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SCE&G Reaches Settlement Agreement on Fuel Cost Application

October 16, 2008

South Carolina Electric & Gas, the principal subsidiary of Scana, 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, South Carolina Electric & Gas (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% of what a residential customer pays for one kWh of electricity. According to SCE&G, these costs are a direct pass-through to customers; SCE&G does not earn a profit on that portion of its rates.

Under terms of the settlement agreement, only the November 2008 increase would be implemented. If approved, the monthly electric bill of a 1,000kWh residential customer would increase $6.53 beginning with the first billing cycle in November 2008, going from $107.67 to $114.20.




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