SCE&G Adjusts Natural Gas Rates Due to Record-High Gas Costs
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Dec. 15, 2005, Columbia, SC - SCE&G has notified South Carolina's Public Service Commission (PSC) and the State Office of Regulatory Staff (ORS) of its need to adjust the purchased gas portion of customers' bills by about 4 percent, effective immediately, due to the higher cost of gas the company is paying for the wholesale commodity. The impact on a typical natural gas consumer using 100 therms of natural gas to heat their home will be approximately $7 per month, or an increase from $175 to $182.

The PSC approved the adoption of a monthly "true-up" mechanism at the company's PGA hearing earlier this year. As a part of a settlement agreement, SCE&G agreed to defer collection of $14 million in natural gas costs it had already incurred, as well as another $7 million in anticipated future under-collections in an effort to minimize the impact on customers, this year, of increases in the cost of gas.

As part of the agreement, SCE&G was authorized to provide data on a monthly basis regarding its purchased gas costs and make adjustments to keep pace with the current cost of gas in the market. SCE&G VP of Gas Operations Marty Phalen said SCE&G's goal is to soften the impact on customer bills this winter as much as possible, while ensuring that customers are not faced with a massive increase to their natural gas bills beginning next fall.

"Unfortunately, with the winter storms that hit the country this past week, the cost of gas hit record highs," said Phalen. "While prices are expected to levelize in the long term, we anticipate that higher prices will continue through this winter, which could lead to further increases in customer bills in the months ahead."

Natural gas production and delivery systems damaged by Hurricanes Katrina and Rita have not yet fully recovered. To date, approximately 25 percent of the natural gas supply coming from the Gulf of Mexico is still not available to the market.

Earlier this week, local community action agencies began taking appointments for SCE&G's $3 million Winter Assistance Fund, which was also approved by the ORS and PSC recently. The funding, which is expected to help 12,000 SCE&G customers, is designed to assist customers who need help the most. Qualifying customers must meet poverty guidelines and have natural gas service with SCE&G. Priority will be given to customers who are elderly, handicapped/disabled, have children under the age of 5, or whose energy costs are more than 20 percent of household income. Customers should call their local community action agency for an appointment.

SCE&G is a subsidiary of SCANA Corporation, a Fortune 500 company headquartered in Columbia, SC. 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 www.scana.com.

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