unjustly enriched by bonuses they were paid in connection with the project. The plaintiff seeks compensatory and consequential damages, attorneys’ fees, and any other relief the court deems proper.

On September 27, 2017, a purported class action was filed against SCANA, Kevin B. Marsh, Jimmy E. Addison, and Stephen A. Byrne by plaintiff Robert L. Norman, on behalf of himself and all others similarly situated, in the Federal District Court. The plaintiff alleges, among other things, that the defendants violated §10(b) of the Exchange Act and Rule 10b-5 promulgated thereunder, and that the individual named defendants are liable under §20(a) of the Exchange Act. The plaintiff seeks compensatory and consequential damages, attorneys’ fees, and any other relief the court deems proper.

On April 27, 2017, SCE&G filed a declaratory judgment lawsuit in the State Court of Common Pleas in Fairfield County, South Carolina (the “Lawsuit”), against Structural Preservation Systems, Inc., a subcontractor to WEC and several dozen other companies that were WEC subcontractors, or who otherwise provided such labor and materials for other companies for the use and benefit of WEC (collectively, the “WEC Subcontractors”), who claimed that WEC had not paid them for work on the V.C. Summer construction project. The Lawsuit was filed for the purpose of asserting SCE&G’s common defenses to such claims by the WEC Subcontractors that WEC owed them payment for labor or materials they supplied on the project. Since that time, more than 40 individual cases have been filed by WEC Subcontractors against SCE&G and Santee Cooper asserting statutory and common law claims against both entities for alleged non-payment by WEC. On September 29, 2017, SCE&G obtained a court order consolidating all current and future lawsuits among SCE&G, Santee Cooper, and the WEC Subcontractors arising out of allegations of non-payment of the WEC Subcontractors by WEC. SCE&G also obtained a court order that designated all such lawsuits as complex and assigning them to one judge. Finally, SCE&G obtained a third Court Order that stayed any party's otherwise required response to any lawsuit, claim, cross-claim, counterclaim, or third party claim in these lawsuits until the parties could work on case management issues and present a plan for case management to the judge assigned the cases. The lawsuits are in the pleadings stage. The WEC Subcontractors have made claims including but not limited to foreclosure of mechanics liens, common law theories including but not limited to negligence and breach of contract, equitable theories including the imposition of a constructive trust on the Toshiba settlement proceeds, damages, and injunctive relief.

On September 26, 2017, the ORS filed the Request with the SCPSC asking for an order directing SCE&G to immediately suspend all revised rates collections from customers which were previously approved by the SCPSC pursuant to the authority of the BLRA. In the Request, the ORS relied upon an opinion of the South Carolina Office of Attorney General issued on the same date, to assert that it is not just and reasonable or in the public interest to allow SCE&G to continue collecting revised rates. Further, the ORS noted the existence of an allegation that SCE&G failed to disclose information that should have been disclosed and that would have appeared to provide a basis for challenging prior requests, and asserted that SCE&G should not be allowed to continue to benefit from nondisclosure. The ORS also asked for an order that, if the BLRA is found to be unconstitutional or the General Assembly amends or revokes the BLRA, then SCE&G should make credits to future bills or refunds to customers for prior revised rates collections.

On September 28, 2017, SCE&G filed a Motion to Dismiss the Request and a Request for Briefing Schedule and Hearing on Motion to Dismiss. On September 28, 2017, the SCPSC deferred action on the Request and ordered a hearing officer to establish a briefing schedule and hearing date on SCE&G's motion. The hearing has been scheduled for December 12, 2017, and the parties who have filed to intervene in the matter include the state's Office of Attorney General and Speaker of the

House of Representatives, the Electric Cooperatives of South Carolina, a large industrial customer, and several environmental groups.

On March 29, 2017, WEC and WECTEC and certain of their affiliates filed petitions for protection under Chapter 11 of the U.S. Bankruptcy Code with the Bankruptcy Court. On September 1, 2017, SCE&G, for itself and as agent for Santee Cooper, filed with the Bankruptcy Court Proofs of Claim for unliquidated damages against each of WEC and WECTEC. The Proofs of Claim are based upon the anticipatory repudiation and material breach by the Consortium of the EPC Contract, and assert against WEC any and all claims that are based thereon or that may be related thereto. On September 27, 2017, SCE&G sold substantially all of its interest in the Toshiba Settlement and assigned all of its claims under the WEC bankruptcy process to Citibank. SCE&G has agreed to use commercially reasonable efforts to cooperate with Citibank and provide reasonable support necessary for its enforcement of those claims. Notwithstanding the sale of the claims, SCE&G and Santee Cooper remain responsible for any claims that may be made by WEC and WECTEC against them relating to the EPC Contract.

On August 8, 2017 a purported class action was filed against SCANA, SCE&G, and its co-defendants Fluor and Fluor Enterprises, Inc., by plaintiff Harry Pennington III, on behalf of himself and all others similarly situated, in Federal District Court. The plaintiff alleges, among other things, that the defendants violated the Worker Adjustment and Retraining Notification Act (“WARN Act”) in connection with the decision to stop construction on the new nuclear project. The plaintiff alleges that the defendants failed to provide adequate advance written notice of his termination of employment.

ITEM 1A. RISK FACTORS

The risk factors from the Registrants' combined Annual Report on Form 10-K for the year ended December 31, 2016, and combined Quarterly Report on Form 10-Q for the quarter ended June 30, 2017, have been updated and are restated below in their entirety.

The risk factors that follow relate in each case to the Company, and where indicated the risk factors also relate to Consolidated SCE&G.

There is uncertainty as to whether the Company and Consolidated SCE&G will be able to recover costs expended for the New Units, and a reasonable return on those costs, under the abandonment provisions of the BLRA or through a general rate case or other regulatory means. In the event the Company and Consolidated SCE&G were to determine that all or a portion of their remaining unrecovered nuclear project costs are to be disallowed and that significant impairment losses must be recognized, material adverse impacts on their results of operations, cash flows and financial condition would occur.

During the term of the Interim Assessment Agreement, SCE&G and Santee Cooper evaluated the various elements of the new nuclear project, including forecasted costs and completion dates, while construction continued, and SCE&G and Santee Cooper continued to make payments for such work. Based on this evaluation, and in light of Santee Cooper's decision to suspend construction, on July 31, 2017, the Company determined to stop construction of the New Units and to pursue recovery of costs incurred in connection with such construction under the abandonment provisions of the BLRA or through a general rate case or other regulatory means. On July 31, 2017, SCE&G gave WEC a five-day notice of termination of the Interim Assessment Agreement, and notified WEC of its determination to stop construction of the New Units.

On August 1, 2017, SCE&G senior management provided an allowable ex parte briefing to the SCPSC regarding the project and this decision, and SCE&G also filed the Abandonment Petition with the SCPSC which included its plan of abandonment and also certain proposed actions which would mitigate related customer rate increases, including a proposal to return to customers the net value of the proceeds received by SCE&G under or arising from the Toshiba Settlement.

The BLRA provides that, in the event of abandonment prior to plant completion, costs incurred, including AFC, and a return on those costs may be recoverable through rates, if the SCPSC determines that the decision to abandon the New Units was prudent. Through the Abandonment Petition, SCE&G had sought recovery of such costs expended on the construction of the New Units, including certain costs incurred subsequent to SCE&G's last revised rates update, and a reasonable return on those costs, and certain other costs under the abandonment provisions of the BLRA. Subsequently, SCE&G’s management met with various stakeholders and members of the South Carolina General Assembly, including legislative leaders, to discuss the abandonment of the new nuclear project and to hear their concerns. In response to those concerns, and to allow for adequate time for governmental officials to conduct their reviews, SCE&G voluntarily withdrew the Abandonment Petition from the SCPSC on August 15, 2017.

In August 2017, special committees of the South Carolina General Assembly, both in the House and in the Senate, began conducting public hearings regarding the decision to abandon the new nuclear project. Members of SCE&G's senior management, along with representatives from Santee Cooper, the ORS and other interested parties, testified before these committees. The reviews being conducted by each of these committees are continuing and neither the Company nor Consolidated SCE&G can predict when their reviews will be complete or what actions, if any, may be proposed or taken, including legislative actions related to the BLRA.

In September 2017, the Company was served with a subpoena issued by the United States Attorney’s Office for the District of South Carolina seeking documents relating to the new nuclear project. The subpoena requires the Company to produce a broad range of documents related to the project. Also in September 2017, the state's Office of Attorney General, the Speaker of the House of Representatives, and the Chair and Vice-Chair of the South Carolina House Utility Ratepayer Protection Committee requested that SLED conduct a criminal investigation into the handling of the new nuclear project by SCANA and SCE&G. In October 2017, the staff of the SEC's Division of Enforcement also issued a subpoena for documents related to an investigation they are conducting related to the new nuclear project. The Company and Consolidated SCE&G intend to fully cooperate with these investigations, and no assurance can be given as to the timing or outcome of these matters.

On September 26, 2017, the South Carolina Office of Attorney General issued an opinion stating, among other things, that "as applied, portions of the BLRA are constitutionally suspect," including the abandonment provisions. Also on September 26, 2017, the ORS filed the Request with the SCPSC asking for an order directing SCE&G to immediately suspend all revised rates collections from customers which were previously approved by the SCPSC pursuant to the authority of the BLRA. In the Request, the ORS relied upon the opinion from the Office of Attorney General to assert that it is not just and reasonable or in the public interest to allow SCE&G to continue collecting revised rates. Further, the ORS noted the existence of an allegation that SCE&G failed to disclose information that should have been disclosed and that would have appeared to provide a basis for challenging prior requests, and asserted that SCE&G should not be allowed to continue to benefit from nondisclosure. The ORS also asked for an order that, if the BLRA is found to be unconstitutional or the General Assembly amends or revokes the BLRA, then SCE&G should make credits to future bills or refunds to customers for prior revised rates collections. SCE&G estimates that revised rates collections currently total approximately $445 million annually, and the amounts accumulated as of September 30, 2017 total approximately $1.8 billion.

On September 27, 2017, the scheduled payments under the Toshiba Settlement, exclusive of the payment due in October 2017, were purchased by Citibank for a one-time upfront payment of $1.847 billion (approximately $1.016 billion for SCE&G's 55% share), including amounts related to certain liens that SCE&G is contesting but for which SCE&G may ultimately be liable. The initial payment was then received from Toshiba on October 2, 2017, as scheduled, in the amount of $150 million ($82.5 million for SCE&G's 55% share). These proceeds have been reflected as a regulatory liability on the condensed consolidated balance sheets, as they will be utilized to benefit SCE&G's customers in a manner to be determined by the SCPSC. On October 17, 2017, the ORS filed a motion with the SCPSC to amend the Request, in which the ORS asked the SCPSC to consider the most prudent manner by which SCE&G will enable its customers to realize the value of the monetized Toshiba Settlement payments and other payments made by Toshiba towards satisfaction of its obligations to SCE&G. It is possible that the outcome of regulatory or legal proceedings could result in requiring SCE&G's share of these proceeds to be placed in escrow pending their final disposition. Such a requirement would significantly harm the Company's and Consolidated SCE&G's results of operations, cash flows and financial condition. In addition, the purchase agreement with Citibank provides that SCE&G and Santee Cooper (each according to its pro rata share) would indemnify Citibank for its losses arising from misrepresentations or covenant defaults under the purchase agreement. If Toshiba fails to make scheduled payments to Citibank under the Toshiba Settlement, it is possible that Citibank could allege that such misrepresentations or covenant defaults have occurred.

On September 28, 2017, citing numerous legal deficiencies in the Request, SCE&G filed a Motion to Dismiss the Request and a Request for Briefing Schedule and Hearing on Motion to Dismiss. On September 28, 2017, the SCPSC deferred action on the Request and ordered a hearing officer to establish a briefing schedule and hearing date on SCE&G's motion. The hearing has been scheduled for December 12, 2017, and the parties who have filed to intervene in the matter or have filed a letter in support of the request by the ORS include the Governor, the state's Office of Attorney General and Speaker of the House of Representatives, the Electric Cooperatives of South Carolina, the SCEUC, certain large industrial customers, and several environmental groups. SCE&G intends to vigorously contest the Request, but cannot give any assurance as to the timing or outcome of this matter. Any adverse action by the SCPSC, such as that sought by the ORS in the Request, could have a material adverse impact on the Company's and Consolidated SCE&G's results of operations, cash flows and financial condition.

Portions of the proceeds received under or arising from the monetization of the Toshiba Settlement have been utilized to repay maturing commercial paper balances, which short-term borrowings had been incurred for the construction of the New

Units prior to the decision to stop their construction. Should the SCPSC or a court direct that these proceeds be refunded to customers in the near-term, or direct that such funds be escrowed or otherwise made unavailable to SCE&G, it is anticipated that SCE&G would reissue commercial paper or draw on its credit facilities to fund such requirement. However, were the SCPSC to rule in favor of the ORS in response to the Request that SCE&G suspend collections from customers of amounts previously authorized under the BLRA, or were other actions of the SCPSC or others taken in order to significantly restrict SCE&G’s access to revenues or impose additional adverse refund obligations on SCE&G, the Company’s and Consolidated SCE&G's assessments regarding the recoverability of all or a portion of the remaining balance of unrecovered nuclear project costs would be adversely impacted. Further, the recognition of significant additional impairment losses with respect to unrecovered nuclear project costs could increase the Company’s and Consolidated SCE&G’s debt to total capitalization to a level which may limit their ability to borrow under their commercial paper programs or under their credit facilities. Borrowing costs for long-term debt issuances could also be impacted.

The ability of SCE&G to recover its costs related to the construction and subsequent abandonment of the new nuclear project, and a reasonable return on them, through rates will be subject to review and approval by the SCPSC. An application under the abandonment provisions of the BLRA, and the regulatory process contemplated thereby, have never been pursued or legally challenged. As a result, and in light of the contentious nature of the ongoing reviews by the South Carolina House Utility Ratepayer Protection Committee, the South Carolina Senate's V.C. Summer Nuclear Project Review Committee and others, it is uncertain whether SCE&G will be able to successfully recover such abandoned costs, and a reasonable return on them. Under the BLRA, the SCPSC must consider and rule on a petition within six months; however, anticipated appeals of any ruling by the SCPSC could be protracted. Further, should the regulatory construct in South Carolina change in such a manner that recovery is sought through other legal proceedings or through regulatory proceedings outside the provisions of the BLRA, such as in a general rate case, other uncertainties may arise.

A downgrade in the credit rating of SCANA or any of SCANA’s subsidiaries, including SCE&G, could negatively affect our ability to access capital and to operate our businesses, thereby adversely affecting results of operations, cash flows and financial condition.

Various rating agencies currently rate SCANA’s long-term senior unsecured debt, SCE&G’s long-term senior secured debt and the long-term senior unsecured debt of PSNC Energy as investment grade, except that SCANA's long-term senior unsecured debt is currently rated by one rating agency as below investment grade. In addition, rating agencies maintain ratings on the short-term debt of SCANA, SCE&G, Fuel Company (which ratings are based upon the guarantee of SCE&G) and PSNC Energy. Rating agencies consider qualitative and quantitative factors when assessing SCANA and its rated operating companies’ credit ratings, including regulatory environment, capital structure and the ability to meet liquidity requirements. In the first quarter of 2017, the agencies placed SCANA and SCE&G’s credit ratings on negative outlook or watch status due to adverse developments relating to the WEC bankruptcy. In the third quarter of 2017, two agencies lowered their ratings for SCANA and its rated subsidiaries, citing a decline in the regulatory environment as a principal reason for the downgrades, and both agencies maintained their negative outlook or watch status. Any actions taken by regulators or legislators that are viewed as adverse, including a requirement that SCE&G make credits to future bills or refunds to customers for prior revised rates collections, or deterioration of our rated companies’ commonly monitored financial credit metrics and additional adverse developments with respect to the new nuclear project could further negatively affect their debt ratings. If these rating agencies were to further lower any of these ratings, particularly any decreases resulting in additional below investment grade ratings for long-term debt instruments, borrowing costs on new issuances would increase, which could adversely impact financial results or limit or eliminate refinancing opportunities, and the potential pool of investors and funding sources could decrease. Any further lowering of these ratings could also trigger more stringent collateral requirements on interest rate and commodity hedges and under gas supply agreements and other contracts, as well as higher interest costs.

The Company and Consolidated SCE&G are defendants in numerous legal proceedings and the subject of ongoing governmental investigations and informal inquiries stemming from the decision to abandon the New Units. The outcome of each of these matters is uncertain, and any resolution adverse to the Company and Consolidated SCE&G could adversely affect results of operations, cash flows and financial condition.

Following the Company’s decision to abandon construction of the New Units, numerous lawsuits seeking class action status have been filed on behalf of customers and shareholders in state court against SCANA, SCE&G, or both, and in certain cases some of their officers and/or directors. The plaintiffs allege various causes of action, including but not limited to waste, breach of fiduciary duty, negligence, unfair trade practices, unjust enrichment, conspiracy, fraud, constructive fraud, misrepresentation and negligent misrepresentation, promissory estoppel, constructive trust, and money had and received, among other causes of action. Plaintiffs generally seek compensatory, consequential and statutory treble damages and such further relief as the court deems just and proper. In addition, certain plaintiffs seek a declaration that SCE&G may not charge its customers to reimburse itself for past and continuing costs of the nuclear project. Certain plaintiffs also seek to freeze certain of

SCE&G’s assets, namely all money SCE&G has received under the Toshiba payment guaranty and related settlement agreement, in addition to the freezing of certain assets of SCANA.

In addition, lawsuits seeking class action status have been filed on behalf of investors in federal court against SCANA and certain of its executive officers. The plaintiffs allege, among other things, that defendants violated Section 10(b) of the Exchange Act and Rule 10b-5 promulgated thereunder (i.e., employment of manipulative and deceptive devices), and one suit alleges violations of the Racketeer Influenced and Corrupt Organizations Act. The plaintiffs in each of these suits seek compensatory and consequential damages and such further relief as the court deems proper.

The Company has also been served with subpoenas issued by the United States Attorney’s Office for the District of South Carolina and the staff of the SEC's Division of Enforcement seeking documents relating to the Company’s new nuclear project. In addition, the state's Office of Attorney General, the Speaker of the House of Representatives, and the Chair and Vice-Chair of the South Carolina House Utility Ratepayer Protection Committee have requested that SLED conduct a criminal investigation into the handling of the new nuclear project by SCANA and SCE&G. The Company and Consolidated SCE&G intend to fully cooperate with any such investigations. Also in connection with the abandonment of the new nuclear project, various state or local governmental authorities may attempt to challenge, reverse or revoke one or more previously-approved tax or economic development incentives, benefits or exemptions and may attempt to apply such action retroactively.

The Company and Consolidated SCE&G cannot predict the outcome of these matters or other claims, allegations or assessments which may arise, and it is possible that adverse outcomes from some of these matters would not be covered by insurance. A resolution adverse to the Company and Consolidated SCE&G could adversely affect results of operations, cash flows and financial condition.

The Company and Consolidated SCE&G are engaged in activities for which they have claimed, and expect to claim in the future, research and experimentation tax deductions and credits and abandonment losses, all of which are the subject of uncertainty and which may be considered controversial by the taxing authorities. The outcome of those uncertainties could adversely impact cash flows and financial condition.

The Company and Consolidated SCE&G have claimed significant research and experimentation tax deductions and credits related to the design and construction activities of the New Units. A significant portion of these claims followed the issuance of final IRS regulations in 2014 regarding such treatment with respect to expenditures related to the design and construction of pilot models. (See also Uncertain Income Tax Positions within the Critical Accounting Policies and Estimates section of Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations and Note 5 to the consolidated financial statements in the Registrants’ Form 10-K for the year ended December 31, 2016.)

The Company and Consolidated SCE&G are subject to numerous environmental laws and regulations that require significant capital expenditures, can increase our costs of operations and may impact our business plans or expose us to environmental liabilities.

The Company and Consolidated SCE&G are subject to extensive federal, state and local environmental laws and regulations, including those relating to water quality and air emissions (such as reducing NO _X , SO ₂ , mercury and particulate matter). Some form of regulation is expected at the federal and state levels to impose regulatory requirements specifically directed at reducing GHG emissions from fossil fuel-fired electric generating units. On August 3, 2015, the EPA issued a revised standard for new power plants by re-proposing NSPS under the CAA for emissions of CO ₂ from newly constructed fossil fuel-fired units. No new coal-fired plants could be constructed without partial carbon capture and sequestration capabilities. The Company and Consolidated SCE&G are monitoring the final rule, but do not plan to construct new coal-fired units in the foreseeable future. In addition, on August 3, 2015, the EPA issued its final rule on emission guidelines for states to follow in developing plans to address GHG emissions from existing units. On October 10, 2017, the Administrator of the EPA signed a notice proposing to repeal the rule on the grounds that it exceeds the EPA's statutory authority. The EPA is further considering the scope of any potential replacement rule and plans to formally solicit information on systems of emission reduction that are in accord with the EPA's interpretation of its statutory authority. However, a number of bills have been introduced in Congress that seek to require GHG emissions reductions from fossil fuel-fired electric generation facilities, natural gas facilities and other sectors of the economy, although none has yet been enacted. In April 2012, the EPA issued the finalized MATS for power plants that requires reduced emissions from new and existing coal and oil-fired electric utility steam generating facilities. The EPA's rule for cooling water intake structures to meet the best technology available became effective in October 2014, and the EPA also issued a final rule in December 2014 regarding the handling of coal ash and other combustion by-products produced by power plant operations. Furthermore, the EPA finalized new standards under the CWA governing effluent limitation guidelines for electric generating units in September 2015.

Compliance with these environmental laws and regulations requires us to commit significant resources toward environmental monitoring, installation of pollution control equipment, emissions fees and permitting at our facilities. These expenditures have been significant in the past and are expected to continue or even increase in the future. Changes in compliance requirements, additional regulations and related costs, or more restrictive interpretations by governmental authorities of existing requirements may impose additional costs on us (such as more stringent clean-up of contaminated sites or reduced emission allowances) or require us to incur additional expenditures or curtail some of our cost savings activities (such as the recycling of fly ash and other coal combustion products for beneficial use). Compliance with any GHG emission reduction requirements, including any mandated renewable portfolio standards, also may impose significant costs on us, and the resulting price increases to our customers may lower customer consumption. Such costs of compliance with environmental regulations could negatively impact our businesses and our results of operations and financial position, especially if emissions or discharge limits are reduced or more onerous permitting requirements or additional regulatory requirements are imposed. Additionally, there can be no assurance that a federal tax or fee for carbon emitting generating facilities will not be imposed.

Renewable and/or alternative electric generation portfolio standards may be enacted at the federal or state level. In June 2014 the State of South Carolina enacted legislation known as Act 236 with the stated goal for each investor-owned utility to supply up to 2% of its 5-year average retail peak demand with renewable electric generation resources by the end of 2020. A utility, at its option, may supply an additional 1% during this period. Such renewable energy may not be readily available in our service territories and could be costly to build, finance, acquire, integrate, and/or operate. Resulting increases in the price of electricity to recover the cost of these types of generation, as approved by regulatory commissions, could result in lower usage of electricity by our customers. In addition, DER generation at customers’ facilities could result in the loss of sales to those customers. Compliance with potential future portfolio standards could significantly impact our capital expenditures and our results of operations and financial condition. Utility scale solar development companies are currently working in South Carolina to develop projects in SCE&G's service territory. The integration of those resources at high penetration levels may be challenging.

The compliance costs of these environmental laws and regulations are important considerations in the Company's and Consolidated SCE&G's strategic planning and, as a result, significantly affect the decisions to construct, operate, and retire facilities, including generating facilities. In turn, they affect the costs and rates of the Company and Consolidated SCE&G. In effecting compliance with MATS, SCE&G has retired three of its oldest and smallest coal-fired units and converted three others such that they are gas-fired.

Commodity price changes, delays in delivery of commodities, commodity availability and other factors may affect the operating cost, capital expenditures and competitive positions of the Company’s and Consolidated SCE&G’s energy businesses, thereby adversely impacting results of operations, cash flows and financial condition.

Our energy businesses are sensitive to changes in coal, natural gas, uranium and other commodity prices (as well as their transportation costs), availability and deliverability. Any such changes could affect the prices these businesses charge, their operating costs, and the competitive position of their products and services. In addition, the abandonment of the New Units may heighten the Company's and Consolidated SCE&G's future exposure to volatility in prices of non-nuclear

commodities such as natural gas. Consolidated SCE&G is permitted to recover the prudently incurred cost of purchased power and fuel (including transportation) used in electric generation through retail customers’ bills, but purchased power and fuel cost increases affect electric prices and therefore the competitive position of electricity against other energy sources. In addition, when natural gas prices are low enough relative to coal to result in the dispatch of gas-fired electric generation ahead of coal-fired electric generation, higher inventories of coal, with related increased carrying costs, may result. This may adversely affect our results of operations, cash flows and financial condition.

In the case of regulated natural gas operations, costs prudently incurred for purchased gas and pipeline capacity may be recovered through retail customers’ bills. However, in both our regulated and deregulated natural gas markets, increases in gas costs affect total retail prices and therefore the competitive position of gas relative to electricity and other forms of energy. Accordingly, customers able to do so may switch to alternate forms of energy and reduce their usage of gas from the Company and Consolidated SCE&G. Customers on a volumetric rate structure unable to switch to alternate fuels or suppliers may reduce their usage of gas from the Company and Consolidated SCE&G. A regulatory mechanism applies to residential and commercial customers at PSNC Energy to mitigate the earnings impact of an increase or decrease in gas usage.

Certain construction-related commodities, such as copper and aluminum used in our transmission and distribution lines and in our electrical equipment, and steel, concrete and rare earth elements, have experienced significant price fluctuations due to changes in worldwide demand. To operate our air emissions control equipment, we use significant quantities of ammonia, limestone and lime. With EPA-mandated industry-wide compliance requirements for air emissions controls, increased demand for these reagents, combined with the increased demand for low sulfur coal, may result in higher costs for coal and reagents used for compliance purposes.

Changing and complex laws and regulations to which the Company and Consolidated SCE&G are subject could adversely affect revenues, increase costs, or curtail activities, thereby adversely impacting results of operations, cash flows and financial condition.

The Company and Consolidated SCE&G operate under the regulatory authority of the United States government and its various regulatory agencies, including the FERC, NRC, SEC, IRS, EPA, the Department of Homeland Security, CFTC and PHMSA. In addition, the Company and Consolidated SCE&G are subject to regulation by the state governments of South Carolina, North Carolina and Georgia via regulatory agencies, state environmental agencies, and state employment commissions. Accordingly, the Company and Consolidated SCE&G must comply with extensive federal, state and local laws and regulations. Such governmental oversight and regulation broadly and materially affect the operation of our businesses. In addition to many other aspects of our businesses, these requirements impact the services mandated or offered to our customers, and the licensing, siting, construction and operation of facilities. They affect our management of safety, the reliability of our electric and natural gas systems, the physical and cyber security of key assets, customer conservation through DSM Programs, information security, the issuance of securities and borrowing of money, financial reporting, interactions among affiliates, the pricing of utility services, the payment of dividends and employment programs and practices. Changes to governmental regulations are continual and potentially costly to effect compliance. Non-compliance with these requirements by third parties, such as our contractors, vendors and agents, may subject the Company and Consolidated SCE&G to operational risks and to liability. We cannot predict the future course of changes in this regulatory environment or the ultimate effect that this changing regulatory environment will have on the Company’s or Consolidated SCE&G’s businesses. Non-compliance with these laws and regulations could result in fines, litigation, loss of licenses or permits, mandated capital expenditures and other adverse business outcomes, as well as reputational damage, which could adversely affect the cash flows, results of operations, and financial condition of the Company and Consolidated SCE&G.

Furthermore, changes in or uncertainty in monetary, fiscal, tax, economic, trade, or regulatory policies of the Federal government may adversely affect the debt and equity markets and the economic climate for the nation, region or particular industries, such as ours or those of our customers. The Company and Consolidated SCE&G also could be adversely impacted by changes in tax policy, or taxes related to the usage of certain fuel types in our businesses or our ownership and/or operation of certain types of generating facilities. Future, unknown regulation of hydraulic fracturing activities also could impact the operations and finances of the Company and Consolidated SCE&G.

The Company and Consolidated SCE&G are subject to extensive rate regulation which could adversely affect operations. Large capital projects (including the construction or abandonment of the New Units as previously described), results of DSM Programs, results of DER programs, and/or increases in operating costs may lead to requests for regulatory relief, such as rate increases, which may be denied, in whole or part, by rate regulators. Rate increases may also result in reductions in customer usage of electricity or gas, legislative action and lawsuits. Additionally, in 2017, legislation which would amend the current BLRA was proposed in the S.C. House of Representatives. In the event this bill were to become law, as proposed, its provisions would not adversely impact SCE&G’s rate recovery with respect to the New Units. However, there

can be no assurance that other legislation which might modify or repeal the BLRA in a manner which would adversely impact SCE&G’s rate recovery, including its reasonable return on costs, with respect to its abandonment of the New Units will not be proposed and passed.

SCE&G’s electric operations in South Carolina and the Company’s gas distribution operations in South Carolina and North Carolina are regulated by state utilities commissions. In addition, the ability of SCE&G to recover the cost of the New Units, including abandonment costs, and a reasonable return on those costs, is subject to rate regulation by the SCPSC. Consolidated SCE&G’s generating facilities are subject to extensive regulation and oversight from the NRC and SCPSC. SCE&G's electric transmission system is subject to extensive regulations and oversight from the SCPSC, NERC and FERC. Implementing and maintaining compliance with the NERC's mandatory reliability standards, enforced by FERC, for bulk electric systems could result in higher operating costs and capital expenditures. Non-compliance with these standards could subject SCE&G to substantial monetary penalties. Our gas marketing operations in Georgia are subject to state regulatory oversight and, for a portion of its operations, to rate regulation. There can be no assurance that Georgia’s gas delivery regulatory framework will remain unchanged as market conditions evolve.

Furthermore, Dodd-Frank affects the use and reporting of derivative instruments. The regulations under this legislation provide for substantial additional regulation of over-the-counter and security-based derivative instruments, among other things, and require numerous rule-makings by the CFTC and the SEC to implement, many of which are still pending final action by those federal agencies. The Company and Consolidated SCE&G have determined that they meet the end-user exception to mandatory clearing of swaps under Dodd-Frank. In addition, the Company and Consolidated SCE&G have taken steps to ensure that they are not the party required to report these transactions in real-time (the "reporting party") by transacting solely with swap dealers and major swap participants, when possible, as well as entering into reporting party agreements with counterparties who also are not swap dealers or major swap participants, which establishes that those counterparties are obligated to report the transactions in accordance with applicable Dodd-Frank regulations. While these actions minimize the reporting obligations of the Company, they do not eliminate required recordkeeping for any Dodd-Frank regulated transactions. Despite qualifying for the end-user exception to mandatory clearing and ensuring that neither the Company nor Consolidated SCE&G is the reporting party to a transaction required to be reported in real-time, we cannot predict when the final regulations will be issued or what requirements they will impose.

Although we have had constructive relationships with regulators in the past, our ability to obtain rate treatment that will allow us to maintain reasonable rates of return is dependent upon regulatory determinations, and there can be no assurance that we will be able to implement rate adjustments when sought.

The Company and Consolidated SCE&G are subject to the reputational risks that may result from a failure to adhere to high standards related to compliance with laws and regulations, ethical conduct, operational effectiveness, customer service and the safety of employees, customers and the public. These risks could adversely affect the valuation of our common stock and the Company’s and Consolidated SCE&G’s access to capital.

The Company and Consolidated SCE&G are committed to comply with all laws and regulations, to assure reliability of provided services, to focus on the safety of employees, customers and the public, to ensure environmental compliance, to maintain the physical and cyber security of their operations and assets, to maintain the privacy of information related to our customers and employees, and to maintain effective communications with the public and key stakeholder groups, particularly during emergencies and times of crisis. Traditional news media and social media can very rapidly convey information, whether factual or not, to large numbers of people, including customers, investors, regulators, legislators and other stakeholders, and the failure to effectively manage timely, accurate communication through these channels could adversely impact our reputation. The Company and Consolidated SCE&G also are committed to operational excellence, to quality customer service, and, through our Code of Conduct and Ethics, to maintain high standards of ethical conduct in our business operations. A failure to meet these commitments, or a perceived failure to meet these commitments, may subject the Company and Consolidated SCE&G not only to fraud, regulatory action, litigation or financial loss, but also to reputational risk that could adversely affect the valuation of SCANA’s stock, adversely affect the Company’s and Consolidated SCE&G’s access to capital, and result in further regulatory oversight. Insurance may not be available or adequate to respond to these events.

A failure of the Company and Consolidated SCE&G to maintain the physical and cyber security of its operations may result in the failure of operations, damage to equipment, or loss of information, and could result in a significant adverse impact to the Company's and Consolidated SCE&G's financial condition, results of operations and cash flows.

The Company and Consolidated SCE&G depend on maintaining the physical and cyber security of their operations and assets. As much of our business is part of the nation's critical infrastructure, the loss or impairment of the assets associated with that portion of our businesses could have serious adverse impacts on the customers and communities that we serve.

Virtually all of the Company's and Consolidated SCE&G's operations are dependent in some manner upon our cyber systems, which encompass electric and gas operations, nuclear and fossil fuel generating plants, human resource and customer systems and databases, information system networks, and systems containing confidential corporate information. Cyber systems, such as those of the Company and Consolidated SCE&G, are often targets of malicious cyber attacks. A successful physical or cyber attack could lead to outages, failure of operations of all or portions of our businesses, damage to key components and equipment, and exposure of confidential customer, vendor, shareholder, employee, or corporate information. The Company and Consolidated SCE&G may not be readily able to recover from such events. In addition, the failure to secure our operations from such physical and cyber events may cause us reputational damage. Litigation, penalties and claims from a number of parties, including customers, regulators and shareholders, may ensue. Insurance may not be adequate to mitigate the adverse impacts of these events. As a result, the Company's and Consolidated SCE&G's financial condition, results of operations, and cash flows may be adversely affected.

The Company and Consolidated SCE&G are vulnerable to interest rate increases, which would increase our borrowing costs, and we may not have access to capital at favorable rates, if at all. Additionally, potential disruptions in the capital and credit markets may further adversely affect the availability and cost of short-term funds for liquidity requirements and our ability to meet long-term commitments; each could in turn adversely affect our results of operations, cash flows and financial condition.

The Company and Consolidated SCE&G rely on the capital markets, particularly for publicly offered debt and equity, as well as the banking and commercial paper markets, to meet our financial commitments and short-term liquidity needs if internal funds are not available from operations. Changes in interest rates affect the cost of borrowing. The Company’s and Consolidated SCE&G’s business plans, which include significant investments in energy generation and other internal infrastructure projects, reflect the expectation that we will have access to the capital markets on satisfactory terms to fund commitments. Moreover, the ability to maintain short-term liquidity by utilizing commercial paper programs is dependent upon maintaining satisfactory short-term debt ratings and the existence of a market for our commercial paper generally.

The Company’s and Consolidated SCE&G’s ability to draw on our respective bank revolving credit facilities is dependent on the ability of the banks that are parties to the facilities to meet their funding commitments and on our ability to timely renew such facilities. Those banks may not be able to meet their funding commitments to the Company or Consolidated SCE&G if they experience shortages of capital and liquidity or if they experience excessive volumes of borrowing requests from us and other borrowers within a short period of time. Longer-term disruptions in the capital and credit markets as a result of uncertainty, changing or increased regulation, reduced alternatives or failures of significant financial institutions could adversely affect our access to liquidity needed for our businesses. Any disruption could require the Company and Consolidated SCE&G to take measures to conserve cash until the markets stabilize or until alternative credit arrangements or other funding for our business needs can be arranged. Such measures could include deferring capital expenditures or other discretionary uses of cash. Disruptions in capital and credit markets also could result in higher interest rates on debt securities, limited or no access to the commercial paper market, increased costs associated with commercial paper borrowing or limitations on the maturities of commercial paper that can be sold (if at all), increased costs under bank credit facilities and reduced availability thereof, and increased costs for certain variable interest rate debt securities of the Company and Consolidated SCE&G.

Disruptions in the capital markets and its actual or perceived effects on particular businesses and the greater economy also adversely affect the value of the investments held within SCANA’s pension trust. A significant long-term decline in the value of these investments may require us to make or increase contributions to the trust to meet future funding requirements. In addition, a significant decline in the market value of the investments may adversely impact the Company’s and Consolidated SCE&G’s results of operations, cash flows and financial condition, including its shareholders’ equity.

Operating results may be adversely affected by natural disasters, man-made mishaps and abnormal weather.

The Company has delivered less gas and, in deregulated markets, received lower prices for natural gas when weather conditions have been milder than normal, and as a consequence earned less income from those operations. Mild weather in the future could adversely impact the revenues and results of operations and harm the financial condition of the Company and Consolidated SCE&G. Hot or cold weather could result in higher bills for customers and result in higher write-offs of receivables and in a greater number of disconnections for non-payment. In addition, for the Company and Consolidated SCE&G, severe weather can be destructive, causing outages and property damage, adversely affecting operating expenses and revenues.

Natural disasters (such as hurricanes or other significant weather events, electromagnetic events or the 2011 earthquake and tsunami in Japan) or man-made mishaps (such as natural gas transmission pipeline failure, electric utility companies' ash pond failures, and cyber-security failures experienced by many businesses) could have direct significant

impacts on the Company and Consolidated SCE&G and on our key contractors and suppliers or could impact us through changes to federal, state or local policies, laws and regulations, and have a significant impact on our financial condition, operating expenses, and cash flows.

The costs of large capital projects, such as the Company’s and Consolidated SCE&G’s construction and environmental compliance, are significant, and these projects are subject to a number of risks and uncertainties that may adversely affect the cost, timing and completion of these projects.

The Company’s and Consolidated SCE&G’s businesses are capital intensive and require significant investments in electric generation and in other internal infrastructure projects, including projects for environmental compliance. Achieving the intended benefits of any large construction project is subject to many uncertainties. For instance, the ability to adhere to established budgets and construction schedules may be affected by many variables, such as the regulatory, legal, training and construction processes associated with securing approvals, permits and licenses and necessary amendments to them within projected timeframes, the availability of labor and materials at estimated costs, the availability and cost of financing, and weather. There also may be contractor or supplier performance issues or adverse changes in their creditworthiness and/or financial stability, unforeseen difficulties meeting critical regulatory requirements, contract disputes and litigation, and changes in key contractors or subcontractors. There may be unforeseen engineering problems or unanticipated changes in project design or scope. Our ability to complete construction projects as well as our ability to maintain current operations at reasonable cost could be affected by the availability of key components or commodities, increases in the price of or the unavailability of labor, commodities or other materials, increases in lead times for components, adverse changes in applicable laws and regulations, new or enhanced environmental or regulatory requirements, supply chain failures (whether resulting from the foregoing or other factors), and disruptions in the transportation of components, commodities and fuels. To the extent that, in connection with the construction of a project, delays occur, costs become unrecoverable, or we otherwise become unable to effectively manage and complete the project, our results of operations, cash flows and financial condition, as well as our qualifications for applicable governmental programs, benefits and tax credits may be adversely affected.

A significant portion of Consolidated SCE&G’s generating capacity is derived from nuclear power, the use of which exposes us to regulatory, environmental and business risks. These risks could increase our costs or otherwise constrain our business, thereby adversely impacting our results of operations, cash flows and financial condition.

In 2016, Unit 1 provided approximately 5.8 million MWh, or 25% of our generation. Hence, SCE&G is subject to various risks of nuclear generation, which include the following:


•	The potential harmful effects on the environment and human health resulting from a release of radioactive materials in connection with the operation of nuclear facilities and the storage, handling and disposal of radioactive materials;


•	Limitations on the amounts and types of insurance commercially available to cover losses that might arise in connection with our nuclear operations or those of others in the United States;


•	The possibility that new laws and regulations could be enacted that could adversely affect the liability structure that currently exists in the United States;


•	Uncertainties with respect to procurement of nuclear fuel and suppliers thereof, fabrication of nuclear fuel and related vendors, and the storage of spent nuclear fuel;


•	Uncertainties with respect to contingencies if insurance coverage is inadequate;


•	Uncertainties with respect to possible future increased regulation of nuclear facilities and nuclear generation, and related costs thereof; and


•	Uncertainties with respect to the technological and financial aspects of decommissioning nuclear plants at the end of their operating lives.

The NRC has broad authority under federal law to impose licensing and safety-related requirements for the operation of nuclear generation facilities. In the event of non-compliance, the NRC has the authority to impose fines or shut down a unit, or both, depending upon its assessment of the severity of the situation, until compliance is achieved. Revised safety requirements promulgated by the NRC could necessitate capital expenditures at nuclear plants such as ours. In today’s environment, there is a heightened risk of terrorist attack on the nation’s nuclear facilities, which has resulted in increased security costs at our nuclear plant. Although we have no reason to anticipate a serious nuclear incident, a major incident at a nuclear facility anywhere in the world could cause the NRC to limit or prohibit the operation or licensing of any domestic nuclear unit, resulting in costly changes to units in operation and adversely impacting our results of operations, cash flows and financial condition. Furthermore, a major incident at a domestic nuclear facility could result in retrospective premium assessments under our nuclear insurance coverages.

Potential competitive changes may adversely affect our gas and electricity businesses due to the loss of customers, reductions in revenues, or write-down of stranded assets.

The utility industry has been undergoing structural change for a number of years, resulting in increasing competitive pressures on electric and natural gas utility companies. Competition in wholesale power sales via an RTO/ISO is in effect across much of the country, but the Southeastern utilities have retained the traditional bundled, vertically integrated structure. Should an RTO/ISO-market be implemented in the Southeast, potential risks emerge from reliance on volatile wholesale market prices as well as increased costs associated with new delivery transmission and distribution infrastructure.

Some states have also mandated or encouraged unbundled retail competition. Should this occur in South Carolina or North Carolina, increased competition may create greater risks to the stability of utility earnings generally and may in the future reduce earnings from retail electric and natural gas sales. In a deregulated environment, formerly regulated utility companies that are not responsive to a competitive energy marketplace may suffer erosion in market share, revenues and profits as competitors gain access to their customers. In addition, the Company’s and Consolidated SCE&G’s generation assets would be exposed to considerable financial risk in a deregulated electric market. If market prices for electric generation do not produce adequate revenue streams and the enabling legislation or regulatory actions do not provide for recovery of the resulting stranded costs, a write-down in the value of the related assets could be required.

The Company and Consolidated SCE&G are subject to the risk of loss of sales due to the growth of distributed generation especially in the form of renewable power such as solar photovoltaic systems, which systems have undergone a rapid decline in their costs. As a result of federal and state subsidies, potential regulations allowing third-party retail sales, and advances in distributed generation technology, the growth of such distributed generation could be significant in the future. Such growth will lessen Company and Consolidated SCE&G sales and will slow growth, potentially causing higher rates to customers.

The Company and SCE&G are subject to risks associated with changes in business and economic climate which could adversely affect revenues, results of operations, cash flows and financial condition and could limit access to capital.

Sales, sales growth and customer usage patterns are dependent upon the economic climate in the service territories of the Company and SCE&G, which may be affected by regional, national or even international economic factors. Adverse events, economic or otherwise, may also affect the operations of suppliers and key customers. Such events may result in the loss of suppliers or customers, in higher costs charged by suppliers, in changes to customer usage patterns and in the failure of customers to make timely payments to us. With respect to the Company, such events also could adversely impact the results of operations through the recording of a goodwill or other asset impairment. The success of local and state governments in attracting new industry to our service territories is important to our sales and growth in sales, as are stable levels of taxation (including property, income or other taxes) which may be affected by local, state, or federal budget deficits, adverse economic climates generally, legislative actions (including tax reform), or regulatory actions. Industrial and commercial customer growth also potentially is affected by the availability of "clean" energy options in our service territory. Budget cutbacks also adversely affect funding levels of federal and state support agencies and non-profit organizations that assist low income customers with bill payments.

In addition, conservation and demand side management efforts and/or technological advances may cause or enable customers to significantly reduce their usage of the Company’s and SCE&G’s products and adversely affect sales, sales growth, and customer usage patterns. For instance, improvements in energy storage technology, if realized, could have dramatic impacts on the viability of and growth in distributed generation.

Factors that generally could affect our ability to access capital include economic conditions and our capital structure. Much of our business is capital intensive, and achievement of our capital plan and long-term growth targets is dependent, at least in part, upon our ability to access capital at rates and on terms that are attractive. If our ability to access capital becomes significantly constrained, our interest costs will likely increase and our financial condition and future results of operations could be adversely impacted.

Problems with operations could cause us to curtail or limit our ability to serve customers or cause us to incur substantial costs, thereby adversely impacting revenues, results of operations, cash flows and financial condition.

Critical processes or systems in the Company’s or Consolidated SCE&G’s operations could become impaired or fail from a variety of causes, such as equipment breakdown, transmission equipment failure, information systems failure or security breach, operator error, natural disasters, and the effects of a pandemic, terrorist attack or cyber attack on our workforce or facilities or on vendors and suppliers necessary to maintain services key to our operations.

In particular, as the operator of power generation facilities, many of which entered service prior to 1985 and may be difficult to maintain, Consolidated SCE&G could incur problems, such as the breakdown or failure of power generation or emission control equipment, transmission equipment, or other equipment or processes which would result in performance below assumed levels of output or efficiency. The integration of a significant amount of distributed generation into our systems may entail additional cycling of our coal-fired generation facilities and may thereby increase the number of unplanned outages at those facilities. In addition, any such breakdown or failure may result in Consolidated SCE&G purchasing emission allowances or replacement power at market rates, if such allowances and replacement power are available at all. These purchases are subject to state regulatory prudency reviews for recovery through rates. If replacement power is not available, such problems could result in interruptions of service (blackout or brownout conditions) in all or part of SCE&G’s territory or elsewhere in the region. Similarly, a natural gas line failure of the Company or Consolidated SCE&G could affect the safety of the public, destroy property, and interrupt our ability to serve customers.

Events such as these could entail substantial repair costs, litigation, fines and penalties, and damage to reputation, each of which could have an adverse effect on the Company’s and Consolidated SCE&G's revenues, results of operations, cash flows, and financial condition. Insurance may not be available or adequate to mitigate the adverse impacts of these events.

SCANA’s ability to pay dividends and to make payments on SCANA’s debt securities may be limited by covenants in certain financial instruments and by the financial results and condition of its subsidiaries, thereby adversely impacting the valuation of our common stock and our access to capital.

We are a holding company that conducts substantially all of our operations through our subsidiaries. Our assets consist primarily of investments in subsidiaries. Therefore, our ability to meet our obligations for payment of interest and principal on outstanding debt and to pay dividends to shareholders and corporate expenses depends on the earnings, cash flows, financial condition and capital requirements of our subsidiaries, and the ability of our subsidiaries, principally Consolidated SCE&G, PSNC Energy and SCANA Energy, to pay dividends or to repay funds to us. Our ability to pay dividends on our common stock may also be limited by existing or future covenants limiting the right of our subsidiaries to pay dividends on their common stock. Any significant reduction in our payment of dividends in the future may result in a decline in the value of our common stock. Such a decline in value could limit our ability to raise debt and equity capital.

The use of derivative instruments could result in financial losses and liquidity constraints. The Company and Consolidated SCE&G do not fully hedge against financial market risks or price changes in commodities. This could result in increased costs, thereby resulting in lower margins and adversely affecting results of operations, cash flows and financial condition.

The Company and Consolidated SCE&G use derivative instruments, including futures, forwards, options and swaps, to manage our financial market risks. The Company also uses such derivative instruments to manage certain commodity (i.e., natural gas) market risk. We could be required to provide cash collateral or recognize financial losses on these contracts as a result of volatility in the market values of the underlying commodities and financial contracts or if a counterparty fails to perform under a contract. We could also be required to provide additional cash collateral if credit rating agency downgrades of our debt trigger more stringent requirements.

The Company strives to manage commodity price exposure by establishing risk limits and utilizing various financial instruments (exchange traded and over-the-counter instruments) to hedge physical obligations and reduce price volatility. We do not hedge the entire exposure of our operations from commodity price volatility. To the extent we do not hedge against commodity price volatility or our hedges are not effective, results of operations, cash flows and financial condition may be adversely impacted.

Failure to retain and attract key personnel could adversely affect the Company’s and Consolidated SCE&G’s operations and financial performance.

A significant portion of our workforce will be eligible for retirement during the next few years. We must attract, retain and develop executive officers and other professional, technical and craft employees with the skills and experience necessary to successfully manage, operate and grow our businesses. Competition for these employees is high, and in some cases we must compete for these employees on a regional or national basis. We may be unable to attract and retain these personnel. Further, the Company’s or Consolidated SCE&G’s ability to construct or maintain generation or other assets requires the availability of suitable skilled contractor personnel. We may be unable to obtain appropriate contractor personnel at the times and places needed. Labor disputes with employees or contractors covered by collective bargaining agreements also could adversely affect implementation of our strategic plan and our operational and financial performance. Furthermore, increased medical benefit costs of employees and retirees could adversely affect the results of operations of the Company and Consolidated SCE&G.

Medical costs in this country have risen significantly over the past number of years and are expected to continue to increase at unpredictable rates. Such increases, unless satisfactorily managed by the Company and Consolidated SCE&G, could adversely affect results of operations.

The Company and Consolidated SCE&G are subject to the risk that strategic decisions made by us either do not result in a return of or on invested capital or might negatively impact our competitive position, which can adversely impact our results of operations, cash flows, financial condition, and access to capital .

From time to time, the Company and Consolidated SCE&G make strategic decisions that may impact our direction with regard to business opportunities, the services and technologies offered to customers or that are used to serve customers, and the generating plants and other infrastructure that form the basis of much of our business. These strategic decisions may not result in a return of or on our invested capital, and the effects of these strategic decisions may have long-term implications that are not likely to be known to us in the short-term. Changing political climates and public attitudes, including customers' concerns regarding rate increases, such as the current environment relating to proposed rate increases or recovery of costs, and a reasonable return on those costs, under the abandonment provisions of the BLRA or through a general rate case or other regulatory means, may adversely affect the ongoing acceptability of strategic decisions that have been made (and, in some cases, previously supported by legislation or approved by regulators), to the detriment of the Company or Consolidated SCE&G (e.g., revision or repeal of the BLRA). Over time, these strategic decisions or changing attitudes toward such decisions, which could be adverse to the Company’s or Consolidated SCE&G’s interests, may have a negative effect on our results of operations, cash flows and financial condition, as well as limit our ability to access capital.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

SCANA:

The following table provides information about purchases by or on behalf of SCANA or any affiliated purchaser (as defined in Rule 10b-18(a)(3) under the Securities Exchange Act of 1934, as amended (Exchange Act)) of shares or other units of any class of SCANA's equity securities that are registered pursuant to Section 12 of the Exchange Act:



Issuer Purchases of Equity Securities
	(a)	(b)		(c)	(d)
Period	Total number of shares (or units) purchased	Average price paid per share (or unit)		Total number of shares (or units) purchased as part of publicly announced plans or programs	Maximum number (or approximate dollar value) of shares (or units) that may yet be purchased under the plans or programs
July 1 - 31	5,935	$	65.16	5,935
August 1 - 31	—	—		—
September 1 - 30	—	—		—
Total	5,935			5,935	*

*The preceding table represents shares acquired for non-employee directors under the Director Compensation and Deferral Plan. On December 16, 2014, SCANA announced a program to convert from original issue to open market purchase of SCANA common stock for all applicable compensation and dividend reinvestment plans. This program took effect in the first quarter of 2015 and has no stated maximum number of shares that may be purchased and no stated expiration date.

ITEM 5. OTHER INFORMATION

SCANA and SCE&G:

SCANA and SCE&G post information from time to time regarding developments relating to SCE&G’s new nuclear project and other matters of interest to investors on SCANA’s website at www.scana.com (which is not intended to be an active hyperlink; the information on SCANA’s website is not a part of this report or any other report or document that SCANA or SCE&G files with or furnishes to the SEC). On SCANA’s homepage, there is a yellow box containing links to the Nuclear Development and Other Investor Information sections of the website. The Nuclear Development section contains a yellow box

Table of Contents

with a link to project news and updates. The Other Investor Information section of the website contains a link to recent investor related information that cannot be found at other areas of the website. Some of the information that will be posted from time to time, including the quarterly reports that SCE&G submits to the SCPSC and the ORS in connection with the new nuclear project, may be deemed to be material information that has not otherwise become public. Investors, media and other interested persons are encouraged to review this information and can sign up, under the Investor Relations Section of the website, for an email alert when there is a new posting in the Nuclear Development and Other Investor Information yellow box.

ITEM 6. EXHIBITS

SCANA and SCE&G:

Exhibits filed or furnished with this Quarterly Report on Form 10-Q are listed in the following Exhibit Index.

As permitted under Item 601(b) (4) (iii) of Regulation S-K, instruments defining the rights of holders of long-term debt of less than 10 percent of the total consolidated assets of SCANA, for itself and its subsidiaries, and of SCE&G, for itself and its consolidated affiliates, have been omitted and SCANA and SCE&G agree to furnish a copy of such instruments to the SEC upon request.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, each of the registrants has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. The signature of each registrant shall be deemed to relate only to matters having reference to such registrant and any subsidiaries thereof.

SCANA CORPORATION

SOUTH CAROLINA ELECTRIC & GAS COMPANY

(Registrants)



	By:	/s/James E. Swan, IV
Date: November 3, 2017		James E. Swan, IV
		Vice President and Controller
		(Principal accounting officer)

EXHIBIT INDEX



	Applicable to Form 10-Q of
Exhibit No.	SCANA	SCE&G	Description
3.01	X		Restated Articles of Incorporation of SCANA, as adopted on April 26, 1989 (Filed as Exhibit 3-A to Registration Statement No. 33-49145 and incorporated by reference herein). Hyperlink is not required pursuant to Rule 105 of Regulation S-T (Instruction 2).
3.02	X		Articles of Amendment dated April 27, 1995 ( Filed as Exhibit 4-A to Registration Statement No. 33-62421 and incorporated by reference herein)
3.03	X		Articles of Amendment effective April 25, 2011 ( Filed as Exhibit 4.03 to Registration Statement No. 333-174796 and incorporated by reference herein)
3.04		X	Restated Articles of Incorporation of SCE&G, as adopted on December 30, 2009 ( Filed as Exhibit 1 to Form 8-A (File Number 000-53860) and incorporated by reference herein)
3.05	X		By-Laws of SCANA as amended and restated as of December 30, 2016 (Filed as Exhibit 3.05 to Form 10-K for the period ended December 31, 2016 (File No. 001-08809) and incorporated by reference herein)
3.06		X	By-Laws of SCE&G as revised and amended on February 22, 2001 ( Filed as Exhibit 3.05 to Registration Statement No. 333-65460 and incorporated by reference herein)
10.01	X	X	Settlement Agreement dated as of July 27, 2017 by and among Toshiba Corporation, SCE&G and Santee Cooper ( Filed as Exhibit 99.2 to Form 8-K dated July 27, 2017 (File No. 001-08809 (SCANA); File No. 001-03375 (SCE&G)) and incorporated by reference herein)
10.02*	X		Form of Indemnification Agreement (Filed as Exhibit 10.01 to Form 10-Q for the period ended June 30, 2012 and incorporated by reference herein)
10.03	X	X	Trade Confirmation dated September 25, 2017, between SCE&G, Santee Cooper and Citibank, N.A., and associated Assignment and Purchase Agreement, dated September 27, 2017, by and among SCE&G, Santee Cooper and Citibank, N. A. (Filed herewith)
12.01	X	X	Statement Re Computation of Ratios (Filed herewith)
31.01	X		Certification of Principal Executive Officer Required by Rule 13a-14 (Filed herewith)
31.02	X		Certification of Principal Financial Officer Required by Rule 13a-14 (Filed herewith)
31.03		X	Certification of Principal Executive Officer Required by Rule 13a-14 (Filed herewith)
31.04		X	Certification of Principal Financial Officer Required by Rule 13a-14 (Filed herewith)
32.01	X		Certification of Principal Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C. Section 1350 (Furnished herewith)
32.02		X	Certification of Principal Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C. Section 1350 (Furnished herewith)
101. INS**	X	X	XBRL Instance Document
101. SCH**	X	X	XBRL Taxonomy Extension Schema
101. CAL**	X	X	XBRL Taxonomy Extension Calculation Linkbase
101. DEF**	X	X	XBRL Taxonomy Extension Definition Linkbase
101. LAB**	X	X	XBRL Taxonomy Extension Label Linkbase
101. PRE**	X	X	XBRL Taxonomy Extension Presentation Linkbase

* Management contract or compensatory plan or arrangement.

** Pursuant to Rule 406T of Regulation S-T, this interactive data file is deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, and otherwise is not subject to liability under these sections.

Exhibit 10.03

Highly Confidential

Reed Smith Draft – September 25, 2017

ASSIGNMENT AND PURCHASE AGREEMENT

by and among

SOUTH CAROLINA ELECTRIC & GAS COMPANY,

THE SOUTH CAROLINA PUBLIC SERVICE AUTHORITY,

as Owners

and

CITIBANK, N.A.,

as Buyer

TABLE OF CONTENTS



Page
ARTICLE I DEFINITIONS	1
Section 1.1 Definitions	1
ARTICLE II SALE AND PURCHASE OF THE INTEREST	6
Section 2.1 Agreement to Sell and Purchase of the Interest	6
Section 2.2 Toshiba Payment Obligation	6
Section 2.3 WEC Rights	7
Section 2.4 Retained Rights	7
Section 2.5 Assumed Obligations	8
ARTICLE III THE CLOSING	9
Section 3.1 Time and Location of the Closing; Transfer of Interest	9
Section 3.2 Payment of Purchase Price	9
Section 3.3 Buyer's Closing Documents	9
Section 3.4 Owners' Closing Documents	9
Section 3.5 Conditions to Closing	10
ARTICLE IV BUYER'S REPRESENTATIONS AND WARRANTIES	11
Section 4.1 Organization; Qualification; Authority and Non-contravention;
Brokers; Ownership	11
Section 4.2 Investment	11
Section 4.3 Anti-Money Laundering and OFAC Compliance	12
Section 4.4 No Reliance	12
ARTICLE V OWNERS' REPRESENTATIONS AND WARRANTIES	13
Section 5.1 Owners' Representations and Warranties	13
Section 5.2 No Implied Representations or Warranties	15
ARTICLE VI COVENANTS	15
Section 6.1 Settlement Agreement	15
Section 6.2 Waiver of Securities Claim	16
Section 6.3 Proxy and Attorney-in-fact	16
Section 6.4 Confidentiality Obligations of the Parties	17
Section 6.5 Release of Owners under this Agreement	17
Section 6.6 True Sale	18
Section 6.7 Cooperation; Further Assurances	18
ARTICLE VII INDEMNIFICATION	20
Section 7.1 Buyer Indemnification	20
Section 7.2 Owners Indemnification	20
Section 7.3 Notice of Claims	21
Section 7.4 Exclusive Remedy	21
ARTICLE VIII MISCELLANEOUS	21
Section 8.1 Notices	21
Section 8.2 Applicable Law	22
Section 8.3 Discretion	22
Section 8.4 Severability	23
Section 8.5 [Reserved]	23
Section 8.6 Entire Agreement	23
Section 8.7 No Oral Amendment	23
Section 8.8 Time of the Essence	23
Section 8.9 Successors and Assigns	23
Section 8.10 Duplicates and Counterparts	23



Section 8.11 Rights Cumulative; Waivers	23
Section 8.12 Assignment	24
Section 8.13 Fees and Expenses	24
Section 8.14 Agreement Not Binding	24
Section 8.15 Waiver of Jury Trial	24
Section 8.16 No Third Party Beneficiaries	24
Section 8.17 Headings; Construction	24
Section 8.18 Jurisdiction; Venue; Consent to Service of Process	25
Section 8.19 Waiver of Conflict	25

EXHIBITS & SCHEDULES



Exhibit A Settlement Agreement
Exhibit B-1 Disclosure Schedule
Exhibit B-2 Disclosure Schedule
Exhibit C Notice of Transfer of Claim Pursuant to Rule 3001(e)
Schedule 1 Purchase Price Terms
Schedule 2 Wire Instructions

ASSIGNMENT AND PURCHASE AGREEMENT

THIS ASSIGNMENT AND PURCHASE AGREEMENT (this “ Agreement ”) made as of

September 27, 2017 (the “ Closing Date ”) by and among South Carolina Electric and Gas Company, a

South Carolina corporation (“ SCE&G ”) and the South Carolina Public Service Authority, a body

corporate and politic created by the Laws of South Carolina (“ Santee Cooper ” and, together with

SCE&G, “ Owners ”), and Citibank, N.A., a National Banking Association organized and existing under

the laws of the United States of America (“ Buyer ”).

RECITALS

A. Owners and Westinghouse Electric Company LLC, a Delaware limited liability company (“ WEC ”) are parties to that certain Engineering, Procurement and Construction Agreement, dated May 23, 2008, by and among SCE&G, acting for itself and as agent for Santee Cooper, WEC and the other parties thereto, as amended (the “ EPC Agreement ”);

B. Toshiba Corporation (“ Toshiba ”) has guaranteed certain obligations of WEC under the EPC Agreement pursuant to the terms of the Toshiba Guaranty;

C. WEC has filed for protection under chapter 11 of the Bankruptcy Code;

D. In respect of Toshiba’s guaranty obligations under the Toshiba Guaranty and to set forth agreements with respect to certain other related matters, Owners and Toshiba entered into that certain Settlement Agreement, dated as of July 27, 2017, by and among Toshiba and Owners, attached hereto as Exhibit A (the “ Settlement Agreement ”), and pursuant to the Settlement Agreement, Toshiba owes certain payments to the Owners as more particularly described therein;

E. Owners have filed the Claims in Bankruptcy Court; and

F. Owners wish to sell and assign their rights to receive payment from Toshiba arising under the Settlement Agreement and certain of their rights, duties and obligations arising under the

WEC Rights, and Buyer, having conducted its own due diligence review of the Toshiba Payment

Obligation and the WEC Rights (together, the “ Interest ”), wishes to purchase the Interest, subject to the terms and conditions more particularly described herein.

AGREEMENT

NOW, THEREFORE, in consideration of the mutual promises, covenants and conditions set forth in this Agreement, and other good and valuable consideration, the receipt and sufficiency of which are expressly acknowledged, and intending to be legally bound, Owners and Buyer hereby agree as follows:

ARTICLE I

DEFINITIONS

Section 1.1 Definitions . For purposes of this Agreement, the following terms and variations thereof have the meanings specified or referred to in this Section 1.1 :

“ Affiliate ” means, with respect to any Person, any other Person that (a) owns or controls, directly or indirectly, such Person, (b) is owned or controlled by such Person, or (c) is under common control with such Person, where “control” means the power to unilaterally direct the management or policies of, or unilaterally prevent any actions by, such Person, whether through the ownership of voting securities, by contract, or otherwise; provided , that in no event shall an Owner (or any of its subsidiaries) be deemed to be an Affiliate of another Owner (or any of its subsidiaries); provided , further , that in no event shall Buyer be deemed to be an Affiliate of any Owner (or any of its subsidiaries).

“ Agreement ” has the meaning set forth in the preamble.

“ Anti-Money Laundering Laws ” means any Laws relating to money laundering or terrorist financing, including, without limitation, the Bank Secrecy Act, 31 U.S.C. sections 5301 et seq .; the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Pub. L. 107-56 (a/k/a the USA PATRIOT Act); Laundering of Monetary Instruments, 18 U.S.C. section 1956; Engaging in Monetary Transactions in Property Derived from Specified Unlawful Activity, 18 U.S.C. section 1957; the Financial Recordkeeping and Reporting of Currency and Foreign Transaction Regulations, 31 C.F.R. Part 103; and any similar Laws currently in force or hereafter enacted.

“ Assumed Obligations ” has the meaning set forth in Section 2.5 .

“ Bankruptcy Code ” means the Bankruptcy Reform Act of 1978, as amended and codified in title 11 of the United States Code, 11 U.S.C. §§ 101-1532, as in effect on the date hereof.

“ Bankruptcy Court ” has the meaning set forth in Section 2.3(a)(i) .

“ Bankruptcy Rules ” has the meaning set forth in Section 5.1(k) .

“ Beneficial Rights ” has the meaning set forth in Section 6.7(d) .

“ Business Day ” means any day, other than a Saturday, a Sunday, a federal holiday or any day on which banking institutions in New York City are not generally open for business.

“ Buyer ” has the meaning set forth in the preamble.

“ Buyer Closing Documents ” has the meaning set forth in Section 3.3 .

“ Buyer Indemnified Persons ” has the meaning set forth in Section 7.2 .

“ Buyer Releasing Parties ” has the meaning set forth in Section 6.5(a) .

“ Claim Documents ” has the meaning set forth in Section 2.3(a)(iv) .

“ Claim Dispute ” has the meaning set forth in Section 6.3 .

“ Claims ” has the meaning set forth in Section 2.3(a)(i) .

“ Closing ” means delivery of the Closing Documents, payment of the Purchase Price and sale and purchase of the Interest in accordance with this Agreement.

“ Closing Date ” has the meaning set forth in the preamble.

“ Closing Documents ” means all documents that are required to be delivered by Owners and/or Buyer at the Closing in accordance with this Agreement.

“ Confidential Information ” means any and all confidential, proprietary or non-public information relating to the Interest, including (i) discussions, disclosures, investigations or negotiations that take place between the parties in relation to the transactions contemplated hereby, (ii) technical data and/or technical interpretations, and (iii) business and financial data, and other commercial information of any Owner.

“ Deal Communications ” has the meaning set forth in Section 8.19 .

“ Disclosure Schedule ” means those certain disclosures set forth on Exhibit B-1

and Exhibit B-2 .

“ Distribution Order ” has the meaning set forth in Section 2.3(a)(ii) .

“ Distribution Order Notice Letter ” means a letter to WEC Debtors, Toshiba and each of its Affiliates that are party to the Distribution Order, in a form reasonably satisfactory to Buyer, pursuant to which Toshiba and such Affiliates will be notified of the assignment of the Distribution Order, and will be directed to make any payments owed to Owners pursuant to the terms thereof as directed by Buyer.

“ Draw Demand ” has the meaning set forth in the Settlement Agreement.

“ EPC Agreement ” has the meaning set forth in the recitals.

“ ERISA ” has the meaning set forth in Section 5.1(n) .

“ Excluded Documents ” means (a) attorney/client correspondence, (b) attorney work product, (c) confidential or privileged information, (d) internal or informal valuations and opinions regarding the Interest, (e) internal analyses and memoranda, (f) regulatory reports and internal assessments of valuation of the Interest, (g) legal conclusions of non-lawyers or summaries prepared by non-lawyers related to legal conclusions reached or expressed by lawyers, (h) communications between Owners and any prospective purchaser of the Interest (other than Buyer) or their legal counsel, advisors or agents, (i) non-public information relating to Toshiba, any WEC Debtor or any Affiliate or related entity thereof, whether learned by any Owner or any advisor, agent or representative of any Owner, in whatever capacity, including as a result of SCE&G’s membership on the UCC, (j) other non-public information, the disclosure of which, in Owners’ good faith and reasonable discretion and opinion of legal counsel, would be in violation of any legal requirement or existing agreements applicable to or binding upon Owners, and (k) any other agreements, documentation and materials that pertain to all or a portion of the Interest that have been deemed legally privileged.

“ First Installment ” has the meaning set forth in Section 2.4(b) .

“ Government List ” means (a) the OFAC SDN List, (b) any other list of terrorists, terrorist organizations or narcotics traffickers maintained pursuant to any of the Rules and Regulations of OFAC that Owners notified Buyer, in writing is now included in “Government Lists” or (c) any similar lists maintained by the United States Department of State, the United States Department of Commerce or any other government authority or pursuant to any Executive Order of the President of the United States of America that Owners notified Buyer in writing is now included in “Government Lists”.

“ Governmental Authority ” means any federal, state, local or foreign government or political subdivision thereof, or any agency or instrumentality of such government or political subdivision, or any self-regulated organization or other non-governmental regulatory authority or quasigovernmental authority (to the extent that the rules, regulations or orders of such organization or authority have the force of law), or any arbitrator, court or tribunal of competent jurisdiction.

“ Indemnified Persons ” has the meaning set forth in Section 7.2 .

“ Interest ” has the meaning set forth in the recitals.

“ Interim Assessment Agreement ” means that certain Interim Assessment Agreement, dated March 28, 2017, by and among Owners, WEC and WECTEC, as amended.

“ Law ” means any statute, law, ordinance, regulation, rule, code, order, constitution, treaty, common law, judgment, decree, other requirement or rule of law of any Governmental Authority.

“ Letters of Credit ” has the meaning set forth in the Settlement Agreement.

“ Mechanics’ Liens ” has the meaning set forth in the Settlement Agreement.

“ Notice ” means any and all acceptances, approvals, consents, demands, notices, requests and other communications required or permitted to be given under this Agreement.

“ OFAC ” means the United States Department of Treasury Office of Foreign Assets Control.

“ OFAC Laws ” means any Laws relating to the economic sanctions programs administered by OFAC, including without limitation, the International Emergency Economic Powers Act, 50 U.S.C. sections 1701 et seq.; the Trading with the Enemy Act, 50 App. U.S.C. sections 1 et seq .; and the Office of Foreign Assets Control, Department of the Treasury Regulations, 31 C.F.R. Parts 500 et seq . (implementing the economic sanctions programs administered by OFAC).

“ OFAC SDN List ” means the list of “Specially Designated Nationals and Blocked Persons” maintained by OFAC.

“ Owner Released Parties ” has the meaning set forth in Section 6.5(a).

“ Owner’s Knowledge ” means: (a) with respect to SCE&G, the actual knowledge of Jimmy Addison, Executive Vice President and Chief Financial Officer of SCANA Corporation; and (b) with respect to Santee Cooper, the actual knowledge of Jeffrey D. Armfield, Senior Vice President and Chief Financial Officer.

“ Owners ” has the meaning set forth in the preamble.

“ Owners Closing Documents ” has the meaning set forth in Section 3.4 .

“ Owners Counsel ” has the meaning set forth in Section 8.19 .

“ Patriot Act Offense ” means any violation of the criminal Laws of the United States of America or of any of the several states, or that would be a criminal violation if committed within the jurisdiction of the United States of America or any of the several states, relating to terrorism or the laundering of monetary instruments, including any offense under (a) any criminal Law against terrorism

or (b) any Anti-Money Laundering Law. “Patriot Act Offense” also includes the crimes of conspiracy to commit, or aiding and abetting another to commit, a Patriot Act Offense.

“ Payment Obligation Suspension Notice ” has the meaning set forth in the Settlement Agreement.

“ Person ” means any individual, corporation, limited liability company, partnership, joint venture, association, joint-stock company, trust, unincorporated organization or Governmental Authority.

“ Privileged Deal Communications ” has the meaning set forth in Section 8.19 .

“ Pro Rata Share ” means, with respect to SCE&G, fifty-five percent (55%), and with respect to Santee Cooper, forty-five percent (45%).

“ Proofs of Claim ” has the meaning set forth in Section 5.1(f) .

“ Public Stock Ownership ” has the meaning set forth in Section 4.1(d) .

“ Purchase Price ” has the meaning set forth in Section 3.2(a) .

“ Retained Rights ” has the meaning set forth in Section 2.4 .

“ Santee Cooper ” has the meaning set forth in the preamble.

“ Satisfied Mechanics’ Liens Amount ” has the meaning set forth in the Settlement Agreement.

“ SCE&G ” has the meaning set forth in the preamble.

“ Securities Act ” means the Securities Act of 1933, as amended.

“ Settlement Agreement ” has the meaning set forth in the recitals.

“ Summer Facility ” has the meaning set forth in the Settlement Agreement.

“ Toshiba ” has the meaning set forth in the recitals.

“ Toshiba Affiliate Amounts ” has the meaning set forth in the Settlement Agreement.

“ Toshiba Amount ” has the meaning set forth in Section 2.2(a)(i) .

“ Toshiba Guaranty ” means that certain Toshiba Corporation Guaranty, dated and effective as of May 23, 2008 and restated in October 2015, and made and entered into by Toshiba in favor of SCE&G, acting for itself and as agent for Santee Cooper, as amended from time to time.

“ Toshiba Notice Letter ” means a letter to Toshiba, in a form reasonably satisfactory to Buyer, pursuant to which Toshiba will be notified of the assignment of the Toshiba Payment Obligation by Owners to Buyer, and will be directed to make any such payments as directed by Buyer.

“ Toshiba Payment Obligation ” has the meaning set forth in Section 2.2(a) .

“Transfer of Claims Forms” means a Form 2100A under the Bankruptcy Rules (Transfer of Claim other than for Security) evidencing the transfer of each of the (a) WEC Claim, and (b) WECTEC Claim.

“ UCC ” has the meaning set forth in Section 2.4(l) .

“ WEC ” has the meaning set forth in the recitals.

“ WEC Claim ” has the meaning set forth in Section 2.3(a)(i) .

“ WEC Debtors ” has the meaning set forth in the Settlement Agreement.

“ WEC Proceedings ” has the meaning set forth in Section 2.3(a)(i) .

“ WEC Rights ” has the meaning set forth in Section 2.3(a) .

“ WECTEC ” has the meaning set forth in Section 2.3(a)(i) .

“ WECTEC Claim ” has the meaning set forth in Section 2.3(a)(i) .

ARTICLE II

SALE AND PURCHASE OF THE INTEREST

Section 2.1 Agreement to Sell and Purchase of the Interest .

(a) Owners agree to sell, assign, transfer and convey all of Owners’ respective rights, title and interest in and to the Interest, and Buyer agrees to purchase such rights, title and interest in and to the Interest and to assume the Assumed Obligations, in accordance with and subject to the terms and conditions of this Agreement.

(b) From and after the Closing Date, Buyer shall be deemed to be the owner of the Interest and shall be entitled to identify itself as the owner of the Interest on the records of each of Toshiba, the WEC Debtors and their respective Affiliates and the Bankruptcy Court, as applicable; provided , that nothing in this Agreement does or shall be deemed to restrict the rights of Owners to take any action in furtherance of any of Owners’ rights under the Retained Rights.

Section 2.2 Toshiba Payment Obligation .

(a) As used herein, the “ Toshiba Payment Obligation ” means, other than the Retained Rights:

(i) any and all rights (but not obligations) of the Owners related to the Owners’ right to receive payment of $2,168,000,000 (the “ Toshiba Amount ”) from Toshiba, subject to (1) the terms set forth herein, (2) the payment schedule set forth in Schedule 2.2 of the Settlement Agreement (and for the avoidance of doubt, any prepayment by Toshiba in accordance with Section 2.3 of the Settlement Agreement), and (3) the related terms set forth in the Settlement Agreement, including all applicable offsets, reductions and credits thereof; and

(ii) any and all rights of Owners arising under the Settlement Agreement.

Section 2.3 WEC Rights .

(a) As used herein, the “ WEC Rights ” means, other than the Retained Rights, all rights, title and interest in and to the following:

(i) the claim, designated as proof of claim number 2440 (the “ WEC Claim ”) asserted against WEC, and the claim, designated as proof of claim number 2444 (the “ WECTEC Claim ”, together with the WEC Claim, the “ Claims ”) asserted against WECTEC Global Project Services Inc., a Louisiana corporation (“ WECTEC ”), in the Chapter 11 bankruptcy case pending in the United States Bankruptcy Court for the Southern District of New York (the “ Bankruptcy Court ”) as In re Westinghouse Electric Company LLC, et al., Chapter 11 Case No. 17-10751-MEW (Jointly Administered) (the “ WEC Proceedings ”); and

(ii) that certain Order Regarding Distributions in respect of Claims and Interests of Toshiba Corporation and Affiliates, entered in the WEC Proceedings on July 20, 2017 in the Bankruptcy Court (the “ Distribution Order ”);

(iii) any and all proofs of claim filed or to be filed in the WEC Proceedings in respect of the Claims, including any proof of claim identified herein and any supplements, modifications or amendments thereto;

(iv) the enforcement of all monetary rights arising under all agreements (including the EPC Agreement and the Toshiba Guaranty), instruments, invoices, proofs of claim (including the Proofs of Claim), purchase orders, proofs of delivery, correspondences between Owners and any WEC Debtor with respect to the EPC Agreement, and all other documents evidencing, creating, relating or referred to in, the Claims, but, in each case, only to the extent necessary for the purpose of prosecuting or enforcing the Claims, and other than the Excluded Documents (collectively, the “ Claim Documents ”);

(v) all interests, fees, payments, proceeds and any other distributions in any form whatsoever made or to be made on account or in respect of the Claims or distributions issued in satisfaction of the Claims;

(vi) all other claims, including “claims” as defined in Section 101(5) of the Bankruptcy Code, suits, causes of action, any other right of any Owner or any of their Affiliates, whether known or unknown, against any WEC Debtor, any of their respective Affiliates, any guarantor or any other third party relating to arising from or in connection with the Claims or the Claim Documents, together with all voting and other rights, property and benefits which may be paid, refunded or reclaimed with respect to the Claims; and

(vii) all rights to receive any payment, including principal, interest, fees, expenses, indemnities, damages, penalties, proceeds and other amounts, or distribution in respect of, or in connection with, any of the foregoing.

Section 2.4 Retained Rights . Notwithstanding the foregoing, the WEC Rights do not include, and Owners shall retain, all rights, title and interest in and to the following (collectively, the “ Retained Rights ”):

(a) the Excluded Documents;

(b) a beneficial interest in the first payment owed by Toshiba pursuant to the Settlement Agreement, the amount of which is $150,000,000 (the “ First Installment ”), which Buyer will remit to Owners in accordance with Section 6.1(a) ;

(c) the Letters of Credit and the right to be named as beneficiary under the Letters of Credit; provided , that the Letters of Credit will be administered by Owners in accordance with Section 6.1(b) ;

(d) the right to contest, settle, pay, control or otherwise administer the Toshiba Affiliate Amounts; provided , that the Toshiba Affiliate Amounts will be administered by Owners in accordance with Section 6.1(c) ;

(e) the right to contest, settle, pay, control or otherwise administer the Mechanics’ Liens; provided , that the Mechanics’ Liens will be administered by Owners in accordance with Section 6.1(d) ;

(f) the EPC Agreement, except to the extent necessary for the purpose of prosecuting or enforcing the Claims;

(g) the Toshiba Guaranty, except to the extent necessary for the purpose of enforcing the Toshiba Payment Obligation;

(h) the Summer Facility;

(i) the Interim Assessment Agreement;

(j) the right of each Owner, on behalf of themselves and the other Owner Released Parties, to be released by the Toshiba Releasing Parties (as defined in the Settlement Agreement) pursuant to Section 5.7(b) of the Settlement Agreement;

(k) the right of each Owner to enforce any breach by Toshiba of Section 4.2 or Section 4.3 of the Settlement Agreement;

(l) SCE&G’s membership on the Unsecured Creditors Committee under the WEC Proceedings (the “ UCC ”), which SCE&G shall resign at Closing; and

(m) any other agreements, instruments, invoices, purchase orders, proofs of delivery, correspondences, and all other documents (whether now or hereafter arising) to the extent not necessary for the purpose of prosecuting or enforcing any part of the Interest.

Section 2.5 Assumed Obligations . In connection with the WEC Rights, Buyer shall assume only the following obligations of Owners (collectively, the “ Assumed Obligations ”):

(a) Owners’ obligations to Toshiba under Section 3.2(c) of the Settlement Agreement, as specifically set forth in Section 6.1(e) of this Agreement; and

(b) Owners’ obligations to Toshiba under Section 5.6 of the Settlement Agreement, as specifically set forth in Section 6.1(f) of this Agreement.

Except as expressly set forth in this Section 2.5 , Buyer shall not assume, and shall have no liability whatsoever to Toshiba or the WEC Debtors or any other person in connection with, any of either Owner’s obligations under the EPC Agreement, the Toshiba Guaranty, the Interim Assessment Agreement, the Settlement Agreement, the Distribution Order, or any documents or relationships directly or indirectly underlying the foregoing.

ARTICLE III

THE CLOSING

Section 3.1 Time and Location of the Closing; Transfer of Interest . The Closing shall occur at 10:00 A.M. (New York City time) on the Closing Date. The Closing will take place at Owners’ attorney’s offices at Reed Smith LLP, 225 Fifth Avenue, Pittsburgh, Pennsylvania or at such other time or location as Owners and Buyer may agree. Upon the satisfaction of the conditions set forth in Section 3.5, Owners irrevocably sell, transfer, assign, grant and convey the Interest to Buyer, and Buyer irrevocably assumes the Assumed Obligations, with effect from and after the Closing Date

Section 3.2 Payment of Purchase Price .

(a) The consideration paid by Buyer to Owners is the product of the Purchase Rate multiplied by the Purchased Amount (each as specified in the purchase price terms contained in Schedule 1 hereto) (the “ Purchase Price ”).

(b) Upon the satisfaction of the conditions set forth in Section 3.5 , the Purchase Price shall be paid by Buyer to Owners on the Closing Date by delivery of such amount to Owners by wire transfer of immediately available funds to the accounts specified on Schedule 2 in accordance with each Owner’s Pro Rata Share.

Section 3.3 Buyer’s Closing Documents . Buyer will deliver the following documents (collectively, the “ Buyer Closing Documents ”) to Owners on or prior to the Closing Date:

(a) the Toshiba Notice Letter, executed by Buyer;

(b) the Distribution Order Notice Letter, executed by Buyer;

(d) such other instruments as may reasonably be requested by Owners to effect the transactions contemplated hereby.

Section 3.4 Owners’ Closing Documents . Owners will deliver the following documents (collectively, the “ Owners Closing Documents ”) to Buyer on or prior to the Closing Date:

(a) a certificate of each Owner, executed by a duly authorized officer of such Owner in such capacity and not in an individual capacity, certifying as to resolutions or written consent duly adopted by the board of directors (or equivalent thereof) of such Owner authorizing the execution and delivery of this Agreement and the performance by such Owner of the transactions contemplated hereby;

(b) the Toshiba Notice Letter, executed by Owners;

(d) a completed and executed IRS Form W-9 or W-8, as applicable;

(e) the Transfer of Claims Forms substantially in the form attached hereto as Exhibit C , duly executed by Owners; and

(f) such other instruments as may reasonably be requested by Buyer to effect the transactions contemplated hereby.

Section 3.5 Conditions to Closing .

(a) Buyer’s obligations to pay the Purchase Price to the Owners and to purchase the Interest hereunder is conditioned on the occurrence of each of the following conditions precedent:

(i) Owners shall have delivered the Owners Closing Documents to Buyer;

(ii) Owners’ representations and warranties in this Agreement shall be true and correct as of the Closing Date; and

(iii) Owners shall have complied with all covenants, agreements and conditions required to be performed, observed or complied with by Owners as of or prior to the Closing Date pursuant to this Agreement.

If any of the foregoing conditions are not satisfied, Buyer may elect, at its sole option and in its sole and absolute discretion, to waive non-compliance in whole or in part with respect to such condition.

(b) Owners’ obligation to sell the Interest hereunder is conditioned on the occurrence of each of the following conditions precedent:

(i) Buyer shall have delivered the Purchase Price;

(ii) Buyer shall have delivered the Buyer Closing Documents to Owners;

(iii) Buyer’s representations and warranties in this Agreement shall be true and correct as of the Closing Date; and

(iv) Buyer shall have complied with all covenants, agreements and conditions required to be performed, observed or complied with by Buyer as of or prior to the Closing pursuant to this Agreement.

If any of the foregoing conditions are not satisfied, Owners may elect, at their sole option and in their sole and absolute discretion, to waive non-compliance in whole or in part with respect to such condition.

ARTICLE IV

BUYER’S REPRESENTATIONS AND WARRANTIES

Without implication that Buyer’s acquisition of the Interest constitutes a purchase of securities within the meaning of federal or state securities Laws, Buyer hereby represents and warrants to Owners as of the Closing Date that:

Section 4.1 Organization; Qualification; Authority and Non-contravention; Brokers; Ownership.

(a) Buyer is a National Banking Association duly organized, validly existing and in good standing under the Laws of the United States of America. Buyer has all necessary approvals, whether governmental or otherwise, and full right, power and authority, to (i) execute and deliver this Agreement and the Buyer Closing Documents and (ii) perform its obligations under this Agreement and the Buyer Closing Documents and consummate the Closing in accordance with this Agreement.

(b) Buyer’s execution and delivery of this Agreement and the Buyer Closing Documents, Buyer’s performance of its obligations under this Agreement and the Buyer Closing Documents do not violate any Law, agreement or controlling document to which Buyer is a party or by which Buyer is bound.

(c) This Agreement and the Buyer Closing Documents have been duly executed by Buyer, and assuming due execution by each of the other parties thereto, this Agreement constitutes the legal, valid and binding obligation of Buyer, enforceable in accordance with its terms, except to the extent that enforceability of such obligation may be subject to bankruptcy, insolvency, moratorium and other similar Laws affecting the rights of creditors generally and to general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law).

(d) Except for any direct or indirect legal or beneficial ownership interest held in the form of public stock (“Public Stock Ownership”), none of Toshiba, any WEC Debtor, or any Affiliate of Toshiba or any WEC Debtor owns any direct or indirect legal or beneficial equity ownership interest in Buyer.

Section 4.2 Investment .

(a) Buyer is an “accredited investor” as such term is defined in the Securities Act, and the rules and regulations promulgated thereunder, including Regulation D.

(b) Buyer is aware that Buyer may be unable to liquidate its investment readily in case of an emergency and that the Interest being purchased may have to be held for an indefinite period of time. Buyer’s overall commitment to investments which are not readily marketable is not excessive in view of Buyer’s net worth and financial circumstances and the purchase of the Interest will not cause such commitment to become excessive. In view of such facts, Buyer acknowledges that Buyer has adequate means of providing for Buyer’s respective current needs, anticipated future needs and possible contingencies and emergencies and has no need for liquidity in the investment in the Interest. Buyer is able to bear the economic risk of the investment in the Interest.

(c) Buyer understands that Buyer is urged to seek independent advice from Buyer’s professional advisors relating to the suitability for Buyer of the purchase of the Interest in view of Buyer’s overall financial needs and with respect to the legal and tax implications of such purchase. Buyer has

independently evaluated the risks of purchasing the Interest, and Buyer is satisfied that Buyer has received information with respect to all matters which Buyer considers material to its decision to purchase the Interest.

(d) Buyer is aware that no public market exists for the Interest and that the Interest may not be sold without compliance with applicable federal and state securities Laws. Buyer understands that Owners have made no assurance that a public market will ever exist for the Interest, and that, even if a public market exists in the future, Buyer may not readily be able to sell the Interest.

(e) Buyer understands that the Interest have not been registered under the Securities Act or the securities Laws of any state. Buyer understands that it may not make any sale, transfer or other disposition of any portion of Interest unless, to the extent applicable, either (i) the Interest first shall have been registered under the Securities Act and all applicable state securities Laws, or (ii) an exemption from such registration is available.

Section 4.3 Anti-Money Laundering and OFAC Compliance . Buyer is in material compliance with all Anti-Money Laundering Laws and OFAC Laws. To the best of Buyer’s knowledge, without any further inquiry, neither Buyer nor any Person holding any legal or beneficial ownership interest in Buyer (whether directly or indirectly) other than in the form of Public Stock Ownership (i)appears on any Government List, (ii) is included in, owned by, controlled by, acting for or on behalf of, providing assistance, support, sponsorship, or services of any kind to, or otherwise associated with any of the Persons referred to or described in any Government List, (iii) has conducted business with or engaged in any transaction with any Person named on any Government List or any Person included in, owned by ,controlled by, acting for or on behalf of, providing assistance, support, sponsorship, or services of any kind to, or otherwise associated with any of the Persons referred to or described in any Government List,(iv) is a Person who has been determined by competent authority to be subject to the prohibitions contained in United States Executive Order 13224, Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or Support Terrorism or any other similar prohibitions contained in the rules and regulations of OFAC or in any enabling legislation or other Presidential Executive Orders in respect thereof, (v) has been previously indicted for or convicted of any felony involving a crime or crimes of moral turpitude or for any Patriot Act Offense or (vi) is currently under investigation by any Governmental Authority for alleged criminal activity.

Section 4.4 No Reliance .

(a) Buyer has conducted adequate due diligence of the Interest and (i) has adequate information concerning the business and financial condition of Toshiba and the WEC Debtors, the Interest and the status of the WEC Proceedings in order to make an informed decision regarding the purchase and sale under this Agreement, (ii) is able to bear the economic risk associated with the sale and purchase of the Interest and the assumption of the Assumed Obligations and has such knowledge and experience so as to be aware of the risks and uncertainties inherent in the purchase of rights and assumption of liabilities of the type contemplated in this Agreement; and (iii) has independently and without reliance on the Owners, any Affiliate of any Owner, or any advisor, agent or representative of any of the foregoing, and based on such information as it has deemed appropriate, made its own analysis and decision to enter into this Agreement.

(b) Buyer acknowledges that no Owner, Affiliate of any Owner, or any advisor, agent or representative of any of the foregoing has been authorized to make, and Buyer has not relied on, any statements other than those expressly set forth in Article V . Buyer is not relying on any continued actions or efforts on the part of any Owner, any Affiliate of any Owner, or any advisor, agent or representative of any of the foregoing with respect to the Interest, except as expressly set forth herein or

in the Closing Documents. Buyer acknowledges that Owners have not guaranteed and do not guaranteed payment of the Toshiba Payment Obligation or in respect of the WEC Rights, and Owners have not guaranteed and do not guarantee the performance, rate of return, value or yield of the Interest. Buyer acknowledges that the Interest is being sold on an “AS-IS”, “WHERE-IS” basis and “WITH ALLFAULTS”, and subject to any and all claims and/or defenses of all types, except as expressly set forth in Article V or Article VI .

ARTICLE V

OWNERS’ REPRESENTATIONS AND WARRANTIES

Section 5.1 Owners’ Representations and Warranties . Each Owner, as to itself only, hereby represents and warrants to Buyer as of the Closing Date as follows:

(a) Such Owner is duly organized, validly existing and in good standing under the Laws of the State of South Carolina. Such Owner has all necessary approvals, whether governmental or otherwise, and full right, power and authority, to (i) execute and deliver this Agreement and the Owners Closing Documents and (ii) perform its obligations under this Agreement and the Owners Closing Documents and consummate the transaction contemplated by this Agreement and the Owners Closing Documents.

(b) Such Owner’s execution and delivery of this Agreement and the Owners Closing Documents, such Owner’s performance of its obligations under this Agreement and the Owners Closing Documents and the execution and performance hereof does not violate any Law, injunction, agreement or controlling document to which such Owner is a party or by which such Owner is bound.

(c) This Agreement and the Owners Closing Documents, have been duly executed and delivered by such Owner, and assuming due execution by each of the other parties thereto, this Agreement constitutes the legal, valid and binding obligation of such Owner, enforceable in accordance with its terms, except to the extent that enforceability of such obligation may be subject to bankruptcy ,insolvency, moratorium and other similar Laws affecting the rights of creditors generally and to general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law).

(d) Such Owner (i) has adequate information concerning the business and financial condition of the WEC Debtors, the Interest and the status of the WEC Proceedings in order to make an informed decision regarding the purchase and sale under this Agreement, (ii) is able to bear the economic risk associated with the sale and purchase of the Interest and has such knowledge and experience so as to be aware of the risks and uncertainties inherent in the purchase of rights and assumption of liabilities of the type contemplated in this Agreement; and (iii) has independently and without reliance on the Buyer ,and based on such information as it has deemed appropriate, made its own analysis and decision to enter into this Agreement.

(e) Such Owner has complied with and has performed, in all material respects, all obligations required to be complied with or performed by it in respect of the Toshiba Guaranty, the Settlement Agreement, the Claims and the Distribution Order. The Settlement Agreement has not been modified, and no rights thereunder have been waived or modified, by such Owner. To such Owner’s Knowledge, (i) the Settlement Agreement was negotiated at arms’ length and in good faith and is a valid and enforceable agreement and (ii) the Settlement Agreement and the Distribution Order are not subject to any pending objection, avoidance, rescission or modification, and there has been no Forbearance Termination Event (as defined in the Settlement Agreement).

(f) Proof of claim number 2440 has been duly and timely filed for the WEC Claim in the WEC Proceedings on August 31, 2017, and proof of claim number 2444 has been duly and timely filed for the WECTEC Claim in the WEC Proceedings on August 31, 2017 (such proofs of claim, together, the “ Proofs of Claim ”), and the Proofs of Claim are accurate, valid and complete in all material respects as of the date of such filings. To such Owner’s Knowledge, the Claims are not subject to any claim or counterclaim or setoff filed by any WEC Debtor against such Owner that will impair Buyer’s recovery (with respect to amount or timing or otherwise) thereunder.

(g) Such Owner is not and has never been an “insider” (within the meaning of Section 101(31) of the Bankruptcy Code) of the WEC Debtors or any of their respective Affiliates or an “affiliate” (within the meaning of Section 101(2) of the Bankruptcy Code or Rule 144 of the Securities Act) of the WEC Debtors.

(h) To such Owner’s Knowledge, (i) Toshiba has not been, and is not, in breach of the Settlement Agreement or the Toshiba Guaranty, and (ii) none of Toshiba nor any of its Affiliates party thereto, have been, or are, in violation of the Distribution Order.

(i) There has been no payment or other distribution received by such Owner by any Affiliate or other third party on behalf of such Owner or otherwise in respect of the Interest, in full or partial satisfaction of, or otherwise in connection with the Interest.

(j) The Interest has not been sold, assigned, pledged, factored, hypothecated, participated, encumbered or otherwise transferred to any third party (or is subject to an agreement for the same), in whole or in part, and such Owner is the sole legal and beneficial owner of its respective portion of the Interest and has good legal and marketable title to such portion of the Interest, free and clear of any and all liens, security interests, encumbrances, rights of set off, netting rights or claims of any kind or nature whatsoever, except for claims asserted in the proceedings set forth on the Disclosure Schedule, none of which has resulted in an attachment, lien or encumbrance upon any part of the Interest.

(k) Except for any notice requirement under Rule 3001 of the Federal Rules of Bankruptcy Procedure (the “ Bankruptcy Rules ”), no consent of, registration with, or approval of, or any other action by, any relevant Person is or will be required for Owners to execute, deliver and perform their obligations under this Agreement or for the transactions contemplated herein to become effective.

(l) Such Owner has not engaged in any act, conduct or omission or had any relationship with Toshiba that will reduce the value of the Toshiba Payment Obligation or impair Buyer’s recovery (with respect to amount or timing or otherwise) thereunder or otherwise adversely affect Buyer’s rights in relation thereto.

(m) Except to the extent as may be provided in the Interim Assessment Agreement or in connection with the suspension of operations at the Summer Facility (units 2 and 3) on or about July31, 2017, (i) the EPC Agreement has not been modified since October 27, 2015 and (ii) no rights under the EPC Agreement have been waived or modified, by such Owner.

(n) No interest in the Interest is being sold by or on behalf of one or more Benefit Plans (as defined under Employee Retirement Income Security Act of 1974, as amended, and the rules and regulations promulgated under it (“ ERISA ”)) and the transaction contemplated hereby is not a Prohibited Transaction (as defined under ERISA).

Section 5.2 No Implied Representations or Warranties . No Owner, Affiliate of any Owner, or any advisor, agent or representative of any of the foregoing has made, nor will be deemed to have made, and each Owner, Affiliate of each Owner, and each advisor, agent or representative of each of the foregoing specifically disclaim, any implied warranties or representations and any statutory warranties or representations under this Agreement, any Closing Document or any other document delivered by any Owner, any Affiliate of any Owner, or any advisor, agent or representative of any of the foregoing to Buyer at the Closing. Except as expressly provided in this Article V , but without limiting the foregoing, neither Owner makes any representations or warranties with respect to (a) the Interest, Toshiba, the WEC Debtors, or any other Person, (b) the enforceability of the EPC Agreement or the Settlement Agreement,(c) the presence or absence of defaults under, defenses to or offsets against the Toshiba Amount (other than expressly described herein), (d) the status or financial condition of Toshiba, the WEC Debtors, or any other Person, (e) any fact or condition respecting the Interest, Toshiba, the WEC Debtors, or any other Person, including the collectability of any amounts under the Claims, or (f) any of the matters referred to in Section 4.4 .

ARTICLE VI

COVENANTS

Section 6.1 Settlement Agreement .

(a) First Installment . Buyer agrees that in the event Buyer receives any portion of the First Installment, Buyer shall accept the same as Owners’ agent and hold the same in trust on behalf of and for the sole benefit of Owners, and shall promptly deliver the same forthwith to Owners in the same form received as soon as reasonably practicable (and in any event within five (5) Business Days following receipt thereof). Any payments by Buyer pursuant to this Section 6.1(a) shall be paid to Owners in accordance with each Owner’s Pro Rata Share.

(b) Letters of Credit . For the avoidance of doubt, the right to receive proceeds under the Letters of Credit has not been assigned to Buyer. To the extent (i) the Toshiba Amount is reduced by a Draw Demand made by Owners, or (ii) Toshiba’s payment obligations under the Settlement Agreement are suspended as a result of the delivery by Toshiba of a Payment Obligation Suspension Notice, Owners will remit to Buyer the amount of such reduction in the Toshiba Amount, in the case of clause (i), and will remit to Buyer the amount then remaining available to be drawn under the Letters of Credit in the case of clause (ii), in each case, in accordance with each Owner’s Pro Rata Share, within five (5) Business Days following the time such payment would have been made by Toshiba to Buyer but for such reduction of the Toshiba Amount or within five (5) Business Days following receipt of the proceeds of the Letters of Credit, as applicable.

(c) Toshiba Affiliate Amounts . The Toshiba Affiliate Amounts will not be paid by Owners. To the extent the Toshiba Amount is reduced by the Toshiba Affiliate Amounts, Owners will remit to Buyer the amount of such reduction in the Toshiba Amount, in accordance with each Owner’s Pro Rata Share, within five (5) Business Days following the time such payment would have been made by Toshiba to Buyer but for such reduction of the Toshiba Amount.

(d) Mechanics’ Liens . Owners will maintain post-Closing control of the process regarding the Mechanics’ Liens (as more fully described in the Settlement Agreement, including Section3.4 and Section 5.8 thereof), and to the extent the Toshiba Amount is reduced by the Satisfied Mechanics’ Liens Amount, Owners will remit to Buyer the amount of such reduction in the Toshiba Amount, in accordance with each Owner’s Pro Rata Share, within five (5) Business Days following the time such payment would have been made by Toshiba to Buyer but for such reduction of the Toshiba Amount.

(e) Non-Cash WEC Receipts . Subject to the conditions applicable to Toshiba pursuant to Section 3.2(c) of the Settlement Agreement, upon receipt of a written demand by Toshiba in accordance with Section 3.2(c) of the Settlement Agreement, Buyer shall transfer to Toshiba any cash received by it on account of a non-cash distribution or interest therein that has not, pursuant to the Settlement Agreement, been applied to monthly payment amounts on Schedule 2.2 thereof. Any such transfer of cash to Toshiba will be accompanied by a reasonably detailed accounting of (i) the non-cash distributions received by such Owner in exchange for, on account of, or in connection with any claims of for a breach by WEC of the EPC Agreement (including any rejection thereof under section 365 of the Bankruptcy Code) and (ii) any cash received in respect thereof.

(f) Support of Sale of Westinghouse’s Assets and Plan Support Agreement . Buyer agrees that it will support a prompt sale of the assets of WEC and the other WEC Debtors pursuant to a plan of reorganization or a motion under section 363 of the Bankruptcy Code that is, in each case, acceptable to Toshiba and Buyer in their respective sole discretion. Buyer agrees that it will negotiate in good faith regarding the terms of an acceptable, in its sole discretion, plan support agreement that will set forth terms of an acceptable, in its sole discretion, chapter 11 plan for WEC and the other WEC Debtors. Such plan support agreement shall include plan provisions which (i) provide for a third party release, exculpation and plan injunction substantially in the form attached to the Settlement Agreement as Exhibit B, and (ii) set forth an allocation, acceptable to Buyer in its sole discretion, of distributions to Buyer on account of its respective claims.

(g) Other Settlement Agreement Covenants . For the avoidance of doubt, Owners acknowledge and agree to comply with all covenants applicable to them under the Settlement Agreement, including, but not limited to the covenants set forth in Section 5.2 ( Southern ), Section 5.3 ( Services Agreements ), Section 5.4 ( Consideration of Cost Reduction Proposals ), Section 5.5 ( Refund of Toshiba Payments ), and Section 7.5 ( Nuclear Indemnity and Insurance ) of the Settlement Agreement, and Buyer agrees that it has no right to interfere with or otherwise abridge or amend such provisions or otherwise abridge, amend or waive Toshiba’s obligations with respect to Section 4.2 (Southern) or Section 4.3(Services Agreements) of the Settlement Agreement.

(h) Each Owner shall (i) promptly provide Buyer with a copy of any notice provided to Toshiba with respect to any Toshiba Affiliate Amount; (ii) promptly provide Buyer with a copy of any notice provided to Toshiba with respect to any Satisfied Mechanics’ Liens Amount; (iii) deliver to Buyer a copy of any notice provided to Toshiba under Section 5.8(a) of the Settlement Agreement concurrently with the delivery of such notice to Toshiba, and (iv) promptly provide Buyer copies of all notices or communications received from Toshiba under the Settlement Agreement, including any Payment Obligation Suspension Notice, and all notices or communications received from the issuers of the Letters of Credit.

Section 6.2 Waiver of Securities Claims. Without implication that Buyer’s acquisition of the Interest constitutes a purchase of securities within the meaning of federal or state securities Laws, in light of the representations, warranties, covenants and acknowledgments contained in this Agreement and in the Closing Documents, the parties hereto waive all rights, if any, to make any claim against any other party hereto in connection with this Agreement under any federal or state securities Law.

Section 6.3 Proxy and Attorney-in-fact . Each Owner irrevocably appoints Buyer as its true and lawful attorney-in-fact and authorizes Buyer to act in such Owner’s name, place and stead, to demand, sue for, compromise and recover all such amounts as now are, or may hereafter become, due and payable for or on account of the Interest and to do all lawful things necessary to enforce Buyer’s right, title and interest in and to the Interest or any portion thereof and such Owners’ rights thereunder or related

thereto. Each Owner hereby acknowledges and agrees that the powers granted to Buyer in this paragraph include the right to (a) do all things necessary to enforce the Interest including to prosecute the Interest and/or to defend the Interest against any objection, dispute or litigation that may be filed or commenced in respect thereof or take any actions against Toshiba (referred to in this Section 6.3 as a “Claim Dispute”), (b) agree to less favorable treatment for the WEC Rights than other similarly situated claims, (c) agree with the WEC Debtors to allow the Claims at an amount less than amounts claimed in the Proofs of Claim, (d) agree with Toshiba to reduce the Toshiba Amount owed by Toshiba and (e) amend the Settlement Agreement in its sole discretion; provided, that none of the foregoing shall have a material adverse effect on any Owner. Each Owner agrees that the powers granted by this Section 6.3 are discretionary and that Buyer may exercise or decline to exercise such powers in Buyer’s sole discretion. Buyer shall have no obligation to take any action to prove or defend the validity or amount of the Claims in the WEC Proceedings. Buyer shall have sole authority to negotiate a settlement of the Claims with the WEC Debtors, to appear in the WEC Proceedings, defend against or oppose any Claim Dispute and file pleadings and documents and otherwise take steps to defend against and oppose such Claim Dispute. Each Owner agrees that it shall take no action in respect of or in connection with the Interest or any portion thereof without Buyer’s express consent; provided , that nothing in this Agreement does or shall be deemed to restrict the rights of either Owner to take any action in furtherance of such Owner’s rights under the Retained Rights. In the event that an Owner receives notice of a Claim Dispute, then such Owner shall immediately, and in any event within five (5) Business Days after its receipt of notice of such Claim Dispute, notify Buyer in writing of such Claim Dispute.

Section 6.4 Confidentiality Obligations of the Parties . Each item of Confidential Information to the extent provided and regardless of whether such information is identified as “Confidential” shall be held in the strictest confidence by the parties hereto and all of their respective Affiliates. The parties hereto covenant and agree not to, and to cause their Affiliates not to, use or disclose any Confidential Information. The parties hereto shall, and shall cause their Affiliates, to protect any Confidential Information in their possession by using the same degree of care, but no less than a reasonable degree of care, to prevent the unauthorized use, dissemination, or publication of the Confidential Information as such party uses to protect its own confidential information of like nature. Notwithstanding the foregoing, each party hereto may share Confidential Information (a) with its respective representatives who need to know such information, provided , that each such representative has agreed to keep such information confidential or is otherwise subject to a duty or policy of Buyer or such Owner to keep such information confidential; (b) with the prior written consent of the Buyer on one hand, in the case of disclosure by an Owner, or the Owners on the other hand, in the case of disclosure by Buyer; (c) as requested or required by Law or in connection with any legal process; (d) in connection with the enforcement of such parties’ rights hereunder; or (e) to the extent that any such information is or becomes public other than as a result of a breach by such party. Notwithstanding anything herein to the contrary, Buyer may disclose the Confidential Information (but not the Purchase Price) to any prospective purchaser, transferee or participant of all or any portion of the Interest; provided, that such prospective purchaser, transferee or participant shall be advised of and agree to be bound by either the provisions of this Section 6.4 or other provisions at least as restrictive as this Section 6.4 .

Section 6.5 Release of Owners under this Agreement .

(a) Effective immediately upon the Closing, Buyer on behalf of itself and its present and former agents, Affiliates, principals, shareholders, stakeholders, predecessors, subsidiaries, successors and assigns (collectively, the “ Buyer Releasing Parties ”), hereby fully, finally and forever releases, acquits and discharges each of the Owners and each of their respective agents, Affiliates, executives, employees, attorneys, advisors, accountants, auditors, representatives, associates, directors, officers, partners, principals, insurers, predecessors, subsidiaries, successors, estates, heirs, executors, trusts, trustees, administrators, licensees and assigns (collectively, the “ Owner Released Parties ”) from any and

all manner of action, causes of action, claims, demands, lawsuits, attorneys’ fees and costs, losses, expenses, damages, right to equitable remedy if such breach gives rise to a right of payment, or liabilities of whatever kind and nature whatsoever, whether now known or unknown, asserted or unasserted, suspected or unsuspected, whether arising under federal, state, local, statutory, common, foreign or administrative Law, or any other Law, whether fixed or contingent, accrued or unaccrued, liquidated or unliquidated, matured or unmatured, disputed or undisputed, at law or in equity, secured or unsecured that any of the Buyer Releasing Parties heretofore had, or now or hereafter have, own or hold, or could assert directly or indirectly, against Owner in any forum, arising out of or related to (i) the Interest, and (ii) this Agreement; provided , that nothing in this Section 6.5 shall release Owners or any of the other Owner Released Parties from any obligation under this Article VI and Article VII .

(b) The Buyer Releasing Parties are fully aware of the provisions of California Civil Code Section 1542, which provides as follows:

A general release does not extend to claims which the creditor does not know or

suspect to exist in his or her favor at the time of executing the release, which if

known by him or her must have materially affected his or her settlement with the

debtor.

Each of the Buyer Releasing Parties agrees to voluntarily waive the provisions of California Civil Code Section 1542 (or under any Law of any state or territory of the United States, or principle of common law, or under the Law of any foreign country, that is similar, comparable or equivalent to section1542 of the California Civil Code) with respect to the claims released in Section 6.5(a) . The Buyer Releasing Parties acknowledge and agree that the foregoing waivers were separately bargained for and a key element of this Agreement of which this release is a part.

(i) The Buyer Releasing Parties promise not to sue or proceed in any manner, in court, agency or any other proceedings, whether at law, in equity, by way of administrative hearing, or otherwise, or to solicit others to institute any such actions or proceedings, against the Owner Released Parties concerning any of the claims in this Section 6.5 .

(ii) The releases and covenants not to sue contained in this Section 6.5 maybe pleaded as a full and complete defense to, and may be used as the basis for an injunction against, any action, suit or other proceeding which may be instituted in breach of the releases or covenants not to sue.

Section 6.6 True Sale . The parties hereto agree that the sale, assignment, transfer and conveyance of the Interest contemplated herein is intended to be an absolute and irrevocable transfer constituting a “true sale” for purposes of the Bankruptcy Code, any other applicable Law and accounting principle without recourse by Buyer to any Owner, except as expressly set forth in Article VII . Each party hereto agrees to treat each such transaction as a “true sale” for all purposes under applicable Law and accounting principles, including in their respective books, records, computer files, tax returns(federal, state and local), regulatory and governmental filings, and shall reflect such sale in their respective financial statements. Each Owner shall advise all Persons inquiring about the ownership of the Interest (or any part thereof) that the Interest (or such part thereof) has been sold to Buyer.

Section 6.7 Cooperation; Further Assurances .

(a) Each Owner hereby agrees to use commercially reasonable efforts to cooperate with Buyer and provide reasonable support to Buyer necessary for Buyer’s enforcement of the WEC

Rights and its rights arising under the Settlement Agreement, including for the avoidance of doubt, (i)providing Buyer with all information, correspondence, notices or other documents, and take all reasonable actions requested by Buyer necessary for Buyer to file claims against the WEC Debtors for all possible damages and claims arising from or related to the WEC Debtors’ rejection of the EPC Agreement, (ii)take reasonable steps necessary for the recognition of Buyer as the holder of the Interest through the Distribution Order Notice Letter and the Toshiba Notice Letter, and (iii) prosecution of the Claims and with respect to any actions against Toshiba; provided , that all of the foregoing will be at Buyer’s sole cost and expense, and no Owner will be required to provide copies of any of the Excluded Documents or operate its respective business in any manner other than the ordinary course as determined in the sole discretion of such Owner.

(b) Each of Owners and Buyer hereby agrees to execute and deliver such other instruments as may be reasonably requested by the other party to consummate and/or evidence the transactions contemplated herein, including copies of any Claim Document to the extent reasonably available.

(c) Without limiting the generality of the foregoing, each Owner agrees that in the event such Owner receives any payment, distribution or notice with respect to or relating to the Interest from and after the Closing Date (including any distributions under the Distribution Order), whether in the form of cash, securities, instruments or any other property, the aforementioned shall constitute property of the Buyer to which the Buyer has an absolute right. Such Owner shall accept the same as Buyer’s agent and shall hold the same in trust on behalf of and for the sole benefit of Buyer, and shall promptly deliver the same forthwith to Buyer in the same form received as soon as reasonably practicable (and in any event within five (5) Business Days following receipt thereof), together with (i) any endorsements or documents necessary to transfer such property to Buyer and (ii) any statements received by such Owner from the WEC Debtors describing such payment or distribution.

(d) Each Owner shall use commercially reasonable efforts to cooperate with Buyer, at Buyer’s sole cost and expense, in any attempt by Buyer to (i) comply with Rule 3001(e) of the Bankruptcy Rules and any additional rules, statutes, or orders applicable to the transfer of the Interest and (ii) file any additional proofs of claim or any amendments to the Proofs of Claim. Owners hereby waive any notice or hearing requirements imposed by Rule 3001(e) of the Bankruptcy Rules, and consents to the substitution of Owners by Buyer for all purposes in the WEC Proceedings, including for voting and distribution purposes with respect to the WEC Rights. Each Owner acknowledges and consents to all terms set forth in this Agreement and, upon timely payment of the Purchase Price as provided herein, waives its right to raise any objection thereto and its right to receive notice pursuant to Bankruptcy Rule 3001(e), and consents to the substitution of Owner by Buyer for purposes of enforcing the WEC Rights in the WEC Proceedings. Owners further stipulate that an order may be entered recognizing the Buyer as the valid owner of the Interest. Buyer shall file the Transfer of Claims Forms within five (5) Business Days of the Closing Date. From the Closing Date until the date on which the Buyer is, or is deemed to be, substituted for Owners pursuant to Rule 3001 of the Bankruptcy Rules, this Agreement shall be deemed to grant Buyer an undivided one hundred percent (100%) participation interest in the WEC Rights.

To the extent the sale, assignment, transfer, or conveyance of all or any portion of the Interest is deemed invalid or otherwise prevented by applicable Law or otherwise, then with respect to such portion of the Interest: (a) the beneficial interest in or to such portion of the Interest (collectively, the “ Beneficial Rights ”) shall in any event pass as of the Closing Date to Buyer; and (b) pending the effectiveness of such sale, assignment, transfer, or conveyance, and so long as the applicable Owner transfers and turns over all Beneficial Rights with respect to such portion of the Interest, Buyer shall assume or discharge any Assumed Obligations of such Owner under such Beneficial Rights as agent for such Owner, and such

Owner shall act as Buyer’s agent in the receipt of any benefits, rights or interest received from the Beneficial Rights.

(e) Each Owner agrees that it shall not take any action under, omit to take any action under, amend, or assign the Settlement Agreement without the written consent of Buyer, such consent not to be unreasonably withheld or delayed if such action would not reasonably be expected to adversely affect the Toshiba Payment Obligation or any of Buyer’s rights or obligations under this Agreement or the Settlement Agreement.

(f) Concurrently with the resignation of SCE&G from the UCC, SCE&G shall (i) advise the United States Trustee of its resignation and (ii) notify the United States Trustee that the WEC Claims have been assigned to the Buyer.

(g) Owners and Buyer agree that with respect to all matters described in this Section 6.7, (i) Owners shall deal directly with Buyer (or its Affiliates) only and (ii) Owners shall take instruction from Buyer (or its Affiliates) only.

(h) Notwithstanding anything to the contrary set forth in this Section 6.7 , in no event will Santee Cooper be obligated to take any action, or refuse to take any action, if such action or failure to act would be materially adverse to the holders of Santee Cooper’s debt obligations issued pursuant to its Master Revenue Obligation Resolution, adopted April 26, 1999.

ARTICLE VII

INDEMNIFICATION

Section 7.1 Buyer Indemnification . Buyer agrees to indemnify, hold harmless and defend the Owner Released Parties for, from and against any and all claims, liabilities, losses, damages, penalties, judgments, costs and expenses, actually incurred by any of them, including reasonable attorney’s fees, on account of, arising out of or related to:

(a) any claim for a finder’s fee or broker’s commission asserted against any Owner by a Person which alleges to have dealt with Buyer of any Affiliate of Buyer with respect to the transaction contemplated by this Agreement; or

(b) any breach or non-fulfilment of any representation, warranty, covenant, agreement or obligation to be performed by Buyer pursuant to this Agreement.

Section 7.2 Owners Indemnification . Subject to Section 7.4(b) and to the extent permitted by Law, each Owner agrees, severally (each in accordance with its Pro Rata Share) and not jointly, to indemnify, hold harmless and defend Buyer and each of its agents, Affiliates, executives, employees, attorneys, advisors, accountants, auditors, representatives, associates, directors, officers, partners, principals, insurers, predecessors, subsidiaries, successors, estates, heirs, executors, trusts, trustees, administrators, licensees and assigns (collectively, the “ Buyer Indemnified Persons ”, and together with Owner Released Parties, “ Indemnified Persons ”) for, from and against any and all claims, liabilities, losses, damages, penalties, judgments, costs and expenses, actually incurred by any of them, including reasonably attorney’s fees, on account of, arising out of or related to:

(a) any claim for a finder’s fee or broker’s commission asserted against Buyer by a Person which alleges to have dealt with Owners or any Affiliate of Owners with respect to the transaction contemplated by this Agreement; or

(b) any breach or non-fulfilment of any representation, warranty, covenant, agreement or obligation to be performed by such Owner pursuant to this Agreement.

Section 7.3 Notice of Claims. Promptly after an Indemnified Person receives notice of a claim (whether received from Buyer, Owners or otherwise) to which this Article VII applies in the Indemnified Person’s opinion, the Indemnified Person will deliver Notice to Buyer or Owners, as applicable, of the claim, provided , that any failure by the Indemnified Person to deliver the Notice to Buyer or Owners, as applicable, will not relieve Buyer or Owners, as applicable, of liability under this Agreement to the extent it is not prejudiced by such failure. The Indemnified Persons shall have the right to select their own counsel to defend any indemnified claim at Buyer’s expense, with respect to any Owner Released Party, or at Owners’ expense, with respect to any Buyer Indemnified Person, or at the Indemnified Person’s request, Buyer or Owners, as applicable, shall defend, and assume the defense of, such claim using counsel reasonably acceptable to the Indemnified Persons. Buyer or Owners, as applicable, will be entitled to defend such claim and will (if required by the Indemnified Person) assume the defense of the claim, using counsel selected by Buyer, with respect to any Owner Released Party, or Owners, with respect to any Buyer Indemnified Person, and reasonably approved by the Indemnified Person.

Section 7.4 Exclusive Remedy.

(a) Following the Closing, the respective rights of the Indemnified Persons to indemnification pursuant to this Article VII shall be the sole and exclusive remedies available to such parties with respect to any and all claims with respect to the subject matter of this Agreement and the transactions contemplated hereby. Notwithstanding the foregoing, (i) nothing herein shall limit or impair any party’s right to obtain specific performance or other equitable relief with respect to any breach or threatened breach of this Agreement or limit any dispute or claim hereunder in respect of fraud with respect to the subject matter of this Agreement or the transactions contemplated hereby, and (ii) nothing herein or in any other document delivered pursuant to this Agreement will prejudice Owners from seeking the benefit of any indemnity, hold harmless agreements and similar agreements by any Person to Owners under any Claim Document, provided the same does not detract from the benefits afforded Buyer under such indemnity. In no event shall any party hereto have any liability under this Agreement for any consequential, indirect, incidental, special, exemplary, punitive, or enhanced damages, including loss of future revenue or income relating to a breach or alleged breach of this Agreement, or diminution of value or any damages based on any type of multiple, whether based on statute, contract, tort, or otherwise.

(b) In no event shall an Owner’s aggregate liability pursuant to its indemnification obligations set forth in Section 7.2 exceed its Pro Rata Share of the Purchase Price, less any amounts actually received by Buyer with respect to the Interest.

ARTICLE VIII

MISCELLANEOUS

Section 8.1 Notices . All Notices shall be in writing and (a) mailed (registered or certified mail, return receipt requested, and postage prepaid), (b) hand-delivered, with signed receipt, or(c) sent by a nationally-recognized overnight courier, addressed to the appropriate party at its address asset forth below. Owners and Buyer each may change from time to time the address to which Notices must be sent, by Notice given in accordance with this Section 8.1 . Subject to the foregoing sentence, all Notices given in accordance with this Section 8.1 shall be effective when received (or delivery is refused) at following address:

If to Buyer:

Attention: __________

with a copy to (which shall not constitute Notice):

Attention: __________

If to either Owner :

South Carolina Electric & Gas Company

Mail Code D304

220 Operation Way

Cayce, SC 29033

Attention: Chief Financial Officer

and to:

South Carolina Public Service Authority

One Riverwood Drive

P.O. Box 2946101

Moncks Corner, SC 29461-6101

Attention: Chief Financial Officer

with copies to (which shall not constitute Notice):

South Carolina Electric & Gas Company

Mail Code D308

220 Operation Way

Cayce, SC 29033

Attention: General Counsel

and to:

South Carolina Public Service Authority

One Riverwood Drive

P.O. Box 2946101

Moncks Corner, SC 29461-6101

Attention: General Counsel (M603)

Section 8.2 Applicable Law . This Agreement is governed by and will be construed in accordance with the Laws of the State of New York (without regard to any conflict of Law provision that would result in the application of the Laws of another jurisdiction).

Section 8.3 Discretion . Wherever under this Agreement Owners or Buyer has the right to approve or determine any matter, Owners’ or Buyer’s approval or determination will be in such party’s sole discretion unless expressly provided to the contrary in this Agreement. Wherever under this Agreement any matter is required to be satisfactory to Owners or Buyer, such party’s determination that the matter is satisfactory will be in its sole discretion unless expressly provided to the contrary in this Agreement.

Section 8.4 Severability . In the event that any provision of this Agreement is invalid or unenforceable under any applicable Law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform to such Law. Any provision hereof which may prove invalid or unenforceable under any Law shall not affect the validity or enforceability of any other provision hereof.

Section 8.5 [Reserved].

Section 8.6 Entire Agreement . This Agreement (including all exhibits, schedules and any other attachments) and the Closing Documents constitute the entire understanding between the parties hereto regarding the subject matter of this Agreement, and supersede any and all previous communications and understandings between the parties (including any bid, indication of interest, commitment letter, or letter of interest) regarding the subject matter of this Agreement.

Section 8.7 No Oral Amendment . This Agreement may not be amended, waived or terminated orally or by any act or omission made individually by Owners or Buyer but may be amended, waived or terminated only by a written document signed by the party against which enforcement of the amendment, waiver or termination is sought.

Section 8.8 Time of the Essence . Time is of the essence with respect to the parties’ performance of their obligations under this Agreement.

Section 8.9 Successors and Assigns . This Agreement binds Owners and Buyer and their respective successors and assigns and inures to the benefit of Owners and Buyer and their respective successors and permitted assigns . Article VII also inures to the benefit of all Indemnified Persons pursuant to Article VII .

Section 8.10 Duplicates and Counterparts . This Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. This Agreement, any and all agreements and instruments executed and delivered in accordance herewith, along with any amendments hereto or thereto, to the extent signed and delivered by means of a facsimile machine or email delivery of a “.pdf” or similar format data file, shall be treated in all manner and respects and for all purposes as an original signature, agreement or instrument and shall be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person. No party hereto shall raise the use of a facsimile machine or e-mail delivery of a “.pdf” or similar format data file to deliver a signature to this Agreement or any amendment hereto or the fact that such signature was transmitted or communicated through the use of a facsimile machine or e-mail delivery of a “.pdf” or similar format data file as a defense to the formation or enforceability of a contract and each party forever waives any such defense.

Section 8.11 Rights Cumulative; Waivers . The rights of each of Owners and Buyer under this Agreement are cumulative and may be exercised as often as such party considers appropriate. The rights of each of Owners and Buyer under this Agreement will not be capable of being waived or varied otherwise than by an express waiver or variation in writing. Any failure to exercise or any delay in exercising any of such rights will not operate as a waiver or variation of that or any other such right. Any defective or partial exercise of any of such rights will not preclude any other or further exercise of that or any other such right. No act or course of conduct or negotiation on the part of any party will in any way preclude such party from exercising any such right or constitute a suspension or any variation of any such right.

Section 8.12 Assignment .

(a) No party to this Agreement may assign its rights or delegate its obligations under this Agreement without the written consent of each of the other parties hereto, such consent not to be unreasonably withheld.

(b) Notwithstanding Section 8.12(a) , Buyer may assign, participate or otherwise transfer any interest in any or all of Buyer’s rights under this Agreement without the consent of Owners; provided, that:


(i)	Buyer shall provide Notice of such assignment, participation or transfer

to each Owner promptly, but in any event within five (5) Business Days after, such assignment, participation or transfer; and


(ii)	in no event shall such assignment, participation or transfer result in either

Owner having any obligation (whether for purposes of payment, Notice, cooperation or otherwise) arising under Section 6.1(b) , Section 6.1(c) , Section 6.1(d) or Section 6.7 to more than one Person at any time, and Buyer (and any of its successor and assigns) shall appoint, or shall be appointed as, an agent, representative or other designee as necessary for such purposes.

Section 8.13 Fees and Expenses . Owners and Buyer each will bear the fees and expenses of its respective accountants, appraisers, attorneys and other consultants and other costs and expenses in connection with the preparation of this Agreement and the consummation of the transaction contemplated by this Agreement. Notwithstanding the foregoing, Buyer shall pay all transfer, filing and recording fees, stamp taxes, costs and expenses, if any, including with respect to any document or instrument to be executed and delivered hereunder.

Section 8.14 Agreement Not Binding . Nothing contained in this Agreement will create any obligation on the part of Owners under this Agreement unless and until Owners have executed and delivered to Buyer a counterpart copy of this Agreement.

Section 8.15 Waiver of Jury Trial . Owners and Buyer waive trial by jury in any proceeding brought or Claim asserted in connection with the transaction contemplated by this Agreement.

Section 8.16 No Third Party Beneficiaries . Except for Indemnified Persons, nothing expressed or mentioned in this Agreement is intended or will be construed to give any other Person any legal or equitable right, remedy or claim under or in respect of this Agreement, or any provisions herein contained, this Agreement and all conditions and provisions hereof being intended to be and being for the sole and exclusive benefit of Owners and Buyer and for the benefit of no other Person.

Section 8.17 Headings; Construction . The headings in this Agreement are for purposes of reference only and will not limit or otherwise affect the meaning hereof. References in this Agreement to numbered Articles or Sections are references to the Articles and Sections of this Agreement. References in this Agreement to lettered Exhibits and numbered Schedules are references to the Exhibits and Schedules attached to this Agreement, all of which are incorporated in and constitute a part of this Agreement. Article, Section, Exhibit and Schedule captions used in this Agreement are for reference only and do not describe or limit the substance, scope or intent of this Agreement or the individual Articles, Sections, Exhibits or Schedules of this Agreement. The terms “include”, “including” and similar terms are construed as if followed by the phase “without limitation.” The singular of any word includes the plural and the plural includes the singular. The use of any gender includes all genders. The

term “provisions” includes terms, covenants, conditions, agreements and requirements. The term “amend” includes modify, supplement, renew, extend, replace, restate and substitute and the term amendment” includes modification, supplement, renewal, extension, replacement, restatement and substitution. Reference to any specific Law or to any document or agreement includes any future amendments to or replacements of the Law, document or agreement, as the case may be. No inference in favor of or against a party with respect to this Agreement may be drawn from the fact that the party drafted this Agreement. All obligations, rights, remedies and waivers contained in this Agreement will be construed as being limited only to the extent required to be enforceable under the Law.

Section 8.18 Jurisdiction; Venue; Consent to Service of Process .

(a) Each of Owners and Buyer hereby irrevocably and unconditionally submits, for itself and its property, to the exclusive jurisdiction of and agrees that venue shall be proper in the courts of the United States of America located in the Southern District of New York or in a state court of record in New York County, New York, and any appellate court therefrom, in any action or proceeding arising out of or relating to or connected with this Agreement, or for recognition or enforcement of any judgment. Each of Owners and Buyer hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding shall be heard and determined in such court. Each of Owners and Buyer agrees that a final judgment in any such action or proceeding will be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by Law.

(b) Each of Owners and Buyer hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement in the above identified court. Each of Owners and Buyer hereby irrevocably waives, to the fullest extent permitted by Law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

Section 8.19 Waiver of Conflict . It is acknowledged by each of the parties hereto that Owners and each of their respective Affiliates have retained Reed Smith LLP (collectively, “ Owners Counsel ”) to act as their counsel in connection with the transactions contemplated hereby and that Owners Counsel has not acted as counsel for any other Person in connection with the transactions contemplated hereby and that no other Person has the status of a client of the Owners Counsel for conflict of interest or any other purposes as a result thereof. Owners and Buyer hereby agree that, in the event that a dispute arises between Owners and Buyer or any of their respective Affiliates, Owners Counsel may represent Owners or any of their Affiliates in such dispute even though the interests of Owners or any of its Affiliates may be directly adverse to Buyer or any of its respective Affiliates and even though Owners Counsel may have represented Buyer in a matter substantially related to such dispute, and Buyer and the irrespective Affiliates hereby waive, on behalf of itself and each of its Affiliates, any conflict of interest in connection with such representation by Owners Counsel and agree not to seek to have Owners Counsel disqualified from representing Owners or any of their Affiliates in connection with such dispute. Each of Owners and Buyer further agrees that, as to all pre-Closing communications between or among any of Owners Counsel, Owners and any of their respective Affiliates or advisors, agents or representatives to the extent related to the transactions contemplated by this Agreement, the attorney-client privilege, the expectation of client confidence and all other rights to any evidentiary privilege belong to Owners and their Affiliates, as applicable, and may be controlled by Owners and their Affiliates and shall not pass to or be claimed by Buyer or any of its respective Affiliates. Each of Buyer and Owners further agrees, on behalf of itself and its Affiliates, that all communications that occurred prior to the Closing in any form or format whatsoever between or among any of Owners Counsel, Owners and any of their respective Affiliates, advisors, agents or representatives that relate to the negotiation, documentation and consummation of the transactions contemplated by this Agreement or any dispute arising under this

Agreement (collectively, the “ Deal Communications ”) shall be deemed to be retained and owned collectively by Owners, shall be controlled by Owners and shall not pass to or be claimed by Buyer or its Affiliates. All Deal Communications that are attorney-client privileged (the “Privileged Deal Communications”) shall remain privileged after the Closing. To the extent that files in respect of any Privileged Deal Communications constitute property of the client, the privilege and the expectation of client confidence relating thereto shall belong solely to Owners and their Affiliates, shall be controlled by Owners and their Affiliates and shall not pass to or be claimed by Buyer or its Affiliates.

[Signature Pages Follow.]

IN WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement as of the date first set forth above.

BUYER :

CITIBANK, N.A.

By:__________________________________________

Name:

Title:

OWNERS :

SOUTH CAROLINA ELECTRIC & GAS COMPANY

By:__________________________________________

Name:

Title:

SOUTH CAROLINA PUBLIC SERVICE AUTHORITY

By:__________________________________________

Name:

Title:

[Signature Page to Assignment and Purchase Agreement]

EXHIBIT A

SETTLEMENT AGREEMENT

(Attached.)

SKADDEN, ARPS, SLATE, MEAGHER &

FLOM LLP Van C. Durrer II

Paul D. Leake Annie Z. Li (admitted pro hac vice)

Four Times Square 300 South Grand Avenue, Suite 3400

New York, New York 10036-6522 Los Angeles, California 90071

Telephone: (212) 735-3000 Telephone: (213) 687-5000

Fax: (212) 735-2000 Fax: (213) 687-5600

-and-

SKADDEN, ARPS, SLATE, MEAGHER &

FLOM (UK) LLP

Chris Mallon

40 Bank Street, Canary Wharf

London E14 5DS United Kingdom

Counsel to Toshiba Corporation

UNITED STATES BANKRUPTCY COURT

FOR THE SOUTHERN DISTRICT OF NEWYORK

--------------------------------------------------------- x

In re Chapter 11

WESTINGHOUSE ELECTRIC Case No. 17-10751

COMPANY LLC, et al. ,

(MEW) (Jointly

Debtors. ¹

Administered)

--------------------------------------------------------- x

¹ The debtors in these chapter 11 cases, along with the last four digits of each Debtor 's federal tax identification number, if any, are: Westinghouse Electric Company LLC (0933), CE Nuclear Power International, Inc. (8833), Fauske and Associates LLC (8538), Field Services, LLC (2550), Nuclear Technology Solutions LLC (1921), Nuclear Holding Co., Inc. (7944), PaR Nuclear, Inc. (6586), PCI Energy Services LLC (9100), Shaw Global Services, LLC (0436), Shaw Nuclear Services, Inc. (6250), Stone & Webster Asia Inc. (1348), Stone & Webster Construction Inc. (1673), Stone & Webster International Inc. (1586), Stone & Webster Services LLC (5448), Toshiba Nuclear Energy Holdings (UK) Limited (2348), TSB Nuclear Energy Services Inc. (2348), WEC Carolina Energy Solutions, Inc. (8735), WEC Carolina Energy Solutions, LLC (2002), WEC Engineering Services Inc. (6759), WEC Equipment & Machining Solutions, LLC (3135), WEC Specialty LLC (N/A), WEC Welding and Machining, LLC (8771), WECTEC Contractors Inc. (4168), WECTEC Global Project Services Inc. (8572), WECTEC LLC (6222), WECTEC Staffing Services LLC (4135), Westinghouse Energy Systems LLC (0328), Westinghouse Industry Products International Company LLC (3909), Westinghouse International Technology LLC (N/A), and Westinghouse Technology Licensing Company LLC (5961). The Debtors' principal offices are located at 1000 Westinghouse Drive, Cranberry Township, Pennsylvania 16066.

NOTICE OF FILING OF SETTLEMENT AGREEMENT AMONG TOSHIBA CORPORATION, SOUTH CAROLINA ELECTRIC & GAS COMPANY, AND THE SOUTH CAROLINA PUBLIC SERVICE AUTHORITY

PLEASE TAKE NOTICE that on July 27, 2017, Toshiba Corporation

(" Toshiba "), South Carolina Electric & Gas Company (" SCE&G "), and the South Carolina

Public Service Authority (" Santee Cooper ") (with SCE&G and Santee Cooper, collectively, the " VC Summer Owners ") entered into a Settlement Agreement (the " Settlement Agreement ") dated as of July 27, 2017 to resolve Toshiba's guaranty liability pursuant to the Engineering, Procurement and Construction Agreement Between South Carolina Electric & Gas Company, For Itself and as Agent For the South Carolina Public Service Authority, as Owner and a Consortium Consisting of Westinghouse Electric Company LLC and Stone & Webster, Inc., as Contractor For AP1000 Nuclear Power Plants (the " EPC Contract ") dated as of May 23, 2008 and as amended from time to time. A true and correct copy of the Settlement Agreement is attached hereto as Exhibit A .

PLEASE TAKE FURTHER NOTICE that on July 20, 2017, this Court entered the Order Regarding Distributions in Respect of Claims and Interests of Toshiba Corporation and Affiliates (the " Distribution Order ") [D.I. 953]. The Distribution Order contemplated this Settlement Agreement now entered into by Toshiba and the VC Summer Owners. Therefore, the VC Summer Owners are now "Owners" that are parties to a "Settlement," as those terms are defined in the Distribution Order, with all rights and obligations as set forth in the Distribution Order. Accordingly, Toshiba's rights and obligations as set forth in the Distribution Order now extend to the VC Summer Owners in addition to the other "Owners" defined in the Distribution Order.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

DATED: July 28, 2017

New York, New York

SKADDEN, ARPS, SLATE, MEAGHER

& FLOM LLP

IsI Paul D. Leake

Paul D. Leake

Four Times Square

New York, New York 10036-6522

Telephone: (212) 735-3000

Facsimile: (212) 735-2000

Paul.Leake@skadden.com

-and-

Van C. Durrer, II Annie Z. Li

300 South Grand Avenue

Los Angeles, CA 90071

Telephone: (213) 687-5000

Facsimile: (213) 687-5600

Van.Durrer@skadden.com

Counsel to Toshiba Corporation

REED SMITH LLP

IsI Paul M. Singer

Paul M. Singer

Reed Smith Centre

225 Fifth Avenue

Pittsburgh, PA 15222

Telephone: (412) 288-3131

Facsimile: (213) 288-3063

PSinger@reedsmith.com

Counsel to South Carolina Electric & Gas Company and the South Carolina Public Service Authority

EXHIBIT A

SETTLEMENT AGREEMENT

EXECUTION COPY

SETTLEMENT AGREEMENT

This SETTLEMENT AGREEMENT (this “ Agreement ”) is entered into as of the 27th day of July, 2017 (the “ Effective Date ”), by and among Toshiba Corporation, a Japanese corporation (“ Toshiba ”), South Carolina Electric & Gas Company, a South Carolina corporation (“ SCE&G ”) and the South Carolina Public Service Authority, a body corporate and politic created by the laws of South Carolina (“ Santee Cooper ”). Each of Toshiba, SCE&G and Santee Cooper may be referred to herein as a “ Party ” and collectively as the “ Parties ”.

WHEREAS, the Owners (as defined in the EPC Agreement (as defined below)) and Westinghouse (as defined below) are parties to the EPC Agreement;

WHEREAS, Toshiba has guaranteed certain obligations of Westinghouse under the EPC Agreement pursuant to the terms of the Toshiba Guaranty (as defined below);

WHEREAS, the Owners contend that they have been damaged by Westinghouse’s failure to perform its obligations under the EPC Agreement, and Westinghouse disputes the Owners’ contentions;

WHEREAS, Westinghouse has filed for protection under chapter 11 of the Bankruptcy Code (as defined below);

WHEREAS, the Owners contend that as a result of, among other things, Westinghouse’s chapter 11 filing and Westinghouse’s alleged failure to perform its obligations under the EPC Agreement, Toshiba’s obligations under the Toshiba Guaranty are due;

WHEREAS, Toshiba and the Owners have been engaged in discussions about Toshiba’s aforementioned guaranty obligations; and

WHEREAS, Toshiba and the Owners desire, through this Agreement, to resolve and set forth the amount and manner of payments to be made by Toshiba (directly or, as contemplated by Article III , indirectly) to SCE&G on behalf of the Owners (as defined below) in respect of Toshiba’s guaranty obligations and to set forth agreements with respect to certain other related matters.

NOW, THEREFORE, in consideration of the recitals, the mutual promises in this Agreement and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties to this Agreement, intending to be legally bound, hereby agree as follows:

ARTICLE I
DEFINED TERMS

Section 1.1 Defined Terms

For purposes of this Agreement, the following terms shall have the meanings hereby ascribed to them, except where the context clearly indicates a different meaning is intended.

“ Affiliate ” means, with respect to any Party, any other Person that (a) owns or controls, directly or indirectly, the Party, (b) is owned or controlled by the Party, or (c) is under common control with the Party, where “control” means the power to unilaterally direct the management or policies of, or unilaterally prevent any actions by, the Person, whether through the ownership of voting securities, by contract, or otherwise; provided , however , that in no event shall an Owner (or any of its subsidiaries) be deemed to be an Affiliate of another Owner (or any of its subsidiaries).

“ Agreed Amount ” means $2,168,000,000.

“ Agreement ” has the meaning set forth in the first paragraph of this Agreement.

“ Bankruptcy Case ” means Case No. 17-10751-MEW filed in the Bankruptcy Court, or any case that now is or in the future becomes jointly administered with such case.

“ Bankruptcy Code ” means the Bankruptcy Reform Act of 1978, as amended and codified in title 11 of the United States Code, 11 U.S.C. §§ 101-1532, as in effect on the date hereof.

“ Bankruptcy Court ” means the United States Bankruptcy Court for the Southern District of New York.

“ Beneficiary ” means SCE&G and Santee Cooper.

“ Covenant Release Date ” means the earlier to occur of the date on which (a) Toshiba properly delivers a Payment Obligation Suspension Notice to Beneficiary in accordance with Section 2.4 and (b) Toshiba is rated by Standard & Poor’s or Moody’s Investor Service at or above the Minimum Rating.

“ Distribution Order ” means an order, in the form of Exhibit C , entered in the Bankruptcy Case by the Bankruptcy Court, with only such changes thereto as are acceptable to each of the Parties in their respective sole discretion.

“ Draw Demand ” has the meaning set forth in Section 3.1 .

“ Draw Instruction Notice ” has the meaning set forth in Section 3.1 .

“ Effective Date ” has the meaning set forth in the first paragraph of this Agreement.

“ EPC Agreement ” means that certain Engineering, Procurement and Construction Agreement entered into as of May 23, 2008, by and among SCE&G, acting for itself and as agent for Santee Cooper, and a consortium consisting of Westinghouse and WECTEC, as amended by (a) the July 2012 Agreement entered into as of July 11, 2012, and (b) the October 2015 Amendment entered into as of October 27, 2015, by and among SCE&G, acting for itself and as agent for Santee Cooper, and a consortium consisting of Westinghouse and WECTEC, in each case as amended from time to time.

“ Excluded Affiliates ” means the WEC Debtors and any other Affiliates of Toshiba that, taken as a whole, are not material to the consolidated financial position, results of operations, cash flows, or the ability to conduct business in the ordinary course, of Toshiba and its Affiliates (other than the WEC Debtors), taken as a whole.

“ External Payments ” means the payments received by Beneficiary described in Section 3.1 , Section 3.2 , Section 3.3 and Section 3.4 other than any of such payments that are rescinded or returned, in whole or in part, as contemplated by Section 2.5 .

“ Final Completion ” means when:

(a) all systems, structures and components needed for the commencement of Start-Up Tests for both Units (or one Unit, if the Owners elect to cease construction of the other Unit) are operational in accordance with the terms of the AP1000 Facility Information;

(b) the U.S. Nuclear Regulatory Commission has made the findings required by 10 CFR 52.103(g) authorizing operation of each Unit;

(d) all AP1000 intellectual property and all warranties and documentation required to be delivered to the Owners pursuant to the EPC Agreement or any services agreement between Westinghouse and any other required WEC Debtors (if any) and the Owners, shall have been delivered to the Owners in satisfaction of the applicable requirements of either the EPC Agreement or such services agreement (if any);

provided however, all such conditions have been satisfied on or before September 30, 2025.

“ Forbearance Date ” means September 30, 2022.

“ Financial Institutions ” has the meaning set forth in clause(s) of the definition of “Standard Permitted Lien.”

“ Forbearance Termination Event ” means the occurrence of any of the following:

(a) any payment contemplated in Section 2.2 has not been received by Beneficiary on or by the payment date therefor set forth on Schedule 2.2 ;

(b) a Toshiba Insolvency Proceeding;

(c) Toshiba has failed to perform, or has violated or breached, in any material respect, any covenant or obligation of Toshiba in Section 4.1 ;

(d) Toshiba has failed to perform, or has violated or breached, in any material respect, any other covenant or obligation of Toshiba in this Agreement, or any

representation or warranty of Toshiba in this Agreement was inaccurate in material respect when made, and such failure, violation, breach or inaccuracy has not been cured by Toshiba within thirty (30) days of Beneficiary delivering to Toshiba a notice of such failure, violation, breach or inaccuracy (it being understood and agreed that there shall be no such cure period or cure opportunity for the items described in clauses (a), (b), (c), (e) and (f) of this definition of Forbearance Termination Event);

(e) Toshiba has failed to deliver a reasonably acceptable certificate from its internal legal team confirming the authorization by the Board of Directors (or similar governing body) of Toshiba of the execution, delivery and performance of this Agreement on or before August 10, 2017;

(f) counsel for each of the Parties has failed to deliver reasonably acceptable legal opinions regarding the authorization, execution, and delivery of this Agreement by such Party and the enforceability of this Agreement against such Party on or before August 10, 2017; or

(g) the Distribution Order has been entered by the Bankruptcy Court and has not been reversed, withdrawn, reconsidered, vacated or otherwise amended in any manner not acceptable to any Owner in its sole discretion, or Toshiba or any Person bound thereby or subject thereto has breached or otherwise not complied with, in any material respect, any provision of the Distribution Order.

“ Governmental Unit ” shall have the meaning set forth in section 101(27) of the Bankruptcy Code, including the U.S. Department of Energy and the Public Service Commission of the South Carolina.

“ Guaranteed Obligations ” has the meaning set forth in the Toshiba Guaranty.

“ IAA ” means that certain Interim Assessment Agreement, dated as of March 28, 2017, entered into by and among SCE&G, Santee Cooper, and Westinghouse and WECTEC, as amended from time to time.

“ Law ” means any law (statutory or common), statute, regulation, rule, code or ordinance enacted, adopted, issued, or promulgated by any Governmental Unit.

“ Letters of Credit ” means the letters of credit described on Exhibit A to this Agreement, as such letters of credit may be renewed or replaced in a manner that is acceptable to the Owners in their sole discretion.

“ Lien ” means any mortgage, pledge, security interest, hypothecation, encumbrance, lien or charge of any kind (including any agreement to give any of the foregoing, any conditional sale or other title retention agreement or any lease in the nature thereof).

“ Mechanics’ Liens ” means mechanics’ liens, as they are defined under Section 29-5-10, et seq. of Title 29 of the South Carolina Code of Laws, against any of the property at the Summer Facility.

“ Minimum Rating ” means an issuer rating of BB+ by Standard & Poor’s or a rating of Ba1 by Moody’s Investor Service.

“ NDA ” means a Nondisclosure Agreement by and among Toshiba and the Owners; provided, however, that Toshiba shall not be required to provide any information absent the execution of a Nondisclosure Agreement acceptable to Toshiba and to the Owners, each in their sole discretion.

“ Owner Released Parties ” has the meaning set forth in Section 5.8(b) .

“ Owner Releasing Parties ” has the meaning set forth in Section 5.8(a) .

“ Party ” has the meaning set forth in the first paragraph of this Agreement.

“ Payment Obligation Suspension Notice ” has the meaning set forth in Section 2.4 .

“ Person ” means any individual, partnership, joint venture, firm, corporation, limited liability company, association, central bank, trust or other enterprise or any governmental or political subdivision or any agency, department or instrumentality thereof.

“ Pro Rata Share ” means, for each Owner, the percentage set forth next to such Owner’s name on Schedule 1.1(a) hereto.

“ Released Parties ” has the meaning set forth in Section 5.8(b) .

“ Releasing Parties ” has the meaning set forth in Section 5.8(b) .

“ Satisfied Mechanics’ Liens Amount ” means the aggregate amount of distribution of cash proceeds and/or other forms of consideration which have the effect of reducing the subject Mechanics’ Lien, in each case actually paid or distributed from the estates of the WEC Debtors in connection with the pending Bankruptcy Case to any and all holders of Mechanics’ Liens.

“ SCE&G ” has the meaning set forth in the first paragraph of this Agreement.

“ Southern ” means collectively Georgia Power Company, a Georgia corporation, Oglethorpe Power Corporation (An Electric Membership Corporation), an electric membership corporation formed under the Laws of the State of Georgia, Municipal Electric Authority of Georgia, a public body corporation and politic and an instrumentality of the State of Georgia, and The City of Dalton, Georgia, an incorporated municipality in the State of Georgia acting by and through its Board of Water, Light and Sinking Fund Commissioners and any other owner or operator of the facility commonly referred to as Units 3 and 4 of the Vogtle Electric Generating Plant in Waynesboro, Georgia.

“ Standard Permitted Lien ” means any of the following:

(a) Liens for taxes not yet delinquent or Liens for taxes being contested in good faith and by appropriate proceedings for which adequate reserves in accordance with generally accepted accounting principles have been established;

(b) Liens in respect of property or assets imposed by Law that were incurred in the ordinary course of business, such as carriers’, suppliers’, warehousemen’s, materialmen’s and mechanics’ Liens and other similar Liens arising in the ordinary course of business, that do not in the aggregate materially detract from the value of such property or assets or materially impair the use thereof in the operation of the business of Toshiba or any of its Affiliates and do not secure any indebtedness;

(c) any modification, renewal or extension of any Lien in existence as of the date hereof, any Lien granted as a replacement or substitute therefor and any Lien granted to secure any refinancing of obligations secured by the foregoing; provided that any such refinancing, refunding, modification, renewal, extension, replacement or substitute Lien (i) does not secure any indebtedness other than the indebtedness secured on date hereof and permitted refinancings, refundings, renewals, exchanges or extensions thereof, and (ii) does not encumber any property other than the property subject thereto on the Effective Date other than (x) after-acquired property covered by the original grant and (y) improvements thereon, accessions thereto or proceeds from the disposition of such property;

(d) Liens incurred or deposits made in the ordinary course of business in connection with workers compensation, unemployment insurance and other types of social security, and other Liens to secure the performance of tenders, statutory obligations, contract bids, government contracts, surety, appeal, customs, performance and return-of-money bonds and other similar obligations, incurred in the ordinary course of business (exclusive of obligations in respect of the payment for borrowed money), whether pursuant to statutory requirements, common law or consensual arrangements;

(e) Liens arising out of judgments, attachments or awards of not more than $200 million in the aggregate and not resulting in a Forbearance Termination Event;

(f) leases or subleases granted in the ordinary course of business to others not interfering in any material respect with the business of Toshiba or any of its Toshiba Affiliates and any interest or title of a lessor under any lease;

(g) easements, rights-of-way, zoning or other restrictions, charges, encumbrances, defects in title, prior rights of other Persons, and obligations contained in similar instruments, in each case that do not secure indebtedness and do not involve, and are not likely to involve at any future time, either individually or in the aggregate, a substantial and prolonged interruption or disruption of the business activities of Toshiba or any of its Toshiba Affiliates;

(h) Liens arising from the rights of lessors under leases (including financing statements regarding property subject to lease), provided that such Liens are only in respect of the property subject to, and secure only, the respective lease (and any other lease with the same or an affiliated lessor); and Liens arising out of conditional sale, title retention, consignment or similar arrangements for the sale of goods entered into by Toshiba or its Toshiba Affiliates in the ordinary course of business;

(i) Liens securing indebtedness in respect of purchase money obligations and capital lease obligations (and refinancings thereof); provided that any such Liens attach only to the

property being financed pursuant to, or subject to a sale and leaseback transaction relating to, such indebtedness and do not encumber any other property of Toshiba or any of its Toshiba Affiliates (other than improvements on and accessions to the property being financed);

(j) bankers’ Liens, rights of setoff and other Liens existing solely with respect to cash and cash equivalents on deposit in one or more accounts maintained by Toshiba or its Toshiba Affiliates, in each case granted in the ordinary course of business or arising by operation of Law in favor of the bank or banks with which such accounts are maintained, securing amounts owing to such bank with respect to cash management, credit card, overdraft and operating account arrangements, including those involving pooled accounts and netting arrangements;

(k) Liens on property of a Person existing at the time such Person is acquired or merged with or into or consolidated with Toshiba or its Toshiba Affiliates to the extent such acquisition, merger or consolidation is permitted hereunder (and such Liens are not created in anticipation or contemplation thereof); provided that such Liens do not extend to property not subject to such Liens at the time of acquisition other than (x) after-acquired property covered by the original grant and (y) improvements thereon, accessions thereto or proceeds from the disposition of such property;

(l) Licenses or sublicenses of intellectual property granted by Toshiba or its Toshiba Affiliates and not interfering in any material respect with the ordinary conduct of business of Toshiba or its Toshiba Affiliates;

(m) Liens attached to cash earnest money deposits made by Toshiba or its Toshiba Affiliates in connection with any letter of intent or purchase agreement entered into by Toshiba or its Toshiba Affiliates;

(n) Liens on insurance policies and the proceeds thereof securing the financing of the premiums with respect thereto to the extent indebtedness in connection with such financing of the payment of insurance premiums;

(o) Liens in favor of customs and revenue authorities arising as a matter of Law to secure payment of customs duties in connection with the importation of goods;

(p) Liens upon specific items of inventory or other goods and proceeds of any Person securing such Person’s obligations in respect of bankers’ acceptances issued or created for the account of such Person to facilitate the purchase, shipment or storage of such inventory or other goods in the ordinary course of business;

(q) (i) contractual or statutory Liens of landlords to the extent relating to the property and assets relating to any lease agreements with such landlord, (ii) contractual Liens of suppliers (including sellers of goods) to the extent limited to property or assets relating to such contract, (iii) contractual or statutory Liens of governmental or other customers to the extent limited to the property or assets relating to such contract, and (iv) Liens in favor of governmental bodies to secure advance or progress payments pursuant to any contract or statute;

(r) any (i) customary restriction on the transfer of licensed intellectual property rights and (ii) customary provision in any agreement that restricts the assignment of such agreement or any intellectual property rights thereunder;

(s) Liens on cash, securities or other property in deposit or securities accounts in connection with the redemption, defeasance, repurchase or other discharge of debt issued by Toshiba or its Toshiba Affiliates in favor of financial institutions, lenders, note holders, sureties and/or letter of credit issuers (and including any agents or trustees for any of the foregoing) that are not affiliated with, or Affiliates of, Toshiba (collectively " Financial Institutions "), in each case, in connection with debt financing arrangements or other financial accommodations provided to Toshiba or any of its Affiliates; and

(t) rights of consignors of goods.

“ Summer Costs ” means the sum of all costs and expenses, as reflected in filings by one or more of the Owners (and any of their predecessors, successors and assigns) with Governmental Units, paid, accrued, or incurred by the Owners (and any of their predecessors, successors and assigns) before or after the date of this Agreement for engineering, procurement and construction costs, and for any other items that would have constituted Work if such items had been performed under the EPC Agreement, with respect to the Summer Facility through the date the Summer Facility achieves Final Completion.

“ Summer Facility ” means the two-unit, nuclear-fueled electricity generation facility that is defined as the “Facility” in the EPC Agreement and that is to be located at the Virgil C. Summer Nuclear Station near Columbia, South Carolina.

“ Survival Action ” has the meaning set forth in Section 7.3(a) .

“ Third Parties ” shall mean with respect to any Person, its respective agents, Affiliates, members, shareholders, executives, employees, attorneys, advisors, accountants, auditors, representatives, associates, directors, officers, partners, principals, insurers, predecessors, subsidiaries, successors, estates, heirs, executors, trusts, trustees, administrators, licensees and assigns, each in their specific capacity as such.

“ Toshiba ” has the meaning set forth in the first paragraph of this Agreement.

“ Toshiba Affiliates ” means the Affiliates of Toshiba other than Excluded Affiliates.

“ Toshiba Affiliate Amounts ” means the unpaid portion of amounts due to Toshiba Affiliates from the Owners from the Effective Date through the pendency of the IAA.

“ Toshiba Financial Information ” means such financial information relating to Toshiba as reasonably requested from time to time by either Owner of the type and in the form provided by Toshiba to (a) any financial institutions, lenders, noteholders, sureties, and/or letter of credit issuers (and including any agents or trustees for any of the foregoing), in each case in connection with debt financing arrangements or other financial accommodations, or (b) Standard & Poor’s or Moody’s Investor Service.

“ Toshiba Guaranty ” means that certain Toshiba Corporation Guaranty dated and effective as of May 23, 2008 and restated in October 2015, and made and entered into by Toshiba in favor of SCE&G, acting for itself and as agent for Santee Cooper, as amended from time to time.

“ Toshiba Insolvency Proceeding ” means the occurrence of any of the following:

(a) (i) Toshiba or any of its Affiliates (other than the Excluded Affiliates) shall (A) admit in writing or demonstrate its inability to pay its debts generally as they become due, (B) make an assignment for the benefit of its creditors, (C) file a petition or application, or an answer, or otherwise commence a proceeding (including a bankruptcy proceeding (hasan tetsuzuki), civil rehabilitation proceeding (minji saisei tetsuzuki), corporate reorganization (kaisha kosei tetsuzuki) or special liquidation (tokubetsu seisan tetsuzuki) under Japanese Laws) under any applicable Law of any country or any political subdivision thereof or of any other Governmental Authority, seeking rehabilitation, reorganization, liquidation or arrangement or similar relief or otherwise to take advantage of any bankruptcy, insolvency or other similar Law, or for the appointment of a receiver, trustee, liquidator, custodian, sequestrator, conservator or other similar agent of Toshiba or any of its Affiliates (other than the Excluded Affiliates) of the whole or any material part of the property or assets of Toshiba or such Affiliate (other than the Excluded Affiliates), or (D) become subject to any kind of out-of-court procedures for rehabilitation, reorganization, liquidation or arrangement or similar relief (other than any restructure of debt financing arrangements existing on the Effective Date in a manner that has no material adverse effect on either Owner or on the ability of Toshiba to perform its obligations under this Agreement); (ii) there is commenced against Toshiba or any of its Affiliates (other than the Excluded Affiliates) any proceeding for any of the relief described in clause (i)(C) or clause (i)(D) above and such proceeding shall remain undismissed for a sixty (60) day period; (iii) there is filed against Toshiba or any of its Affiliates (other than the Excluded Affiliates) any petition for commencement of proceeding for any of the relief described in clause (i)(C) or (i)(D) above and such petition for commencement of proceeding or proceeding shall remain undismissed for a sixty (60) day period; or (iv) Toshiba or any of its Affiliates (other than the Excluded Affiliates), by any act in any such proceeding, indicates its consent to or approval of or acquiescence in such relief;

(b) (i) a court of competent jurisdiction shall enter an order, judgment or decree appointing a receiver, trustee, (special) liquidator, custodian, sequestrator, conservator or other similar agent of Toshiba or any of its Affiliates (other than the Excluded Affiliates) for the whole or any substantial part of its property or assets, or (ii) under the provisions of any Law for the relief or aid of debtors, a court of competent jurisdiction shall assume custody or control of Toshiba or any of its Affiliates (other than the Excluded Affiliates) or of the whole or any substantial part of its property or assets; or

(c) Toshiba or any of its Affiliates (other than the Excluded Affiliates) shall file a certificate or other instrument of liquidation or dissolution or shall be liquidated, dissolved or wound-up or shall commence any action or proceeding for liquidation, dissolution, or winding-up, or shall take any corporate action in furtherance thereof; or Toshiba or any of its Affiliates (other than the Excluded Affiliates) shall have

commenced against it any action or proceeding for liquidation, dissolution, or winding-up or shall have filed any petition for commencement of any action or proceeding for liquidation, dissolution, or winding-up.

“ Toshiba Obligation Amount ” means the Agreed Amount (a) minus any amounts paid to, and received by, Beneficiary under Section 2.2 or Section 2.3 , (b) minus any External Payments properly paid to, and received by, Beneficiary, (c) minus the Toshiba Affiliate Amount, (d) minus the Satisfied Mechanics’ Liens Amount, and (d) plus any amounts paid or returned by Beneficiary as contemplated by Section 2.5 .

“ Toshiba Released Parties ” has the meaning set forth in Section 5.8(a) .

“ Toshiba Releasing Parties ” has the meaning set forth in Section 5.8(b) .

“ WEC Debtors ” means, collectively, Westinghouse and any of the other entities listed on Schedule 1.1(b) .

“ WECTEC ” means WECTEC Global Project Services Inc., a Louisiana corporation formerly named CB&I Stone & Webster, Inc., and, prior thereto, named Stone & Webster, Inc.

“ Westinghouse ” means Westinghouse Electric Company LLC, a Delaware limited liability company.

Section 1.2 Other Defined Terms

Unless otherwise defined or specified in this Agreement, capitalized terms shall have the meanings ascribed to them in the EPC Agreement.

ARTICLE II
SETTLEMENT AMOUNT AND TOSHIBA PAYMENTS

Section 2.1 Establishment of Amount of Toshiba Obligation Under the Toshiba Guaranty

The Parties agree that, notwithstanding (a) any term of or condition in the Toshiba Guaranty, the EPC Agreement, or any other agreement (including, but not limited to, any such term or condition relating to any alleged breach of warranty of title), (b) the performance, termination, breach, amendment, modification, assignment, rejection, assumption, unenforceability, or invalidity of the Toshiba Guaranty, the EPC Agreement, or any other agreement, or (c) the cessation or continuation of work on all or any portion of the Summer Facility or the completion, suspension or abandonment of all or any portion of the Summer Facility, the amount of Toshiba’s payment obligations under the Toshiba Guaranty is fully accrued and irrevocably deemed and agreed to be an amount equal to the Agreed Amount. In no event will Toshiba claim or assert that Toshiba’s payment obligations under the Toshiba Guaranty are for an amount less than the Agreed Amount, and each Owner agrees that in no event will it claim or assert Toshiba’s payment obligations under the Toshiba Guaranty or the EPC Agreement are for an amount in excess of the Agreed Amount. For the avoidance of doubt, the Owners acknowledge that the Agreed Amount is not subject to any further increase.

Section 2.2 Toshiba Payment Obligations

Notwithstanding (a) any term of or condition in the Toshiba Guaranty, the EPC Agreement, or any other agreement, (b) the performance, termination, breach, amendment, modification, assignment, rejection, assumption, unenforceability or invalidity of the Toshiba Guaranty, the EPC Agreement, or any other Agreement (including, but not limited to, any such term or condition relating to any alleged breach of warranty of title), or (c) the cessation or continuation of work on all or any portion of the Summer Facility or the completion, suspension or abandonment of all or any portion of the Summer Facility, except to the extent adjustments are made by application of an External Payment, Toshiba Affiliate Amount and the Satisfied Mechanics’ Liens Amount pursuant to Article III , Toshiba shall pay the Agreed Amount to Beneficiary. Except to the extent paid by application of an External Payment pursuant to Article III , Toshiba shall make such payment to Beneficiary in the monthly payment amounts and on the payment dates set forth on Schedule 2.2 . Toshiba shall make each such payment in United States dollars by wire transfer of immediately available funds to an account as may be designated from time to time by Beneficiary, provided that such designation shall have been delivered to Toshiba at least thirty (30) days prior to the applicable payment date.

Section 2.3 Optional Prepayments

Toshiba, without premium or penalty, may prepay any of the monthly payment amounts set forth on Schedule 2.2 . Beneficiary will apply such prepayments pro rata (based on the respective unpaid amounts set forth on Schedule 2.2 ) against all remaining monthly payment amounts set forth on Schedule 2.2 that are not past due. External Payments shall not constitute optional prepayments hereunder.

Section 2.4 Suspension of Payment Obligations Based on Letters of Credit

Notwithstanding anything to the contrary in Section 2.2 , if the aggregate amount of Toshiba’s remaining payment obligations under Section 2.2 (determined disregarding any External Payments that have not already been applied pursuant to Article II I against monthly payment amounts set forth on Schedule 2.2 ) is less than the remaining amount then available to be drawn under the Letters of Credit by SCE&G prior to expiration of any of the Letters of Credit (after taking into account any required notice and cure periods, Draw Instruction Notices and any outstanding demands for payment under the Letters of Credit) without restriction, Toshiba may deliver a written notice (a “ Payment Obligation Suspension Notice ”) to the Owners stating that the aggregate amount of Toshiba’s remaining payment obligations under Section 2.2 (determined disregarding any External Payments that have not already been applied pursuant to Article III against monthly payment amounts set forth on Schedule 2.2 ) is, and on the suspension date specified by Toshiba in the Payment Obligation Suspension Notice will be, less than the remaining amount then available to be drawn under the Letters of Credit by Beneficiary prior to expiration of any of the Letters of Credit (after taking into account any required notice and cure periods, Draw Instruction Notices and any outstanding demands for payment under the Letters of Credit) without restriction ( provided , however , that Toshiba may not deliver a Payment Obligation Suspension Notice at any time (a) in which there exists a Forbearance Termination Event (disregarding, for the purpose of this Section 2.4 , the cure period and cure opportunity provisions of clause (d) of the definition of Forbearance Termination Event), (b) either Owner is

not permitted to make demand for such payment under the Letters of Credit or (c) with a specified suspension date in the sixty (60) day period before the expiration date of any of the Letters of Credit or at any time thereafter). Following delivery of the Payment Obligation Suspension Notice to the Owners, upon the suspension date specified by Toshiba in the Payment Obligation Suspension Notice, which date shall be at least forty five (45) days after the date of such delivery, Toshiba’s direct payment obligations under Section 2.2 (but not under Section 2.5 ) will be suspended and Beneficiary shall be permitted to demand payments under the Letters of Credit in an aggregate amount equal to the amount of the Toshiba payment obligations that were so suspended; provided , however , that if Beneficiary makes any such demand for payment under the Letters of Credit and, for any reason, such payment is not received by Beneficiary within five (5) business days in the United States of America of the making of such demand, the suspension of Toshiba’s direct payment obligations under Section 2.2 shall be lifted, Toshiba’s payment obligations shall be reinstated effective as of the time of the original suspension (and any Covenant Release Date contemplated by clause (a) of the definition of “Covenant Release Date” shall be deemed voided and not to have occurred), and Toshiba shall make all payments as and when contemplated by Section 2.2 . Beneficiary, in connection with making a demand, as contemplated by this Section 2.4 , for payment under the Letters of Credit, shall provide Toshiba with a copy of such demand substantially contemporaneously with delivery of such demand to the applicable issuer.

Section 2.5 Reinstatement for Rescinded or Returned Payments

If, at any time, any payment or distribution or portion thereof contemplated by this Agreement (including any External Payments and any payments under this Article II) is rescinded or otherwise returned by Beneficiary or any other Person, whether upon or in connection with a Toshiba Insolvency Proceeding or the insolvency, bankruptcy, or reorganization of Toshiba, or otherwise, the original payment obligation of Toshiba under this Agreement shall be reinstated as of the date of such rescission or return and, to the extent such rescission or return relates to any payments as to which the payment dates therefor were prior to the date of such rescission or return, Toshiba shall make a payment to Beneficiary in the aggregate amount of such payments that were due on such payment dates within ten (10) Japanese business days following the delivery by Beneficiary to Toshiba of a written notice of such rescission or other return, accompanied by reasonable supporting documentation of such rescission or return.

Section 2.6 Preservation of Claims Against WEC Debtors and Third Parties

Nothing contained herein shall impact or limit the claims asserted by the Owners against any WEC Debtor or any third party (other than a Toshiba Released Party).

ARTICLE III
EXTERNAL PAYMENTS AND CREDITS

Section 3.1 Payment through Draw on Letters of Credit

Notwithstanding anything to the contrary in Section 5.1 , Beneficiary may draw on any Letter of Credit prior to the Forbearance Termination Date on the following conditions. Beneficiary may deliver a written notice (a “Draw Instruction Notice”) to Toshiba advising Toshiba that the

Owners intend to make a demand for payment (“ Draw Demand ”) under the Letters of Credit after all applicable notices have been delivered to Westinghouse and all notice, grace or cure periods have ended permitting the Owners to draw under such Letters of Credit; provided, however, that (a) Owners shall not make a draw prior to October 1, 2017; (b) the amount of the Draw Demand shall not exceed $45,000,000, and (c) the amount of any Draw Demand shall not exceed the remaining amount then available to be drawn under the Letters of Credit by the Owners prior to expiration of any of the Letters of Credit (after taking into account any required notice and cure periods, and any other demands for payment under the Letters of Credit) without restriction. In the event Beneficiary elects to draw on a Letter of Credit as set forth in this section, Beneficiary shall specify in the Draw Instruction Notice (a) the amount to be demanded in the Draw Demand and (b) instructions as to which monthly payment amount shall be reduced by Beneficiary by application of the proceeds of the Draw Demand (it being understood that, except as set forth below, the Owners shall apply the proceeds of any Demand Draw first to any past due monthly payments and then to any next due monthly payments). If Beneficiary receives the proceeds of the Draw Demand from the issuer(s) of the Letters of Credit within ten (10) business days in the United States of America of the Owners’ presentation of the Draw Demand, Beneficiary will apply such proceeds to reduce monthly payment amounts as specified in the Draw Instruction Notice. If Beneficiary does not receive the proceeds of the Draw Demand from the issuer(s) of the Letters of Credit within ten (10) business days in the United States of America of the Owners’ presentation of the Draw Demand, (a) Toshiba shall be obligated to pay to Beneficiary as and when contemplated by Section 2.2 the monthly payment amounts that were to be reduced by Beneficiary by application of the proceeds of such Draw Demand and (b) Beneficiary will apply such proceeds of the Draw Demand, if and when received from the issuer(s) of the Letters of Credit, first to any past due monthly payments and then to any next due monthly payments.

Section 3.2 Westinghouse Proceeds

(a) Beneficiary will apply the first $853,000,000 of all cash distributions received by it (i) pursuant to the Distribution Order or as contemplated by Section 4.6 , or (ii) in respect of claims of the Owners for a breach by Westinghouse of the EPC Agreement (including any rejection thereof under section 365 of the Bankruptcy Code), including any distributions from Westinghouse in exchange for, on account of, or in connection with such claims, against the monthly payment obligations of Toshiba under Section 2.2 . Beneficiary will apply such cash distributions received by it to the monthly payment amounts on Schedule 2.2 in inverse order of their specified payment dates (i.e., starting with payment dates that are the farthest in the future).

(b) Beneficiary will apply all cash distributions in excess of $853,000,000 received by it (i) pursuant to the Distribution Order or as contemplated by Section 4.6 , or (ii) in respect of claims of the Owners for a breach by Westinghouse of the EPC Agreement (including any rejection thereof under section 365 of the Bankruptcy Code), including any distributions from Westinghouse in exchange for, on account of, or in connection with such claims, against the monthly payment obligations of Toshiba under Section 2.2 Beneficiary will apply such distributions pro rata (based on the respective unpaid amounts set forth on Schedule 2.2 ) (a) first against all remaining monthly payment amounts set forth on Schedule 2.2 that have payment dates on or after March, 1 2019 and that are not past due, (b) second against all remaining monthly payment amounts set forth on Schedule 2.2 that have payment dates before March 1,

2019 and that are not past due and (c) third, if there are monthly payment amounts that are past due, against any such payment amounts.

(c) For the avoidance of doubt, no non-cash distribution received by either Owner shall be applied to reduce the monthly payment obligations of Toshiba under Section 2.2 , unless and until such distribution is reduced to cash. In the event that, as of the time (i) Toshiba is entitled to exercise subrogation rights as contemplated by Section 8.3 and (ii) the proviso in Section 8.3 is no longer applicable, any Owner continues to own or have any interest in any non-cash distributions received by such Owner in exchange for, on account of, or in connection with any claims of such Owner for a breach by Westinghouse of the EPC Agreement (including any rejection thereof under section 365 of the Bankruptcy Code), Toshiba shall have the right, at any time thereafter, to demand in writing that such Owner, if and when any such non-cash distribution or interest therein is thereafter reduced to cash, transfer to Toshiba such cash. Following its receipt of such written demand such Owner shall so transfer to Toshiba any such cash received by it on account of such non-cash distribution or interest therein that has not, pursuant to this Agreement, been applied to monthly payment amounts on Schedule 2.2 , but only to the extent the aggregate amount of all cash transferred to Toshiba pursuant to this Section 3.2(c) does not exceed such Owner’s Pro Rata Share of the Agreed Amount. Any such transfer of cash to Toshiba will be accompanied by a reasonably detailed accounting of (a) the non-cash distributions received by such Owner in exchange for, on account of, or in connection with any claims of such Owner for a breach by Westinghouse of the EPC Agreement (including any rejection thereof under section 365 of the Bankruptcy Code) and (b) any cash received in respect thereof.

Section 3.3 Toshiba Affiliate Amounts

The Owners shall have no obligation to pay the Toshiba Affiliate Amounts, provided , however , that any such Toshiba Affiliate Amounts withheld by the Owners shall reduce the Agreed Amount on a dollar-for-dollar basis. Beneficiary will apply such cash distributions received by it to the monthly payment amounts on Schedule 2.2 in inverse order of their specified payment dates (i.e., starting with payment dates that are the farthest in the future). For the avoidance of doubt, any Toshiba Affiliate Amounts paid by the Owners to or on account of Toshiba Affiliates shall not reduce the Agreed Amount.

Section 3.4 Satisfied Mechanics’ Liens Amount

The Satisfied Mechanics’ Liens Amount shall reduce the Agreed Amount as follows: (i) the first $100 million of Satisfied Mechanic’s Liens Amounts shall reduce the Agreed Amount on a dollar for dollar basis; (ii) the next $41 million of Satisfied Mechanic’s Liens Amounts shall not reduce the Agreed Amount and (iii) all remaining Satisfied Mechanic’s Liens Amounts in excess of $141 million shall reduce the Agreed Amount on a dollar for dollar basis. Beneficiary will apply the Satisfied Mechanic’s Liens Amounts to the monthly payment amounts on Schedule 2.2 in inverse order of their specified payment dates (i.e., starting with payment dates that are the farthest in the future).

ARTICLE IV
COVENANTS OF TOSHIBA

Section 4.1 Restrictive Covenants . At all times prior to the Covenant Release Date (and thereafter if the Covenant Release Date is voided pursuant to ‎ Section 2.4 ), Toshiba shall not, and shall cause each of its Affiliates (other than (i) the WEC Debtors and (ii) Affiliates of Toshiba that have their common equity securities listed on the New York Stock Exchange, The NASDAQ Stock Market, the Japan Stock Exchange, the London Stock Exchange, the Shanghai Stock Exchange, the Hong Kong Stock Exchange, Euronext or any other stock exchange acceptable to the Owners) not to, (a) create, incur, assume or suffer to exist any Lien upon or with respect to any assets of Toshiba or any of its Affiliates (other than (i) the WEC Debtors and (ii) Affiliates that have their common equity securities listed on the New York Stock Exchange, The NASDAQ Stock Market, the Japan Stock Exchange, the London Stock Exchange, the Shanghai Stock Exchange, the Hong Kong Stock Exchange, Euronext or any other stock exchange acceptable to the Owners), whether now owned or hereafter acquired, or (b) take any other action (including in connection with merger, spin or consolidation, deconsolidation or amalgamation) that, in each case, would have the effect of subordinating the claims of Beneficiary under the Toshiba Guaranty or the claims of either Owner under this Agreement to any other claims. The foregoing provisions of this ‎ Section 4.1 shall not apply to:

(i) the transactions described in the press release issued by Toshiba on April 24, 2017, a copy of which is attached as Schedule 4.1(b) , as well as the other ancillary transactions described in Schedule 4.1(b);

(ii) Liens in favor of Financial Institutions, in each case, in connection with debt financing arrangements or other financial accommodations provided to Toshiba or any of its Affiliates;

(iii) any Standard Permitted Lien arising in the ordinary course of business of Toshiba and its Affiliates; and

(iv) guaranties by Toshiba for existing and new ordinary course projects of Toshiba or its Affiliates so long as such guaranties are subordinate to or pari passu with Toshiba’s obligations under the Toshiba Guaranty and under this Agreement.

Section 4.2 Southern

Toshiba will negotiate in good faith with the Owners regarding, and to minimize any adverse effects on the Owners or the construction, maintenance or operation of the Summer Facility (whether such facility is completed under the EPC Agreement or otherwise) of, any agreements or arrangements Toshiba or any of its Affiliates may enter into or contemplate entering into with Southern or any successors or assigns thereof; provided , however , that in no event will Toshiba or its Affiliates be required, by reason of this Section 4.2 , to release, amend, waive, or otherwise modify any of their rights under this Agreement or any other agreement.

Section 4.3 Services Agreements

Toshiba will negotiate in good faith with the Owners regarding a potential services agreement under which Toshiba would provide parts and services relating to the Summer Facility; provided , however , that in no event will Toshiba, by reason of this Section 4.3 , have any obligation to enter into such services agreement; and provided further, however, that this Section 4.3 shall not require Toshiba to offer any extension of defect liability periods for the equipment and services it has supplied pursuant to previous agreements.

Section 4.4 Financial Information

Until the full and irrevocable payment by Toshiba of all amounts contemplated by Section 2.2 (determined disregarding any External Payments that have not already been applied pursuant to Article III against monthly payment amounts set forth on Schedule 2.2 ), and provided that the NDA remains effective (or, if the NDA is not effective, provided that each of the requesting Owners is willing to enter into a new agreement with Toshiba with confidentiality terms substantially comparable to those in the NDA), Toshiba will provide to Beneficiary the Toshiba Financial Information promptly following the request therefor by any Owner. Notwithstanding the foregoing, Toshiba shall be under no obligation to provide information to the Beneficiary relating to asset sales that have not been completed.

Section 4.5 Amendment, Modification and Waiver of the Distribution Order.

Without the prior written consent of each Owner, which consent may be granted or withheld in its sole discretion, Toshiba will not seek to reverse, withdraw, have reconsidered, vacate or otherwise amend the Distribution Order. Toshiba shall comply with all of its obligations under the Distribution Order.

Section 4.6 Pay Over . Until the full and irrevocable payment to Beneficiary of the Toshiba Obligation Amount pursuant to this Agreement, after taking into account the effect of any amounts that have been or in the future may be required to be paid or returned by Beneficiary or any other Person as contemplated by Section 2.5 , any of the following that are received by Toshiba or any of its Affiliates (other than the WEC Debtors) shall be segregated and held in trust by Toshiba for Beneficiary and promptly paid over by Toshiba to Beneficiary for the benefit of SCE&G and Santee Cooper to be applied by Beneficiary as provided in Section 3.2(a) and Section 3.2(b) : (i) any payment or distribution from Westinghouse (or any of its subsidiaries) or Toshiba Nuclear Energy Holdings (UK) Limited (or any of its subsidiaries); (ii) any proceeds from the sale, by asset sale, stock sale, merger or otherwise, of Westinghouse (or any of its subsidiaries) or Toshiba Nuclear Energy Holdings (UK) Limited (or any of its subsidiaries; or (iii) any proceeds from the sale of any claim against Westinghouse (or any of its subsidiaries) or Toshiba Nuclear Energy Holdings (UK) Limited (or any of its subsidiaries) (any of the items described in the foregoing clauses (i), (ii) and (iii), the “ Pay Over Property ”); provided , however , that, with respect to any Pay Over Property in respect of the equity securities of Toshiba Nuclear Energy Holdings (UK) Limited, this Section 4.6 shall not apply to the portion of such Pay Over Property allocable to any minority owner of Toshiba Nuclear Energy Holdings (UK) Limited that is not an Affiliate of Toshiba under the governing documents of Toshiba Nuclear Energy Holdings (UK) Limited, so long as such allocated portion does not exceed 10% of such Pay Over Property. Notwithstanding any provision of this Section 4.6 , in lieu of complying with the foregoing provisions of this Section 4.6 Toshiba shall be entitled to

return to Westinghouse (or any of its subsidiaries) or Toshiba Nuclear Energy Holdings (UK) Limited (or any of its subsidiaries) any Pay Over Property paid or distributed by such Person or such Person's agent or designee to Toshiba or any of its Affiliates. Toshiba further agrees that it (i) will not sell or transfer, or permit any of its Affiliates (other than the WEC Debtors) to sell or transfer (other than any sale or transfer to any Affiliate other than the WEC Debtors), any rights in respect of intercompany loans to Westinghouse (or any of its subsidiaries) or Toshiba Nuclear Energy Holdings (UK) Limited (or any of its subsidiaries) or any claims Toshiba or any of its Affiliates (other than the WEC Debtors) may have against Westinghouse (or any of its subsidiaries) or Toshiba Nuclear Energy Holdings (UK) Limited (or any of its subsidiaries) (and that Toshiba has sole authority to control) arising from Beneficiary or Owners’ draws under the Letters of Credit until the full and irrevocable payment to Beneficiary of the Toshiba Obligation Amount pursuant to this Agreement, after taking into account the effect of any amounts that have been or in the future may be required to be paid or returned by Beneficiary or any other Person as contemplated by Section 2.5 and (ii) will not sell or transfer any of its equity interest in Toshiba Nuclear Energy Holdings (UK) Limited until after a sale of all or substantially all of the assets of the WEC Debtors, including all or substantially all of the assets of Toshiba Nuclear Energy Holdings (UK) Limited.

Section 4.7 Payments Free and Clear

(a) All payments under this Agreement shall be made in U.S. Dollars and without any deductions or withholding for or on account of any tax imposed upon any Owner, Beneficiary or Toshiba unless such deduction or withholding is required by any applicable Law, as modified by the practice of any relevant governmental revenue authority, then in effect. If Toshiba is so required to deduct or withhold, then Toshiba will (i) pay to the relevant authorities the full amount required to be deducted or withheld (including the full amount of tax required to be deducted or withheld from any additional amount paid by Toshiba to any Owner or Beneficiary under this Section 4.7 ) promptly upon the earlier of determining that such deduction or withholding is required or receiving notice that such an amount has been assessed against any Owner or Beneficiary, and in any event before penalties attach thereto or interest accrues thereon, (ii) promptly forward to the Owners an official receipt (or certified copy), or other documentation reasonably acceptable to the Owners, evidencing such payment to such authorities and (iii) in addition to the payment which any Owner or Beneficiary is otherwise entitled under this Agreement, if such deduction or withholding is on account of any tax imposed upon Toshiba, pay to the Owners and Beneficiary such additional amount as is necessary to ensure that the net amount actually received by the Owners and Beneficiary (free and clear of taxes assessed against Toshiba) will equal the full amount the Owners and Beneficiary would have received had no such deduction or withholding been required.

(b) If (i) Toshiba is required to make any deduction or withholding on account of any tax from any payment made by it under this Agreement, (ii) Toshiba does not make the deduction or withholding, and (iii) a liability for or on account of the tax is therefore assessed directly against any Owner or Beneficiary, Toshiba shall pay to the Owners and Beneficiary, promptly after deemed, the amount of the liability (including any related liability for interest or penalties).

ARTICLE V
COVENANTS OF BENEFICIARY AND OWNERS

Section 5.1 Forbearance

Beneficiary will not, prior to the Forbearance Date, enforce any rights under the Toshiba Guaranty unless a Forbearance Termination Event has occurred (inclusive of the expiration without cure of any applicable cure period set forth in clause (d) of the definition of Forbearance Termination Event). Unless a Forbearance Termination Event has occurred, Beneficiary will not, prior to the Forbearance Date, make any demand for payment under any of the Letters of Credit except (a) as contemplated by Section 2.4 or Section 3.1 , (b) from and after the delivery by Toshiba of a Payment Obligation Suspension Notice, and (c) in the sixty (60) day period before the expiration thereof.

Section 5.2 Southern

Each of the Owners agrees that it will negotiate in good faith with Toshiba regarding, and to minimize any adverse effects on the Owners or the construction, maintenance or operation of the Summer Facility (whether such facility is completed under the EPC Agreement or otherwise) of, any agreement or arrangements Toshiba or any of its Affiliates may enter into or contemplate entering into with Southern or any successors or assigns thereof; provided , however , that in no event will any of the Owners be required, by reason of this Section 5.2 , to release, amend, waive, or otherwise modify any of their rights under this Agreement or any other agreement.

Section 5.3 Services Agreements

Beneficiary will negotiate in good faith with Toshiba regarding a potential services agreement under which Toshiba may provide parts and services relating to the Summer Facility; provided , however , that in no event will any of the Owners be required, by reason of this Section 5.3 , to release, amend, waive, or otherwise modify any of their rights under this Agreement or any other agreement; and provided further , however , that in no event will any of the Owners, by reason of this Section 5.3 , have any obligation to enter into such services agreement or to consider, or to undertake, any work or obligation with respect to the Summer Facility or the completion thereof.

Section 5.4 Consideration of Cost Reduction Proposals

Beneficiary will consider any good faith proposals it may receive from Toshiba for arrangements for incentives benefitting both Toshiba and the Owners that are intended to reduce costs to achieve Final Completion; provided , however , that in no event will any of the Owners be required, by reason of this Section 5.4 , to release, amend, waive, or otherwise modify any of their rights under this Agreement or any other agreement; and provided , further , however , that in no event will any of the Owners, by reason of this Section 5.4 , have any obligation to enter into any arrangements with respect to any such incentives or to consider, or to undertake, any work or obligation with respect to the Summer Facility or Final Completion. Each Owner acknowledges and agrees that Toshiba is not required to provide any proposals pursuant to this Section 5.4 . Toshiba makes no representations or warranties in respect of any such proposal. Except to the extent it otherwise agrees in writing, Toshiba will have no responsibility for the implementation and operation of any such proposal.

Section 5.5 Refund of Toshiba Payments

If, and only if, the Summer Facility achieves Final Completion, Beneficiary and each of the Owners agrees that it will promptly provide Toshiba with a statement (the “ Summer Cost Statement ”), in a form reasonably acceptable to Toshiba, of all Summer Costs. If (a) the amount of (i) Summer Costs as shown on the Summer Cost Statement minus (ii) the Contract Price (as adjusted as provided by the EPC Agreement) is less than (b) the Agreed Amount, then, if all payment obligations of Toshiba in this Agreement has been fully and irrevocably paid (whether or not then due), each Owner shall pay Toshiba its Pro Rata Share of 50% of the resulting difference. For the avoidance of doubt, the Parties acknowledge that the Owners shall have no obligation to minimize or reduce the Summer Costs, and Toshiba shall have no right to assert any right to payment under this Section 5.5 based on an assertion that the Summer Costs should have been lower.

Section 5.6 Support of Sale of Westinghouse’s Assets and Plan Support Agreement

Toshiba and each of the Owners agrees that it will support a prompt sale of the assets of Westinghouse and the other WEC Debtors pursuant to a plan of reorganization or a motion under section 363 of the Bankruptcy Code that is, in each case, acceptable to Toshiba and the Owners in their respective sole discretion. Toshiba and each of the Owners agrees that it will negotiate in good faith regarding the terms of an acceptable, in their respective sole discretion, plan support agreement that will set forth terms of an acceptable, in their respective sole discretion, chapter 11 plan for Westinghouse and the other WEC Debtors. Such plan support agreement shall include plan provisions which (i) provide for a third party release, exculpation and plan injunction substantially in the form of Exhibit B , and (ii) set forth an allocation, acceptable to each of the Owners in their respective sole discretion, of distributions to the Owners on account of their respective claims.

Section 5.7 Release

(a) Effective immediately upon the full payment to Beneficiary, and receipt by the Owners, of the Toshiba Obligation Amount, each of the Owners on behalf of itself and its present and former agents, Affiliates, principals, shareholders, stakeholders, predecessors, subsidiaries, successors and assigns (collectively, the “ Owner Releasing Parties ”) hereby fully, finally and forever releases, acquits and discharges Toshiba, the Toshiba Affiliates, and any Toshiba Third Parties (but in no event including the WEC Debtors, any subsidiaries or any WEC Third Parties thereof (such parties collectively, the “ Toshiba Released Parties ”)) from any and all manner of action, causes of action, claims, demands, lawsuits, attorneys’ fees and costs, losses, expenses, damages, right to equitable remedy if such breach gives rise to a right of payment, or liabilities of whatever kind and nature whatsoever, whether now known or unknown, asserted or unasserted, suspected or unsuspected, whether arising under federal, state, local, statutory, common, foreign or administrative Law, or any other Law, rule or regulation, whether fixed or contingent, accrued or unaccrued, liquidated or unliquidated, matured or unmatured, disputed or undisputed, at law or in equity, secured or unsecured that any of the Owner Releasing Parties heretofore had, or now or hereafter have, own or hold, or could assert directly or indirectly, against Toshiba in any forum, arising out of or related to (a) the EPC Agreement and any and all related documents, and (b) the Toshiba Guaranty; provided, however , that nothing in

this Section 5.7(a) shall release Toshiba or any of the other Toshiba Released Parties from any obligation under any contract or agreement to which it is a party (other than the Toshiba Guaranty), including this Agreement (including under Section 2.5 ), any other contract in connection with Toshiba’s or any other Toshiba Released Party’s role as supplier to the Summer Facility, and any services agreements entered into by Toshiba and the Owners. For the avoidance of doubt, if a Third Party is both a Toshiba Third Party and a WEC Third Party, the release contained herein only pertains to such Third Party in its capacity as a Toshiba Third Party.

(b) Effective immediately upon the effectiveness of the release contemplated by Section 5.7(a) , Toshiba, on behalf of itself and its present and former agents, Affiliates, principals, shareholders, stakeholders, predecessors, subsidiaries, successors and assigns, excluding the WEC Debtors and any subsidiaries thereof (collectively, the “ Toshiba Releasing Parties ”, together with the Owner Releasing Parties, the “ Releasing Parties ”) hereby fully, finally and forever releases, acquits and discharges each of the Owners and each of their respective agents, Affiliates, executives, employees, attorneys, advisors, accountants, auditors, representatives, associates, directors, officers, partners, principals, insurers, predecessors, subsidiaries, successors, estates, heirs, executors, trusts, trustees, administrators, licensees and assigns (collectively, the “ Owner Released Parties ”, together with the Toshiba Released Parties, the “ Released Parties ”) from any and all manner of action, causes of action, claims, demands, lawsuits, attorneys’ fees and costs, losses, expenses, damages, right to equitable remedy if such breach gives rise to a right of payment, or liabilities of whatever kind and nature whatsoever, whether now known or unknown, asserted or unasserted, suspected or unsuspected, whether arising under federal, state, local, statutory, common, foreign or administrative Law, or any other Law, rule or regulation, whether fixed or contingent, accrued or unaccrued, liquidated or unliquidated, matured or unmatured, disputed or undisputed, at law or in equity, secured or unsecured that any of the Toshiba Releasing Parties heretofore had, or now or hereafter have, own or hold, or could assert directly or indirectly, against Toshiba in any forum, arising out of or related to (a) the EPC Agreement and any and all related documents, and (b) the Toshiba Guaranty; provided however , that nothing in this Section 5.7(b) shall release any of the Owner Released Parties from any obligation under any other contract or agreement to which it is a party (other than the Toshiba Guaranty), including this Agreement, any other contract in connection with Toshiba’s or any other Toshiba Released Party’s role as supplier to the Summer Facility, and any services agreements entered into by Toshiba and the Owners.

(c) The Releasing Parties are fully aware of the provisions of California Civil Code Section 1542, which provides as follows:

A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor.

Each of the Releasing Parties agrees to voluntarily waive the provisions of California Civil Code Section 1542 (or under any Law of any state or territory of the United States, or principle of common law, or under the Law of any foreign country, that is similar, comparable or equivalent to section 1542 of the California Civil Code) with respect to the claims released in Section 5.7(a)

and Section 5.7(b) . The Releasing Parties acknowledge and agree that the foregoing waiver was separately bargained for and a key element of the Agreement of which this release is a part.

(d) Covenants Not To Sue

(i) The Releasing Parties promise not to sue or proceed in any manner, in court, agency or any other proceedings, whether at law, in equity, by way of administrative hearing, or otherwise, or to solicit others to institute any such actions or proceedings, against the Released Parties concerning any of the claims released in this Section 5.7 .

(ii) The releases and covenants not to sue contained in this Section 5.7 may be pleaded as a full and complete defense to, and may be used as the basis for an injunction against, any action, suit or other proceeding which may be instituted in breach of the releases or covenants not to sue.

Section 5.8 Mechanics’ Liens

(a) The Beneficiary shall, from time to time, provide information reasonably requested by Toshiba regarding settlements or satisfactions of the Mechanics’ Liens claims, including an accounting of the Satisfied Mechanics Liens Amount and documentation to support the same, with copies of all lien release certificates pursuant to such lien claim resolutions to be provided to Toshiba following receipt of the same in accordance with Section 8.1 of this Agreement.

(b) In the event that, as of the time (i) Toshiba is entitled to exercise subrogation rights as contemplated by Section 8.3 and (ii) the proviso in Section 8.3 is no longer applicable, any Owner continues to own or have any interest in any Mechanics’ Liens claims, Toshiba shall have the right, at any time thereafter, to demand in writing that such Owner, if and when any such interest therein is thereafter reduced to cash, transfer to Toshiba such cash. Any such transfer of cash to Toshiba will be accompanied by a reasonably detailed accounting of any cash received by such Owner in respect of such Mechanics’ Liens claims.

Section 5.9 Resolutions; Legal Opinions . Beneficiary shall deliver reasonably acceptable, certified English translation of the resolutions approved by the Board of Directors (or similar governing body) of Beneficiary authorizing the execution, delivery and performance of this Agreement on or before August 10, 2017. Additionally, counsel for the Beneficiary shall deliver reasonably acceptable legal opinions regarding the authorization, execution, and delivery of this Agreement by such Beneficiary and the enforceability of this Agreement against such Beneficiary on or before August 10, 2017

ARTICLE VI
REPRESENTATIONS AND WARRANTIES

Section 6.1 Representations and Warranties of Toshiba

Toshiba represents and warrants to the Owners as of the date of this Agreement that:

(a) Due Organization . Toshiba is a corporation duly organized and validly existing under the Laws of Japan. Toshiba has the requisite power and authority to own and operate its business and properties and to carry on its business as such business is now being conducted and is duly qualified to do business in any other jurisdiction in which the transaction of its business makes such qualification necessary.

(b) Due Authorization; Binding Obligation . Toshiba has full power and authority to execute and deliver this Agreement and to perform its obligations hereunder, and the execution, delivery and performance of this Agreement by Toshiba, and the consummation by Toshiba of the transactions contemplated hereby, have been duly authorized by the necessary action on the part of Toshiba; this Agreement has been duly executed and delivered by Toshiba and is the valid and binding obligation of Toshiba enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, liquidation, and other similar Laws and principles of equity affecting creditors’ rights and remedies generally.

(c) Non-Contravention . The execution, delivery and performance of this Agreement by Toshiba and the consummation of the transactions contemplated hereby do not and will not (i) violate or conflict with (A) the organizational documents of Toshiba or (B) any Law or any order of any Governmental Unit, (ii) violate, conflict with or result in a breach or termination of, or otherwise give any Person additional rights or compensation under, or the right to terminate or accelerate, or the loss of a material benefit under, or constitute (with notice or lapse of time, or both) a default under the terms of any indenture, mortgage, lease, agreement, instrument, judgment, decree, order or ruling to which Toshiba is a party or by which it or any of its properties is bound or affected or (iii) result in the creation or imposition of any Lien with respect to, or otherwise have an adverse effect upon, the properties or assets of Toshiba or any of its Affiliates.

(d) Approvals . There are no approvals or consents of Governmental Units or other Persons not yet obtained, the absence of which would materially impair Toshiba’s ability to execute, deliver and perform its obligations under this Agreement.

(e) Litigation . There are no proceedings, claims or lawsuits pending or, to the knowledge of Toshiba, threatened against Toshiba that question the legality, validity or enforceability of this Agreement or any of the transactions contemplated hereby.

Section 6.2 Representation and Warranties of Owners

Each Owner hereby severally represents and warrants to Toshiba as of the date of this Agreement that:

(a) Validity and Enforceability . Such Owner has the corporate power and authority to execute and deliver this Agreement and to perform its obligations under this Agreement. The execution, delivery and performance of this Agreement by such Owner, and the consummation by such Owner of the transactions contemplated hereby, have been duly authorized and approved by all required action on the part of such Owner. This Agreement has been duly executed and delivered by such Owner and, assuming due authorization, execution and delivery by Toshiba, represents the legal, valid and binding obligation of such Owner

enforceable against such Owner in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, liquidation, and other similar Laws and principles of equity affecting creditors’ rights and remedies generally.

(b) Existence and Good Standing . Such Owner is duly organized, validly existing and in good standing under the Laws of the State of South Carolina.

(c) No Conflict; Required Filings and Consents . Neither the execution of this Agreement by such Owner nor the performance by such Owner of its obligations hereunder will violate or conflict with the charter or any other organizational document of such Owner and such execution and performance do not and will not conflict with or result in a breach of or default under any indenture, mortgage, lease, agreement, instrument, judgment, decree, order or ruling to which such Owner is a party or by which it or any of its properties is bound or affected.

(d) Approvals . There are no approvals or consents of Governmental Units or other Persons not yet obtained, the absence of which would materially impair such Owner’s ability to execute, deliver and perform its obligations under this Agreement.

(e) Litigation . There are no proceedings, claims or lawsuits pending or, to the knowledge of such Owner, threatened against such Owner that question the legality, validity or enforceability of this Agreement or any of the transactions contemplated hereby.

ARTICLE VII
REMEDIES, NUCLEAR INDEMNITY AND INSURANCE

Section 7.1 Beneficiary Remedies . From and after the earlier of (a) any Forbearance Termination Event (including the expiration without cure of any applicable cure period set forth in clause (d) of the definition of Forbearance Termination Event) and (b) the Forbearance Date, Beneficiary may pursue all of its legal and equitable rights and remedies under the Toshiba Guaranty and Toshiba shall not argue that the terms or existence of this Agreement constitute a defense thereunder; provided, however, that each of the Owners agrees that it shall not, in any event, pursue, assert, or claim any amounts under the Toshiba Guaranty in excess of the Toshiba Obligation Amount and Toshiba agrees that it shall not, in any event, assert or claim that under the Toshiba Guaranty it owes Beneficiary an amount less than the Toshiba Obligation Amount.

Section 7.2 Owner Remedies . From and after a Forbearance Termination Event, in addition to Beneficiary’s rights under Section 7.1 , each Owner may (a) by notice to Toshiba, declare all payment obligations of Toshiba under this Agreement to be immediately due and payable, whereupon all such obligations shall accelerate and be immediately due and payable; provided, however, that if a Toshiba Insolvency Proceeding has occurred, no such declaration shall be required and, upon the occurrence of such Toshiba Insolvency Proceeding, all of such obligations shall automatically accelerate and be immediately due and payable, (b) make draws under the Letters of Credit and apply the proceeds thereof to reduce amounts due under this Agreement (including amounts due as a result of the acceleration described in the foregoing clause (a)) or under the Toshiba Guaranty and (c) pursue all of legal and equitable rights and remedies available to it.

Section 7.3 Specific Performance; Remedies Not Exclusive .

(a) Toshiba agrees that irreparable damage will result if this Agreement is not performed by Toshiba in accordance with its terms, and any damages available at law for a breach of this Agreement would not be an adequate remedy. Therefore, this Agreement and the obligations of Toshiba hereunder shall be enforceable in a court of equity, or other tribunal with jurisdiction, by a decree of specific performance, and appropriate preliminary or permanent injunctive relief may be applied for and granted in connection therewith (and any requirement to post any bond in connection therewith is hereby waived). Notwithstanding the foregoing, neither the Beneficiary nor any of the Owners may seek a decree of specific performance, or any related preliminary or permanent injunctive relief, with respect to any action (a “ Survival Action ”) taken by Toshiba that violates Section 4.1 if (i) such action has been approved in advance by Toshiba’s board of directors and (ii) in connection with such approval, Toshiba’s board of directors has determined, in good faith, after consultation with, and receiving the advice of, outside legal counsel, that (A) the failure to take the Survival Action will (x) violate the directors’ fiduciary duties under applicable Law and (y) result in the failure of Toshiba to continue as a going concern and (B) such Survival Action will have the minimum adverse consequence to Beneficiary and the Owners that can be reasonably achieved while also allowing Toshiba to continue as a going concern (it being understood, for the avoidance of doubt, that notwithstanding anything to the contrary herein, Beneficiary and Owners reserve all rights to pursue all of its legal and equitable rights and remedies under the Toshiba Guaranty; provided, however, that each of the Owners agrees that it shall not, in any event, pursue, assert, or claim any amounts under the Toshiba Guaranty in excess of the Toshiba Obligation Amount). Subject to the limitations set forth in this Section 7.3(a) , if an action is brought by either Owner to enforce this Agreement, Toshiba shall waive the defense that there is adequate remedy at Law. The limitations set forth in this Section 7.3(a) on seeking a decree of specific performance, or any related preliminary or permanent injunctive relief, shall not mean, and shall not imply, that a violation of Section 4.1 is not a breach of this Agreement and a Forbearance Termination Event triggering the rights and remedies arising therefrom as set forth in this Agreement and at law, which rights and remedies shall be available.

(b) Each of Beneficiary and the Owners agree that irreparable damage will result if this Agreement is not performed in accordance with its terms, and any damages available at law for a breach of this Agreement would not be an adequate remedy. Therefore, this Agreement and the obligations of each of the Beneficiary and the Owners hereunder shall be enforceable in a court of equity, or other tribunal with jurisdiction, by a decree of specific performance, and appropriate preliminary or permanent injunctive relief may be applied for and granted in connection therewith (and any requirement to post any bond in connection therewith is hereby waived). If an action is brought by Toshiba to enforce this Agreement, Beneficiary and each of the Owners shall waive the defense that there is adequate remedy at Law.

(c) All remedies provided for in this Agreement or otherwise available at law or in equity shall be cumulative and not exclusive and shall be in addition to any other remedies that a Party may have under this Agreement.

Section 7.4 Attorneys’ Fees

The prevailing Party in any action to enforce this Agreement against any other Party or to recover damages or obtain other remedies for a breach of this Agreement by any other Party shall

be entitled to receive from the losing Party any and all costs (including reasonable attorneys’ fees and related expenses) incurred in connection with such action.

Section 7.5 Nuclear Indemnity and Insurance

Subject to Section 7.5(f) , while they are owners of the Summer Facility and all required authorizations from the U.S. Nuclear Regulatory Commission authorizing operation of the Summer Facility have been issued and are in effect:

(a) Owners shall maintain insurance to cover Public Liability Claims as defined in 42 U.S.C. § 2014(w) in such form and in such amount to meet the financial protection requirements of the Atomic Energy Act of 1954, as amended, and regulations promulgated pursuant thereto.

(b) Owners shall maintain a governmental indemnity agreement pursuant to the Atomic Energy Act of 1954, as amended, and regulations promulgated pursuant thereto.

(c) In the event that the financial protection system contemplated by Section 170 of the Atomic Energy Act of 1954, as amended, is repealed or changed, Owners will maintain in effect liability protection through governmental indemnity, limitation of liability to third parties and/or insurance of comparable coverage which will not result in a material impairment of the protection afforded Toshiba and its Affiliates set forth on Schedule 7.5 hereto by such nuclear liability protection system which is in effect as of the Effective Date (as defined in the EPC Agreement), subject to (i) the availability of insurance, (ii) customary practice in the United States nuclear electric utility industry, and (iii) other relevant factors in light of the then existing conditions. Subject to the foregoing subsections (i), (ii), and (iii) of the immediately preceding sentence, Owners shall ensure that Toshiba and its Affiliates set forth on Schedule 7.5 hereto is included in the omnibus definition of “insured” under such alternate insurance coverage or are otherwise included as additional insureds at no cost to Toshiba or its Affiliates set forth on Schedule 7.5 hereto.

(d) In no event shall Toshiba or its Affiliates set forth on Schedule 7.5 hereto be responsible to Owners (or any of the owners of Unit 1) for personal or bodily injury (including death), property damage, loss or damage to any property at the Summer Facility and Unit 1, or for any indirect, special, incidental, punitive or consequential loss, damage or injury, whether or not based on any claim of fault, negligence or strict liability, where any of the foregoing arises out of or results from a Nuclear Incident and Owners hereby release Toshiba and its Affiliates from any such liability.

(e) Nuclear Property Insurance . Owners shall take reasonable steps to maintain property insurance in reasonable amounts and at reasonable costs with respect to the Facility and the Summer Facility and the Unit 1 (and associated structures) as may be available from the existing nuclear property insurance pools (e.g., Nuclear Electric Insurance Limited – NEIL), or other sources and consistent with the then current industry practice, providing protection against physical loss or damage to the Summer Facility. The limits of insurance shall also be maintained in accordance with the requirements of the U.S. Nuclear Regulatory Commission and in a manner and to the extent that property of similar character is usually

insured by companies similarly situated to the Owners with like properties. Such insurance shall cover Toshiba and its Affiliates set forth on Schedule 7.5 hereto to the extent of their interest in any loss paid thereunder, and as between Owners and Toshiba and its Affiliates set forth on Schedule 7.5 hereto, Owners hereby waive all rights to proceeds from such insurance and rights of subrogation on behalf of themselves and their insurers for any loss or damage covered by such insurance to the extent of Toshiba’s and its Affiliates’ (such Affiliates set forth on Schedule 7.5 hereto) loss during the Work and thereafter whether liability for such loss or damage arises in contract, tort or otherwise, and irrespective of fault, negligence, strict liability or otherwise.

(f) Duration . The protection provided pursuant to this Section 7.5 shall be taken out prior to the first delivery of Nuclear Fuel at the Summer Facility, and shall remain in effect until the permanent decommissioning of the Summer Facility; provided , however , that upon permanent cessation of operation, the coverages and limits of insurance may be reduced to the extent permitted by the U.S. Nuclear Regulatory Commission.

ARTICLE VIII
MISCELLANEOUS

Section 8.1 Notices

All notices, requests, demands and other communications under this Agreement shall be in writing and shall be deemed to have been duly given or made as follows: (a) if sent designated for overnight delivery by an internationally recognized overnight air courier (such as Federal Express), one (1) business day after mailing; (b) if sent by facsimile transmission before 5:00 p.m. on a business day local time of recipient, when transmitted and receipt is confirmed; (c) if sent by electronic mail, when transmitted; and (d) if otherwise actually personally delivered, when delivered, provided that such notices, requests, demands and other communications are delivered to the address set forth below, or to such other address as any Party shall provide by like notice to the other Party:

if to Toshiba:

Toshiba Corporation
1-1, Shibaura 1-chome, Minato-ku
Tokyo 105-8001, Japan
Attention: Ayumi Wada

General Manager, Legal Affairs Division
Facsimile: +81-3-5444-9214
Email: ayumi.wada@toshiba.co.jp

with a copies (which shall not constitute notice) to:

Skadden, Arps, Slate, Meagher & Flom LLP
300 S Grand Ave, Suite 3400
Los Angeles, CA 90071
Attention: Van C. Durrer, II
Facsimile: (213) 687-5200
Email: van.durrer@skadden.com

and to:

Skadden, Arps, Slate, Meagher & Flom LLP
1-6-1 Rappongi, Minato-ku

Tokyo 106-6021, Japan
Attention: Mitsuhiro Kamiya
Facsimile: +81-3-3568-2626
Email: mitsuhiro.kamiya@skadden.com

if to either Owner:

South Carolina Electric & Gas Company

Attn: President

Mail Code D302
220 Operation Way

Cayce, SC 29033

Telephone No.: 803-217-8097

Facsimile No.: 804-933-7043

and to:

South Carolina Public Service Authority

Attn: Chief Operating Officer (M602)

One Riverwood Drive

P.O. Box 2946101

Moncks Corner, SC 29461-6101

Telephone No.: 843-761-4087

Facsimile No.: 843-761-7037

with copies (which shall not constitute notice) to:

South Carolina Electric & Gas Company

Attn: General Counsel

Mail Code D308
220 Operation Way

Cayce, SC 29033

Telephone No.: 803-217-8634

Facsimile No.: 804-933-7676

And to:

South Carolina Public Service Authority

Attn: General Counsel (M603)

One Riverwood Drive

P.O. Box 2946101

Moncks Corner, SC 29461-6101

Telephone No.: 843-761-7007

Facsimile No.: 843-761-7037

Section 8.2 Waiver

The failure at any time of a Party to require performance by the other Party of any responsibility or obligation required by this Agreement shall in no way affect a Party’s right to require such performance at any time thereafter, nor shall the waiver by a Party of a breach of any provision of this Agreement by any other Party constitute a waiver of any other breach of the same or any other provision or constitute a waiver of the responsibility or obligation itself.

Section 8.3 Subrogation

Effective upon the full and irrevocable payment to Beneficiary, and receipt by the Owners, of the Toshiba Obligation Amount pursuant to this Agreement, after taking into account the effect of any amounts that have been or in the future may be required to be paid or returned by Beneficiary or any other Person as contemplated by Section 2.5 , Toshiba shall be entitled to exercise any and all subrogation rights (including, without limitation, any such rights pursuant to Section 509 of the Bankruptcy Code) it may have against Westinghouse arising from a breach by Westinghouse of the EPC Agreement (including rejection thereof pursuant to Section 365 of the Bankruptcy Code); provided , however , that Toshiba's claims by way of such subrogation shall be subordinated to all claims of the Owners against Westinghouse and the other WEC Debtors until all such claims of the Owners have been paid in full in cash.

Section 8.4 Assignment

This Agreement shall be binding upon and inure to the benefit of the successors and permitted assigns of each Party under this Agreement. Except as otherwise specifically provided in this Agreement, neither this Agreement nor any right or obligation hereunder may be assigned or delegated in whole or in part to any other Person except that Beneficiary and each of the Owners may assign its rights hereunder.

Section 8.5 Third Party Rights

Nothing in this Agreement, whether express or implied, is intended or shall be construed to confer, directly or indirectly, upon or give to any Person, other than the Parties, any legal or equitable right, remedy or claim under or in respect of this Agreement or any covenant, condition or other provision contained herein.

Section 8.6 Choice of Law

This Agreement shall be construed and enforced in accordance with and governed by the Laws of the State of New York, without giving effect to the principles of conflict of laws thereof.

Section 8.7 Headings

The headings of the Articles and Sections in this Agreement are provided for convenience of reference only and shall not be deemed to constitute a part hereof.

Section 8.8 Entire Agreement

This Agreement, together with the Exhibits and Schedules hereto, constitutes the entire agreement of the Parties with respect to the subject matter hereof and supersedes all prior agreements and understandings, oral and written, between the Parties with respect to the subject matter hereof. For the avoidance of doubt, nothing in this Agreement (a) alters or otherwise affects the Letters of Credit (except as provided in Section 5.1 hereof) or the EPC Agreement or any rights or obligations thereunder or (b) alters, amends, or otherwise affects, or constitutes a novation, accord or satisfaction of, the Toshiba Guaranty except as provided in Article II , Article III , Section 5.1 and Section 8.11 hereof.

Section 8.9 Severability

Should any term, provision, covenant or restriction of this Agreement be deemed invalid, illegal, void by any rule of Law of any jurisdiction in which it is to be performed or unenforceable for any reason, such term, provision, covenant or restriction shall be deemed null and void, but the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force in all other respects and shall in no way be affected, impaired or invalidated so long as the intended economic and legal substance of this Agreement, taken as a whole, is not affected in any manner materially adverse to any Party. Should any provision of this Agreement be or become ineffective because of changes in Law or interpretations thereof, or should this Agreement fail to include a provision that is required as a matter of Law, the validity of the other terms, provisions, covenants and restrictions of this Agreement shall not be affected thereby so long as the intended economic and legal substance of this Agreement, taken as a whole, is not affected in any manner materially adverse to any Party. Upon such a determination that any term or other provision is invalid, illegal, void, omitted or unenforceable or upon such provision being or becoming ineffective, the Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible to the fullest extent permitted by Law and in an acceptable manner in order that the matters contemplated hereby be addressed as originally contemplated to the fullest extent possible.

Section 8.10 Counterparts

This Agreement may be executed in several counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

Section 8.11 Further Assurances

Each Party shall execute such instruments and documents and shall give such further assurances as shall be necessary to perform such Party’s obligations hereunder.

Section 8.12 Jurisdiction; Venue

Either Party may submit the dispute to arbitration in accordance with the terms of Exhibit D hereto. Except as provided below in this Section 8.12 with respect to arbitration, any suit, action or proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement shall be brought in a federal court or, if jurisdiction cannot lie therein, a state court, in either case located in New York, and each of the Parties hereby consents and submits to the exclusive jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such suit, action or proceeding and irrevocably waives, to the fullest extent permitted by Law, any objection which it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding which is brought in any such court has been brought in an inconvenient forum; provided , however , that no Party may bring such a suit, action or proceeding with respect to any dispute that is already the subject of an arbitration proceeding that has been commenced as provided below in this Section 8.12 . Process in any such suit, action or proceeding may be served on any Party anywhere in the world, whether within or without the jurisdiction of any such court. Notwithstanding anything to the contrary in this Section 8.12 , a provisional attachment, provisional injunction or any other provisional legal remedies to secure a Party’s right or benefit may be brought in a court of competent jurisdiction in a state or federal court located in New York or in a district court located in Japan, wherever located. For the avoidance of doubt, nothing in this Section 8.12 shall permit Beneficiary or the Owners to seek a decree of specific performance or any related preliminary or permanent injunctive relief that would violate Section 7.3(a) of this Agreement.

Section 8.13 Certain Interpretive Matters

(a) Unless the context requires otherwise, (i) all references to Sections, Articles, Exhibits, or Schedules are to Sections, Articles, Exhibits, or Schedules of or to this Agreement, (ii) words in the singular include the plural and vice versa, (iii) the term “including” means “including without limitation,” and (iv) the terms “herein,” “hereof,” “hereunder” and words of similar import shall mean references to this Agreement as a whole and not to any individual section or portion hereof. All references to “ $ ” or dollar amounts will be to lawful currency of the United States of America. All references to “$” or dollar amounts, or “%” or percent or percentages, shall be to precise amounts and not rounded up or down. All references to “ day ” or “ days ” will mean calendar days.

(b) No provision of this Agreement will be interpreted in favor of, or against, either of the Parties by reason of the extent to which such Party or its counsel participated in the drafting thereof or by reason of the extent to which any such provision is inconsistent with any prior draft of this Agreement or such provision.

Section 8.14 Waiver of Right to Jury Trial . EACH OF THE OWNERS AND TOSHIBA HEREBY WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, AMONG TOSHIBA AND ANY OWNER ARISING OUT OF, IN CONNECTION WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS SETTLEMENT AGREEMENT OR ANY OTHER

INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION WITH THIS SETTLEMENT AGREEMENT OR THE TRANSACTIONS RELATED HERETO. EACH OF THE OWNERS AND TOSHIBA HEREBY (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, AND (B) ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO THIS SETTLEMENT AGREEMENT, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS OF EACH OF THE OWNERS AND TOSHIBA UNDER THIS SETTLEMENT AGREEMENT.

Section 8.15 Obligations of the Owners are Several . Notwithstanding anything to the contrary in this Agreement, the obligations of the Owners hereunder are several and not joint.

Section 8.16 Amendment, Modification, and Waiver of the Agreement. This Agreement may not be amended or modified without the prior written consent of each Party, which consent may be granted or withheld by such Party in its sole discretion. The provisions and covenants set forth in this Agreement may not be waived without the prior written consent of each affected Party, which consent may be granted or withheld by such Party in its sole discretion.

Section 8.17 Counterparts. This Agreement may be executed in any number of parts, all of which taken together shall be considered to comprise one and the same document, and this Agreement shall become binding on all Parties when each Party has completed delivery of an executed counterpart copy to the other Parties. Delivery may be effected by actual delivery or by electronic transmission of an executed counterpart copy to the other Parties.

Section 8.18 Confidentiality . Prior to the approval of the Parties’ respective Boards of Directors (or other applicable governing bodies) and the delivery and release of fully executed signature pages thereto, no Party will disclose to any person (a) any terms or other facts with respect to the transaction contemplated herein, including the status thereof or (b) the prior execution of any Party to this Agreement.

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

IN WITNESS WHEREOF, the Parties have duly executed this Agreement as of the date first above written.

TOSHIBA CORPORATION

By: /s/Mamoru Hatazawa

Its: Executive Officer Corporate VP

SOUTH CAROLINA ELECTRIC & GAS COMPANY

By: /s/Kevin B. Marsh

Its: Chief Executive Officer

SOUTH CAROLINA PUBLIC SERVICE AUTHORITY

By: /s/Lonnie N. Carter

Its: Chief Executive Officer

[Signature Page to Settlement Agreement]

EXHIBIT A

Letters of Credit

Standby Letter of Credit No. 00606948 in the amount of US $22,500,000.00 issued by Mizuho Bank, Ltd for the benefit of South Carolina Electric and Gas Company, for itself and as agent for South Carolina Public Service Authority.

Standby Letter of Credit No. LG/MIS/NY-095396 in the amount of US $22,500,000.00 issued by Sumitomo Mitsui Banking Corporation for the benefit of South Carolina Electric and Gas Company, for itself and as agent for South Carolina Public Service Authority.

EXHIBIT B

Form of Plan Injunction, Release, and Exculpation

For the avoidance of doubt, the Parties and their respective Affiliates shall be included in “Released Parties,” “Exculpated Parties,” or similar defined terms as necessary and appropriate.

Injunction .

AS OF THE EFFECTIVE DATE, EXCEPT WITH RESPECT TO THE OBLIGATIONS OF THE REORGANIZED DEBTORS UNDER THE PLAN OR THE CONFIRMATION ORDER, ALL ENTITIES WHO HAVE HELD, CURRENTLY HOLD OR MAY HOLD ANY CLAIMS OR INTERESTS, OBLIGATIONS, SUITS, JUDGMENTS, DAMAGES, DEMANDS, DEBTS, RIGHTS, CAUSES OF ACTION OR LIABILITIES THAT ARE WAIVED, DISCHARGED OR RELEASED UNDER THIS PLAN SHALL BE PERMANENTLY ENJOINED FROM TAKING ANY OF THE FOLLOWING ENFORCEMENT ACTIONS AGAINST THE DEBTORS, THE REORGANIZED DEBTORS, THE RELEASED PARTIES (TO THE EXTENT THE RELEASED PARTIES ARE RELEASED BY A RELEASING PARTY) OR ANY OF THEIR RESPECTIVE ASSETS OR PROPERTY ON ACCOUNT OF ANY SUCH WAIVED, DISCHARGED OR RELEASED CLAIMS, OBLIGATIONS, SUITS, JUDGMENTS, DAMAGES, DEMANDS, DEBTS, RIGHTS, CAUSES OF ACTION OR LIABILITIES: (1) COMMENCING OR CONTINUING IN ANY MANNER ANY ACTION OR OTHER PROCEEDING; (2) ENFORCING, LEVYING, ATTACHING, COLLECTING OR RECOVERING IN ANY MANNER ANY JUDGMENT, AWARD, DECREE OR ORDER; (3) CREATING, PERFECTING OR ENFORCING ANY LIEN OR ENCUMBRANCE; (4) ASSERTING ANY RIGHT OF SETOFF, SUBROGATION OR RECOUPMENT OF ANY KIND AGAINST ANY DEBT, LIABILITY OR OBLIGATION DUE TO ANY DEBTOR, REORGANIZED DEBTOR OR RELEASED PARTY; AND (5) COMMENCING OR CONTINUING ANY ACTION, IN ANY MANNER, IN ANY PLACE TO ASSERT ANY CLAIM WAIVED, DISCHARGED OR RELEASED UNDER THIS PLAN OR THAT DOES NOT OTHERWISE COMPLY WITH OR IS INCONSISTENT WITH THE PROVISIONS OF THIS PLAN.

Exculpation .

FROM AND AFTER THE EFFECTIVE DATE, THE EXCULPATED PARTIES, THE DEBTORS AND THE REORGANIZED DEBTORS SHALL NEITHER HAVE NOR INCUR ANY LIABILITY TO ANY ENTITY, AND NO HOLDER OF A CLAIM OR INTEREST, NO OTHER PARTY IN INTEREST AND NONE OF THEIR RESPECTIVE REPRESENTATIVES SHALL HAVE ANY RIGHT OF ACTION AGAINST ANY DEBTOR, REORGANIZED DEBTOR, EXCULPATED PARTY OR ANY OF THEIR RESPECTIVE REPRESENTATIVES FOR ANY ACT TAKEN OR OMITTED TO BE TAKEN BEFORE THE EFFECTIVE DATE IN CONNECTION WITH, RELATED TO OR ARISING OUT OF THE CHAPTER 11 CASES, THE DEBTORS IN POSSESSION OR THE NEGOTIATION, CONSIDERATION, FORMULATION, PREPARATION,

DISSEMINATION, IMPLEMENTATION, CONFIRMATION OR CONSUMMATION OF THIS PLAN, THE EXHIBITS, THE DISCLOSURE STATEMENT, ANY AMENDMENTS TO ANY OF THE FOREGOING OR ANY OTHER TRANSACTIONS PROPOSED IN CONNECTION WITH THE CHAPTER 11 CASES OR ANY CONTRACT, INSTRUMENT, RELEASE OR OTHER AGREEMENT OR DOCUMENT CREATED OR ENTERED INTO OR ANY OTHER ACT TAKEN OR OMITTED TO BE TAKEN IN CONNECTION THEREWITH DURING THE CHAPTER 11 CASES OR IN CONNECTION WITH ANY OTHER OBLIGATIONS ARISING UNDER THIS PLAN OR THE OBLIGATIONS ASSUMED HEREUNDER; PROVIDED, HOWEVER, THAT THE FOREGOING PROVISIONS OF THIS SECTION SHALL HAVE NO EFFECT ON: (1) THE LIABILITY OF ANY ENTITY THAT WOULD OTHERWISE RESULT FROM THE FAILURE TO PERFORM OR PAY ANY OBLIGATION OR LIABILITY UNDER THIS PLAN OR ANY CONTRACT, INSTRUMENT, RELEASE OR OTHER AGREEMENT OR DOCUMENT (i) PREVIOUSLY ASSUMED, (ii) ENTERED INTO DURING THE CHAPTER 11 CASES, OR (iii) TO BE ENTERED INTO OR DELIVERED IN CONNECTION WITH THIS PLAN OR (2) THE LIABILITY OF ANY EXCULPATED PARTY THAT WOULD OTHERWISE RESULT FROM ANY ACT OR OMISSION OF SUCH EXCULPATED PARTY TO THE EXTENT THAT SUCH ACT OR OMISSION IS DETERMINED IN A FINAL ORDER TO HAVE CONSTITUTED GROSS NEGLIGENCE OR WILLFUL MISCONDUCT (INCLUDING FRAUD). FOR THE AVOIDANCE OF DOUBT, NOTHING IN THIS PROVISION SHALL RELIEVE ANY EXCULPATED PARTY FROM ANY OBLIGATION OR LIABILITY UNDER [THIS AGREEMENT OR THE TOSHIBA GUARANTY.]

Third Party Release .

WITHOUT LIMITING ANY OTHER APPLICABLE PROVISIONS OF, OR RELEASES CONTAINED IN, THIS PLAN, AS OF THE EFFECTIVE DATE, IN CONSIDERATION FOR THE OBLIGATIONS OF THE DEBTORS AND THE REORGANIZED DEBTORS UNDER THIS PLAN AND THE CONSIDERATION AND OTHER CONTRACTS, INSTRUMENTS, RELEASES, AGREEMENTS OR DOCUMENTS TO BE ENTERED INTO OR DELIVERED IN CONNECTION WITH THIS PLAN, EACH RELEASING PARTY SHALL BE DEEMED TO HAVE FOREVER RELEASED AND COVENANTED WITH THE RELEASED PARTIES TO FOREVER RELEASE, WAIVE AND DISCHARGE ALL LIABILITIES IN ANY WAY THAT SUCH ENTITY HAS, HAD OR MAY HAVE AGAINST ANY RELEASED PARTY (WHICH RELEASE SHALL BE IN ADDITION TO THE DISCHARGE OF CLAIMS AND TERMINATION OF INTERESTS PROVIDED HEREIN AND UNDER THE CONFIRMATION ORDER AND THE BANKRUPTCY CODE), IN EACH CASE, RELATING TO A DEBTOR, THE ESTATES, THE CHAPTER 11 CASES, THE NEGOTIATION, CONSIDERATION, FORMULATION, PREPARATION, DISSEMINATION, IMPLEMENTATION, CONFIRMATION OR CONSUMMATION OF THIS PLAN, THE EXHIBITS, THE DISCLOSURE STATEMENT, ANY AMENDMENTS THERETO, THE DIP CREDIT AGREEMENT, THE DIP ORDER, ANY OF THE NEW SECURITIES AND DOCUMENTS, THE RESTRUCTURING TRANSACTIONS OR ANY OTHER TRANSACTIONS IN CONNECTION WITH THE CHAPTER 11 CASES OR ANY CONTRACT, INSTRUMENT, RELEASE OR OTHER

AGREEMENT OR DOCUMENT CREATED OR ENTERED INTO OR ANY OTHER ACT TAKEN OR OMITTED TO BE TAKEN IN CONNECTION THEREWITH OR IN CONNECTION WITH ANY OTHER OBLIGATIONS ARISING UNDER THIS PLAN OR THE OBLIGATIONS ASSUMED HEREUNDER;

THE FOREGOING PROVISION OF THIS SECTION SHALL HAVE NO EFFECT ON:

(A) THE LIABILITY OF ANY ENTITY THAT WOULD OTHERWISE RESULT FROM THE FAILURE TO PERFORM OR PAY ANY OBLIGATION OR LIABILITY UNDER THIS PLAN OR ANY CONTRACT, INSTRUMENT, RELEASE OR OTHER AGREEMENT OR DOCUMENT (i) PREVIOUSLY ASSUMED, (ii) ENTERED INTO DURING THE CHAPTER 11 CASES, OR (iii) TO BE TO BE ENTERED INTO OR DELIVERED IN CONNECTION WITH THIS PLAN;

(B) THE LIABILITY OF ANY RELEASED PARTY THAT WOULD OTHERWISE RESULT FROM ANY ACT OR OMISSION OF SUCH RELEASED PARTY TO THE EXTENT THAT SUCH ACT OR OMISSION IS DETERMINED IN A FINAL ORDER TO HAVE CONSTITUTED GROSS NEGLIGENCE OR WILLFUL MISCONDUCT (INCLUDING FRAUD);

FOR THE AVOIDANCE OF DOUBT, NOTHING IN THIS PROVISION SHALL RELIEVE ANY RELEASED PARTY FROM ANY OBLIGATION OR LIABILITY UNDER [THIS AGREEMENT OR THE TOSHIBA GUARANTY.]

ENTRY OF THE CONFIRMATION ORDER BY THE BANKRUPTCY COURT SHALL CONSTITUTE AN ORDER APPROVING THE THIRD PARTY RELEASE PURSUANT TO BANKRUPTCY RULE 9019, AND FURTHER, SHALL CONSTITUTE THE BANKRUPTCY COURT’S FINDING THAT THE THIRD PARTY RELEASE IS: (1) IN EXCHANGE FOR THE GOOD AND VALUABLE CONSIDERATION PROVIDED BY THE RELEASED PARTIES; (2) A GOOD FAITH SETTLEMENT AND COMPROMISE OF THE CLAIMS RELEASED BY THE THIRD PARTY RELEASE; (3) IN THE BEST INTERESTS OF THE DEBTORS AND ALL HOLDERS OF CLAIMS AND INTERESTS; (4) FAIR, EQUITABLE AND REASONABLE; (5) GIVEN AND MADE AFTER DUE NOTICE AND OPPORTUNITY FOR HEARING; AND (6) A BAR TO ANY OF THE RELEASING PARTIES ASSERTING ANY CLAIM OR CAUSES OF ACTION RELEASED PURSUANT TO THE THIRD PARTY RELEASE. NOTHING HEREIN SHALL ABROGATE APPLICABLE ATTORNEY DISCIPLINARY RULES.

EXHIBIT C

Distribution Order

UNITED STATES BANKRUPTCY COURT

SOUTHERN DISTRICT OF NEW YORK

------------------------------------------------------- x

In re : Chapter 11

WESTINGHOUSE ELECTRIC : Case No. 17-10751 (MEW)

COMPANY LLC, et al., :

: (Jointly Administered)

Debtors ¹ :

------------------------------------------------------- x

ORDER REGARDING DISTRIBUTIONS IN RESPECT OF

CLAIMS AND INTERESTS OF TOSHIBA CORPORATION AND AFFILIATES

Upon consideration of this Order Regarding Distributions of Claims and Interests of Toshiba Corporation and Affiliates (this “ Order ”); the terms of this Order having been approved in form and substance by the above-captioned debtors (collectively, the “ Debtors ”),Georgia Power Company (“ Georgia Power ”), Oglethorpe Power Corporation (“ OPC ”),Municipal Electric Authority of Georgia (“ MEAG ”), and the City of Dalton, Georgia (“ Dalton ”),as joint owners (Georgia Power, OPC, MEAG and Dalton, collectively, the “ Vogtle Owners ”) of the Vogtle Electric Generating Plant (the “ Vogtle Plant ”), and Toshiba Corporation (“ Toshiba ” and, together with the Debtors and the Vogtle Owners, the “ Parties ”); and upon the Amended Declaration of Kei Nishida In Support of Entry of the Stipulated Order Regarding Distributions.

¹ The debtors in these chapter 11 cases, along with the last four digits of each Debtor’s federal tax identification number, if any, are: Westinghouse Electric Company LLC (0933), CE Nuclear Power International, Inc. (8833), Fauske and Associates LLC (8538), Field Services, LLC (2550), Nuclear Technology Solutions LLC (1921), Nuclear Holding Co., Inc. (7944), PaR Nuclear, Inc. (6586), PCI Energy Services LLC (9100), Shaw Global Services, LLC (0436), Shaw Nuclear Services, Inc. (6250), Stone & Webster Asia Inc. (1348), Stone & Webster Construction Inc. (1673), Stone & Webster International Inc. (1586), Stone & Webster Services LLC (5448), Toshiba Nuclear Energy Holdings (UK) Limited (2348), TSB Nuclear Energy Services Inc. (2348), WEC Carolina Energy Solutions, Inc. (8735), WEC Carolina Energy Solutions, LLC (2002), WEC Engineering Services Inc. (6759), WEC Equipment & Machining Solutions, LLC (3135), WEC Specialty LLC (N/A), WEC Welding and Machining, LLC (8771), WECTEC Contractors Inc. (4168), WECTEC Global Project Services Inc. (8572), WECTEC LLC (6222), WECTEC Staffing Services LLC (4135), Westinghouse Energy Systems LLC (0328), Westinghouse Industry Products International Company LLC (3909), Westinghouse International Technology LLC (N/A), and Westinghouse Technology Licensing Company LLC (5961). The Debtors’ principal offices are located at 1000 Westinghouse Drive, Cranberry Township, Pennsylvania 16066.

In Respect of Claims and Interests of Toshiba Corporation and Affiliates (the “ Nishida Declaration ”); and the Parties having agreed and the Court having found that:

A. The Court has jurisdiction over this matter pursuant to 28 U.S.C. §§ 157 and 1334;

B. This is a core proceeding pursuant to 28 U.S.C. § 157(b);

C. Notice of the relief granted herein was sufficient under the circumstances and consistent with the Bankruptcy Rules, the Local Rules and the Order Pursuant to 11 U.S.C. § 105(a) and Fed. R. Bankr. P. 1015(c), 2002(m), and 9007 Implementing Certain Notice and Case Management Procedures (D.I. 101);

D. Toshiba and the Vogtle Owners have entered into a settlement (the “ Vogtle Settlement ”), a copy of which has been separately filed at Docket No. 764 and attached to the Nishida Declaration as Exhibit A thereto, pursuant to which Toshiba and the Vogtle Owners have resolved, among other things, the timing, amount and manner of payments to be made by Toshiba, directly or indirectly, to the Vogtle Owners in respect of Toshiba’s guaranty obligations to the Vogtle Owners;

E. Toshiba, and South Carolina Electric & Gas Company and South Carolina Public Service Authority (collectively, the “ VC Summer Owners ”) as owners of the VC Summer Electric Generating Plant are engaged in negotiations regarding a potential settlement to resolve the timing, amount, and manner of payments to be made by Toshiba, directly or indirectly, to the VC Summer Owners in respect of Toshiba’s guaranty obligations to the VC Summer Owners (any VC Summer settlement that is ultimately entered into by those parties, being referred to as the “ VC Summer Settlement ” and, together with the Vogtle Settlement, the “ Settlements ”);

F. The Vogtle Settlement requires and, if and when entered into by the parties thereto, the VC Summer Settlement will require the entry of an Order by this Court that provides that the Vogtle Owners and the VC Summer Owners (the Vogtle Owners and VC Summer Owners, collectively the “ Owners ”) shall receive all distributions from the Debtors’ estates in respect of (i) any rights of Toshiba or any other entity (other than each of the Debtors and any of the Debtors’ subsidiaries) that (a) owns or controls, directly or indirectly, Toshiba, (b) is owned or controlled by Toshiba, or (c) is under common control with Toshiba, where “control” means the power to unilaterally direct the management or policies of, or unilaterally prevent any actions by, the other entity, whether through the ownership of voting securities, by contract, or otherwise (any entity set forth in (a), (b), or (c) other than each of the Debtors and any of the Debtors’ subsidiaries, an “ Affiliate ”, and Toshiba and such Affiliates collectively, the “ Toshiba Entities ”) in respect of intercompany loans made by any Toshiba Entity to any of the Debtors or any Debtor’s subsidiaries, (ii) any claims, if any, the Toshiba Entities may have (and that Toshiba has sole authority to control) against any of the Debtors or any of the Debtors’ subsidiaries arising from draws by any of the Owners under any letters of credit (the rights and claims set forth in subsections (i) and (ii) collectively, the “ Toshiba Claims ”), and (iii) Toshiba’s 90% equity interest in Debtor Toshiba Nuclear Energy Holdings (UK) Limited (“ TNEH ” and such equity interest, the “ TNEH Interest ”);

G. Based on the Nishida Declaration:

(i) Toshiba owns the TNEH Interest free and clear of liens, and the assets held by TNEH (and wholly-owned subsidiaries thereof) together with the assets of the Debtors (and wholly-owned subsidiaries thereof), constitute all of the rights, properties and assets owned, used or held for use by Toshiba and its Affiliates in the Core Businesses described in the Declaration of Lisa J. Donohue filed on the petition date [Docket No. 4];

(ii) Aside from the TNEH Interest and the equity interest of National Atomic Company Kazatomprom JSC in TNEH, there are no other shares, capital stock,

equity interests or other securities of TNEH issued and outstanding; and the TNEH Interest represents at least 90% of the shares of TNEH and is held of record and beneficially by Toshiba;

( iii) There are no subscriptions, options, “phantom” stock rights, stock appreciation rights, warrants or other legally binding rights, agreements or commitments entitling any person to acquire or otherwise receive from TNEH any shares, capital stock, equity interests and other securities of TNEH;

(iv) Toshiba, Toshiba Nuclear Energy Holdings (US) Inc., an Affiliate of Toshiba, and TSB Nuclear Energy USA Group Inc., an Affiliate of Toshiba, collectively own, and, subject to any sale, transfer or encumbrance permitted by paragraph 8 of this Order, will own, all Toshiba Claims (and all interests in the Toshiba Claims) free and clear of liens; and

(v) Since the date the Debtors filed for relief under chapter 11 of the Bankruptcy Code, no Toshiba Entity has transferred, assigned or encumbered any claims against the Debtors (or any interest in such claims).

A. After due deliberation, the Court has determined that good and adequate cause exists for approval of this Order;

NOW, THEREFORE, IT IS HEREBY ORDERED THAT:

1. Subject to further Order of the Court solely to establish procedures to implement this paragraph and without limiting the terms hereof, any and all Distributions (as defined below) made in these cases on account of the Toshiba Claims or the TNEH Interest shall be made directly to designated representatives of the Vogtle Owners and the VC Summer Owners, and not to any of the Toshiba Entities listed or described on Exhibit A hereto, any subsequent transferee of the Toshiba Claims or the TNEH Interest, any successor or assign of any Toshiba Entity listed or described on Exhibit A hereto, or any person or entity claiming through or on behalf of a Toshiba Entity listed or described on Exhibit A hereto (each such entity, a “ Transferee ”) until Toshiba’s obligations under each of the Settlements are fully satisfied in accordance with their terms (the “ Settlement Completion Date ”); provided, however, that no Distribution shall be made to any Toshiba Entity that is not listed or described on Exhibit A

hereto (each, a “ Non-Consenting Toshiba Entity ”), until the date that is 30 days after the Debtors have provided each of Toshiba, the Vogtle Owners and the VC Summer Owners with prior written notice of such Distribution (the “ Distribution Notice ”), indicating in the Distribution Notice the identity of any Non-Consenting Toshiba Entity entitled to such Distribution; provided further, however, that, in the event that prior to such date any of the Vogtle Owners or VC Summer Owners file a motion requesting that the Court order Toshiba to cause each such Non- Consenting Toshiba Entity to file with the Court a written notice confirming such Non- Consenting Toshiba Entity’s consent to be bound by the provisions of this Order as if listed on Exhibit A hereto on the date hereof, no such Distribution shall be made to any Non-Consenting Toshiba Entity until the date that is 14 days after the date the Court enters an order adjudicating such motion filed by the Vogtle Owners or VC Summer Owners on the merits. Following the occurrence of a Settlement Completion Date, the parties to the applicable Settlement shall provide notice to the Debtors or a designated representative of the Debtors.

2. In accordance with the terms, conditions and limitations in the Settlements, Toshiba shall receive a dollar for dollar credit against its obligations to the Owners under each Settlement for any Distributions made to such Owners on account of the Toshiba Claims or the TNEH Interest.

3. All Distributions on account of the Toshiba Claims and the TNEH Interest made to the Owners shall be free and clear of any and all rights, claims liens or other interests of the Toshiba Entities listed or described on Exhibit A hereto or the Transferees, and this Order shall be binding on any Transferees; for the avoidance of doubt, nothing in this paragraph 3 shall affect any rights, claims or interests of the DIP Lenders under the Debtors’ postpetition financing facility and the final order approving same [Docket No. 565].

4. As used herein, “ Distribution ” means any payment or distribution from or through any of the Debtors, whether in the form of cash, securities or other consideration, whether in the ordinary course, pursuant to a plan of reorganization or liquidation (a “ Plan ”), as proceeds of a sale, by an order of the Court or otherwise, it being recognized that the amount of any such payment or distribution may have been reduced as a result of setoff or claims, counterclaims, defenses, causes of action or any other rights the Debtors may hold or otherwise be able to assert with respect to any Plan, proof of claim or interest, or any other matters, against the party receiving the payment or distribution. Any reinstatement of an equity interest under a Plan shall be deemed a Distribution and such reinstated interest prior to the Settlement Completion Date shall be deemed reissued to respective designated representatives on behalf of the Vogtle Owners and the VC Summer Owners.

5. In the event that, notwithstanding the foregoing, the Toshiba Entities listed or described on Exhibit A hereto or any Transferee receives a Distribution on account of the Toshiba Claims or the TNEH Interest, such Distribution shall be segregated and deemed held in trust by the applicable Toshiba Entity listed or described on Exhibit A hereto for the Owners that are parties to a Settlement, and promptly paid to such Owners as mandated by this Order.

6. In the event that any of the Toshiba Entities listed or described on Exhibit A hereto fails to file a proof of claim in respect of any of the Toshiba Claims, the Owners that are parties to a Settlement shall have the right to file a proof of claim in respect of such Toshiba Claims, and Toshiba shall provide such Owners with any information the Owners reasonably require to prepare such proof of claim within 30 days after a written request for such information by the Owners, provided , however , that nothing in this paragraph 6 shall constitute an exception from or otherwise vary any deadlines set forth in any bar date order entered by the Court.

7. Until the Settlement Completion Date, the Owners that are parties to a Settlement shall have the right to vote, and participate in and defend against any objection or other request for relief filed in respect of, the Toshiba Claims, subject to any applicable deadlines pursuant to the Federal Rules of Bankruptcy Procedure, the Local Bankruptcy Rules for the Southern District of New York, the Order Pursuant to 11 U.S.C. § 1059(a) and Fed. R. Bankr. P. 1015(c), 2002(m), and 9007 Implementing Certain Notice and Case Management Procedures [Docket No. 101], or any other applicable order of this Court.

8. Toshiba will not sell, transfer or encumber, or permit any Toshiba Entity listed or described on Exhibit A hereto (each, a “ Consenting Toshiba Entity ”) to sell, transfer or encumber, any of the Toshiba Claims (other than any sale or transfer to any other Consenting Toshiba Entity) until a Settlement Completion Date has occurred with respect to both of the Settlements. The Consenting Toshiba Entities shall not consummate any sale or transfer of any of the Toshiba Claims to any other Toshiba Entity (other than any sale or transfer to any other Consenting Toshiba Entity) unless and until the Toshiba Entity which is the intended transferee or recipient of such transferred Toshiba Claim confirms, by written notice filed with the Court, its consent to be bound by the provisions of this Order as if named on Exhibit A hereto as of the date hereof and thereby becomes a Consenting Toshiba Entity hereunder. Toshiba will not sell, transfer or encumber the TNEH Interest until after a sale of all or substantially all of the assets of the Debtors, including all or substantially all of the assets of TNEH.

9. None of the Toshiba Entities listed or described on Exhibit A shall file a motion seeking to dismiss or convert any of the Debtors’ (including TNEH’s) chapter 11 cases without the written consent of the Owners that are parties to a Settlement. For the avoidance of

doubt, nothing in this paragraph shall impede, interfere with, or otherwise impair any action or determination by the Debtors with respect to any such dismissal or conversion.

10. Nothing herein shall be deemed to limit or otherwise modify any of the terms of the Vogtle Settlement, which shall remain in full force and effect, or any VC Summer Settlement.

11. The Debtors are hereby authorized and directed to take all actions necessary or appropriate to comply with the terms of this Order.

12. Nothing herein shall limit or otherwise modify the rights of any Owner to file or pursue any claims against any of the Debtors or any of their respective subsidiaries.

13. Nothing herein shall affect the Debtors’ claims, counterclaims, defenses, causes of action or any other rights the Debtors may hold or otherwise be able to assert with respect to any Plan, proof of claim or interest, or any other matters, against the Parties to this Order.

14. Nothing contained in this Order shall be deemed an admission as to the validity of any claim against the Debtors, including, without limitation, any claim of any of the Owners or Toshiba against any of the Debtors.

15. The terms and conditions of this Order shall be immediately effective and enforceable upon its entry.

16. The Court shall retain jurisdiction with respect to all matters arising from or related to the implementation, enforcement or interpretation of this Order.

17. In the event of any sale or other disposition of any assets of a Debtor or any subsidiary of such Debtor, this Court shall have exclusive jurisdiction over and adjudicate any dispute regarding the allocation of the sale proceeds among the assets sold.



Dated: July 20, 2017 New York, New York	s/ Michael E. Wiles THE HONORABLE MICHAEL E. WILES UNITED STATES BANKRUPTCY JUDGE

ACCEPTED AND AGREED BY:

DEBTORS WESTINGHOUSE ELECTRIC COMPANY, LLC, et al . (other than TNEH)

By: / s/ Gary Holtzer

Their: Attorney of record

DEBTOR TOSHIBA NUCLEAR ENERGY HOLDINGS (UK) LIMITED

By: /s/ Kyle Ortiz

Its: Attorney of record

TOSHIBA CORPORATION, TOSHIBA NUCLEAR ENERGY HOLDINGS (US) INC.

By: /s/ Van C. Durrer, II

Its: Attorney of record

GEORGIA POWER COMPANY

By: /s/ Gregory M. Gordon

Its: Attorney of record

OGLETHORPE POWER CORPORATION (AN ELECTRIC MEMBERSHIP CORPORATION)

By: /s/ Gregory M. Gordon

Its: Attorney of record

MUNICIPAL ELECTRIC AUTHORITY OF GEORGIA

By: /s/ Gregory M. Gordon

Its: Attorney of record

THE CITY OF DALTON, GEORGIA

By: /s/ Gregory M. Gordon

Its: Attorney of record

Exhibit A

Toshiba Corporation

Toshiba Nuclear Energy Holdings (US) Inc.

Each of the other Toshiba Entities (as defined in this Order) that subsequently files a notice in the above-captioned chapter 11 cases confirming such Toshiba Entity’s consent to be bound by the provisions in this Order.

EXHIBIT D

Arbitration

(a) Arbitration Rules and Administering Body . Either Party may submit the dispute to the International Chamber of Commerce (the " Administrators ") for arbitration under and in accordance with the Rules of Arbitration of the International Chamber of Commerce as in force at the time such arbitration is commenced (the " Rules "), for final and binding resolution, provided, however, that to the extent the Rules conflict with the provisions of this Exhibit D , the provisions of this Exhibit D shall prevail. The Party electing arbitration shall so notify the other Party in accordance with the Rules.

(b) Appointment of Arbitrator . The dispute shall be settled by a panel consisting of a three arbitrators. The Parties agree that one arbitrator shall be appointed by each party within twenty (20) days of the date of a request to initiate arbitration. The third presiding arbitrator shall be appointed by agreement of the two Party-appointed arbitrators within fourteen (14) days of the appointment of the second arbitrator or, if no such agreement can be reached, by the Administrator.

(c) Location . The site of the arbitration shall be New York City. Each Party waives any objection it may now or hereafter have to the above venue and specifically waives any objection that any dispute resolved under this Exhibit D was brought in any inconvenient forum and agrees not to plead or claim the same.

(d) Monetary Awards . Any monetary award of the arbitration panel shall be made and payable in U.S. Dollars. Any such monetary award shall accrue interest at the maximum rate allowed under the law of which governs this Agreement, from the date of the notification of the dispute in accordance with Exhibit D to the date when the award is paid in full.

(e) Arbitration Costs . Each Party shall pay for its own costs and expenses (including attorneys' fees and expenses) incurred in order to participate in the arbitration; provided, however, that the Parties shall share equally the fees and expenses of the arbitration panel and any other general hearing expenses from which both Parties benefit.

(f) Description of Award . The arbitral award rendered by the arbitration panel shall be in writing and shall set forth in reasonable detail the facts of the dispute and the reasons for the arbitration panel's decision.

(g) International Arbitration . It is the Parties' intention that any arbitration pursuant to this Exhibit D shall be an "international arbitration," conducted under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York, 10 June 1958) (the " New York Convention "). If at any time the United States or Japan ceases to be a signatory to the New York Convention, the Parties agree to execute an amendment to this Agreement which shall ensure, to the fullest extent allowed by law, that the provisions and intent of the New York Convention applicable to this Exhibit D are thereby incorporated into this Exhibit D and become binding upon the Parties.

SCHEDULE 1.1(a)

Pro Rata Shares



SCE&G	55%
Santee Cooper	45%

SCHEDULE 1.1(b)

WEC Debtors

Westinghouse Electric Company LLC

Toshiba Nuclear Energy Holdings (UK) Limited

TSB Nuclear Energy Services Inc.

Westinghouse Technology Licensing Company LLC

Westinghouse International Technology LLC

Fauske and Associates LLC

PaR Nuclear Holding Co., Inc.

PaR Nuclear, Inc.

WEC Welding and Machining, LLC

WEC Equipment & Machining Solutions, LLC

CE Nuclear Power International, Inc.

WEC Engineering Services Inc.

Westinghouse Energy Systems LLC

Westinghouse Industry Products International Company LLC

WEC Carolina Energy Solutions, LLC

WEC Carolina Energy Solutions, Inc.

PCI Energy Services LLC

WEC Specialty LLC

WECTEC LLC

WECTEC Staffing Services LLC

WECTEC Global Project Services Inc.

Field Services, LLC

Stone & Webster International, Inc.

Stone & Webster Services LLC

Stone & Webster Asia Inc

Nuclear Technology Solutions LLC

Shaw Global Services, LLC

Shaw Nuclear Services, Inc.

Stone & Webster Construction Inc.

WECTEC Contractors Inc.

SCHEDULE 2.2

Payment Schedule



Payment Date If any below date is a bank holiday in the United States or Japan, the next business day shall be the payment date for such payment.	Monthly Payment Amounts (in millions)
October 1, 2017	$	150.00
November 1, 2017	32.50
December 1, 2017	32.50
January 1, 2018	32.50
February 1, 2018	32.50
March 1, 2018	32.50
April 1, 2018	23.50
May 1, 2018	23.50
June 1, 2018	23.50
July 1, 2018	23.50
August 1, 2018	23.50
September 1, 2018	23.50
October 1, 2018	23.50
November 1, 2018	23.50
December 1, 2018	23.50
January 1, 2019	23.50
February 1, 2019	23.50
March 1, 2019	37.50
April 1, 2019	37.50
May 1, 2019	37.50
June 1, 2019	37.50
July 1, 2019	37.50
August 1, 2019	37.50
September 1, 2019	37.50
October 1, 2019	37.50
November 1, 2019	37.50
December 1, 2019	37.50
January 1, 2020	37.50
February 1, 2020	37.50
March 1, 2020	37.50
April 1, 2020	37.50
May 1, 2020	37.50
June 1, 2020	37.50
July 1, 2020	37.50
August 1, 2020	37.50
September 1, 2020	37.50
October 1, 2020	37.50
November 1, 2020	37.50
December 1, 2020	37.50
January 1, 2021	37.50
February 1, 2021	37.50
March 1, 2021	37.50
April 1, 2021	37.50
May 1, 2021	37.50



June 1, 2021	37.50
July 1, 2021	37.50
August 1, 2021	37.50
September 1, 2021	37.50
October 1, 2021	37.50
November 1, 2021	37.50
December 1, 2021	37.50
January 1, 2022	37.50
February 1, 2022	37.50
March 1, 2022	37.50
April 1, 2022	37.50
May 1, 2022	37.50
June 1, 2022	37.50
July 1, 2022	37.50
August 1, 2022	37.50
September 1, 2022	22.0

SCHEDULE 4.1(b)

Toshiba Corporate Reorganization Transaction



Business Line	Type of Transaction
Energy Systems & Solutions Company: Power and Industrial Systems Research and Development Center	Potential transfer of the Power and Industrial Systems Research and Development Center to new subsidiary entity which succeeds to the ESS business, or inclusion of the Power and Industrial Systems Research and Development Center in the split transaction

SCHEDULE 7.5

Specified Affiliates

Each of the following entities shall be deemed to be on Schedule 7.5 for purposes of Section 7.5(c) and Section 7.5(d) of the Settlement Agreement. Each of the following entities shall be deemed to be on Schedule 7.5 for purposes of Section 7.5(e) to the extent such entity has performed any activities connected in any way with the EPC Agreement and are also either performing Work as defined in the EPC Agreement or are Subcontractors or Vendors as defined in the EPC Agreement; provided that Owners will use commercially reasonable efforts to extend such coverage to entities on Schedule 7.5 that are not performing Work.


1.	Toshiba Corporation


2.	Toshiba America, Inc.


3.	Toshiba Nuclear Energy Holdings (US) Inc.


4.	Toshiba America Nuclear Energy Corporation


5.	Toshiba America Energy Systems Corporation


6.	Toshiba International Corporation


7.	Toshiba of Europe Limited


8.	Toshiba International (Europe) Ltd.


9.	Toshiba Plant Systems & Services Corporation


10.	TPSC US Corporation


11.	Toshiba Technical Services International Corporation


12.	Toshiba Electric Service Corporation


13.	Toshiba Electronic Devices & Storage Corporation


14.	Toshiba Solutions Corporation


15.	Toshiba Energy Systems & Solutions Corporation

Exhibit B-1

DISCLOSURE SCHEDULE



CASE NAME	C/A Number	DATE
Foreclosure Actions
SCE&G v. Structural Preservation Systems, et al.	2017-CP-20-117 (Fairfield Cty.)	4/27/2017
Baker Concrete Construction, Inc. v. SCE&G	2017-CP-20-151 (Fairfield Cty.)	5/22/2017
Structural Preservation Systems, LLC v. SCE&G and SC Public Service Authority and Baker Concrete Construction, Inc.	2017-CP-20-190 (Fairfield Cty.)	6/20/2017
Specialty Maintenance & Construction v. SCE&G	2017-CP-20-233 (Fairfield Cty.)	7/25/2017
Tindall Corporation v. SCE&G, SC Public Service Authority, et al.	2017-CP-20-269 (Fairfield Cty.)	8/10/2017
Bagwell Fence Co, Inc. v. SCE&G	2017-CP-20-272 (Fairfield Cty.)	8/16/2017
Electrical Equipment Company v. SCE&G, SC Public Service Authority, et al.	2017-CP-20-273 (Fairfield Cty.)	8/16/2017
DuBose National Energy Services, Inc. v. SCE&G	2017-CP-20-274 (Fairfield Cty.)	8/16/2017
Bridgewell Resources, Inc. v. SCE&G and SC Public Service Authority	2017-CP-10-278 (Fairfield Cty.)	8/17/2017
United Rentals (North America) v. SCE&G	2017-CP-20-00284 (Fairfield Cty.)	8/18/2017



CASE NAME	C/A Number	DATE
Fluor Enterprises, Inc. v. SCE&G and SC Public Service Authority, et al.	2017-CP-20-288 (Fairfield Cty.)	8/21/2017
Intertech Security, LLC v. SCE&G	2017-CP-20-00308 (Fairfield Cty.)	9/1/2017
S&ME Inc. v. SCE&G	2017-CP-20-313 (Fairfield Cty.)	9/7/2017
General Supply & Services, Inc. v. SCE&G	2017-CP-20-00314 (Fairfield Cty.)	9/8/2017
Cannon Sline, Inc. v. SCE&G and SC Public Service Authority	2017-CP-20-00309 (Fairfield Cty.)	9/1/2017
CB&I Laurens, Inc. and CBI Services, LLC v. SCE&G and SC Public Service Authority	2017-CP-20-00320 (Fairfield Cty.)	9/13/2017
Newport News Industrial Corp. v. SCE&G and SC Public Service Authority	2017-CP-20-323	9/14/2017
May Heavy Equipment, LLC v. SCE&G and SC Public Service Authority	2017-CP-20-328	9/14/2017
Gregory Electric Co., Inc. v. SCE&G and SC Public Service Authority	2017-CP-20-331	9/15/2017
Calvert Company, Inc. v. SCE&G and SC Public Service Authority	2017-CP-20-333	9/15/2017
Airtool Equipment Rental Inc.v. SCE&G and SC Public Service Authority	2017-CP-20-334 (Fairfield Cty.)	9/18/2017
N.W. White & Co. v. SCE&G	2017-CP-20-335 (Fairfield Cty.)	9/18/2017
Sargent & Lundy, LLC v. SCE&G, et al.	2017-CP-20-346	9/21/2017
Garney Companies, Inc. v. SCE&G, et al.	2017-CP-20-347	9/21/2017
Ed Waters and Sons Contracting Co., Inc. v. SCE&G, et al	2017-CP-20-349 (Fairfield Cty.)	9/22/17
HD Supply Construction Supply, Ltd. v. SCE&G, et al.	2017-CP-20-350 (Fairfield Cty.)	9/22/2017
Harris Acquisition III, LLC v. SCE&G	2017-CP-20-359 (Fairfield Cty.)	9/26/2017
SteelFab, Inc. v. SCE&G	2017-CP-20-360 (Fairfield Cty.)	9/26/2017



CASE NAME	C/A Number	DATE
Class Actions/ Individual Law Suits
Pennington v. Fluor Corp., Fluor Enterprises, Inc., and SCANA Corp	0:17-cv-2094 (U.S. Dist. Ct.)	8/8/2017
Hope Brown and Thomas Lott, on behalf of themselves and all others similarly situated, v. SC Public Service Authority (also known as Santee Cooper) and SCANA Corporation,	2017-CP-40-05409 (Richland Cty.)	9/8/2017
Jessica S. Cook v. South Carolina Public Service Authority (also known as Santee Cooper), SCE&G and Palmetto Electric Cooperative, Inc.	2017-CP-25-348 (Hampton Cty.)	9/7/2017
Edwinda Goodman, et al. v. SCANA Corporation and SCE&G	2017-CP-20-300 (Fairfield Cty.)	8/28/2017
Doza Rizen On Wheels, LLC v. SCANA Corp.	2017-CV-2010100547 (Fairfield Cty.)	8/17/2017
Richard Lightsey v. SCE&G	2017-CP-25-335 (Hampton Cty.)	8/14/2017
Crangle v. Marsh, et al.	2017-CP-40-5791 (Richland Cty.)	9/26/2017
Lebrian Cleckley, on behalf of himself and all others similarly situated, v. SCE&G	2017-CP-40-04833 (Richland Cty.)	8/11/2017
Christine Delmater, Stephanie Speicher on behalf of themselves and all other similarly situated	No. 3:17-cv-02563 (U.S. Dist. Ct.)	9/25/17
Friends of the Earth and Sierra Club v. SCE&G	No. 2017-207-E (Public Service Commission)	6/22/2017



CASE NAME	C/A Number	DATE
In re Request of the S.C. Office of Regulatory Staff for Relief to SCE&G Rates Pursuant to S.C. Code § 58-27-290	No. 2017-___-E (Public Service Commission)	9/26/2017

Exhibit B-2

DISCLOSURE SCHEDULE



CASE NAME	C/A Number	DATE
Foreclosure Actions
Specialty Maintenance & Construction, Inc. v. South Carolina Public Service Authority, a/k/a Santee Cooper	2017-CP-20-00298 (Fairfield Cty)	8/28/2017
EvapTech, Inc. v. SCE&G and SC Public Service Authority	2017-CP-20-00332 (Fairfield Cty.)	9/15/2017
Airtool Equipment Rental, Inc. v. SCE&G and South Carolina Public Service Authority	2017-CP-20-00334 (Fairfield, Cty.)	9/18/2017
Border States Industries, Inc. d/b/a Shealy Electrical Wholesalers, Inc. v. SCE&G and South Carolina Public Service Authority	2017-CP-20-00342 (Fairfield Cty.)	9/20/2017



CASE NAME	C/A Number	DATE
Class Actions/Individual Law Suits
Chris Kolbe and Ruth Ann Keffer, on behalf of themselves and all others similarly situated v. South Carolina Public Service Authority, an agency of the State of South Carolina; W. Leighton Lord, III, in his capacity as chairman and director of the South Carolina Public Service Authority; William A. Finn, in his capacity as director of the South Carolina Public Service Authority; Barry Wynn, in his capacity as director of the South Carolina Public Service Authority; Kristofer Clark, in his capacity as director of the South Carolina Public Service Authority; Merrell W. Floyd, in his capacity as director of the South Carolina Public Service Authority; J. Calhoun Land, IV, in his capacity as director of the South Carolina Public Service Authority; Stephen H. Mudge, in his capacity as director of the South Carolina Public Service Authority; Peggy H. Pinnell, in her capacity as director of the South Carolina Public Service Authority; Dan J. Ray, in his capacity as director of the South Carolina Public Service Authority; David F. Singleton, in his capacity as director of the South Carolina Public Service Authority; and Jack F. Wolfe, in his capacity as director of the South Carolina Public Service Authority	2017-CP-08-02009 (Berkeley Cty)	8/23/2017

EXHIBIT C

UNITED STATES BANKRUPTCY COURT

SOUTHERN DISTRICT OF NEW YORK



In re:
		Case No. 17-10751 (MEW)
WESTINGHOUSE ELECTRIC
COMPANY, LLC, et al.,		Chapter 11

	Debtors.	Jointly Administered

NOTICE OF TRANSFER OF

CLAIM PURSUANT TO RULE 3001(e)

PLEASE TAKE NOTICE that [●] of or an undivided [ ] ownership interest in the claim set forth below

(the “Transferred Claim”), of [ ] (“Assignor”) filed as an original or amended Proof of Claim against

the Debtor(s):

Proof of Claim Amount Proof of Claim No.

[●] [●]

has been transferred and assigned to Citibank, N.A. (“Assignee”). The signature of Assignor on this

document is evidence of the transfer of [●] of or an undivided [ ] ownership interest in the claim and all

rights thereto.

Assignor hereby waives any notice or hearing requirements imposed by Rule 3001 of the Bankruptcy

Rules, and stipulates that an order may be entered recognizing this assignment as an unconditional

assignment and the Assignee herein as the valid owner of the Transferred Claim. You are hereby

requested to make all future payments and distributions, and to give all notices and other

communications, in respect of the Transferred Claim to the Assignee.

ASSIGNEE: CITIBANK, N.A. ASSIGNOR: [●]

Address: Address:

Signature: Signature:

Name: Name:

Title: Title:

Date: Date:

SCHEDULE 1

PURCHASE PRICE TERMS

AGGREGATE PURCHASE PRICE PAID TO OWNERS

Immediately upon settlement of this transaction, payment of the Purchase Price shall be made as follows:

Purchased Amount: $2,018,000,000.00

multiplied by Purchase Rate: 91.5300%

Purchase Price: $1,847,075,400.00

Pro Rata Share :

South Carolina Electric & Gas Company (55%): $1,015,891,470.00

The South Carolina Public Service Authority (45%): $831,183,930.00

Total: $1,847,075,400.00

SCHEDULE 2

WIRE INSTRUCTIONS

SOUTH CAROLINA ELECTRIC & GAS COMPANY WIRE INSTRUCTIONS :

Financial Institution: Wells Fargo Bank, NA

Address: 420 Montgomery Street

San Francisco, CA 94104

Account Name: SCE&G Master Account

Routing Number / ABA: 121000248

Account Number: #############

Bank Contact: #############

SCE&G Contact: #############

SOUTH CAROLINA PUBLIC SERVICE AUTHORITY WIRE INSTRUCTIONS :

Financial Institution: Wells Fargo Bank, N.A.

ABA: 121000248

Credit Account: #############

Tax ID: #############

Santee Cooper Contact: #############

Santee Cooper Fax: #############

Exhibit 12.01

COMPUTATION OF RATIOS

September 30, 2017

RATIO OF EARNINGS TO FIXED CHARGES



SCANA:	Nine Months Ended September 30, 2017		Twelve Months Ended September 30, 2017		Years ended December 31,
Dollars in Millions	Nine Months Ended September 30, 2017		Twelve Months Ended September 30, 2017		2016			2015		2014			2013			2012
Fixed Charges as defined:
Interest on debt		$283.3		$375.4		$356.8			$327.8		$318.2			$305.9			$301.3
Amortization of debt premium, discount and expense (net)	3.0		4.0		4.5			4.7		9.7			5.3			4.9
Interest component on rentals	2.5		3.4		3.5			3.7		4.1			4.9			4.9
Total Fixed Charges (A)		$288.8		$382.8		$364.8			$336.2		$332.0			$316.1			$311.1
Earnings as defined:
Pretax income from continuing operations		$468.5	$652.6		$865.6			$1,138.4			$786.0			$693.8			$601.6
Total fixed charges above	288.8		382.8		364.8			336.2		332.0			316.1			311.1
Pretax equity in (earnings) losses of investees	1.6		1.2		(0.7		)	0.8		(1.4		)	(3.2		)	(3.3		)
Cash distributions from equity investees	2.4		3.3		3.7			4.0		7.4			9.6			3.3
Total Earnings (B)	$761.3		$1,039.9		$1,233.4			$1,479.4		$1,124.0			$1,016.3			$912.7
Ratio of Earnings to Fixed Charges (B/A)	2.64		2.72		3.38			4.40		3.39			3.22			2.93



SCE&G:	Nine Months Ended September 30, 2017		Twelve Months Ended September 30, 2017		Years ended December 31,
Dollars in Millions	Nine Months Ended September 30, 2017		Twelve Months Ended September 30, 2017		2016		2015		2014		2013		2012
Fixed Charges as defined:
Interest on debt		$226.2		$299.6		$284.6		$258.4		$237.6		$226.4		$217.4
Amortization of debt premium, discount and expense (net)	2.2		3.0		3.5		3.7		4.4		4.2		3.9
Interest component on rentals	2.9		3.9		4.0		4.1		4.0		4.5		3.2
Total Fixed Charges (A)		$231.3		$306.5		$292.1		$266.2		$246.0		$235.1		$224.5
Earnings as defined:
Pretax income from continuing operations		$408.8		$548.1		$774.1		$711.0		$676.0		$579.7		$509.5
Total fixed charges above	231.3		306.5		292.1		266.2		246.0		235.1		224.5
Pretax equity in losses of investees	3.7		4.3		3.1		5.0		5.3		3.5		3.8
Total Earnings (B)		$643.8	$858.9		$1,069.3			$982.2		$927.3		$818.3		$737.8
Ratio of Earnings to Fixed Charges (B/A)	2.78		2.80		3.66		3.69		3.77		3.48		3.29

Exhibit 31.01

CERTIFICATION

I, Kevin B. Marsh, certify that:


1.	I have reviewed this quarterly report on Form 10-Q of SCANA Corporation;


2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;


3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;


4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:


(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;


(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;


(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and


(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and


5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):


(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and


(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.



Date: November 3, 2017
	/s/Kevin B. Marsh
	Kevin B. Marsh
	Chairman of the Board, President, Chief Executive Officer and
	Chief Operating Officer

Exhibit 31.02

CERTIFICATION

I, Jimmy E. Addison, certify that:


1.	I have reviewed this quarterly report on Form 10-Q of SCANA Corporation;


2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;


3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;


4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:


(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;


(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;


(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and


(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and


5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):


(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and


(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.



Date: November 3, 2017

	/s/Jimmy E. Addison
	Jimmy E. Addison
	Executive Vice President and Chief Financial Officer

Exhibit 31.03

CERTIFICATION

I, Kevin B. Marsh, certify that:


1.	I have reviewed this quarterly report on Form 10-Q of South Carolina Electric & Gas Company;


2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;


3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;


4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:


(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;


(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;


(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and


(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and


5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):


(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and


(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.



Date: November 3, 2017
	/s/Kevin B. Marsh
	Kevin B. Marsh
	Chairman of the Board and Chief Executive Officer

Exhibit 31.04

CERTIFICATION

I, Jimmy E. Addison, certify that:


1.	I have reviewed this quarterly report on Form 10-Q of South Carolina Electric & Gas Company;


2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;


3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;


4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:


(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;


(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;


(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and


(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and


5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):


(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and


(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.



Date: November 3, 2017
	/s/Jimmy E. Addison
	Jimmy E. Addison
	Executive Vice President and Chief Financial Officer

Exhibit 32.01

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of SCANA Corporation (the “Company”) on Form 10-Q for the quarter ended September 30, 2017 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), we certify pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, that:


(1)	The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and


(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.



Date: November 3, 2017


/s/Kevin B. Marsh		/s/Jimmy E. Addison
Kevin B. Marsh		Jimmy E. Addison
Chairman of the Board, President, Chief Executive Officer		Executive Vice President and Chief Financial Officer
and Chief Operating Officer

Exhibit 32.02

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of South Carolina Electric & Gas Company (the “Company”) on Form 10-Q for the quarter ended September 30, 2017 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), we certify pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, that:


(1)	The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and


(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.



Date: November 3, 2017


/s/Kevin B. Marsh		/s/Jimmy E. Addison
Kevin B. Marsh		Jimmy E. Addison
Chairman of the Board and Chief Executive Officer		Executive Vice President and Chief Financial Officer