Columbia, SC, August 10, 2005 -- SCANA Corporation (NYSE: SCG) announced today that South Carolina Electric & Gas Company (SCE&G), its principal subsidiary, has entered into a settlement agreement with the Office of Regulatory Staff (ORS) and other parties relating to SCE&G's requested increase in retail natural gas base rates in South Carolina. The settlement agreement is subject to approval by the Public Service Commission of South Carolina (PSC).
The settlement agreement provides for an increase in SCE&G's annual natural gas revenues of approximately $22.9 million, or 5.69 percent. The new rates are based on an allowed return on common equity of 10.25 percent and, if approved by the PSC, would become effective for bills rendered on or after the first billing cycle of November 2005.
In addition to the ORS, all other interveners in the case have signed on to the settlement agreement, including Frank Knapp, Jr. (a commercial customer of SCE&G), the South Carolina Energy Users Committee (a consortium of large industrial customers) and the U. S. Department of Defense.
"It is very much in the best interest of all parties to settle cases such as these whenever possible" said Neville Lorick, SCE&G's president and chief operating officer. "We were prepared to justify the full amount of the requested increase. However, we believe that we can operate our gas system reliably and efficiently based upon these rates. The proposed new rates would provide us the opportunity to earn an adequate return on our current natural gas assets and would enhance our ability to make additional capital investments that will be necessary to support future growth and economic development in our State. We hope the Commission will approve the settlement agreement as submitted."
SCE&G filed an application (Docket 2005 -113-G) with the PSC on April 26, 2005, requesting an overall increase in its retail natural gas base rates of approximately $28.5 million, or 7.09 percent. That increase was based on an adjusted test year that ended December 31, 2004 and an 11.75 percent allowed return on common equity. This was the company's first request for an increase in retail natural gas base rates since 1989, and was largely associated with recovering capital and operating costs associated with expanding and operating SCE&G's natural gas system over the last 16 years.
The 5.69 percent overall increase proposed in the settlement agreement would be allocated among customer classes as follows: 11.3 percent for residential customers; 4.8 percent for small and medium commercial customers; and 6.4 percent for large commercial and industrial customers. The percentage increase allocated to each class of customers is based on the cost of serving those customers.
"The impact of the proposed rate increase to our residential customers' bills will fluctuate according to usage," said Lorick.
A residential customer using 100 therms currently pays $121.11 in a typical winter month. Under the rates contained in the settlement agreement, a residential customer would pay $125.61 (under residential value rates) or $133.35 (under residential standard rates), an increase of $4.50 or $12.24, respectively. Part of the increase in standard rates during the winter months will be offset by a reduced minimum charge in the summer months. Value rates apply to customers using an average of 10 or more therms during the months of June, July and August.
SCE&G provides natural gas service to approximately 283,000 customers in 34 counties in South Carolina. The company is also engaged in the generation, transmission, distribution and sale of electricity to more than 592,000 customers in 24 counties in the central, southern and southwestern sections of the state.
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 website at www.scana.com.
SAFE HARBOR STATEMENT
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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