October 15, 2008

South Carolina Electric & Gas Company Reaches Settlement Agreement on Fuel Cost Application

South Carolina Electric & Gas Co. (SCE&G), principal subsidiary of SCANA Corporation (NYSE: SCG), has entered into a settlement agreement with the South Carolina Office of Regulatory Staff and the other parties of record regarding the company's recent filing for a mid-period adjustment to the fuel cost portion of its electric rates. The agreement, which is subject to approval by the Public Service Commission of South Carolina (PSC), would limit the adjustment to one phase instead of the originally requested two phases, thereby reducing the total increase to customer bills by about half.

As a regulated utility, SCE&G is permitted to seek full recovery of costs prudently incurred in purchasing fuel, such as coal and natural gas, to operate its electric generation facilities. Fuel costs currently represent about 25 percent of what a residential customer pays for a kilowatt hour of electricity. These costs are a direct pass-through to customers; SCE&G does not earn a profit on that portion of its rates.

Typically, the PSC reviews SCE&G's electric fuel costs and authorizes the company to adjust electric rates annually - usually in May - to reflect those costs. However, significant increases in fuel costs through the first half of 2008 led SCE&G to file in August for it's first-ever, mid-period fuel cost adjustment. To help level out the impact on residential customers, the company sought to implement the adjustment in two phases: a 6.06 percent increase beginning in November, then another 5.72 percent increase in January 2009. But with coal and natural gas prices having decreased since the filing, the ORS last week recommended to the PSC that the proposed second increase be eliminated.

Under terms of the settlement agreement, only the November increase would be implemented. If approved, the monthly electric bill of a 1,000-kwh residential customer would increase $6.53 beginning with the first billing cycle in November, going from $107.67 to $114.20. A hearing on the matter will be held before the PSC Oct. 20.

"Fortunately, with the price of coal and natural gas declining recently, the impact of rising energy costs on our customers over the next six months or so won't be quite as much as we had anticipated," said SCE&G President Kevin Marsh. "Still, we know it's going to be a challenging winter for a lot of folks. We are reminding customers that energy efficiency is extremely important, and that there are programs available to help customers who may face difficulty budgeting for their monthly energy bills. We encourage them to visit our website at www.sceg.com for energy saving ideas, or pick up brochures from our local offices."

SCE&G last week announced a corporate contribution of $250,000 to Project SHARE, a financial assistance program funded by SCE&G customers and employees and administered through local community action agencies. One hundred percent of Project SHARE contributions go to help low-income customers pay their energy bills. SCE&G said it will also provide a dollar-for-dollar match on customer and employee donations to Project SHARE up to $100,000 through the end of 2008.

"We hope to inspire those who are able to give so that Project SHARE can help more families have a warm winter," said Marsh.


SCE&G is a regulated public utility engaged in the generation, transmission, distribution and sale of electricity to approximately 646,000 customers in South Carolina. The company also provides natural gas service to approximately 303,000 customers throughout the state. Information about SCE&G is available on the company's web site at www.sceg.com.

SCANA Corporation, a Fortune 500 company headquartered in Columbia, SC, is an energy-based holding company principally engaged, through subsidiaries, in electric and natural gas utility operations and other energy-related businesses. Information about SCANA and its businesses is available on the company's web site at www.scana.com.