South Carolina Electric and Gas Company Files for Increase to Electric Rates

CAYCE, SC – January 15, 2010 – South Carolina Electric & Gas Company (SCE&G), principal subsidiary of SCANA Corporation (NYSE:SCG), today filed an application with the Public Service Commission of South Carolina (PSC) requesting a 9.52 percent overall increase in retail electric base rates. A public hearing on SCE&G’s application is expected to be held by the PSC in May or early June.

Recognizing the financial challenge that this increase will represent for many of our customers, we’ve asked the Commission to phase in this increase in three stages over the next 18 months, said SCE&G President Kevin Marsh. We believe the phase-in approach balances the impact on our customers with the company’s need to recover its costs.

If approved, customer rates would increase as follows:

                                                                                                   July 15, 2010       Jan. 1, 2011       July 1, 2011
Overall increase compared to current rates                          3.19%                   3.06%                   3.27%
• Residential customers:                                                           3.24%                   3.11%                   3.33%
• Small commercial customers:                                               3.19%                   3.07%                   3.28%
• Medium commercial customers:                                           3.09%                   2.97%                   3.18%
• Large commercial/industrial customers:                             3.08%                   2.96%                   3.16%

The monthly bill of a residential customer using 1,000 kilowatt hours of electricity would increase $3.91 in phase 1, $3.77 in phase 2 and $4.01 in phase 3.

Marsh said the company’s base rate filing – its first since June 2007 – is primarily driven by the costs associated with complying with governmental regulations – particularly those related to protecting the environment.

We are committed to conducting business in an environmentally sensitive manner, said Marsh. However, ensuring compliance with ever-increasing governmental regulations comes with a price tag, and it’s getting steeper all the time. This rate increase request is a concrete example of that fact. Our rate application reflects the recovery of expenditures of more than $700 million on federally mandated environmental and safety initiatives.

Marsh said environmental upgrades since SCE&G’s last retail electric rate filing include installation of flue gas desulfurization equipment, commonly called scrubbers, to reduce sulfur dioxide (SO2) emissions at the company’s two largest coal-fired plants, Wateree Station in Eastover, and Williams Station in Charleston. Marsh said the scrubbers – installed at a cost of more than $500 million – will eliminate more than 95 percent of SO2 from the two plants and an estimated 60-90 percent of mercury emissions.

He said the company also recently installed selective catalytic reduction (SCR) equipment at its Cope Station plant near Orangeburg. The equipment is expected to reduce nitrogen oxide (NOx) emissions from the plant by more than 70 percent, at a cost of more than $70 million. NOx emissions indirectly contribute to the formation of smog.

Also reflected in the rate filing is recovery of the remaining balance associated with construction of the federally-mandated Lake Murray back-up dam.  The project was completed in 2005 at a total cost of nearly $329 million. To help defray the project’s financial impact on customers, SCE&G elected to use synthetic fuel tax credits to help pay for construction of the backup dam.  We were able to save our customers more than $254 million by utilizing the tax credits we’d earned through investments made outside of our regulated business, said Marsh. Through today’s filing, the company is seeking to recover the remaining balance of about $74.2 million. 

Marsh said SCE&G’s employees have remained focused on controlling costs in the face of economic upheaval. We are cost-conscious in everything we do as we work to serve our customers safely, reliably and as efficiently as possible. he said. Our plants consistently rank among the most efficient in the U.S.

Even as rates continue to rise, Marsh said electricity remains a good value. If you’re an SCE&G customer using 1,000 kilowatt hours a month, right now you can heat your home, refrigerate your food, run your washer and dryer, take a hot shower, watch TV, work on your computer, turn on your lights, cook your meals, and on and on — all for around $4 a day. That’s an incredible value by any measure.

PROFILE
South Carolina Electric & Gas Company is a regulated public utility engaged in the generation, transmission, distribution and sale of electricity to approximately 654,000 customers in 26 counties in the central, southern and southwestern portions of South Carolina. The company also provides natural gas service to approximately 306,000 customers in 34 counties in the state. Information about SCE&G is available on the company’s web site at www.sceg.com.

SCANA Corporation, a Fortune 500 company headquartered in Cayce, South Carolina, is an energy-based holding company principally engaged, through subsidiaries, in electric and natural gas utility operations and other energy-related businesses in South Carolina, North Carolina and
Georgia. Information about SCANA Corporation and its businesses is available on the Company’s web site at www.scana.com.