Agreement to lessen the impact of natural gas costs for SCE&G customers
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Oct. 20, 2005, Columbia, SC - With wholesale natural gas prices at unprecedented levels, SCE&G has agreed to defer for one year the recovery of more than $14 million in under-collected expenses incurred in purchasing natural gas for customers over the past 12 months. Normally, those costs are passed on in full directly to customers through an annual "purchased gas adjustment" to customer rates.

This agreement, which is part of a settlement with the Office of Regulatory Staff and the South Carolina Energy Users Committee, reduces the requested adjustment originally sought by the company in the residential cost of gas by approximately 21 percent, or 11 cents per therm. It also stipulates that the cost-of-gas factor for the period beginning Nov. 1, 2005 will be based on the 24-month average of forecasted natural gas costs rather than the 12-month forecast period typically used in PGA proceedings. While this change lowers the cost-of-gas factor, which benefits customers, it is projected to increase the under-collection of gas supply costs during the forecast period by approximately $7 million.

To help ensure the under-collection does not exceed that mark by the end of the forecast period, the agreement will allow SCE&G to adjust its cost-of-gas factor on a monthly basis beginning in December 2005.

"We believe spreading the required increase over the longer period will allow us to take advantage of a projected softening in gas prices a year from now," said Marty Phalen, SCE&G vice president of gas operations. "While this is a departure from current PGA practice, we feel it is in the best interests of our customers to make the exception given the current volatility in the natural gas market.

"It's important for our customers to understand that as part of our effort to reduce the overall impact of this PGA, the cost-of-gas factor on their bills will now change on a monthly basis to keep pace with current changes to the wholesale natural gas market," said Phalen.

Based on the proposed purchased gas component, a residential customer using 100 therms of natural gas per month in the winter would pay $175.68.

With PSC approval, terms of the settlement agreement will be in effect beginning next month.

SCE&G is a subsidiary of SCANA Corporation, a Fortune 500 company headquartered in Columbia, S.C. SCANA 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


Statements included in this press release which are not statements of historical fact are intended to be, and are hereby identified as, "forward-looking statements" for purposes of the safe harbor provided by Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. 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) that the information is of a preliminary nature and may be subject to further and/or continuing review and adjustment, (2) regulatory actions or changes in the utility and nonutility regulatory environment, (3) current and future litigation, (4) changes in the economy, especially in areas served by the Company's subsidiaries, (5) the impact of competition from other energy suppliers, including competition from alternate fuels in industrial interruptible markets, (6) growth opportunities for the Company's regulated and diversified subsidiaries, (7) the results of financing efforts, (8) changes in the Company's accounting policies, (9) weather conditions, especially in areas served by the Company's subsidiaries, (10) performance of the Company's pension plan assets, (11) inflation, (12) changes in environmental regulations, (13) volatility in commodity natural gas markets and (14) the other risks and uncertainties described from time to time in the Company's periodic reports filed with the United States Securities and Exchange Commission. The Company disclaims any obligation to update any forward-looking statements.
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