South Carolina Public Service Commission Approves Settlement Agreement on SCE&G's Natural Gas Costs
John Winn
(803) 217-9240

Bryan Hatchell
(803) 217-7458

Columbia, SC, October 25, 2005 - South Carolina Electric & Gas Company (SCE&G), principal subsidiary of SCANA Corporation (NYSE: SCG), announced that The Public Service Commission of South Carolina (PSC) today approved a settlement agreement that will allow SCE&G to recover higher projected costs of natural gas purchased for its customers. The settlement agreement, which was presented to the PSC at a public hearing held on October 20 by the Office of Regulatory Staff, the South Carolina Energy Users Committee (a consortium of large industrial customers) and SCE&G, pertained to the PSC's annual review of the purchased gas adjustment (PGA) component of SCE&G's retail natural gas rates.

Highlights of the approved settlement agreement are as follows:

(1) SCE&G will defer, for one year, recovery of approximately $14 million in under-collected gas costs incurred in purchasing natural gas for its customers over the past 12 months. That amount will be subject to collection beginning November 1, 2006.

(2) The settlement agreement stipulates that the cost-of-gas factor to be applied to customer bills for the 12-month period beginning Nov. 1, 2005 will be based on projected natural gas costs over a 24-month period rather than the 12-month forecast period typically used in PGA proceedings. This change lowers the cost-of-gas factor and is projected to increase the under-collection of gas costs during the 12-month forecast period by approximately $7 million.

(3) SCE&G will not accrue interest on the under-collected amounts through October 31, 2006. After that date, interest will accrue monthly on the under-collected balance until the projected $21 million in under-collected gas costs is fully recovered.

(4) To help ensure that the under-collection does not exceed that $21 million mark by the end of the 12-month forecast period, the settlement agreement allows SCE&G to adjust its cost-of-gas factor on a monthly basis beginning in December 2005. That change will allow the company to keep pace with further increases in the wholesale cost of natural gas. The annual PGA review allows SCE&G to pass through to customers increases or decreases in the cost of natural gas. SCE&G does not profit from such adjustments. The new PGA component of rates will be effective beginning in November 2005.


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.