SCANA Subsidiary Files for Adjustment to Natural Gas Rates as Required Under New State Law

COLUMBIA, S.C., June 15, 2006 /PRNewswire-FirstCall/ -- South Carolina Electric & Gas Company (SCE&G), principal subsidiary of SCANA Corporation , today filed with the Public Service Commission of South Carolina (PSC) for an overall 3.26 percent increase in its natural gas base rates. The filing is SCE&G's first under a 2005 state law -- The Natural Gas Rate Stabilization Act -- designed to reduce volatility of customer rates by allowing for more efficient recovery of costs associated with maintaining and expanding natural gas service infrastructure. The new law also works to reduce customer rates when increased revenues cause a utility's earnings to exceed the return on equity (ROE) range authorized by the PSC.

"We are continually investing in our system to better meet the needs of our customers. Along with allowing for more timely recovery of those costs, reviewing rates on an annual basis allows for modest adjustments to customer rates as opposed to the more drastic adjustments that often accompany less frequent reviews," said Marty Phalen, SCE&G's vice president of natural gas operations.

Phalen said there are three main issues behind the requested increase, all of which are tied to improving service to customers. First is SCE&G's pending acquisition of two liquefied natural gas (LNG) facilities from South Carolina Pipeline Corp. to help improve SCE&G's ability to meet demand during times of peak usage. Phalen said that move will substantially improve reliability of service to SCE&G's customers. "These LNG facilities will give us about 18 days of supply to meet peaking needs as opposed to the three days of peaking supply we had previously. This will better position us to avoid possible disruptions in service," he said.

The second issue is also about improving reliability. The company is expecting to take ownership of additional "upstream" natural gas storage capacity to improve supply availability during the winter months. "The additional capacity will allow us to buy and store natural gas at typically lower summer prices," said Phalen. "We can then draw on that supply in the winter when demand and prices are higher; this allows us to serve our customers more cost effectively."

Phalen cited customer growth as the third key issue. "Rapid residential and commercial development throughout our service territory and growing demand for natural gas service require that we continue to invest in building and maintaining our natural gas delivery system," he said. "By bringing more stability to the cost recovery process, this new law allows us to better meet the growing needs of our customers."

The new statute requires South Carolina's regulated natural gas utilities to make quarterly filings with the PSC and the South Carolina Office of Regulatory Staff (ORS) showing actual investments, revenues and expenses. Each year, the ORS will review SCE&G's financials for the 12 month period ending March 31. If the company's actual return on equity (ROE) for that period was more than 0.50 percent above or below the 10.25 percent return authorized by the PSC, SCE&G is required to file for a rate adjustment to bring earnings back to that authorized rate of return.

In today's filing, SCE&G declared an ROE of 4.38 percent for the 12 month period ending March 31. The information supporting SCE&G's filing will be reviewed by the ORS, which will issue an audit report by Sept. 1. The PSC will then review SCE&G's filing and the ORS audit report and will issue an order in October. The rate adjustment would be implemented with the first billing cycle of November 2006.

Phalen said the adjustment represents about $7 per month on the average winter heating bill for residential customers. The proposed overall 3.26 percent increase breaks out as follows:

* 4.24 percent for residential customers (based on 100 therms of usage during a winter month) * 2.83 percent for small and medium commercial customers * 1.96 percent for large commercial/industrial customers. PROFILE

SCE&G is a regulated public utility engaged in the generation, transmission, distribution and sale of electricity to approximately 613,000 customers in 26 counties in the central, southern and southwestern portions of South Carolina. The company also provides natural gas service to approximately 294,000 customers in 34 counties in the state. Information about SCE&G is available on the company's web site at http://www.sceg.com/.

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. The Company serves approximately 613,000 electric customers in South Carolina and more than 1.2 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 http://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 non-utility 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 accounting principles, (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.