South Carolina Public Service Commission Approves Settlement Agreement on SCE&G’s Natural Gas Costs
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John Winn
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October 25, 2006, Columbia, SC – SCANA Corporation (NYSE: SCG), announced that the South Carolina Public Service Commission (PSC) today approved an agreement that will allow its principal subsidiary, South Carolina Electric & Gas Co. (SCE&G), to lower the natural gas bills of SCE&G’s customers by 10 percent from where they peaked last winter after Hurricane Katrina interrupted supplies from the Gulf of Mexico.

The agreement – part of a settlement facilitated by the South Carolina Office of Regulatory Staff with SCE&G and the South Carolina Energy Users Committee – reduces the purchased-gas portion of SCE&G’s rates by 14 percent from last winter’s record highs. Purchased-gas costs account for about 70 percent of a customer’s overall gas bill and are a direct pass-through of what the company must pay on the wholesale market to purchase and transport natural gas to its customers; SCE&G does not profit from this portion of its rates.

Beginning in November, the average bill of a residential customer using 100 therms of natural gas during a winter month will fall to $160.45; that’s down nearly $18 – or 10 percent – from this past December and January.

The PSC also authorized SCE&G to begin making monthly adjustments to customer rates to track with the cost of gas in the market; those adjustments will be calculated based on a rolling 12-month forecast of purchased gas costs.

“Using a rolling 12-month average to calculate gas costs helps maintain price stability for our customers by diminishing the impact of volatility in the wholesale natural gas market,” said Marty Phalen, SCE&G vice president of gas operations. “It helps avoid situations like we saw last year, when customers felt the impact of Hurricane Katrina in the form of a sudden large increase to rates. It also allows us to pass savings on to customers more quickly when our purchased gas costs fall below projections.”

SCANA Corporation, a Fortune 500 company headquartered in Columbia, S.C., is an energy-based holding company principally engaged, through subsidiaries, in electric and natural gas utility operations and other energy-related businesses. The company serves approximately 617,000 electric customers in South Carolina and more than one million natural gas customers in South Carolina, North Carolina and Georgia. Information about SCANA and its businesses is available on the company’s website at