ORD 2017-15 Adopted With Franchise Agreement ORDINANCE NO. 2017-15
AN ORDINANCE AUTHORIZING THE CITY OF NORTH AUGUSTA TO GRANT A
NONEXCLUSIVE FRANCHISE AGREEMENT TO SOUTH CAROLINA ELECTRIC
AND GAS COMPANY, ITS SUCCESSORS AND ASSIGNS, FOR THE PROVISION OF
ELECTRIC AND GAS SERVICES WITHIN THE CITY
WHEREAS, South Carolina Electric and Gas Company has requested that
the City grant to said company a new franchise agreement related to said company's use of
the streets and public places of the municipality to construct, install, maintain, and operate
its facilities; and
WHEREAS, the existing franchises for electric and gas are scheduled to
terminate in 2020; and
WHEREAS, South Carolina Electric and Gas Company and Aiken Electric
Cooperative, Inc. have recently entered into an agreement related to service areas within the
City and have requested that the City grant new franchises to both companies at this time;
and
WHEREAS, the Mayor and City Council have considered this request and
determined that such request is proper and in the interest of the citizens.
NOW, THEREFORE, BE IT ORDAINED by the Mayor and City Council of
the City of North Augusta, South Carolina, in meeting duly assembled and by the authority
thereof, that:
1. The City grant to South Carolina Electric and Gas Company a
nonexclusive franchise as specified in the Franchise Agreement attached
hereto,marked as"Exhibit A", and incorporated by reference.
2. All other ordinances or parts of ordinances in conflict herewith are, to the
extent of such conflict,hereby repealed.
3. This Ordinance shall become effective immediately upon its adoption on
third and final reading.
4. The City Administrator is authorized to execute any documents necessary
to complete the granting of this franchise agreement.
DONE, RATIFIED AND ADOPTED BY THE MAYOR AND CITY COUNCIL OF THE CITY OF
NORTH AUGUSTA, SOUTH CAROLINA,ON THIS le' DAY OF OCTOBER,2017.
FIRST READING: l/c/�� J l91144/g0
SECOND READING: 00 O 4 j ROBERT A. PETTIT,MAYOR
THIRD READING: (/�- 4' ATTEST:
DONNA B.YOUNG,CITY CLER
STATE OF SOUTH CAROLINA
COUNTY OF AIKEN ) ORDINANCE NO.
CITY OF NORTH AUGUSTA
ORDINANCE ("FRANCHISE ORDINANCE" OR "AGREEMENT") TO GRANT TO
SOUTH CAROLINA ELECTRIC & GAS COMPANY, ITS SUCCESSORS AND
ASSIGNS, THE NON-EXCLUSIVE RIGHT, POWER AND AUTHORITY TO ERECT AND
TO INSTALL, MAINTAIN, AND OPERATE ON, ALONG, ACROSS, IN, OVER, ABOVE,
UPON AND UNDER THE STREETS, ALLEYS AND OTHER PUBLIC PLACES OF THE
CITY: (1) ELECTRIC LINES, POLES, WIRES, GUYS, PUSH BRACES,
TRANSFORMERS AND APPURTENANT FACILITIES; (2) GAS MAINS, PIPES AND
SERVICES AND OTHER APPURTENANT FACILITIES; AND (3) COMMUNICATION
LINES AND FACILITIES FOR ANY PURPOSE AND ANY USE BY THE COMPANY OR
ANY DESIGNEE, TOGETHER WITH ANY NECESSARY RIGHT OF ACCESS
THERETO, FOR SUCH PERIOD AS THE SAME IS NEEDED BY THE COMPANY TO
RENDER SERVICE TO ITS CUSTOMERS IN THE CITY OF NORTH AUGUSTA, SOUTH
CAROLINA FROM THOSE FACILITIES; TO SET THE AMOUNT OF FRANCHISE FEE
TO BE PAID BY SOUTH CAROLINA ELECTRIC & GAS COMPANY TO THE CITY; IF
SO REQUIRED, TO LEVY FRANCHISE FEES ON THIRD PARTIES SELLING
ELECTRICITY OR GAS USING SCE&G'S ELECTRIC OR GAS SYSTEMS; TO ALLOW
FOR THE ESTABLISHMENT OF A FUND AND UNDERGROUND UTILITY DISTRICTS
FOR ELECTRIC NON-STANDARD SERVICE; BE IT ORDAINED BY THE MAYOR AND
COUNCIL OF NORTH AUGUSTA IN CITY COUNCIL ASSEMBLED:
Section 1
Wherever the word "Company" appears in this Franchise Ordinance, it is hereby to
designate, and shall be held to refer to South Carolina Electric & Gas Company, a corporation
duly authorized and doing business pursuant to the laws of the State of South Carolina, its
successors and assigns.
Section 2
The non-exclusive right, power and authority is hereby granted and vested in the Company
to erect and to install, maintain and operate on, along, across, in, over, above, upon and under
the streets, alleys, bridges, rights-of-way and other public places of the City: (1) electric lines,
poles, wires, guys, push braces, transformers and other appurtenant facilities; (2) gas mains,
pipes and services and other appurtenant facilities; and (3) communication lines and facilities for
Electric&Gas Franchise Page 1 of 14 Form Approved: August 19, 2015
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any purpose and any use by the Company or any designee, with any necessary right of access
thereto; and to use those facilities to conduct an electric and/or gas business, and any other
business or businesses which may be lawfully conducted using the permitted facilities. As
required by federal law, the Company may allow pole attachments for cable systems or other
telecommunications carriers. It is the responsibility of the cable systems or other
telecommunication carriers to secure any necessary easements or permits for their attachments.
Section 3
Any street, alley, bridge, right-of-way or other public place used by the Company shall not
be obstructed longer than necessary during its work of construction or repair, and shall be restored
to the same good order and condition as when said work was commenced. No part of any street,
alley, bridge, right-of-way, or other public place of the City, including any public drain, sewer, catch
basin, water pipe, pavement or other public improvement, shall be injured. However, should any
such damage occur due to Company's failure to use due care, the Company shall repair the
same as promptly as possible after notice from the City, and, in default thereof, the City may make
such repairs and charge the reasonable cost thereof to and collect the same from the Company.
The Company shall save the City harmless from all liability or damage (including judgment,
decrees, and legal court costs) resulting from its failure to use due care in the exercise of the
privileges hereby granted or of its rights under this Section.
Section 4
Upon approval of this Franchise Agreement and the franchise agreement between Aiken
Electric Cooperative, Inc. ("Aiken Electric") in accordance with the terms of the Agreement
Concerning Electric Service Rights Between Aiken Electric Cooperative and South Carolina
Electric & Gas Company, dated August 23, 2017 ("Electric Service Rights Agreement"), the
Company shall have electric service rights to the parcels shaded in red on Exhibit A, and Aiken
Electric shall have electric service rights to the parcels shaded in green on Exhibit A, provided,
however, that:
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A. The Company may continue to provide electric service to any building or structure
to which it is already providing electric service as of the effective date of the
Franchise Agreements until such building or structure is removed, torn down,
razed to the ground, or demolished, even if Exhibit A provides electric service
rights for the parcel on which the building or structure is located to Aiken Electric;
and Aiken Electric may continue to provide electric service to any building or
structure to which it is already providing electric service as of the effective date of
the Franchise Agreements until such building or structure is removed, torn down,
razed to the ground, or demolished, even if Exhibit A provides electric service
rights for the parcel on which the building or structure is located to the Company.
After any building or structure that is being served by Aiken Electric or the
Company pursuant to the terms of this Subsection 3(A) is removed, torn down,
razed to the ground, or demolished, the service rights designation in Exhibit A shall
be the sole determining factor as to whether Aiken Electric or the Company has
the right to provide electric service to any future replacement building or structure
within that parcel.
B. Where any new building or structure is constructed so that part of the building or
structure resides on a red parcel in Exhibit A and part of the building or structure
resides on a green parcel of Exhibit A, the customer, in its sole discretion, may
choose whether the Company or Aiken Electric provides electric service to such
new building or structure.
C. Upon any future annexation by the City, the Company shall have electric service
rights to those annexed parcels assigned to it by the Public Service Commission
of South Carolina prior to the annexation, and Aiken Electric shall have electric
service rights to those annexed parcels assigned to it by the Public Service
Commission of South Carolina prior to the annexation.
D. If the City Council does not approve this Franchise Agreement and the franchise
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agreement with Aiken Electric pursuant to the terms of the Electric Service Rights
Agreement, the Electric Service Rights Agreement shall be considered terminated,
null, and void.
Section 5
The Company shall:
A. Construct and extend its electric system within the present and/or extended City
limits and have the right to connect new services in the parcels shaded in red on Exhibit A and in
newly annexed parcels assigned to the Company by the Public Service Commission of South
Carolina prior to the annexation, and supply standard electric service at standard voltages under
rates and general terms and conditions as authorized by law; and construct and extend its gas
system within the present and/or extended City limits and furnish gas, if available, to the City and
applicants residing therein upon request, under rates and general terms and conditions as
authorized by law.
B. If requested by the City, install underground electric distribution and service lines
in new residential subdivisions of twenty-five lots or more in the City under terms and conditions
customarily applicable with respect to aid to construction.
C. Furnish, install, operate, and when called upon, expand and maintain all of the
electric street lighting system (to include both lighting fixtures and poles) and service along the
streets, highways, alleys and public places of the City, as said system may be hereafter installed
and/or changed by order of the City, in accordance with the terms and provisions of this franchise.
All materials furnished shall be of standard quality and kind, and shall meet the requirements of
good street lighting practice.
D. Make changes in the location of the street lighting system covered by this franchise
upon written request of the City.
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E. Render to the City a bill each month for the street lighting service furnished
hereunder during the preceding month, in accordance with the provisions of this Franchise
Ordinance.
F. Maintain at its own expense a system for repairing the street lighting system in
use. The Company, upon receiving official notice that there is a defective standard fixture or pole,
shall within five (5) days repair or replace the same.
Section 6
The City shall:
A. Take electric street lighting and other City electric and gas services from the
Company during the period covered by this Franchise Ordinance in all areas of the City served
by Company or in which Company is authorized by law to serve.
B. Pay monthly, within twenty-five (25) days after receipt, a proper bill from the
Company for the preceding month's service in accordance with the amounts provided for in
approved tariffs.
C. Accept the street lighting system as it exists on the effective date of this Franchise
Ordinance.
D. Pay the Company for street lighting service at the municipal rate schedule
approved by the Public Service Commission of South Carolina applicable to that lighting fixture
and pole, including underground rates. If no applicable municipal rate is available for any fixture
and pole at the time of billing, then the City shall pay the full and applicable non-municipal rate for
such fixture(s) and pole(s).
E. Notify the Company in writing of areas annexed into the City, including with the
notification: (1) accurate maps, (2) tax map numbers, and (3) street addresses of all locations in
the annexed areas so that newly annexed customers may be subject to franchise fees. Such
notification is a precondition to franchise fee payments by the Company on those accounts. In
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addition, the City shall promptly update its municipal boundary maps with its County Geographical
Information Systems (GIS) Office.
F. Upon annexation, pay to the Company for street lighting service to customers
subject to the annexation at the municipal rate schedule approved by the Public Service
Commission of South Carolina applicable to that lighting fixture and pole, including underground
rates. If no applicable municipal rate is available for any fixture and pole at the time of billing,
then the City shall pay the full and applicable non-municipal rate for such fixture(s) and pole(s).
Section 7
The Company may supply any form of gas containing approximately one thousand (1,000)
BTUs per cubic foot, and its obligation in respect thereto shall continue only so long as it is able
to obtain an adequate supply of such gas satisfactory for service hereunder, provided however,
that in the receipt of such gas, customers within the City, including the City, shall enjoy rights
equal to other similarly situated customers served by the Company.
Section 8
The City and the Company agree that:
A. All work performed within the municipal limits by the Company or its contractors
shall be in accordance with the National Electric Safety Code and the applicable electric and gas
rules and regulations, as adopted by the Public Service Commission of South Carolina.
B. The records of the Company pertaining to the electric street lighting system are to
be accepted as full and final proof of the existence and configuration of the same, that system
being hereinafter referred to as the "Street Lighting System."
C. Where lighting units of a different type and character than those now included in
the Street Lighting System are desired by the City, a new unit charge and specification shall be
agreed upon which will apply to such lighting units and which thereafter shall become a part
hereof.
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D. Except as otherwise provided herein, the City shall have the right at any time to
order the installation of new fixtures and poles in new areas of the City.
E. The City shall have access at all reasonable times to maps, records, and rates
relating to the Street Lighting System in the City.
F. Subject to applicable rates and terms and conditions, throughout the life of the
franchise the Company will supply to the City, and the City agrees that it will purchase from the
Company, electric energy and gas required by the City for its own use including traffic signal
lighting, street lighting, lighting and power for public buildings, pumping stations, or other
installations now owned or hereafter constructed or acquired by the City and for all other uses in
all areas served by or to be served by the Company, as allowed by law. However, should the
City request to provide electric service to any of its facilities utilizing an alternative energy facility
owned by the City, the Company will consent to such a request so long as the energy from that
facility is allowed by and subject to a rate schedule approved by the Public Service Commission
of South Carolina. If the City receives service from such a facility, then the Company shall have
the right to change the terms and conditions under which it provides any remaining services to
City facilities.
G. The Company shall charge and the City shall pay to the Company monthly for all
electric and gas energy furnished by the Company for miscellaneous light and power and/or gas
services under this franchise in accordance with rates and tariffs and terms and conditions as
established by law.
H. None of the electric or gas energy furnished hereunder shall be sold, disposed of,
or exchanged by the City to others without the expressed written consent of the Company.
The electric or gas energy hereunder is not guaranteed or warranted to be free
from minor interruptions or from major outages or electrical surges beyond the control of the
Company.
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Section 9
All work upon the streets and public places of the City shall be done under the general
supervision of the Mayor and Council (or other legally constituted governing body) of the City, and
all sidewalks or street pavements or street surfaces which may be displaced by reason of such
work shall be properly replaced and relayed by the Company, its successors and assigns, to the
reasonable requirements of the Mayor and Council (or other legally constituted governing body)
of the City.
Section 10
The Company shall, as to all other conditions and elements of service not fixed herein, be
and remain subject to the reasonable rules and regulations of the Public Service Commission of
South Carolina or its successors, applicable to electric & gas service in the City.
Section 11
A. As payment for the right to provide electric and gas services, and any other
services as may be permitted under this Franchise Ordinance, in the succeeding calendar year,
the Company shall pre-pay into the Treasury of the City, on the first business day of July each
year, beginning with the year 2018, a sum of money (the "Franchise Fee") equal to five percent
(5%) of the gross sales revenue accruing to the Company during the preceding calendar year
from all residential and commercial sales of electricity and gas in the municipality and all wheeling
or transportation service to such customers within the corporate limits of the City, not including
sales made under legally authorized special sales programs which allow the Company to reduce
prices to meet customers' competitive energy prices. To change the percentage of the revenue
on which the Franchise Fee is calculated, the City must both (1) amend this Franchise Ordinance
by means of an Amendatory Ordinance solely addressed to that purpose, and (2) provide the
Company written notice including an attested copy of the Amendatory Ordinance at least ninety
(90) days prior to the next Franchise Fee payment due date. So long as both conditions are met,
the increase will apply to the next Franchise Fee payment due from the Company and the
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recovery of the higher fee will begin during the calendar year for which the Franchise Fee applies.
During the term of this Franchise Ordinance, the percentage of the revenue on which the
Franchise Fee is based shall not exceed the highest percentage paid by the Company to any
other town or city under a franchise agreement. Any other revenue accruing to the Company in
the municipality may be subject to other fees and/or business license taxes as appropriate.
B. Subject to Section 11(A) above, the City's right to receive franchise fees as
provided for herein shall be in lieu of all occupation, license, excise and special franchise taxes
and fees, and shall be in full payment of all money demands, charges, or fees of any nature
whatsoever imposed by the City, except ad valorem taxes on property. The Company may at its
option pay and deduct from its franchise fee payments any amount that shall be required or
exacted from the Company for the benefit of the City other than ad valorem taxes on property.
C. It is expressly understood that all franchise fees or other payments imposed by the
City on the Company shall be collected from customers of the Company within the municipal
boundaries, as is presently provided for in the orders of the Public Service Commission of South
Carolina applicable to the Company. From time to time, but no more than once a year and no
less than once every three years, the Company will provide the City a list of service addresses to
which franchise fees are being applied (the"List"). The City shall have sixty (60) days from receipt
to verify that all addresses included on the List are accurate and that no addresses are missing.
Unless the City notifies the Company of any error: (1) the City shall be required to reimburse the
Company for any Franchise Fee refund based on an address incorrectly included on the List; (2)
the Company shall not be responsible for Franchise Fees for any service addresses not included
on the List. Reimbursement shall be made to the Company within sixty (60) days of receipt of
request by the City or the Company may agree, in its sole discretion, to deduct the amounts owed
under this Subsection from the next Franchise Fee payment to the City. This information is
confidential and proprietary and shall not be disclosed to any third party under the Freedom of
Information Act or otherwise without a court order or the Company's prior written consent.
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D. The City hereby levies, and the Company may collect and transmit to the City, a
franchise fee on electricity and gas sold by third parties to customers within the City using the
Company lines, or facilities; said fee is to be in all respects equivalent to the franchise fees
established herein plus a proportional share of all other payments to the City, or to the Non-
Standard Service Fund established hereunder, which the Company is obligated to make on
whatever basis during the life of this franchise.
E. Should the City itself ever at any time construct, purchase, lease, acquire, own,
hold or operate an electric or gas distribution system to provide electric and gas service within the
City, then the payment of percentages of gross sales revenue herein provided to be paid by the
Company, shall abate, cease and no longer be due and no other fee for the franchise rights shall
be required.
Section 12
The City and Company further agree that:
A. In addition to the requirements above, the City may require the Company to
convert overhead distribution and service lines to underground lines or other non-standard service
to existing customers ("Non-Standard Service"), including the use of special equipment or facilities
or the use of special landscaping or screening of facilities, within the municipal limits of City, to
the extent that the cost of such Non-Standard Service can be defrayed by the Non-Standard
Service Fund provided for in this Section. The costs of Non-Standard Service are defined as those
costs which exceed the costs of standard service. Underground distribution and/or service wires
to new customers, whether residential or commercial, shall not be included in the definition of
Non-Standard Service for the purposes of this Section.
B. The Non-Standard Service Fund (hereinafter, the "Fund") shall be established
pursuant to the terms of this Ordinance and shall be used to defray the costs of Non-Standard
Service.
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C. Each year the Company shall designate to the Fund an amount equivalent to fifty
basis points (0.50%) applied to the Company's gross revenue from electric service utilized in
Section 11, that being the same amount of electric revenue that is used in computing its municipal
franchise fee payment for that year. (The "Company Match" to the Fund.) This designation shall
occur simultaneously with the payment of the franchise fee for the year in question and shall be
in addition to the franchise fee. The Company Match funds shall remain on deposit with the
Company and be paid out by the Company on a one to one basis with the City matching funds as
needed to defray costs of Non-Standard Service. Unexpended amounts of the Company Match
not used in a given year shall remain designated to the Fund, provided that the amount of
Company Match designated to the Fund shall never exceed the sum of the matches for the most
recent five (5) years.
D. The City shall designate as the City's matching funds an amount equal to fifty basis
points (0.50%) applied to the electric revenue subject to franchise fee charges for that year. The
City's matching funds shall remain on deposit with the City and be paid out on a one to one basis
with the Company Match funds to defray the cost of Non-Standard Service. Unexpended fund
balances will carry over from year to year, provided that the amount of the City's match designated
to the Fund shall never exceed the sum of the matches for the most recent five (5) years.
E. For any Non-Standard Service project involving more than twenty-five (25) existing
customers, the City may designate an underground utility district ("Underground Utility District")
wherein Non-Standard Service will be provided, and at its option may conduct a referendum or
petition in that district to determine whether the project should go forward. After an Underground
Utility District has been designated and the Non-Standard Service project approved by that
District, but prior to commencement of construction for the Non-Standard Service project, the City
shall, by ordinance pursuant to S.C. Code Ann. § 6-1-330, as amended, authorize the collection
of a fee from the property owners of each parcel within the District (the "Underground Utility Fee").
The Underground Utility Fee shall be applied to all of Company's accounts for electricity within
Electric&Gas Franchise Page 11 of 14 Form Approved: August 19, 2015
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the boundaries of the Underground Utility District. The total of such Underground Utility Fee, the
Franchise Fee in Section 11(A) and any other fee provided for in Section 11 will not exceed 7%
of a customer's total bill for electricity. The Underground Utility Fee shall be applied beginning
with the commencement of construction of the project for a definite time not to exceed ten (10)
years. Proceeds shall be paid into the Fund, provided that the Fund has paid for the construction
of the Non-Standard Service within the Underground Utility District. If the City or the Company
advanced funds for the Non-Standard Service in the Underground Utility District, the Underground
Utility Fee shall be used to reimburse the City or the Company as appropriate on a monthly basis
following recovery of same from the customers. The cost of borrowing funds from the Company
to pay for the Non-Standard Service in the Underground Utility District shall be included in the
reimbursement. The Company's weighted average cost of capital as filed with the Public Service
Commission of South Carolina would apply to any amounts advanced by the Company.
F. The amounts designated for the Fund shall be used exclusively to defray the
reasonable and necessary costs of planning, designing, permitting and/or constructing the electric
utility projects involving Non-Standard Service.
G. Costs for Non-Standard Service projects shall be paid from amounts designated
to the Fund as incurred. The Company shall be required to undertake Non-Standard Service
projects in the City only to the extent that balances designated to the Fund are reasonably
projected to be adequate to cover the costs of the projects as they are incurred.
H. The City shall establish, in consultation with the Company, priorities for Non-
Standard Service projects. Projects which maintain system reliability, and/or improve system
safety, shall have priority over all other non-standard service projects. All Non-Standard Service
projects shall conform to good utility practices as to reliability and safety.
The City shall use best efforts to acquire all necessary right-of-way, transformer
sites, or other use and access rights for Non-Standard Service projects. Within three (3) months
of completion of an overhead to underground conversion project, the Company shall remove
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overhead facilities and the City shall remove and require other utilities and third parties, if any, to
remove their facilities from the Company's poles and shall require property owners to connect to
the underground facilities.
Section 13
This Franchise Ordinance is subject to the constitution and laws of the State of South
Carolina.
Section 14
This Franchise Ordinance shall not become effective until accepted in writing by the
Company, which shall be within thirty (30) days from the date of its ratification by the City and on
the same date that the Franchise Ordinance for Aiken Electric becomes effective. The terms,
obligations and rights granted by this Franchise Ordinance, when accepted by the Company, shall
constitute a contract between the City and the Company, and shall be in full force and effect for
a term of thirty (30) years from the effective date. Upon acceptance by the Company in writing,
this Franchise Ordinance supersedes and replaces Franchise Ordinance Number 2000-02 which
became effective on March 21, 2000, and Franchise Ordinance Number 2005-02 which became
effective on March 27, 2005.
Section 15
The rights hereunder accrue exclusively to the parties, their successors and assigns. It is
the express intent of the parties that this Franchise Ordinance shall not create any rights in third
parties.
Ratified in City Council this kJ,' day of ' - -' ---- , 201
b
(originally signed Y ned :)9 Y
Robert A. Pettit, Mayor
ATTEST:
(originally signed by:)
Donna B. Young, City CI
Electric&Gas Franchise Page 13 of 14 Form Approved: August 19, 2015
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ACCEPTANCE of the franchises granted by the 4ittiin Ordinance cknowledged b
SOUTH CAROLINA ELECTRIC &GAS COMPANY, THIS DAY OF , 20/
SOUTH CAROLINA ELECTRIC & GAS COMPANY
(originally signed by)
W. Keller issam, Preisident
SCE&G tail Operations
ATTEST:
Gina S. Cha pion,
Its Corporate Secretary ��`�`�t11ECTA%''%,,%z.
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Electric&Gas Franchise Page 14 of 14 Form Approved: August 19,2015
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