10-Q

QuickLinks -- Click here to rapidly navigate through this document

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

ý	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2004
or
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Transition Period from                                to

Commission File Number	Registrant, State of Incorporation, Address and Telephone Number	I.R.S. Employer Identification No.
1-8809	SCANA Corporation (a South Carolina Corporation) 1426 Main Street, Columbia, South Carolina 29201 (803) 217-9000	57-0784499
1-3375	South Carolina Electric & Gas Company (a South Carolina Corporation) 1426 Main Street, Columbia, South Carolina 29201 (803) 217-9000	57-0248695
1-11429	Public Service Company of North Carolina, Incorporated (a South Carolina Corporation) 1426 Main Street, Columbia, South Carolina 29201 (803) 217-9000	56-2128483

        Indicate by check mark whether the registrants: (1) have filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrants were required to file such reports), and (2) have been subject to such filing requirements for the past 90 days. SCANA Corporation Yes ý No o South Carolina Electric & Gas Company Yes ý No o Public Service Company of North Carolina, Incorporated Yes ý No o.

        Indicate by check mark whether the registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2). SCANA Corporation Yes ý No o South Carolina Electric & Gas Company Yes o No ý Public Service Company of North Carolina, Incorporated Yes o No ý.

        Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

Registrant	Description of Common Stock	Shares Outstanding at April 30, 2004
SCANA Corporation	Without Par Value	111,114,644
South Carolina Electric & Gas Company	$4.50 Par Value	40,296,147	(a)
Public Service Company of North Carolina, Incorporated	Without Par Value	1,000	(a)

(a)

Held beneficially and of record by SCANA Corporation.

        This combined Form 10-Q is separately filed by SCANA Corporation, South Carolina Electric & Gas Company and Public Service Company of North Carolina, Incorporated. Information contained herein relating to any individual company is filed by such company on its own behalf. Each company makes no representation as to information relating to the other companies.

        Public Service Company of North Carolina, Incorporated meets the conditions set forth in General Instruction H(1)(a) and (b) of Form 10-Q and therefore is filing this form with the reduced disclosure format allowed under General Instruction H(2).

INDEX

		Page
PART I. FINANCIAL INFORMATION
SCANA Corporation Financial Section		3
Item 1.	Financial Statements
	Condensed Consolidated Balance Sheets as of March 31, 2004 and December 31, 2003	4
	Condensed Consolidated Statements of Income for the Periods Ended March 31, 2004 and 2003	6
	Condensed Consolidated Statements of Cash Flows for the Periods Ended March 31, 2004 and 2003	7
	Condensed Consolidated Statements of Comprehensive Income for the Periods Ended March 31, 2004 and 2003	8
	Notes to Condensed Consolidated Financial Statements	9
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	26
Item 4.	Controls and Procedures	27
South Carolina Electric & Gas Company Financial Section		28
Item 1.	Financial Statements
	Condensed Consolidated Balance Sheets as of March 31, 2004 and December 31, 2003	29
	Condensed Consolidated Statements of Income for the Periods Ended March 31, 2004 and 2003	31
	Condensed Consolidated Statements of Cash Flows for the Periods Ended March 31, 2004 and 2003	32
	Notes to Condensed Consolidated Financial Statements	33
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	40
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	46
Item 4.	Controls and Procedures	46
Public Service Company of North Carolina, Incorporated Financial Section		47
Item 1.	Financial Statements
	Condensed Consolidated Balance Sheets as of March 31, 2004 and December 31, 2003	48
	Condensed Consolidated Statements of Income for the Periods Ended March 31, 2004 and 2003	49
	Condensed Consolidated Statements of Cash Flows for the Periods Ended March 31, 2004 and 2003	50
	Notes to Condensed Consolidated Financial Statements	51
Item 2.	Management's Narrative Analysis of Results of Operations	54
Item 4.	Controls and Procedures	55
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	56
Item 2.	Changes in Securities, Use of Proceeds and Issuer Purchases of Equity Securities	56
Item 6.	Exhibits and Reports on Form 8-K	56
Signatures		58
Exhibit Index		59

2

SCANA CORPORATION
FINANCIAL SECTION

3

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

SCANA CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)

Millions of dollars			March 31, 2004			December 31, 2003
Assets
Utility Plant:
	Electric		$	5,616		$	5,558
	Gas			1,691			1,687
	Common			196			193
	Total			7,503			7,438
	Accumulated depreciation and amortization			(2,316	)		(2,280	)
	Total			5,187			5,158
	Construction work in progress			1,035			987
	Nuclear fuel, net of accumulated amortization			36			42
	Acquisition adjustments, net of accumulated amortization			230			230
	Utility Plant, Net			6,488			6,417
Nonutility Property, Net of Accumulated Depreciation				93			96
Investments				168			178
	Nonutility Property and Investments, Net			261			274
Current Assets:
	Cash and temporary investments			218			117
	Receivables, net of allowance for uncollectible accounts of $23 and $16			494			503
	Receivables—affiliated companies			18			13
	Inventories (at average cost):
		Fuel		94			147
		Materials and supplies		62			60
		Emission allowances		13			6
	Prepayments			41			36
	Deferred income taxes, net			12			—
	Total Current Assets			952			882
Deferred Debits:
	Environmental			19			20
	Assets held in trust, net—nuclear decommissioning			46			44
	Pension asset, net			274			270
	Other regulatory assets			328			348
	Other			181			175
	Total Deferred Debits			848			857
Total			$	8,549		$	8,430

4

Millions of dollars		March 31, 2004		December 31, 2003
Capitalization and Liabilities
Shareholders' Investment:
	Common equity	$	2,370	$	2,306
	Preferred stock (Not subject to purchase or sinking funds)		106		106
	Total Shareholders' Investment		2,476		2,412
Preferred Stock, net (Subject to purchase or sinking funds)			9		9
Long-Term Debt, net			3,332		3,225
	Total Capitalization		5,817		5,646
Current Liabilities:
	Short-term borrowings		191		195
	Current portion of long-term debt		202		202
	Accounts payable		238		288
	Accounts payable—affiliated companies		16		12
	Customer deposits		45		43
	Taxes accrued		51		81
	Interest accrued		57		55
	Dividends declared		43		41
	Deferred income taxes, net		—		4
	Other		49		74
	Total Current Liabilities		892		995
Deferred Credits:
	Deferred income taxes, net		802		790
	Deferred investment tax credits		116		117
	Asset retirement obligation—nuclear plant		119		118
	Postretirement benefits		136		135
	Other regulatory liabilities		549		519
	Other		118		110
	Total Deferred Credits		1,840		1,789
Commitments and Contingencies			—		—
Total		$	8,549	$	8,430

See Notes to Condensed Consolidated Financial Statements.

5

SCANA CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)

		Three Months Ended March 31,
Millions of dollars, except per share amounts
		2004		2003
Operating Revenues:
	Electric	$	380	$	336
	Gas—regulated		426		427
	Gas—nonregulated		330		306
	Total Operating Revenues		1,136		1,069
Operating Expenses:
	Fuel used in electric generation		95		81
	Purchased power		13		10
	Gas purchased for resale		577		571
	Other operation and maintenance		155		144
	Depreciation and amortization		63		60
	Other taxes		39		35
	Total Operating Expenses		942		901
Operating Income			194		168
Other Income, Including Allowance for Equity Funds Used During Construction of $6 and $5			14		16
Income Before Interest Charges, Income Taxes and Preferred Stock Dividends			208		184
Interest Charges, Net of Allowance for Borrowed Funds Used During Construction of $4 and $2			50		51
Dividend Requirement of SCE&G—Obligated Mandatorily Redeemable Preferred Securities			—		1
Income Before Income Taxes and Preferred Stock Dividends			158		132
Income Tax Expense			55		46
Income Before Preferred Stock Dividends			103		86
Cash Dividends on Preferred Stock of Subsidiary (At stated rates)			2		2
Net Income		$	101	$	84
Basic and Diluted Earnings Per Share of Common Stock		$	.91	$	.75
Weighted Average Shares Outstanding (millions)			110.9		110.8

See Notes to Condensed Consolidated Financial Statements.

6

SCANA CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

				Three Months Ended March 31,
Millions of dollars
				2004			2003
Cash Flows From Operating Activities:
	Net income			$	101		$	84
	Adjustments to reconcile net income to net cash provided from operating activities:
		Depreciation and amortization			64			62
		Amortization of nuclear fuel			6			6
		Loss on sale of assets			1			—
		Hedging activities			(3	)		(3	)
		Allowance for funds used during construction			(10	)		(7	)
		Over collection, fuel adjustment clauses			42			16
		Changes in certain assets and liabilities:
			(Increase) decrease in receivables, net		4			(38	)
			(Increase) decrease in inventories		44			62
			(Increase) decrease in prepayments		(5	)		—
			(Increase) decrease in pension asset		(4	)		(1	)
			(Increase) decrease in other regulatory assets		1			(1	)
			Increase (decrease) in deferred income taxes, net		1			1
			Increase (decrease) in regulatory liabilities		3			9
			Increase (decrease) in postretirement benefits obligations		1			3
			Increase (decrease) in accounts payable		(46	)		10
			Increase (decrease) in taxes accrued		(30	)		(24	)
			Increase (decrease) in interest accrued		2			6
		Changes in other assets			4			(10	)
		Changes in other liabilities			(13	)		(20	)
	Net Cash Provided From Operating Activities				163			155
Cash Flows From Investing Activities:
	Utility property additions and construction expenditures, net of AFC				(122	)		(171	)
	Increase in nonutility property				(4	)		(3	)
	Investments in affiliates				(3	)		(4	)
	Net Cash Used For Investing Activities				(129	)		(178	)
Cash Flows From Financing Activities:
	Proceeds:
		Issuance of First Mortgage Bonds			—			198
		Issuance of notes and loans			100			—
		Issuance of common stock upon exercise of stock options			15			—
	Repayments:
		Notes and loans			—			(60	)
		Repurchase of common stock			(4	)		—
	Dividends and distributions:
		Common stock			(38	)		(37	)
		Preferred stock			(2	)		(2	)
	Short-term borrowings, net				(4	)		(95	)
	Net Cash Provided From Financing Activities				67			4
Net Increase (Decrease) In Cash and Temporary Investments					101			(19	)
Cash and Temporary Investments, January 1					117			341
Cash and Temporary Investments, March 31				$	218		$	322
Supplemental Cash Flow Information:
	Cash paid for—Interest (net of capitalized interest of $4 and $2)			$	47		$	46
	—Income taxes				—			1
Noncash Investing and Financing Activities:
	Unrealized loss on securities available for sale, net of tax				(6	)		—

See Notes to Condensed Consolidated Financial Statements.

7

SCANA CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)

		Three Months Ended March 31,
Millions of dollars
		2004			2003
Net Income		$	101		$	84
Other Comprehensive Income (Loss), net of tax:
	Unrealized losses on securities available for sale		(6	)		—
	Unrealized losses on hedging activities		(2	)		(2	)
Total Comprehensive Income(1)		$	93		$	82

(1)

Accumulated other comprehensive income (loss) totaled $(2.1) million and $5.6 million as of March 31, 2004 and December 31, 2003, respectively.

See Notes to Condensed Consolidated Financial Statements.

8

SCANA CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2004
(Unaudited)

        The following notes should be read in conjunction with the Notes to Consolidated Financial Statements appearing in SCANA Corporation's (together with its consolidated subsidiaries, the Company) Annual Report on Form 10-K for the year ended December 31, 2003. These are interim financial statements, and due to the seasonality of the Company's business, the amounts reported in the Condensed Consolidated Statements of Income are not necessarily indicative of amounts expected for the year. In the opinion of management, the information furnished herein reflects all adjustments, all of a normal recurring nature, which are necessary for a fair statement of the results for the interim periods reported.

1.     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A.    Basis of Accounting

        The Company accounts for its regulated utility operations, assets and liabilities in accordance with the provisions of Statement of Financial Accounting Standards (SFAS) 71, "Accounting for the Effects of Certain Types of Regulation." SFAS 71 requires cost-based rate-regulated utilities to recognize in their financial statements certain revenues and expenses in different time periods than do enterprises that are not rate-regulated. As a result, the Company has recorded as of March 31, 2004, approximately $347 million and $549 million of regulatory assets (including environmental) and liabilities, respectively. Information relating to regulatory assets and liabilities follows.

Millions of dollars	March 31, 2004			December 31, 2003
Accumulated deferred income taxes, net	$	109		$	110
Under-(over)-collections—electric fuel and gas cost adjustment clauses, net		(1	)		38
Deferred environmental remediation costs		19			20
Asset retirement obligation—nuclear decommissioning		47			48
Deferred non-conventional fuel tax benefits, net		(74	)		(67	)
Storm damage reserve		(34	)		(37	)
Franchise agreements		60			62
Non-legal asset retirement obligations		(353	)		(346	)
Other		25			21
Total	$	(202	)	$	(151	)

        Accumulated deferred income tax liabilities arising from utility operations that have not been included in customer rates are recorded as a regulatory asset. Accumulated deferred income tax assets arising from deferred investment tax credits are recorded as a regulatory liability.

        Under-(over-) collections—fuel adjustment clauses, net represent amounts under or over-collected from customers pursuant to the fuel adjustment clause (electric customers) or gas cost adjustment clause (gas customers) as approved by the Public Service Commission of South Carolina (SCPSC) or North Carolina Utilities Commission (NCUC) during annual hearings.

        Deferred environmental remediation costs represent costs associated with the assessment and clean-up of manufactured gas plant (MGP) sites currently or formerly owned by the Company. Costs incurred at sites owned by South Carolina Electric & Gas Company (SCE&G) are being recovered through rates. Such costs, totaling approximately $9.8 million, are expected to be fully recovered by the end of 2009. A portion of the costs incurred at sites owned by PSNC Energy has been recovered

9

through rates, and management believes the remaining costs of approximately $6.8 million will be recoverable. Amounts incurred and deferred to date that are not currently being recovered through gas rates at PSNC Energy are approximately $2.4 million.

        Asset retirement obligation—nuclear decommissioning represents the regulatory asset associated with the legal obligation to decommission and dismantle V. C. Summer Nuclear Station (Summer Station) as required by SFAS 143, "Accounting for Asset Retirement Obligations."

        Deferred non-conventional fuel tax benefits, net represent the deferral of partnership losses and other expenses of approximately $44 million, offset by the accumulated deferred income tax credits of approximately $117 million associated with SCE&G's two partnerships involved in converting coal to synthetic fuel. Under a plan approved by the SCPSC, any tax credits generated from non-conventional fuel produced by the partnerships and consumed by SCE&G and ultimately passed through to SCE&G, net of partnership losses and other expenses, have been and will be deferred and will be applied to offset the capital costs of projects required to comply with legislative or regulatory actions.

        The storm damage reserve represents an SCPSC approved reserve account capped at $50 million to be collected through rates over a period of approximately ten years. The accumulated storm damage reserve can be applied to offset actual incremental storm damage costs in excess of $2.5 million in a calendar year.

        Franchise agreements represent costs associated with the 30-year electric and gas franchise agreements with the cities of Charleston and Columbia, South Carolina. These amounts are not earning a return, but are being amortized through cost of service over approximately 15 years.

        Non-legal asset retirement obligations represent net collections through depreciation rates of estimated costs to be incurred for the future retirement of assets for which no legal retirement obligation exists.

        The SCPSC and the NCUC (collectively, state commissions) have reviewed and approved through specific orders most of the items shown as regulatory assets. Other items represent costs which are not yet approved for recovery by a state commission. In recording these costs as regulatory assets, management believes the costs will be allowable under existing rate-making concepts that are embodied in rate orders received by the Company. However, ultimate recovery is subject to state commission approval. In the future, as a result of deregulation or other changes in the regulatory environment, the Company may no longer meet the criteria for continued application of SFAS 71 and could be required to write off its regulatory assets and liabilities. Such an event could have a material adverse effect on the Company's results of operations, liquidity or financial position in the period the write-off would be recorded.

B.    Equity Compensation Plan

        Under the SCANA Corporation Long-Term Equity Compensation Plan (the Plan), certain employees and non-employee directors may receive incentive and nonqualified stock options and other forms of equity compensation. The Company accounts for this equity-based compensation using the intrinsic value method under APB 25, "Accounting for Stock Issued to Employees," and related interpretations. In addition, the Company has adopted the disclosure provisions of SFAS 123, "Accounting for Stock-Based Compensation" and SFAS 148, "Accounting for Stock-Based Compensation-Transition and Disclosure."

        All options have been granted with exercise prices equal to the fair market value of the Company's stock on the respective grant dates since the Plan's inception; therefore, no compensation expense has been recognized in connection with such grants. If the Company had determined to recognize

10

compensation expense for the issuance of options based on the fair value method described in SFAS 123, pro forma net income and earnings per share would have been as presented below:

	Three Months Ended March 31,
	2004		2003
Net income—as reported (millions)	$	101.2	$	83.6
Net income—pro forma (millions)	$	100.9	$	83.2
Basic and diluted earnings per share—as reported	$	.91	$	.75
Basic and diluted earnings per share—pro forma	$	.91	$	.75

        No options have been granted since 2002.

C.    Pension and Other Postretirement Benefit Plans

        Components of net periodic benefit income or cost recorded by the Company were as follows:

							Other Postretirement Benefits
	Pension Benefits
Three months ended March 31 (Millions of dollars)
	2004			2003			2004		2003
Service cost	$	2.8		$	2.6		$	0.8	$	1.3
Interest cost		9.1			9.5			2.9		3.8
Expected return on assets		(17.7	)		(15.0	)		—		—
Prior service cost amortization		1.6			1.6			0.2		0.8
Transition obligation amortization		0.2			0.2			0.3		0.3
Actuarial (gain) loss		—			0.5			0.5		0.2
Net periodic benefit (income) cost	$	(4.0	)	$	(0.6	)	$	4.7	$	6.4

D.    Earnings Per Share

        Earnings per share amounts have been computed in accordance with SFAS 128, "Earnings Per Share." Under SFAS 128, basic earnings per share are computed by dividing net income by the weighted average number of common shares outstanding for the period. Diluted earnings per share are computed as net income divided by the weighted average number of shares of common stock outstanding during the period after giving effect to securities considered to be dilutive potential common stock. The Company uses the treasury stock method in determining total dilutive potential common stock.

E.    Affiliated Transactions

        SCE&G holds two equity-method investments in partnerships involved in converting coal to non-conventional fuel. SCE&G had recorded as receivables from these affiliated companies approximately $17.8 million and $13.4 million at March 31, 2004 and December 31, 2003, respectively. SCE&G had recorded as payables to these affiliated companies approximately $15.6 million and $12.2 million at March 31, 2004 and December 31, 2003, respectively.

F.     Reclassifications

        Certain amounts from prior periods have been reclassified to conform with the presentation adopted for 2004.

11

2.     RATE AND OTHER REGULATORY MATTERS

South Carolina Electric & Gas Company (SCE&G)

Electric

        In January 2003, in conjunction with the approval of a retail rate increase, the SCPSC deferred action on the recovery of certain purchased power costs pending the resolution of the appeal of the SCPSC's May 2002 order. In May 2002 the SCPSC approved SCE&G's request to increase the fuel component of rates charged to electric customers, which reflected higher fuel costs projected for the period May 2002 through April 2003. The increase also provided continued recovery for under-collected actual fuel costs through April 2001, including short-term purchased power costs necessitated by outages at two of SCE&G's base load generating plants in winter 2000-2001. The Consumer Advocate of South Carolina (Consumer Advocate) appealed to the South Carolina Circuit Court (Circuit Court) the portion of the SCPSC's order related to the recovery of certain purchased power costs. The Circuit Court ruled that the current fuel clause only provides for the recovery of the fuel costs included in purchased power and not the total cost of the power purchased. The Circuit Court remanded the case to the SCPSC for final disposition. In April 2004 the SCPSC approved a stipulation agreement between the Consumer Advocate and SCE&G whereby SCE&G would be allowed to defer for recovery in a future rate proceeding the portion of the purchased power costs not allowed to be recovered through the fuel clause.

        In April 2004 the SCPSC approved SCE&G's request to increase the fuel component of rates charged to electric customers from 1.678 cents per KWh to 1.821 cents per KWh. The increase reflects higher fuel costs projected for the period May 2004 through April 2005. The increase also provides continued recovery for under-collected actual fuel costs through February 2004. The new rates will be effective as of the first billing cycle in May 2004.

Gas

        SCE&G's rates are established using a cost of gas component approved by the SCPSC which may be modified periodically to reflect changes in the price of natural gas purchased by SCE&G.

        SCE&G's cost of gas component in effect during the period January 1, 2003 through March 31, 2004 was as follows:

Rate Per Therm		Effective Date
$	.728	January–February 2003
	.928	March–October 2003
	.877	November 2003–March 2004

        The SCPSC allows SCE&G to recover through a billing surcharge to its gas customers the costs of environmental cleanup at the sites of former MGPs. The billing surcharge is subject to annual review and provides for the recovery of substantially all actual and projected site assessment and cleanup costs and environmental claims settlements for SCE&G's gas operations that had previously been recorded in deferred debits. In October 2003, as a result of the annual review, the SCPSC approved SCE&G's request to reduce the billing surcharge from 3.0 cents per therm to 0.8 cents per therm, which is intended to provide for the recovery, prior to the end of the year 2009, of the balance remaining at March 31, 2004 of $9.8 million.

Public Service Company of North Carolina, Incorporated (PSNC Energy)

        PSNC Energy's rates are established using a benchmark cost of gas approved by the NCUC, which may be modified periodically to reflect changes in the market price of natural gas. PSNC Energy revises its tariffs with the NCUC as necessary to track these changes and accounts for any over- or

12

under-collections of the delivered cost of gas in its deferred accounts for subsequent rate consideration. The NCUC reviews PSNC Energy's gas purchasing practices annually.

        PSNC Energy's benchmark cost of gas in effect during the period January 1, 2003 through March 31, 2004 was as follows:

Rate Per Therm		Effective Date
$	.460	January–February 2003
	.595	March 2003
	.725	April–November 2003
	.600	December 2003–March 2004

        For service rendered on and after March 1, 2004, the NCUC authorized PSNC Energy to implement decrements in its sales and transportation rate schedules to reflect a decrease of approximately $5.7 million in PSNC Energy's annual fixed gas costs as well as the current over-recovery of approximately $16.5 million.

        A state expansion fund, established by the North Carolina General Assembly and funded by refunds from PSNC Energy's interstate pipeline transporters, provides financing for expansion into areas that otherwise would not be economically feasible to serve. In June 2000 the NCUC approved PSNC Energy's requests for disbursement of up to $28.4 million from PSNC Energy's expansion fund to extend natural gas service to Madison, Jackson and Swain Counties in western North Carolina. PSNC Energy estimates that the cost of this project will be approximately $31 million. The Madison County and Jackson County portions of the project were completed in 2002, and the Swain County portion was completed and placed in service in April 2004. Through March 31, 2004 approximately $29 million had been spent on this project.

        In December 1999 the NCUC issued an order approving the Company's acquisition of PSNC Energy. As specified in the order, PSNC Energy agreed to a moratorium on general rate cases until August 2005. General rate relief can be obtained during this period to recover costs associated with material adverse governmental actions and force majeure events.

3.     LONG-TERM DEBT

        On February 11, 2004 South Carolina Generating Company, Inc. (GENCO) issued $100 million of senior secured promissory notes maturing February 1, 2024 and bearing a fixed interest rate of 5.49%. Proceeds from this issuance were used to support GENCO's construction program and to repay intercompany advances borrowed for that purpose.

4.     RETAINED EARNINGS

        The Company's Restated Articles of Incorporation do not limit the dividends that may be paid on its common stock. However, the Restated Articles of Incorporation of SCE&G contain provisions that, under certain circumstances, could limit the payment of cash dividends on its common stock. In addition, with respect to hydroelectric projects, the Federal Power Act requires the appropriation of a portion of certain earnings therefrom. At March 31, 2004 approximately $45.3 million of retained earnings were restricted by this requirement as to payment of cash dividends on SCE&G's common stock.

5.     FINANCIAL INSTRUMENTS

Investments

        Certain of the Company's subsidiaries hold investments in marketable securities, some of which are subject to SFAS 115, "Accounting for Certain Investments in Debt and Equity Securities,"

13

mark-to-market accounting and some of which are considered cost basis investments for which determination of fair value historically has been considered impracticable. Equity holdings subject to SFAS 115 are categorized as "available for sale" and are carried at quoted market prices, with any unrealized gains and losses credited or charged to other comprehensive income (loss) within common equity on the Company's balance sheet. Debt securities and preferred stock with significant debt characteristics are categorized as "held to maturity" and are carried at amortized cost. When indicated, and in accordance with its stated accounting policy, the Company performs periodic assessments of whether any decline in the value of these securities to amounts below the Company's cost basis is other than temporary. When other than temporary declines occur, write-downs are recorded through operations, and new (lower) cost bases are established. The Company also holds investments in several partnerships and joint ventures, some of which are accounted for using the equity method.

        At March 31, 2004 SCANA Communications Holdings, Inc. (SCH), a wholly owned, indirect subsidiary of the Company, held investments in the following equity and debt securities.

Investee	Securities	Basis
		(Millions of dollars)
Magnolia Holding	6.2 million shares nonvoting common stock	$	2.1
ITC^DeltaCom	567.5 thousand shares of common stock		1.1
	163.6 thousand shares series A 8% preferred stock, convertible into 2.8 million shares of common stock		13.2
	Warrants to purchase 506.9 thousand shares of common stock		1.1
Knology	2.6 million shares of common stock		23.1
	2.2 million shares of nonvoting common stock		19.6
	13% senior unsecured notes due 2009, including accrued interest		51.1
	Warrants to purchase 16.5 thousand shares of common stock		—

        Magnolia Holding Company, LLC (Magnolia Holding), holds ownership interests in several Southeastern communications companies.

        ITC^DeltaCom, Inc. (ITC^DeltaCom) is a regional provider of telecommunications services. The common shares of ITC^DeltaCom owned by SCH had a market value of $3.7 million, and the warrants owned have a market value of $2.0 million as of March 31, 2004. The ITC^DeltaCom preferred shares owned by SCH are classified as held to maturity due to their debt features, and their market value is not readily determinable.

        Knology, Inc. (Knology) is a fully integrated provider of video, voice, data and advanced communication services to residential and business customers in the southeastern United States. The common shares of Knology (voting and non-voting) owned by SCH had a market value of $32.6 million as of March 31, 2004.

Derivatives

        The Company follows the guidance required by FAS 133 "Accounting for Derivative Instruments and Hedging Activities," as amended, in accounting for derivatives, including those arising from cash flow hedges related to natural gas. The Company also utilizes swap agreements to manage interest rate risk. These transactions are more fully described in Note 9 to the consolidated financial statements in the Company's 2003 Form 10-K.

        The Company recognized gains of approximately $1.9 million and $5.6 million, net of tax, as a result of qualifying cash flow hedges whose hedged transactions occurred during the three months

14

ended March 31, 2004 and 2003, respectively. These amounts were recorded in cost of gas. The Company estimates that most of the March 31, 2004 unrealized gain balance of $3.2 million, net of tax, will be reclassified from accumulated other comprehensive income (loss) to earnings in 2004 and 2005 as a decrease to gas cost if market prices remain stable. As of March 31, 2004, all of the Company's cash flow hedges settle by their terms before the end of 2006.

        Option premiums and gains resulting from qualifying fair value hedges during the three months ended March 31, 2004 and 2003 were insignificant and were recorded in cost of gas. As of March 31, 2004 all of the Company's fair value hedges had settled.

        At March 31, 2004 the estimated fair value of the Company's swaps totaled $14.3 million (gain) related to combined notional amounts of $333.1 million.

6.     COMMITMENTS AND CONTINGENCIES

        Reference is made to Note 10 to the consolidated financial statements appearing in the Company's Annual Report on Form 10-K for the year ended December 31, 2003. Commitments and contingencies at March 31, 2004 include the following:

A.    Lake Murray Dam Reinforcement

        In October 1999 the United States Federal Energy Regulatory Commission (FERC) mandated that SCE&G reinforce its Lake Murray Dam in order to comply with new federal safety standards. Construction for the project and related activities, which began in the third quarter of 2001 is expected to cost approximately $275 million and be completed in 2005. Costs incurred through March 31, 2004 totaled approximately $192 million.

B.    Nuclear Insurance

        The Price-Anderson Indemnification Act, which deals with public liability for a nuclear incident, currently establishes the liability limit for third-party claims associated with any nuclear incident at $10.8 billion. Each reactor licensee is currently liable for up to $100.6 million per reactor owned for each nuclear incident occurring at any reactor in the United States, provided that not more than $10 million of the liability per reactor would be assessed per year. SCE&G's maximum assessment, based on its two-thirds ownership of Summer Station, would be approximately $67.1 million per incident, but not more than $6.7 million per year.

        Congress failed to renew the Price-Anderson Indemnification Act when it expired in 2003. The delayed renewal has no impact on the Company due to the "grandfathered" status of existing licensees that are covered under the expired Act until such time as it is renewed.

        SCE&G currently maintains policies (for itself and on behalf of the South Carolina Public Service Authority) with Nuclear Electric Insurance Limited. The policies, covering the nuclear facility for property damage, excess property damage and outage costs, permit retrospective assessments under certain conditions to cover insurer's losses. Based on the current annual premium, SCE&G's portion of the retrospective premium assessment would not exceed $15.8 million.

15

        To the extent that insurable claims for property damage, decontamination, repair and replacement and other costs and expenses arising from a nuclear incident at Summer Station exceed the policy limits of insurance, or to the extent such insurance becomes unavailable in the future, and to the extent that SCE&G's rates would not recover the cost of any purchased replacement power, SCE&G will retain the risk of loss as a self-insurer. SCE&G has no reason to anticipate a serious nuclear incident at Summer Station. If such an incident were to occur, it would have a material adverse impact on the Company's results of operations, cash flows and financial position.

C.    Environmental

        The Company maintains an environmental assessment program to identify and evaluate current and former sites that could require environmental cleanup. As site assessments are initiated, estimates are made of the amount of expenditures, if any, deemed necessary to investigate and clean up each site. These estimates are refined as additional information becomes available; therefore, actual expenditures could differ significantly from the original estimates. Amounts estimated and accrued to date for site assessments and cleanup relate solely to regulated operations.

South Carolina Electric & Gas Company

        At SCE&G, site assessment and cleanup costs are deferred and amortized with recovery provided through rates. Deferred amounts, net of amounts previously recovered through rates and insurance settlements, totaled $9.8 million at March 31, 2004. The deferral includes the estimated costs associated with the following matters.

        SCE&G owns a decommissioned MGP site in the Calhoun Park area of Charleston, South Carolina. The site is currently being remediated for benzene contamination in the intermediate aquifer on surrounding properties. SCE&G anticipates that the remaining remediation activities will be completed by the end of 2004, with certain monitoring and retreatment activities continuing until 2007. As of March 31, 2004, SCE&G has spent approximately $19.8 million to remediate the Calhoun Park site and expects to spend an additional $2 million.

        SCE&G owns three other decommissioned MGP sites in South Carolina which contain residues of by-product chemicals. Two of these sites are currently being remediated under work plans approved by the South Carolina Department of Health and Environmental Control (DHEC). SCE&G is continuing to investigate the remaining site and is monitoring the nature and extent of residual contamination. SCE&G anticipates that major remediation activities for the three owned sites will be completed before 2006. As of March 31, 2004, SCE&G has spent approximately $3.1 million related to these sites, and expects to spend an additional $4.9 million.

Public Service Company of North Carolina, Incorporated

        PSNC Energy is responsible for environmental cleanup at five sites in North Carolina on which MGP residuals are present or suspected. PSNC Energy's actual remediation costs for these sites will depend on a number of factors, such as actual site conditions, third-party claims and recoveries from other potentially responsible parties. PSNC Energy has recorded a liability and associated regulatory asset of $6.8 million, which reflects the estimated remaining liability at March 31, 2004. Amounts incurred and deferred to date that are not currently being recovered through gas rates are approximately $2.4 million. Management believes that all MGP cleanup costs incurred will be recoverable through gas rates.

D.    Claims and Litigation

        In 1999 an unsuccessful bidder for the purchase of certain propane gas assets of SCANA Corporation (SCANA) filed suit against SCANA in Circuit Court, seeking unspecified damages. The

16

suit alleges the existence of a contract for the sale of assets to the plaintiff and various causes of action associated with that contract. The Company does not believe that the resolution of this issue will have a material impact on its results of operations, cash flows or financial position.

        On August 21, 2003, SCE&G was served as a co-defendant in a purported class action lawsuit styled as Collins v. Duke Energy Corporation, Progress Energy Services Company, and South Carolina Electric & Gas Company, in South Carolina's Circuit Court of Common Pleas for the Fifth Judicial Circuit. The plaintiffs are seeking damages for the alleged improper use of electric transmission easements but have not asserted a dollar amount for their claims. Specifically, the plaintiffs contend that the licensing of attachments on electric utility poles, towers and other facilities to non-utility third parties or telecommunication companies for other than the electric utilities' internal use along the electric transmission line right-of-way constitutes a trespass. The Company is confident of the propriety of its actions and intends to mount a vigorous defense. The Company further believes that the resolution of these claims will not have a material adverse impact on its results of operations, cash flows or financial condition.

        A complaint was filed on October 22, 2003 against SCE&G by the State of South Carolina alleging that SCE&G violated the Unfair Trade Practices Act by charging municipal franchise fees to some customers residing outside a municipality's limits. The complaint also alleges that SCE&G failed to obey, observe, or comply with the lawful order of the SCPSC by charging franchise fees to those not residing within a municipality. The complaint seeks restitution to all affected customers and penalties up to $5,000 for each separate violation. SCE&G is confident of the reasonableness of its actions and intends to mount a vigorous defense. The allegations contained in the complaint are the subject of a similar lawsuit that was filed and served on SCE&G, for which a Motion to Dismiss is pending. The allegations are also the subject of a purported class action lawsuit filed on or about December 12, 2003 against Duke Energy Corporation, Progress Energy Services Company and SCE&G. SCE&G believes that the resolution of these actions will not have a material adverse impact on its results of operations, cash flows or financial condition. In addition, SCE&G filed a petition with the SCPSC on October 23, 2003 pursuant to S. C. Code Ann. R.103-836. The petition requests that the SCPSC exercise its jurisdiction to investigate the operation of the municipal franchise fee collection requirements applicable to SCE&G's electric and gas service, to approve SCE&G's efforts to correct any past franchise fee billing errors, to adopt improvements in the system which will reduce such errors in the future, and to adopt any regulation which the SCPSC deems just and proper to regulate the franchise fee collection process.

        The Company is also engaged in various other claims and litigation incidental to its business operations which management anticipates will be resolved without material loss to the Company.

7.     SEGMENT OF BUSINESS INFORMATION

        The Company's reportable segments are listed in the following table. The Company uses operating income to measure profitability for its regulated operations. Therefore, net income is not allocated to the Electric Operations, Gas Distribution and Gas Transmission segments. The Company uses net income to measure profitability for its Retail Gas Marketing and Energy Marketing segments. Gas Distribution is comprised of the local distribution operations of SCE&G and PSNC Energy which meet SFAS 131 criteria for aggregation.

17

Disclosure of Reportable Segments
(Millions of dollars)

Three Months Ended March 31, 2004	External Revenue			Intersegment Revenue			Operating Income		Net Income			Segment Assets
Electric Operations	$	380		$	1		$	96		n/a		$	5,134
Gas Distribution		370			2			58		n/a			1,449
Gas Transmission		54			118			6		n/a			313
Retail Gas Marketing		218			—			n/a	$	20			145
Energy Marketing		112			3			n/a		—			51
All Other		15			68			1		1			684
Adjustments/Eliminations		(13	)		(192	)		33		80			773
Consolidated Total	$	1,136		$	—		$	194	$	101		$	8,549
March 31, 2003
Electric Operations	$	336		$	2		$	84		n/a		$	4,566
Gas Distribution		343			—			61		n/a			1,416
Gas Transmission		84			108			5		n/a			317
Retail Gas Marketing		183			—			n/a	$	13			124
Energy Marketing		123			—			n/a		(2	)		67
All Other		14			67			—		(1	)		601
Adjustments/Eliminations		(14	)		(177	)		18		74			1,086
Consolidated Total	$	1,069		$	—		$	168	$	84		$	8,177

18

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

SCANA CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

        The following discussion should be read in conjunction with Management's Discussion and Analysis of Financial Condition and Results of Operations appearing in SCANA Corporation's (together with its consolidated subsidiaries, the Company) Annual Report on Form 10-K for the year ended December 31, 2003.

        Statements included in this discussion and analysis (or elsewhere in this quarterly report) 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) changes in the utility and nonutility regulatory environment, (3) changes in the economy, especially in areas served by the Company's subsidiaries, (4) the impact of competition from other energy suppliers, including competition from alternate fuels in industrial interruptible markets, (5) growth opportunities for the Company's regulated and diversified subsidiaries, (6) the results of financing efforts, (7) changes in the Company's accounting policies, (8) weather conditions, especially in areas served by the Company's subsidiaries, (9) performance of and marketability of the Company's investments in telecommunications companies, (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.

Electric Operations

        In April 2004 the joint U.S.-Canada Power System Outage Task Force issued its "Final Report on the August 14, 2003 Blackout in the United States and Canada: Causes and Recommendations" (Blackout Report). The Blackout Report contains 46 recommendations that, if implemented, the Task Force believes would improve reliability of North America's interconnected bulk power system (the grid). Full implementation of the Blackout Report's recommendations would require a number of actions by legislative, regulatory and industry participants. However, the Blackout Report asserts as its single most important recommendation that the U.S. Congress should enact the reliability provisions contained in the Energy Bill, different versions of which passed the House and Senate in 2003 but have stalled in conference committee. Various provisions of the Energy Bill related to electric reliability are being resubmitted as separate legislation (reliability legislation). It is anticipated that any reliability legislation, if passed, would make reliability standards mandatory and enforceable with penalties for non-compliance and would strengthen the role of the U.S. Federal Energy Regulatory Commission (FERC), enabling it to enact regulatory initiatives that would significantly change the country's existing regulatory framework governing transmission, open access and energy markets and would attempt, in large measure, to standardize the national energy market. The Company cannot predict whether Congress will enact reliability legislation or the extent to which the other recommendations contained in the Blackout Report will be implemented. If implemented, such legislation could have a significant

19

impact on SCE&G's access to or cost of power for its native load customers and on SCE&G's marketing of power outside of its service territory.

        In addition, the North American Electric Reliability Council (NERC) is expected to proceed with its initiatives to develop, establish and enforce standards for the grid. To that end, NERC is working closely with FERC to implement stronger reliability standards among NERC's voluntary membership. SCE&G, along with other NERC members, is also working closely with NERC in these efforts. Such initiatives would be significantly influenced by any reliability legislation enacted by Congress. If implemented, such initiatives by FERC and NERC could have a significant impact on SCE&G's access to or cost of power for its native load customers and on SCE&G's marketing of power outside its service territory.

Retail Gas Marketing

        In March 2004 SCANA Energy acquired approximately 47,000 retail natural gas customers formerly served by another gas marketer in Georgia. With this transaction, SCANA Energy's total customer base represents about a 30 percent share of the 1.5 million customers in Georgia's natural gas market. SCANA Energy remains the second largest natural gas marketer in the state.

        In March 2004 SCANA Energy's term for serving low-income and high credit risk customers was extended by the GPSC for an additional year (beginning September 1).

        In November 2003 the Georgia Public Service Commission (GPSC) filed a petition with FERC seeking a declaratory order on the assignment of interstate capacity. That petition addressed the question of whether FERC would preempt the GPSC if a plan proposed by SCANA Energy for the assignment of Atlanta Gas Light Company's interstate capacity assets to certificated natural gas marketers was adopted by the GPSC. On April 15, 2004 FERC ruled that it continues to maintain jurisdiction and would preempt the GPSC in any plan dealing with interstate capacity assets. SCANA Energy has operated successfully under the current interstate capacity plan and does not expect that FERC's ruling will have any negative impact on operations.

RESULTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2004
AS COMPARED TO THE CORRESPONDING PERIOD IN 2003

Earnings Per Share

        Reported (GAAP) earnings per share of common stock for the periods ended March 31, 2004 and 2003 were as follows:

	First Quarter
	2004		2003
Reported (GAAP) earnings per share	$	.91	$	.75

        Reported (GAAP) earnings per share increased by $.16 due to improved electric margins of $.15, improved gas margins of $.09, lower interest expense of $.01 and a reduction of preferred dividend requirements of $.01. These factors were partially offset by higher operation and maintenance expenses of $.06, higher property taxes of $.02 and higher depreciation and amortization expense of $.02.

20

Pension Income

        Pension income was recorded on the Company's financial statements as follows:

		First Quarter
Millions of dollars
		2004		2003
Income Statement Impact:
	Reduction in (component of) employee benefit costs	$	1.1	$	(1.0	)
	Other income		2.5		1.9
Balance Sheet Impact:
Reduction in (component of) capital expenditures			0.3		(0.3	)
	Component of amount due to Summer Station co-owner		0.1		—
Total Pension Income		$	4.0	$	0.6

        For the last several years, the market value of the Company's retirement plan (pension) assets has exceeded the total actuarial present value of accumulated plan benefits. Pension income in the first quarter of 2004 increased compared to the corresponding period in 2003 primarily as a result of a more favorable investment market.

Allowance for Funds Used During Construction (AFC)

        AFC is a utility accounting practice whereby a portion of the cost of both equity and borrowed funds used to finance construction (which is shown on the balance sheet as construction work in progress) is capitalized. The Company includes an equity portion of AFC in nonoperating income and a debt portion of AFC in interest charges (credits) as noncash items, both of which have the effect of increasing reported net income. The increase in AFC for the three months ended March 31, 2004 is primarily due to construction expenditures related to the Jasper County Generating Station Project and the Lake Murray Dam Project (see discussion at CAPITAL PROJECTS).

Dividends Declared

        The Company's Board of Directors has declared the following dividends on common stock during 2004:

Declaration Date	Dividend Per Share		Record Date	Payment Date
February 19, 2004	$	.365	March 10, 2004	April 1, 2004
April 29, 2004	$	.365	June 10, 2004	July 1, 2004

Electric Operations

        Electric Operations is comprised of the electric operations of SCE&G, South Carolina Generating Company, Inc. (GENCO) and South Carolina Fuel Company, Inc. (Fuel Company). Electric operations sales margins were as follows:

	First Quarter
Millions of dollars	2004		% Change		2003
Operating revenues	$	379.9	13.1	%	$	336.0
Less: Fuel used in generation		95.4	18.1	%		80.8
Purchased power		12.7	21.0	%		10.5
Margin	$	271.8	11.1	%	$	244.7

21

        Margin increased primarily due to increased retail electric base rates that went into effect in February 2003, for a total impact of $7.1 million, an additional $3.2 million due to favorable weather, $14.6 million from off-system sales and $2.2 million due to customer growth and consumption.

Gas Distribution

        Gas Distribution is comprised of the local distribution operations of SCE&G and Public Service Company of North Carolina, Incorporated (PSNC Energy). Gas distribution sales margins (including transactions with affiliates) were as follows:

	First Quarter
Millions of dollars	2004		% Change		2003
Operating revenues	$	371.7	8.3	%	$	343.3
Less: Gas purchased for resale		264.2	14.1	%		231.5
Margin	$	107.5	(3.9	)%	$	111.8

        Margin decreased primarily due to decreased recovery of environmental remediation expenses of $3.2 million (offset in operations and maintenance) and an unfavorable competitive position of natural gas relative to alternate fuels of $1.6 million, partially offset by customer growth and increased consumption of $0.5 million.

Gas Transmission

        Gas Transmission is comprised of the operations of South Carolina Pipeline Corporation (SCPC). Gas transmission sales margins (including transactions with affiliates) were as follows:

	First Quarter
Millions of dollars	2004		% Change		2003
Operating revenues	$	172.3	(10.5	)%	$	192.4
Less: Gas purchased for resale		157.7	(12.1	)%		179.4
Margin	$	14.6	12.3	%	$	13.0

        Margin increased primarily due to higher transportation revenue as a result of new customers of $1.8 million, partially offset by an unfavorable competitive position of natural gas relative to alternate fuels of $0.5 million.

Retail Gas Marketing

        Retail Gas Marketing is comprised of SCANA Energy, a division of SCANA Energy Marketing, Inc., which operates in Georgia's natural gas market. Retail Gas Marketing revenues and net income were as follows:

	First Quarter
Millions of dollars	2004		% Change		2003
Operating revenues	$	217.7	18.5	%	$	183.7
Net income	$	20.6	55.8	%	$	13.2

        Operating revenues increased primarily as a result of increased volumes and higher average retail prices. Net income increased primarily due to higher margins of $8.9 million partially offset by increased bad debt expense of $1.2 million.

22

Energy Marketing

        Energy Marketing is comprised of the Company's non-regulated marketing operations, excluding SCANA Energy. Energy Marketing operating revenues and net loss were as follows:

	First Quarter
Millions of dollars	2004			% Change		2003
Operating revenues	$	115.2		(6.0	)%	$	122.4
Net loss	$	(0.5	)	74.6	%	$	(1.8	)

        Operating revenues decreased primarily as a result of decreased volumes. Net loss decreased primarily due to improved gas margins of $1.7 million.

Other Operating Expenses

        Other operating expenses were as follows:

	First Quarter
Millions of dollars	2004		% Change		2003
Other operation and maintenance	$	154.6	7.3	%	$	144.1
Depreciation and amortization		62.7	4.7	%		59.9
Other taxes		38.8	12.5	%		34.5
Total	$	256.1	7.4	%	$	238.5

23

        Other operation and maintenance expenses increased primarily due to increased labor and benefit costs of $5.8 million, increased bad debt expenses of $2.0 million, 2004 winter storm restoration expenses of $2.5 million and increased expense at electric generation plants of $3.4 million, partially offset by decreased recovery of environmental remediation expenses of $3.2 million (offset in gas margin) and increased pension income of $2.1 million. Depreciation and amortization increased due to normal net property changes. Other taxes increased primarily due to increased property taxes.

Other Income (Expense)

        Other income, including AFC, decreased primarily due to reduced other non-operating income partially offset by an increase in AFC due to construction expenditures related to the Jasper County Generating Station Project and the Lake Murray Dam Project.

Income Taxes

        Income taxes increased primarily as a result of changes in operating income.

LIQUIDITY AND CAPITAL RESOURCES

        The Company anticipates that its contractual cash obligations will be met through internally generated funds, the incurrence of additional short-term and long-term indebtedness and sales of additional equity securities. The Company expects that it has or can obtain adequate sources of financing to meet its projected cash requirements for the foreseeable future. The Company's ratio of earnings to fixed charges for the 12 months ended March 31, 2004 was 2.95.

        Cash requirements for the Company's regulated subsidiaries arise primarily from their operational needs, funding their construction programs and payment of dividends to SCANA Corporation. The ability of the regulated subsidiaries to replace existing plant investment, as well as to expand to meet future demand for electricity or gas, will depend on their ability to attract the necessary financial capital on reasonable terms. Regulated subsidiaries recover the costs of providing services through rates charged to customers. Rates for regulated services are generally based on historical costs. As customer growth and inflation occur and these subsidiaries continue their ongoing construction programs, rate increases will be sought. The future financial position and results of operations of the regulated subsidiaries will be affected by their ability to obtain adequate and timely rate and other regulatory relief, if requested.

        The following table summarizes how the Company generated and used funds for property additions and construction expenditures during the three months ended March 31, 2004 and 2003:

	Three Months Ended March 31,
Millions of dollars
	2004			2003
Net cash provided from operating activities	$	163		$	155
Net cash provided from financing activities		67			4
Cash and temporary investments available at the beginning of the period		117			341
Funds used for utility property additions and construction expenditures, net of noncash allowance for funds used during construction	$	122		$	171
Funds used for nonutility property additions		4			3
Funds used for investments		(3	)		(4	)

        SCE&G intends to file an electric rate case with the SCPSC in the summer of 2004 requesting, among other things, recovery of capital expenditures related to the generating facility in Jasper County, South Carolina. This filing will also include SCE&G's plan to use synthetic fuel tax credits to offset

24

construction costs of SCE&G's reinforcement dam at Lake Murray. The SCPSC would be expected to render its decision on the filing within six months of the rate application being filed.

CAPITAL TRANSACTIONS

        On February 11, 2004 GENCO issued $100 million of senior secured promissory notes maturing February 1, 2024 and bearing a fixed interest rate of 5.49%. Proceeds from this issuance were used to support GENCO's construction program and to repay intercompany advances borrowed for that purpose.

        Effective May 1, 2004 shares of SCANA's common stock purchased on behalf of participants in the SCANA Investor Plus Plan, Stock Purchase-Savings Plan and Director Compensation and Deferral Plan are being purchased directly from SCANA rather than on the open market. SCANA estimates that these original issue purchases will result in the issuance of approximately 2 million new shares of common stock and provide approximately $65 million in additional common stock equity on an annual basis. In addition, effective April 29, 2004 SCANA discontinued purchasing outstanding shares of common stock on the open market.

CAPITAL PROJECTS

        Construction of SCE&G's 875 megawatt generation facility in Jasper County, South Carolina has been completed. The facility includes three natural gas combustion-turbine generators and one steam-turbine generator. The $450 million facility began commercial operation in May 2004. Approximately $276 million of the capital expenditures have been included in rate base, and the remainder are expected to be included in the rate case previously discussed.

        In October 1999 FERC mandated that SCE&G reinforce its Lake Murray Dam in order to comply with new federal safety standards. Construction for the project and related activities, which began in the third quarter of 2001, is expected to cost approximately $275 million and be completed in 2005. Costs incurred through March 31, 2004 totaled approximately $192 million.

        Construction of SCPC's South System Loop was completed in March 2004 at a cost of approximately $21 million. This pipeline stretches 38.3 miles from SCG Pipeline's connection with SCE&G's Jasper County generation facility to Yemassee in Hampton County, South Carolina, providing a new supply source to SCPC's current system.

ENVIRONMENTAL MATTERS

        For information on environmental matters see Note 6C to condensed consolidated financial statements.

OTHER MATTERS

Nuclear Station

        In April 2004 the Nuclear Regulatory Commission (NRC) approved SCE&G's application for a 20-year license extension for its V. C. Summer Nuclear Station (Summer Station). The extension allows the plant to operate through 2042.

Synthetic Fuel

        SCE&G holds two equity-method investments in partnerships involved in converting coal to non-conventional fuel, the use of which fuel qualifies for federal income tax credits. The aggregate investment in these partnerships as of March 31, 2004 is approximately $3 million, and through March 31, 2004, they have generated and passed through to SCE&G approximately $107 million in such tax credits. At March 31, 2004 SCE&G has recorded on its balance sheet $74 million net deferred

25

fuel tax benefits, which include partnership losses, net of tax. In addition, Primesouth, Inc, a non-regulated subsidiary of SCANA, operates a synthetic fuel facility for a third party and receives management fees, royalties and expense reimbursements related to these services. Primesouth does not benefit from any synfuel tax credits.

        Under a plan approved by the SCPSC, any tax credits generated and ultimately passed through to SCE&G from synfuel produced for and consumed by SCE&G, net of partnership losses and other expenses, have been and will be deferred and will be applied to offset the capital costs of projects required to comply with legislative or regulatory actions. See Note 1A to the condensed consolidated financial statements.

        In March 2004 the Company received a "No Change" letter from the Internal Revenue Service (IRS) related to SCE&G's interest in the synthetic fuel partnership S. C. Coaltech No. l L.P. for the tax year 2000. This letter supports the Company's position that the synthetic fuel tax credits have been properly claimed.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

        All financial instruments held by the Company described below are held for purposes other than trading.

        Interest rate risk—The table below provides information about long-term debt issued by the Company and other financial instruments that are sensitive to changes in interest rates. For debt obligations the table presents principal cash flows and related weighted average interest rates by expected maturity dates. For interest rate swaps, the figures shown reflect notional amounts and related maturities. Fair values for debt and swaps represent quoted market prices.

As of March 31, 2004		Expected Maturity Date
Millions of dollars Liabilities		2004	2005	2006	2007	2008	There- After	Total	Fair Value
Long-Term Debt:
Fixed Rate ($)		197.9	193.6	174.4	68.6	158.6	2,640.9	3,434.0	3,484.1
Average Fixed Interest Rate (%)		7.53	7.39	8.50	6.96	6.13	6.24	6.60
Variable Rate ($)				200.0				200.0	200.0
Average Variable Interest Rate (%)				1.57				1.57
Interest Rate Swaps:
Pay Variable/Receive Fixed ($)		57.5	3.2	3.2	28.2	118.2	122.8	333.1	14.3
	Average Pay Interest Rate (%)	5.84	4.30	4.30	4.31	2.81	2.97	3.55
	Average Receive Interest Rate (%)	7.70	8.75	8.75	7.11	5.89	6.51	6.59

        While a decrease in interest rates would increase the fair value of debt, it is unlikely that events which would result in a realized loss will occur.

        At March 31, 2004 the Company held investments in the 13% senior unsecured notes (due 2009) of a telecommunications company, the cost basis of which, including accrued interest, is approximately $51.1 million. As these notes are not broadly traded, determination of their fair value is not practicable.

        Commodity price risk—The following table provides information about the Company's financial instruments that are sensitive to changes in natural gas prices. Weighted average settlement prices are per 10,000 mmbtu. Fair value represents quoted market prices.

26

Expected Maturity:

	Futures Contracts			Options
2004	Long ($)	Short ($)		Purchased call (long) ($)	Purchased put (short) ($)
Settlement Price(a)	6.05	6.01
Contract Amount	16.5	2.4	Strike Price(a)	4.86	—
Fair Value	20.0	2.6	Contract Amount	6.8	—
2005
Settlement Price(a)	5.89	6.44
Contract Amount	5.3	0.2	Strike Price(a)	—	—
Fair Value	6.5	0.2	Contract Amount	—	—
2006
Settlement Price(a)	5.66	—
Contract Amount	0.5	—	Strike Price(a)	—	—
Fair Value	0.7	—	Contract Amount	—	—

(a)

Weighted average

        Equity price risk—Investments in telecommunications companies' equity securities (excluding preferred stock with significant debt characteristics) are carried at market value or, if market value is not readily determinable, at cost. The carrying value of the Company's investments in such securities totaled $40.4 million at March 31, 2004. A temporary decline in value of ten percent would result in a $4.0 million reduction in fair value and a corresponding adjustment, net of tax effect, to the related equity account for unrealized gains/losses, a component of Other Comprehensive Income (Loss). An other than temporary decline in value of ten percent would result in a $4.0 million reduction in fair value and a corresponding adjustment to net income, net of tax effect.

Item 4. Controls and Procedures

        As of March 31, 2004 an evaluation was performed under the supervision and with the participation of the Company's management, including the Chief Executive Officer (CEO) and Chief Financial Officer (CFO), of the effectiveness of the design and operation of the Company's disclosure controls and procedures. Based on that evaluation, the Company's management, including the CEO and CFO, concluded that as of March 31, 2004 the Company's disclosure controls and procedures were effective. There has been no change in the Company's internal control over financial reporting during the quarter ended March 31, 2004 that has materially affected or is reasonably likely to materially affect the Company's internal control over financial reporting.

27

SOUTH CAROLINA ELECTRIC & GAS COMPANY
FINANCIAL SECTION

28

Item 1.    Financial Statements

SOUTH CAROLINA ELECTRIC & GAS COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)

Millions of dollars			March 31, 2004			December 31, 2003
Assets
Utility Plant:
	Electric		$	5,616		$	5,558
	Gas			459			456
	Common			196			193
	Total			6,271			6,207
	Accumulated depreciation and amortization			(1,937	)		(1,907	)
	Total			4,334			4,300
	Construction work in progress			989			951
	Nuclear fuel, net of accumulated amortization			36			42
	Utility Plant, Net			5,359			5,293
Nonutility Property and Investments, Net				26			25
Current Assets:
	Cash and temporary investments			79			56
	Receivables, net			230			238
	Receivables—affiliated companies			42			61
	Inventories (at average cost):
		Fuel		30			35
		Materials and supplies		56			54
		Emission allowances		13			6
	Prepayments			25			20
	Deferred income taxes, net			4			—
	Total Current Assets			479			470
Deferred Debits:
	Environmental			10			11
	Assets held in trust, net—nuclear decommissioning			46			44
	Pension asset, net			274			270
	Due from affiliates—pension and postretirement benefits			21			20
	Other regulatory assets			310			333
	Other			139			145
	Total Deferred Debits			800			823
Total			$	6,664		$	6,611

29

Millions of dollars		March 31, 2004		December 31, 2003
Capitalization and Liabilities
Shareholders' Investment:
	Common equity	$	2,059	$	2,043
	Preferred stock (Not subject to purchase or sinking funds)		106		106
	Total Shareholders' Investment		2,165		2,149
Preferred Stock, net (Subject to purchase or sinking funds)			9		9
Long-Term Debt, net			2,110		2,010
Total Capitalization			4,284		4,168
Minority Interest			75		100
Current Liabilities:
	Short-term borrowings		191		140
	Current portion of long-term debt		142		142
	Accounts payable		93		104
	Accounts payable—affiliated companies		91		134
	Customer deposits		25		25
	Taxes accrued		48		101
	Interest accrued		40		39
	Dividends declared		38		43
	Deferred income taxes, net		—		8
	Other		24		34
	Total Current Liabilities		692		770
Deferred Credits:
	Deferred income taxes, net		720		707
	Deferred investment tax credits		114		114
	Asset retirement obligation—nuclear plant		119		118
	Due to affiliates—pension and postretirement benefits		15		15
	Postretirement benefits		136		135
	Regulatory liabilities		446		429
	Other		63		55
	Total Deferred Credits		1,613		1,573
Commitments and Contingencies			—		—
Total		$	6,664	$	6,611

See Notes to Condensed Consolidated Financial Statements.

30

SOUTH CAROLINA ELECTRIC & GAS COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)

		Three Months Ended March 31,
Millions of dollars
		2004		2003
Operating Revenues:
	Electric	$	381	$	337
	Gas		146		140
	Total Operating Revenues		527		477
Operating Expenses:
	Fuel used in electric generation		95		81
	Purchased power (including affiliated purchases)		13		10
	Gas purchased for resale		111		100
	Other operation and maintenance		108		104
	Depreciation and amortization		52		49
	Other taxes		35		31
	Total Operating Expenses		414		375
Operating Income			113		102
Other Income, Including Allowance for Equity Funds Used During Construction of $5 and $4			6		7
Income Before Interest Charges, Minority Interest, Income Taxes and Preferred Stock Dividends			119		109
Interest Charges, Net of Allowance for Borrowed Funds Used During Construction of $3 and $2			35		34
Dividend Requirement of Company—Obligated Mandatorily Redeemable Preferred Securities			—		1
Income Before Minority Interest, Income Taxes and Preferred Stock Dividends			84		74
Minority Interest			2		2
Income Before Income Taxes and Preferred Stock Dividends			82		72
Income Tax Expense			28		25
Net Income			54		47
Preferred Stock Cash Dividends Declared (At stated rates)			2		2
Earnings Available for Common Shareholder		$	52	$	45

See Notes to Condensed Consolidated Financial Statements.

31

SOUTH CAROLINA ELECTRIC & GAS COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

				Three Months Ended March 31,
Millions of dollars
				2004			2003
Cash Flows From Operating Activities:
	Net income			$	54		$	47
	Adjustments to reconcile net income to net cash provided from operating activities:
		Minority interest			2			2
		Depreciation and amortization			52			49
		Amortization of nuclear fuel			6			6
		Allowance for funds used during construction			(8	)		(6	)
		Over collections, fuel adjustment clauses			32			22
		Changes in certain assets and liabilities:
			(Increase) decrease in receivables, net		27			(1	)
			(Increase) decrease in inventories		(4	)		15
			(Increase) decrease in prepayments		(5	)		3
			(Increase) decrease in pension asset		(4	)		(1	)
			(Increase) decrease in other regulatory assets		2			—
			Increase (decrease) in deferred income taxes, net		1			(1	)
			Increase (decrease) in regulatory liabilities		4			9
			Increase (decrease) in postretirement benefits obligations		1			3
			Increase (decrease) in accounts payable		(54	)		(22	)
			Increase (decrease) in taxes accrued		(53	)		(41	)
			Increase (decrease) in interest accrued		1			5
		Changes in other assets			(1	)		(21	)
		Changes in other liabilities			—			(2	)
	Net Cash Provided From Operating Activities				53			66
Cash Flows From Investing Activities:
	Utility property additions and construction expenditures, net of AFC				(107	)		(155	)
	Increase in nonutility property				(1	)		—
	Investments in affiliates				(3	)		(4	)
	Net Cash Used For Investing Activities				(111	)		(159	)
Cash Flows From Financing Activities:
	Proceeds:
		Issuance of First Mortgage Bonds			—			198
		Issuance of notes			100			—
	Dividends and distributions:
		Common stock			(41	)		(40	)
		Preferred stock			(2	)		(2	)
		Distribution to parent			(27	)		—
	Short-term borrowings, net				51			(64	)
	Net Cash Provided From Financing Activities				81			92
Net Increase (Decrease) In Cash and Temporary Investments					23			(1	)
Cash and Temporary Investments, January 1					56			23
Cash and Temporary Investments, March 31				$	79		$	22
Supplemental Cash Flow Information:
	Cash paid for—Interest (net of capitalized interest of $3 and $2)			$	35		$	30
	—Income taxes				—			—

See Notes to Condensed Consolidated Financial Statements.

32

SOUTH CAROLINA ELECTRIC & GAS COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2004
(Unaudited)

        The following notes should be read in conjunction with the Notes to Consolidated Financial Statements appearing in South Carolina Electric & Gas Company's (the Company) Annual Report on Form 10-K for the year ended December 31, 2003. These are interim financial statements, and due to the seasonality of the Company's business, the amounts reported in the Condensed Consolidated Statements of Income are not necessarily indicative of amounts expected for the year. In the opinion of management, the information furnished herein reflects all adjustments, all of a normal recurring nature, which are necessary for a fair statement of the results for the interim periods reported.

1.     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A.    Variable Interest Entity

        The Company adopted Financial Accounting Standards Board Interpretation No. 46 (Revised 2003) (FIN 46), "Consolidation of Variable Interest Entities", effective January 1, 2004, which requires an enterprise's consolidated financial statements to include entities in which the enterprise has a controlling financial interest. The Company has determined that it has a controlling financial interest in South Carolina Generating Company, Inc. (GENCO) under the criteria of FIN 46, and accordingly, the accompanying condensed consolidated financial statements include the accounts of the Company, GENCO and South Carolina Fuel Company, Inc. Prior period amounts have been restated to reflect the adoption of FIN 46. The consolidation resulted in an increase of approximately $336 million in net assets reflected in the condensed consolidated balance sheet for March 31, 2004. The equity interest in GENCO is held solely by SCANA Corporation, the Company's parent. Accordingly, GENCO's equity and results of operations are reflected as a minority interest in the Company's condensed consolidated financial statements, and the adoption of FIN 46 therefore had no impact on the Company's equity, net earnings or cash flows.

        GENCO owns and operates a coal-fired electric generating station with a 615 megawatt net generating capacity (summer rating). GENCO's electricity is sold solely to the Company under the terms of a power purchase and related agreement. Substantially all of GENCO's property (carrying value of approximately $75 million) serves as collateral for its long-term borrowings.

B.    Basis of Accounting

        The Company accounts for its regulated utility operations, assets and liabilities in accordance with the provisions of Statement of Financial Accounting Standards (SFAS) 71, "Accounting for the Effects of Certain Types of Regulation." SFAS 71 requires cost-based rate-regulated utilities to recognize in their financial statements certain revenues and expenses in different time periods than do enterprises that are not rate-regulated. As a result the Company has recorded, as of March 31, 2004, approximately

33

$320 million and $446 million of regulatory assets (including environmental) and liabilities, respectively. Information relating to regulatory assets and liabilities follows.

Millions of dollars	March 31, 2004			December 31, 2003
Accumulated deferred income taxes, net	$	103		$	104
Under-(over-)collections—electric fuel and gas cost adjustment clauses, net		7			39
Deferred environmental remediation costs		10			11
Asset retirement obligation—nuclear decommissioning		47			48
Deferred non-conventional fuel tax benefits, net		(74	)		(67	)
Storm damage reserve		(34	)		(37	)
Franchise agreements		60			62
Non-legal asset retirement obligations		(270	)		(265	)
Other		25			20
Total	$	(126	)	$	(85	)

        Accumulated deferred income tax liabilities arising from utility operations that have not been included in customer rates are recorded as a regulatory asset. Accumulated deferred income tax assets arising from deferred investment tax credits are recorded as a regulatory liability.

        Under-(over-)collections—fuel adjustment clauses, net represent amounts under or over-collected from customers pursuant to the fuel adjustment clause (electric customers) or gas cost adjustment clause (gas customers) as approved by the Public Service Commission of South Carolina (SCPSC) during annual hearings.

        Deferred environmental remediation costs represent costs associated with the assessment and clean-up of manufactured gas plant (MGP) sites currently or formerly owned by the Company. Costs incurred at sites owned by the Company are being recovered through rates. Such costs, totaling approximately $9.8 million, are expected to be fully recovered by the end of 2009.

        Asset retirement obligation—nuclear decommissioning represents the regulatory asset associated with the legal obligation to decommission and dismantle V. C. Summer Nuclear Station (Summer Station) as required by SFAS 143, "Accounting for Asset Retirement Obligations."

        Deferred non-conventional fuel tax benefits, net represent the deferral of partnership losses and other expenses of approximately $44 million, offset by the accumulated deferred income tax credits of approximately $117 million associated with the Company's two partnerships involved in converting coal to synthetic fuel. Under a plan approved by the SCPSC, any tax credits generated from non-conventional fuel produced by the partnerships and consumed by the Company and ultimately passed through to the Company, net of partnership losses and other expenses, have been and will be deferred and will be applied to offset the capital costs of projects required to comply with legislative or regulatory actions.

        The storm damage reserve represents an SCPSC approved reserve account capped at $50 million to be collected through rates over a period of approximately ten years. The accumulated storm damage reserve can be applied to offset actual storm damage costs in excess of $2.5 million in a calendar year.

        Franchise agreements represent costs associated with the 30-year electric and gas franchise agreements with the cities of Charleston and Columbia, South Carolina. These amounts are not earning a return, but are being amortized through cost of service over approximately 15 years.

        Non-legal asset retirement obligations represent net collections through depreciation rates of estimated costs to be incurred for the future retirement of assets for which no legal retirement obligation exists.

34

        The SCPSC has reviewed and approved through specific orders most of the items shown as regulatory assets. Other items represent costs which are not yet approved for recovery by the SCPSC. In recording these costs as regulatory assets, management believes the costs will be allowable under existing rate-making concepts that are embodied in rate orders received by the Company. However, ultimate recovery is subject to SCPSC approval. In the future, as a result of deregulation or other changes in the regulatory environment, the Company may no longer meet the criteria for continued application of SFAS 71 and could be required to write off its regulatory assets and liabilities. Such an event could have a material adverse effect on the Company's results of operations, liquidity or financial position in the period the write-off would be recorded.

C.    Affiliated Transactions

        The Company has entered into agreements with certain affiliates to purchase gas for resale to its distribution customers and to purchase electric energy. The Company purchases all of its natural gas requirements from South Carolina Pipeline Corporation (SCPC). The Company had approximately $26.8 million and $39.5 million payable to SCPC for such gas purchases at March 31, 2004 and December 31, 2003, respectively.

        The Company holds two equity-method investments in partnerships involved in converting coal to non-conventional fuel. The Company had recorded as receivables from these affiliated companies for these investments approximately $17.8 million and $13.4 million at March 31, 2004 and December 31, 2003, respectively. The Company had recorded as payables to these affiliated companies approximately $15.6 million and $12.2 million at March 31, 2004 and December 31, 2003, respectively.

D.    Pension and Other Postretirement Benefit Plans

        Components of net periodic benefit income or cost recorded by the Company were as follows:

							Other Postretirement Benefits
	Pension Benefits
Three months ended March 31 (Millions of dollars)
	2004			2003			2004			2003
Service cost	$	2.8		$	2.6		$	0.8		$	1.3
Interest cost		9.1			9.5			2.9			3.8
Expected return on assets		(17.7	)		(15.0	)		—			—
Prior service cost amortization		1.6			1.6			0.2			0.8
Transition obligation amortization		0.2			0.2			0.3			0.3
Actuarial (gain) loss		—			0.5			0.5			0.2
Amount attributable to company affiliates		(0.4	)		(0.5	)		(0.9	)		(1.2	)
Net periodic benefit (income) cost	$	(4.4	)	$	(1.1	)	$	3.8		$	5.2

E.    Reclassifications

        Certain amounts from prior periods have been reclassified to conform with the presentation adopted for 2004.

2.     RATE AND OTHER REGULATORY MATTERS

Electric

        In January 2003, in conjunction with the approval of a retail rate increase, the SCPSC deferred action on the recovery of certain purchased power costs pending the resolution of the appeal of the SCPSC's May 2002 order. In May 2002 the SCPSC approved the Company's request to increase the fuel component of rates charged to electric customers, which reflected higher fuel costs projected for

35

the period May 2002 through April 2003. The increase also provided continued recovery for under-collected actual fuel costs through April 2001, including short-term purchased power costs necessitated by outages at two of the Company's base load generating plants in winter 2000–2001. The Consumer Advocate of South Carolina (Consumer Advocate) appealed to the South Carolina Circuit Court (Circuit Court) the portion of the SCPSC's order related to the recovery of certain purchased power costs. The Circuit Court ruled that the current fuel clause only provides for the recovery of the fuel costs included in purchased power and not the total cost of the power purchased. The Circuit Court remanded the case to the SCPSC for final disposition. In April 2004 the SCPSC approved a stipulation agreement between the Consumer Advocate and SCE&G whereby SCE&G would be allowed to defer for recovery in a future rate proceeding the portion of the purchased power costs not allowed to be recovered through the fuel clause.

        In April 2004 the SCPSC approved SCE&G's request to increase the fuel component of rates charged to electric customers from 1.678 cents per KWh to 1.821 cents per KWh. The increase reflects higher fuel costs projected for the period May 2004 through April 2005. The increase also provides continued recovery for under-collected actual fuel costs through February 2004. The new rates will be effective as of the first billing cycle in May 2004.

Gas

        The Company's rates are established using a cost of gas component approved by the SCPSC which may be modified periodically to reflect changes in the price of natural gas purchased by the Company.

        The Company's cost of gas component in effect during the period January 1, 2003 through March 31, 2004 was as follows:

Rate Per Therm		Effective Date
$	.728	January–February 2003
	.928	March–October 2003
	.877	November 2003–March 2004

        The SCPSC allows the Company to recover, through a billing surcharge to its gas customers, the costs of environmental cleanup at the sites of former MGPs. The billing surcharge is subject to annual review and provides for the recovery of substantially all actual and projected site assessment and cleanup costs and environmental claims settlements for the Company's gas operations that had previously been recorded in deferred debits. In October 2003, as a result of the annual review, the SCPSC approved the Company's request to reduce the billing surcharge from 3.0 cents per therm to 0.8 cents per therm, which is intended to provide for the recovery, prior to the end of the year 2009, of the balance remaining at March 31, 2004 of $9.8 million.

3.     LONG-TERM DEBT

        On February 11, 2004 GENCO issued $100 million of senior secured promissory notes maturing February 1, 2024 and bearing a fixed interest rate of 5.49%. Proceeds from this issuance were used to support GENCO's construction program and to repay intercompany advances borrowed for that purpose.

4.     RETAINED EARNINGS

        The Company's Restated Articles of Incorporation contain provisions that, under certain circumstances, could limit the payment of cash dividends on its common stock. In addition, with respect to hydroelectric projects, the Federal Power Act requires the appropriation of a portion of certain earnings therefrom. At March 31, 2004 approximately $45.3 million of retained earnings were restricted by this requirement as to payment of cash dividends on common stock.

36

5.     COMMITMENTS AND CONTINGENCIES

        Reference is made to Note 10 to the consolidated financial statements appearing in the Company's Annual Report on Form 10-K for the year ended December 31, 2003. Commitments and Contingencies at March 31, 2004 include the following:

A.    Lake Murray Dam Reinforcement

        In October 1999 the United States Federal Energy Regulatory Commission (FERC) mandated that the Company reinforce its Lake Murray Dam in order to comply with new federal safety standards. Construction for the project and related activities, which began in the third quarter of 2001, is expected to cost approximately $275 million and be completed in 2005. Costs incurred through March 31, 2004 totaled approximately $192 million.

B.    Nuclear Insurance

        The Price-Anderson Indemnification Act, which deals with public liability for a nuclear incident, currently establishes the liability limit for third-party claims associated with any nuclear incident at $10.8 billion. Each reactor licensee is currently liable for up to $100.6 million per reactor owned for each nuclear incident occurring at any reactor in the United States, provided that not more than $10 million of the liability per reactor would be assessed per year. The Company's maximum assessment, based on its two-thirds ownership of Summer Station, would be approximately $67.1 million per incident, but not more than $6.7 million per year.

        Congress failed to renew the Price-Anderson Indemnification Act when it expired in 2003. The delayed renewal has no impact on the Company due to the "grandfathered" status of existing licensees that are covered under the expired Act until such time as it is renewed.

        The Company currently maintains policies (for itself and on behalf of the South Carolina Public Service Authority) with Nuclear Electric Insurance Limited. The policies, covering the nuclear facility for property damage, excess property damage and outage costs, permit retrospective assessments under certain conditions to cover insurer's losses. Based on the current annual premium, the Company's portion of the retrospective premium assessment would not exceed $15.8 million.

        To the extent that insurable claims for property damage, decontamination, repair and replacement and other costs and expenses arising from a nuclear incident at Summer Station exceed the policy limits of insurance, or to the extent such insurance becomes unavailable in the future, and to the extent that the Company's rates would not recover the cost of any purchased replacement power, the Company will retain the risk of loss as a self-insurer. The Company has no reason to anticipate a serious nuclear incident at Summer Station. If such an incident were to occur, it would have a material adverse impact on the Company's results of operations, cash flows and financial position.

C.    Environmental

        The Company maintains an environmental assessment program to identify and evaluate current and former sites that could require environmental cleanup. As site assessments are initiated, estimates are made of the amount of expenditures, if any, deemed necessary to investigate and clean up each site. These estimates are refined as additional information becomes available; therefore, actual expenditures could differ significantly from the original estimates. Amounts estimated and accrued to date for site assessments and cleanup relate solely to regulated operations.

        At the Company, site assessment and cleanup costs are deferred and amortized with recovery provided through rates. Deferred amounts, net of amounts previously recovered through rates and insurance settlements, totaled $9.8 million at March 31, 2004. The deferral includes the estimated costs associated with the following matters.

37

        The Company owns a decommissioned MGP site in the Calhoun Park area of Charleston, South Carolina. The site is currently being remediated for benzene contamination in the intermediate aquifer on surrounding properties. SCE&G anticipates that the remaining remediation activities will be completed by the end of 2004, with certain monitoring and retreatment activities continuing until 2007. As of March 31, 2004, the Company has spent approximately $19.8 million to remediate the Calhoun Park site and expects to spend an additional $2 million.

        The Company owns three other decommissioned MGP sites in South Carolina which contain residues of by-product chemicals. Two of these sites are currently being remediated under work plans approved by the South Carolina Department of Health and Environmental Control (DHEC). The Company is continuing to investigate the remaining site and is monitoring the nature and extent of residual contamination. The Company anticipates that major remediation activities for the three owned sites will be completed before 2006. As of March 31, 2004, the Company has spent approximately $3.1 million related to these sites, and expects to spend an additional $4.9 million.

D.    Claims and Litigation

        On August 21, 2003, the Company was served as a co-defendant in a purported class action lawsuit styled as Collins v. Duke Energy Corporation, Progress Energy Services Company, and South Carolina Electric & Gas Company, in South Carolina's Circuit Court of Common Pleas for the Fifth Judicial Circuit. The plaintiffs are seeking damages for the alleged improper use of electric transmission easements but have not asserted a dollar amount for their claims. Specifically, the plaintiffs contend that the licensing of attachments on electric utility poles, towers and other facilities to non-utility third parties or telecommunication companies for other than the electric utilities' internal use along the electric transmission line right-of-way constitutes a trespass. The Company is confident of the propriety of its actions and intends to mount a vigorous defense. The Company further believes that the resolution of these claims will not have a material adverse impact on its results of operations, cash flows or financial condition.

        A complaint was filed on October 22, 2003 against the Company by the State of South Carolina alleging that the Company violated the Unfair Trade Practices Act by charging municipal franchise fees to some customers residing outside a municipality's limits. The complaint also alleges that the Company failed to obey, observe, or comply with the lawful order of the SCPSC by charging franchise fees to those not residing in a municipality. The complaint seeks restitution to all affected customers and penalties up to $5,000 for each separate violation. The Company is confident of the reasonableness of its actions and intends to mount a vigorous defense. The allegations contained in the complaint are the subject of a similar lawsuit that was filed and served on the Company, for which a Motion to Dismiss is pending. The allegations are also the subject of a purported class action lawsuit filed on or about December 12, 2003 against Duke Energy Corporation, Progress Energy Services Company and the Company. The Company further believes that the resolution of these actions will not have a material adverse impact on its results of operations, cash flows or financial condition. In addition, the Company filed a petition with the SCPSC on October 23, 2003 pursuant to S. C. Code Ann. R.103-836. The petition requests that the SCPSC exercise its jurisdiction to investigate the operation of the municipal franchise fee collection requirements applicable to the Company's electric and gas service, to approve the Company's efforts to correct any past franchise fee billing errors, to adopt improvements in the system which will reduce such errors in the future, and to adopt any regulation which the SCPSC deems just and proper to regulate the franchise fee collection process.

        The Company is also engaged in various other claims and litigation incidental to its business operations which management anticipates will be resolved without material loss to the Company.

38

6.     SEGMENT OF BUSINESS INFORMATION

        The Company's reportable segments are listed in the following table. The Company uses operating income to measure profitability for its regulated operations. Therefore, net income is not allocated to the Electric Operations and Gas Distribution segments. Intersegment revenues were not significant.

Disclosure of Reportable Segments
(Millions of Dollars)

	2004						2003
Three Months Ended March 31,	External Revenue		Operating Income		Segment Assets		External Revenue		Operating Income		Segment Assets
Electric Operations	$	381	$	97	$	5,080	$	337	$	84	$	4,587
Gas Distribution		146		16		325		140		18		315
Adjustments/Eliminations		—		—		1,259		—		—		1,156
Consolidated Total	$	527	$	113	$	6,664	$	477	$	102	$	6,058

39

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

SOUTH CAROLINA ELECTRIC & GAS COMPANY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

        The following discussion should be read in conjunction with Management's Discussion and Analysis of Financial Condition and Results of Operations appearing in South Carolina Electric & Gas Company's (SCE&G) Annual Report on Form 10-K for the year ended December 31, 2003.

        Statements included in this discussion and analysis (or elsewhere in this quarterly report) 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) changes in the utility regulatory environment, (3) changes in the economy, especially in SCE&G's service territory, (4) the impact of competition from other energy suppliers, including competition from alternate fuels in industrial interruptible markets, (5) growth opportunities, (6) the results of financing efforts, (7) changes in SCE&G's accounting policies, (8) weather conditions, especially in areas served by SCE&G, (9) performance of SCANA Corporation's (SCANA) pension plan assets and the impact on SCE&G's results of operations, (10) inflation, (11) changes in environmental regulations and (12) the other risks and uncertainties described from time to time in SCE&G's periodic reports filed with the United States Securities and Exchange Commission. SCE&G disclaims any obligation to update any forward-looking statements.

Electric Operations

        In April 2004 the joint U.S.-Canada Power System Outage Task Force issued its "Final Report on the August 14, 2003 Blackout in the United States and Canada: Causes and Recommendations" (Blackout Report). The Blackout Report contains 46 recommendations that, if implemented, the Task Force believes would improve reliability of North America's interconnected bulk power system (the grid). Full implementation of the Blackout Report's recommendations would require a number of actions by legislative, regulatory and industry participants. However, the Blackout Report asserts as its single most important recommendation that the U.S. Congress should enact the reliability provisions contained in the Energy Bill, different versions of which passed the House and Senate in 2003 but have stalled in conference committee. Various provisions of the Energy Bill related to electric reliability are being resubmitted as separate legislation (reliability legislation). It is anticipated that any reliability legislation, if passed, would make reliability standards mandatory and enforceable with penalties for non-compliance and would strengthen the role of the U.S. Federal Energy Regulatory Commission (FERC), enabling it to enact regulatory initiatives that would significantly change the country's existing regulatory framework governing transmission, open access and energy markets and would attempt, in large measure, to standardize the national energy market. The Company cannot predict whether Congress will enact reliability legislation or the extent to which the other recommendations contained in the Blackout Report will be implemented. If implemented, such legislation could have a significant impact on SCE&G's access to or cost of power for its native load customers and on SCE&G's marketing of power outside of its service territory.

40

        In addition, the North American Electric Reliability Council (NERC) is expected to proceed with its initiatives to develop, establish and enforce standards for the grid. To that end, NERC is working closely with FERC to implement stronger reliability standards among NERC's voluntary membership. SCE&G, along with other NERC members, is also working closely with NERC in these efforts. Such initiatives would be significantly influenced by any reliability legislation enacted by Congress. If implemented, such initiatives by FERC and NERC could have a significant impact on SCE&G's access to or cost of power for its native load customers and on SCE&G's marketing of power outside its service territory.

41

RESULTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2004
AS COMPARED TO THE CORRESPONDING PERIOD IN 2003

Net Income

        Net income for the periods ended March 31, 2004 and 2003 was as follows:

	First Quarter
Millions of dollars
	2004		2003
Net income	$	53.8	$	47.0

        Net income increased due to higher electric margins of $16.6 million and a reduction of preferred dividend requirements of $0.9 million, partially offset by lower gas margins of $3.1 million, higher operation and maintenance expense of $3.1 million, higher depreciation expense of $1.6 million, higher property taxes of $2.4 million and higher interest expense of $0.7 million.

Pension Income

        Pension income was recorded on SCE&G's financial statements as follows:

		First Quarter
Millions of dollars
		2004		2003
Income Statement Impact:
	Reduction in (component of) employee benefit costs	$	1.4	$	(0.7	)
	Other income		2.5		2.0
Balance Sheet Impact:
	Reduction in (component of) capital expenditures		0.4		(0.2	)
	Component of amount due to Summer Station co-owner		0.1		—
Total Pension Income		$	4.4	$	1.1

        For the last several years, the market value of SCANA's retirement plan (pension) assets has exceeded the total actuarial present value of accumulated plan benefits. SCE&G's portion of SCANA's pension income in the first quarter of 2004 increased compared to the corresponding period in 2003 primarily as a result of a more favorable investment market.

Allowance for Funds Used During Construction (AFC)

        AFC is a utility accounting practice whereby a portion of the cost of both equity and borrowed funds used to finance construction (which is shown on the balance sheet as construction work in progress) is capitalized. SCE&G includes an equity portion of AFC in nonoperating income and a debt portion of AFC in interest charges (credits) as noncash items, both of which have the effect of increasing reported net income. The increase in AFC for the three months ended March 31, 2004 is primarily due to construction expenditures related to the Jasper County Generating Station Project and the Lake Murray Dam Project (see discussion at CAPITAL PROJECTS).

42

Dividends Declared

        SCE&G and GENCO's Board of Directors has declared the following dividends on common stock held by SCANA during 2004:

Declaration Date	Amount		Quarter Ended	Payment Date
February 19, 2004	$	36.0 million	March 31, 2004	April 1, 2004
April 29, 2004	$	37.0 million	June 30, 2004	July 1, 2004

Electric Operations

        Electric Operations is comprised of the electric operations of SCE&G, GENCO and South Carolina Fuel Company, Inc. Electric operations sales margins were as follows:

	First Quarter
Millions of dollars	2004		% Change	2003
Operating Revenues	$	381.1	13.0%	$	337.4
Less: Fuel used in generation		95.4	18.1%		80.8
Purchased power		12.7	21.0%		10.5
Margin	$	273.0	10.9%	$	246.1

        Margin increased primarily due to increased retail electric base rates that went into effect in February 2003 for a total impact of $7.1 million, an additional $3.2 million due to favorable weather, $14.6 million from off-system sales and $2.0 million due to customer growth and consumption.

Gas Distribution

        Gas Distribution is comprised of the local distribution operations of SCE&G. Gas distribution sales margins (including transactions with affiliates) were as follows:

	First Quarter
Millions of dollars
	2004		% Change	2003
Operating Revenues	$	145.7	4.0%	$	140.1
Less: Gas purchased for resale		110.8	10.6%		100.2
Margin	$	34.9	(12.5)%	$	39.9

        Margin decreased primarily due to decreased recovery of environmental remediation expenses of $3.2 million (offset in operations and maintenance) and an unfavorable competitive position of natural gas relative to alternate fuels of $1.9 million.

Other Operating Expenses

        Other operating expenses were as follows:

	First Quarter
Millions of dollars	2004		% Change	2003
Other operation and maintenance	$	108.7	4.8%	$	103.7
Depreciation and amortization		51.9	5.3%		49.3
Other taxes		35.0	12.5%		31.1
Total	$	195.6	6.3%	$	184.1

43

        Other operation and maintenance expenses increased primarily due to increased labor and benefit costs of $2.4 million, 2004 winter storm restoration expenses of $2.5 million and increased expenses at electric generation plants of $3.4 million, partially offset by decreased recovery of environmental remediation expenses of $3.2 million (offset in gas margin) and increased pension income of $2.1 million. Depreciation and amortization expense increased primarily due to normal net property changes. Other taxes increased primarily due to increased property taxes.

Other Income

        Other income, including AFC, decreased primarily due to reduced other non-operating income partially offset by an increase in AFC due to construction expenditures related to the Jasper County Generation Station Project and the Lake Murray Dam Project.

Interest Expense

        Interest expense increased by $3.9 million due to increased long-term debt partially offset by $2.1 million due to lower interest rates and by $1.0 million due to increased AFC.

Income Taxes

        Income taxes increased primarily as a result of changes in operating income.

LIQUIDITY AND CAPITAL RESOURCES

        SCE&G anticipates that its contractual cash obligations will be met through internally generated funds and the incurrence of additional short-term and long-term indebtedness. SCE&G expects that it has or can obtain adequate sources of financing to meet its projected cash requirements for the foreseeable future. SCE&G's ratio of earnings to fixed charges for the 12 months ended March 31, 2004 was 3.07.

        SCE&G's cash requirements arise primarily from its operational needs, funding its construction programs and payment of dividends to SCANA. The ability of SCE&G to replace existing plant investment, as well as to expand to meet future demand for electricity and gas, will depend upon its ability to attract the necessary financial capital on reasonable terms. SCE&G recovers the costs of providing services through rates charged to customers. Rates for regulated services are generally based on historical costs. As customer growth and inflation occur and SCE&G continues its ongoing construction program, SCE&G expects to seek increases in rates. SCE&G's future financial position and results of operations will be affected by its ability to obtain adequate and timely rate and other regulatory relief, if requested.

        The following table summarizes how SCE&G generated and used funds for property additions and construction expenditures during the three months ended March 31, 2004 and 2003:

	Three Months Ended March 31,
Millions of dollars
	2004			2003
Net cash provided from operating activities	$	53		$	66
Net cash provided from financing activities		81			92
Funds used for investments		(3	)		(4	)
Cash and temporary cash investments available at the beginning of the period		56			23
Funds used for utility property additions and construction expenditures, net of noncash allowance for funds used during construction	$	107		$	155
Funds used for nonutility property additions		1			—

44

        SCE&G intends to file an electric rate case with the SCPSC in the summer of 2004 requesting, among other things, recovery of capital expenditures related to the generating facility in Jasper County, South Carolina. This filing will also include SCE&G's plan to use synthetic fuel tax credits to offset construction costs of SCE&G's reinforcement dam at Lake Murray. The SCPSC would be expected to render its decision on the filing within six months of the rate application being filed.

CAPITAL TRANSACTIONS

        On February 11, 2004 GENCO issued $100 million of senior secured promissory notes maturing February 1, 2024 and bearing a fixed interest rate of 5.49%. Proceeds from this issuance were used to support GENCO's construction program and to repay intercompany advances borrowed for that purpose.

CAPITAL PROJECTS

        Construction of SCE&G's 875 megawatt generation facility in Jasper County, South Carolina has been completed. The facility includes three natural gas combustion-turbine generators and one steam-turbine generator. The $450 million facility began commercial operation in May 2004.

        In October 1999 FERC mandated that SCE&G reinforce its Lake Murray Dam in order to comply with new federal safety standards. Construction for the project and related activities, which began in the third quarter of 2001, is expected to cost approximately $275 million and be completed in 2005. Costs incurred through March 31, 2004 totaled approximately $192 million.

ENVIRONMENTAL MATTERS

        For information on environmental matters see Note 5C to condensed consolidated financial statements.

OTHER MATTERS

Nuclear Station

        In April 2004 the Nuclear Regulatory Commission (NRC) approved SCE&G's application for a 20-year license extension for its V. C. Summer Nuclear Station (Summer Station). The extension allows the plant to operate through 2042.

Synthetic Fuel

        SCE&G holds two equity-method investments in partnerships involved in converting coal to non-conventional fuel, the use of which fuel qualifies for federal income tax credits. The aggregate investment in these partnerships as of March 31, 2004 is approximately $3 million, and through March 31, 2004, they have generated and passed through to SCE&G approximately $107 million in such tax credits. At March 31, 2004 SCE&G has recorded on its balance sheet $74 million net deferred fuel tax benefits, which include partnership losses, net of tax.

        Under a plan approved by the SCPSC, any tax credits generated and ultimately passed through to SCE&G from synfuel produced for and consumed by SCE&G, net of partnership losses and other expenses, have been and will be deferred and will be applied to offset the capital costs of projects required to comply with legislative or regulatory actions. See Note 1B to condensed consolidated financial statements.

        In March 2004 SCANA received a "No Change" letter from the Internal Revenue Service (IRS) related to SCE&G's interest in the synthetic fuel partnership S. C. Coaltech No. l L.P. for the tax year 2000. This letter supports SCANA's position that the synthetic fuel tax credits have been properly claimed.

45

Item 3. Quantitative and Qualitative Disclosures About Market Risk

        All financial instruments held by SCE&G and GENCO described below are held for purposes other than trading.

        Interest rate risk—The table below provides information about long-term debt issued by SCE&G and GENCO which is sensitive to changes in interest rates. For debt obligations the table presents principal cash flows and related weighted average interest rates by expected maturity dates. Fair values for debt represent quoted market prices.

As of March 31, 2004	Expected Maturity Date
Millions of dollars Liabilities	2004	2005	2006	2007	2008	There- after	Total	Fair Value
Long-Term Debt:
Fixed Rate ($)	139.2	189.2	169.9	39.2	39.2	1,821.9	2,398.6	2,339.8
Average Interest Rate (%)	7.46	7.37	8.51	6.86	6.86	6.03	6.42

        While a decrease in interest rates would increase the fair value of debt, it is unlikely that events which would result in a realized loss will occur.

Item 4. Controls and Procedures

        As of March 31, 2004 an evaluation was performed under the supervision and with the participation of SCE&G's management, including the Chief Executive Officer (CEO) and Chief Financial Officer (CFO), of the effectiveness of the design and operation of SCE&G's disclosure controls and procedures. Based on that evaluation, SCE&G's management, including the CEO and CFO, concluded that as of March 31, 2004 SCE&G's disclosure controls and procedures were effective. There has been no change in SCE&G's internal control over financial reporting during the quarter ended March 31, 2004 that has materially affected or is reasonably likely to materially affect SCE&G's internal control over financial reporting.

46

PUBLIC SERVICE COMPANY OF NORTH CAROLINA, INCORPORATED
FINANCIAL SECTION

        Public Service Company of North Carolina, Incorporated meets the conditions set forth in General Instruction H(1)(a) and (b) of Form 10-Q and therefore is filing this form with the reduced disclosure format allowed under General Instruction H(2).

47

Item 1. Financial Statements

PUBLIC SERVICE COMPANY OF NORTH CAROLINA, INCORPORATED
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)

Millions of dollars			March 31, 2004			December 31, 2003
Assets
Gas Utility Plant			$	931		$	923
Accumulated depreciation				(261	)		(256	)
Acquisition Adjustment, Net of Accumulated Amortization				210			210
Gas Utility Plant, Net				880			877
Nonutility Property and Investments, Net				27			28
Current Assets:
	Cash and temporary investments			33			18
	Restricted cash and temporary investments			8			7
	Receivables, net of allowance for uncollectible accounts of $3 and $3			96			115
	Receivables-affiliated companies			6			5
	Inventories (at average cost):
		Stored gas		26			56
		Materials and supplies		5			5
	Prepayments			1			2
	Deferred income taxes, net			4			3
	Total Current Assets			179			211
Deferred Debits:
	Due from affiliate-pension asset			13			13
	Regulatory assets			19			17
	Other			8			6
	Total Deferred Debits			40			36
Total			$	1,126		$	1,152
Capitalization and Liabilities
Capitalization:
	Common equity		$	521		$	502
	Long-term debt, net			278			278
	Total Capitalization			799			780
Current Liabilities:
	Short-term borrowings			—			55
	Current portion of long-term debt			8			8
	Accounts payable			35			48
	Accounts payable-affiliated companies			5			2
	Customer deposits			7			7
	Taxes accrued			25			10
	Interest accrued			4			6
	Distributions/dividends declared			4			4
	Other			12			15
	Total Current Liabilities			100			155
Deferred Credits:
	Deferred income taxes, net			96			96
	Deferred investment tax credits			2			2
	Due to affiliate-postretirement benefits			17			17
	Regulatory liabilities			99			86
	Other			13			16
	Total Deferred Credits			227			217
Total			$	1,126		$	1,152

See Notes to Condensed Consolidated Financial Statements.

48

PUBLIC SERVICE COMPANY OF NORTH CAROLINA, INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)

		Three Months Ended March 31,
Millions of dollars
		2004		2003
Operating Revenues		$	226	$	203
Cost of Gas			153		131
Gross Margin			73		72
Operating Expenses:
	Operation and maintenance		20		19
	Depreciation		9		9
	Other taxes		2		2
	Total Operating Expenses		31		30
Operating Income			42		42
Other Income, Including Allowance for Equity Funds Used During Construction			—		2
Interest Charges, Net of Allowance for Borrowed Funds Used During Construction			5		5
Income Before Income Tax Expense			37		39
Income Tax Expense			14		15
Net Income		$	23	$	24

See Notes to Condensed Consolidated Financial Statements.

49

PUBLIC SERVICE COMPANY OF NORTH CAROLINA, INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

				Three Months Ended March 31,
Millions of dollars
				2004			2003
Cash Flows From Operating Activities:
	Net income			$	23		$	24
	Adjustments to reconcile net income to net cash provided from operating activities:
		Depreciation and amortization			9			9
		Loss on sale of assets			1			—
		Over (under) collection, gas cost adjustment clause			7			(6	)
		Changes in certain assets and liabilities:
			(Increase) decrease in receivables, net		18			(6	)
			(Increase) decrease in inventories		30			20
			Increase (decrease) in accounts payable		(10	)		1
			Increase (decrease) in deferred income taxes, net		(1	)		1
			Increase (decrease) in regulatory liabilities		1			—
			Increase (decrease) in taxes accrued		15			15
		Changes in other assets			—			2
		Changes in other liabilities			(6	)		(8	)
Net Cash Provided From Operating Activities					87			52
Cash Flows From Investing Activities:
	Construction expenditures				(13	)		(10	)
	Nonutility and other				—			(1	)
Net Cash Used For Investing Activities					(13	)		(11	)
Cash Flows From Financing Activities:
	Repayment of short-term borrowings, net				(55	)		(31	)
	Distributions/dividend payments				(4	)		(5	)
Net Cash Used For Financing Activities					(59	)		(36	)
Net Increase In Cash and Temporary Investments					15			5
Cash and Temporary Investments, January 1					18			1
Cash and Temporary Investments, March 31				$	33		$	6
Supplemental Cash Flow Information:
Cash paid for—Interest (net of capitalized interest of $0.2 and $0.4)				$	7		$	6
—Income taxes					—			—

See Notes to Condensed Consolidated Financial Statements.

50

PUBLIC SERVICE COMPANY OF NORTH CAROLINA, INCORPORATED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2004
(Unaudited)

        The following notes should be read in conjunction with the Notes to Consolidated Financial Statements appearing in Public Service Company of North Carolina, Incorporated's (the Company) Annual Report on Form 10-K for the year ended December 31, 2003. These are interim financial statements, and due to the seasonality of the Company's business, the amounts reported in the Condensed Consolidated Statements of Income are not necessarily indicative of amounts expected for the year. In the opinion of management, the information furnished herein reflects all adjustments, all of a normal recurring nature, which are necessary for a fair statement of the results for the interim periods reported.

1.     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A.    Basis of Accounting

        The Company accounts for its regulated utility operations, assets and liabilities in accordance with the provisions of Statement of Financial Accounting Standards (SFAS) 71, "Accounting for the Effects of Certain Types of Regulation." SFAS 71 requires cost-based rate-regulated utilities to recognize in their financial statements certain revenues and expenses in different time periods than do enterprises that are not rate-regulated. As a result, the Company has recorded as of March 31, 2004 approximately $19 million and $99 million of regulatory assets and liabilities, respectively. Information relating to regulatory assets and liabilities follows.

Millions of dollars	March 31, 2004			December 31, 2003
Excess deferred income taxes	$	(2	)		—
Over-collections-gas cost adjustment clause, net		(8	)	$	(1	)
Deferred environmental remediation costs		9			9
Non-legal asset retirement obligations		(79	)		(77	)
Total	$	(80	)	$	(69	)

        Excess deferred income taxes represent deferred income taxes recorded in prior years at a rate higher than the current statutory rate. Pursuant to a North Carolina Utilities Commission (NCUC) order, the Company is required to refund these amounts to customers through a rate decrement.

        Over-collections-gas cost adjustment clause, net represents amounts over-collected from customers pursuant to the Company's Rider D mechanism approved by the NCUC. This mechanism allows the Company to recover all prudently incurred gas costs.

        Deferred environmental remediation costs represent costs associated with the assessment and clean-up of manufactured gas plant (MGP) sites currently or formerly owned by the Company. A portion of the costs incurred has been recovered through rates. Approximately $2.4 million in costs have been incurred and deferred for subsequent rate consideration. (See Note 4.) Management believes that all MGP cleanup costs will be recoverable through gas rates.

        Non-legal asset retirement obligations represent net collections through depreciation rates of estimated costs to be incurred for the future retirement of assets for which no legal retirement obligation exists.

        The NCUC has reviewed and approved through specific orders most of the items shown as regulatory assets. Other items represent costs which are not yet approved for recovery by the NCUC.

51

In recording these costs as regulatory assets, management believes the costs will be allowable under existing rate-making concepts that are embodied in rate orders received by the Company. However, ultimate recovery is subject to NCUC approval. In the future, as a result of deregulation or other changes in the regulatory environment, the Company may no longer meet the criteria for continued application of SFAS 71 and could be required to write off its regulatory assets and liabilities. Such an event could have a material adverse effect on the Company's results of operations, liquidity or financial position in the period the write-off would be recorded.

B.    Total Comprehensive Income

        Total comprehensive income was not significantly different from net income for any period reported. Accumulated other comprehensive income (loss) of the Company totaled $(1.1) million and $(1.0) million as of March 31, 2004 and December 31, 2003, respectively.

C.    Reclassifications

        Certain amounts from prior periods have been reclassified to conform with the presentation adopted for 2004.

2.     RATE AND OTHER REGULATORY MATTERS

        The Company's rates are established using a benchmark cost of gas approved by the NCUC, which may be modified periodically to reflect changes in the market price of natural gas. The Company revises its tariffs with the NCUC as necessary to track these changes and accounts for any over- or under-collections of the delivered cost of gas in its deferred accounts for subsequent rate consideration. The NCUC reviews the Company's gas purchasing practices annually.

        The Company's benchmark cost of gas in effect during the period January 1, 2003 through March 31, 2004 was as follows:

Rate Per Therm		Effective Date
$	.460	January–February 2003
	.595	March 2003
	.725	April–November 2003
	.600	December 2003–March 2004

        For service rendered on and after March 1, 2004, the NCUC authorized the Company to implement decrements in its sales and transportation rate schedules to reflect a decrease of approximately $5.7 million in the Company's annual fixed gas costs as well as the current over-recovery of approximately $16.5 million.

        A state expansion fund, established by the North Carolina General Assembly and funded by refunds from the Company's interstate pipeline transporters, provides financing for expansion into areas that otherwise would not be economically feasible to serve. In June 2000 the NCUC approved the Company's requests for disbursement of up to $28.4 million from the Company's expansion fund to extend natural gas service to Madison, Jackson and Swain Counties in western North Carolina. The Company estimates that the cost of this project will be approximately $31 million. The Madison County and Jackson County portions of the project were completed in 2002, and the Swain County portion was completed and placed in service in April 2004. Through March 31, 2004 approximately $29 million had been spent on this project.

        In December 1999 the NCUC issued an order approving SCANA Corporation's acquisition of the Company. As specified in the order, the Company agreed to a moratorium on general rate cases until

52

August 2005. General rate relief can be obtained during this period to recover costs associated with material adverse governmental actions and force majeure events.

3.     FINANCIAL INSTRUMENTS

        The Company follows the guidance required by SFAS 133 "Accounting for Derivative Instruments and Hedging Activities," as amended, in accounting for derivatives, including those arising from cash flow hedges related to natural gas.

        The Company utilizes hedging activities for natural gas purchases. Transaction fees and any realized gains or losses are recorded in deferred accounts for subsequent rate consideration. As of March 31, 2004 the Company had deferred net costs of approximately $1.9 million.

        The Company also utilizes swap agreements to manage interest rate risk. At March 31, 2004 the estimated fair value of the Company's swaps totaled $2.7 million related to combined notional amounts of $33.1 million.

4.     COMMITMENTS AND CONTINGENCIES

        The Company is responsible for environmental cleanup at five sites in North Carolina on which MGP residuals are present or suspected. The Company's actual remediation costs for these sites will depend on a number of factors, such as actual site conditions, third-party claims and recoveries from other potentially responsible parties. The Company has recorded a liability and associated regulatory asset of approximately $6.8 million, which reflects the estimated remaining liability at March 31, 2004. Amounts incurred and deferred to date that are not currently being recovered through gas rates are approximately $2.4 million. Management believes that all MGP cleanup costs will be recoverable through gas rates.

5.     SEGMENT OF BUSINESS INFORMATION

        Gas Distribution is the Company's only reportable segment. Gas Distribution uses operating income to measure profitability. Intersegment revenues between Gas Distribution and nonreportable segments were not significant.

Disclosure of Reportable Segments
(Millions of dollars)

	2004						2003
Three months Ended March 31,
	External Revenue		Operating Income		Segment Assets		External Revenue		Operating Income		Segment Assets
Gas Distribution	$	226	$	42	$	1,039	$	203	$	42	$	1,023
All Other		—		n/a		28		—		n/a		28
Adjustments/Eliminations		—		—		59		—		—		(18	)
Consolidated Total	$	226	$	42	$	1,126	$	203	$	42	$	1,033

53

Item 2. Management's Narrative Analysis of Results of Operations.

PUBLIC SERVICE COMPANY OF NORTH CAROLINA, INCORPORATED
MANAGEMENT'S NARRATIVE ANALYSIS OF RESULTS OF OPERATIONS

        The following discussion should be read in conjunction with Management's Narrative Analysis of Results of Operations appearing in Public Service Company of North Carolina, Incorporated's (PSNC Energy) Annual Report on Form 10-K for the year ended December 31, 2003.

        Statements included in this narrative analysis (or elsewhere in this quarterly report) 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) changes in the utility regulatory environment, (3) changes in the economy, especially in PSNC Energy's service territory, (4) the impact of competition from other energy suppliers, including competition from alternate fuels in industrial interruptible markets, (5) growth opportunities, (6) the results of financing efforts, (7) changes in PSNC Energy's accounting policies, (8) weather conditions, especially in areas served by PSNC Energy, (9) performance of SCANA Corporation's (SCANA) pension plan assets and the impact on PSNC Energy's results of operations, (10) inflation, (11) changes in environmental regulations and (12) the other risks and uncertainties described from time to time in PSNC Energy's periodic reports filed with the United States Securities and Exchange Commission. PSNC Energy disclaims any obligation to update any forward-looking statements.

Net Income and Distributions/Dividends

        Net income decreased for the three months ended March 31, 2004 approximately $1.6 million compared to the same period in 2003 primarily due to higher operating expenses of $1.7 million and lower other income of $1.5 million, partially offset by increased margin of $0.7 million and lower income taxes of $0.9 million.

        The nature of PSNC Energy's business is seasonal. The quarters ending March 31 and December 31 are generally PSNC Energy's most profitable quarters due to increased demand for natural gas related to space heating requirements.

        PSNC Energy's Board of Directors has authorized the following distributions/dividends on common stock held by SCANA during 2004:

Declaration Date	Amount	Quarter Ended	Payment Date
February 19, 2004	$4.0 million	March 31, 2004	April 1, 2004
April 29, 2004	$3.5 million	June 30, 2004	July 1, 2004

54

Gas Distribution

        Gas distribution is comprised of the local distribution operations of PSNC Energy. Changes in the gas distribution sales margins were as follows:

	First Quarter
Millions of dollars	2004		% Change		2003
Operating revenues	$	226.0	11.2	%	$	203.2
Less: Cost of gas		153.4	16.8	%		131.3
Gross margin	$	72.6	1.0	%	$	71.9

        Gas distribution sales margin for the three months ended March 31, 2004 increased primarily due to customer growth of approximately $1.9 million, higher other operating revenues of $0.3 million and a positive margin impact from changes in the benchmark cost of gas of approximately $0.3 million. This increase was partially offset by a decline in customer usage per degree day of approximately $2.1 million.

Operation and Maintenance Expenses

        Operation and maintenance expenses increased $1.7 million for the three months ended March 31, 2004 compared to the same period in 2003 primarily due to increased labor and benefits costs of $0.9 million and increased administrative and general business expenses of $0.7 million.

Other Income

        Other income decreased $1.5 million compared to the same period in 2003 primarily due to a $1.0 million loss recognized on the sale of PSNC Energy's former corporate headquarters in Gastonia, North Carolina.

Income Taxes

        Income taxes changed primarily as a result of changes in operating and other income.

Capital Expansion Program and Liquidity Matters

        PSNC Energy's capital expansion program includes the construction of lines, systems and facilities and the purchase of related equipment. PSNC Energy's 2004 construction budget is approximately $51 million, compared to actual construction expenditures through March 31, 2004 of $13.4 million. PSNC Energy's ratio of earnings to fixed charges for the 12 months ended March 31, 2004 was 3.27.

        At March 31, 2004 PSNC Energy had no outstanding short-term borrowings and had unused lines of credit of $125 million.

Item 4. Controls and Procedures

        As of March 31, 2004 an evaluation was performed under the supervision and with the participation of PSNC Energy's management, including the Chief Executive Officer (CEO) and Chief Financial Officer (CFO), of the effectiveness of the design and operation of PSNC Energy's disclosure controls and procedures. Based on that evaluation, PSNC Energy's management, including the CEO and CFO, concluded that as of March 31, 2004 PSNC Energy's disclosure controls and procedures were effective. There has been no change in PSNC Energy's internal control over financial reporting during the quarter ended March 31, 2004 that has materially affected or is reasonably likely to materially affect PSNC Energy's internal control over financial reporting.

55

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

        The Company, SCE&G and PSNC Energy are engaged in various claims and litigation incidental to their business operations which management anticipates will be resolved without material loss to the Company. The status of matters previously disclosed in the Company's Annual Report on Form 10-K for 2003 have not changed significantly.

Item 2. Purchases of Equity Securities by the Issuer and Affiliated Purchases

Period	(a) Total number of shares (or units) purchased	(b) Average price paid per share (or unit)		(c) Total number of shares (or units) purchased as part of publicly announced plans or programs	(d) Maximum number (or approximate dollar value) of shares (or units) that may yet be purchased under the plans or programs
January 1, 2004– January 31, 2004	—		—	—	1,155,670
February 1, 2004– February 29, 2004	55,000	$	34.54	55,000	1,100,673
March 1, 2004– March 31, 2004	60,400	$	35.86	60,400	1,018,981
Total	115,400	$	35.23	115,400	1,018,981

        On October 24, 2003, the Company announced that it would repurchase shares of SCANA stock on the open market. Total shares repurchased could not exceed the aggregate, measured at the time of any such purchase, of the number of shares theretofore issued pursuant to the exercise of options granted under the Long-Term Equity Compensation Plan (the Plan) plus the number of shares issuable upon the exercise of options exercisable under the Plan as of the date of such purchase or to become exercisable within 60 days of such date. No expiration date was stated, and the program under which such repurchases were made did not expire during the period covered by the above table. Effective April 29, 2004, the Company discontinued purchasing outstanding shares of common stock on the open market.

Item 3, 4 and 5 are not applicable.

Item 6. Exhibits and Reports on Form 8-K

A.    Exhibits

SCANA Corporation, South Carolina Electric & Gas Company and Public Service Company of North Carolina, Incorporated:

Exhibits filed with this Quarterly Report on Form 10-Q are listed in the following Exhibit Index. Certain of such exhibits which have heretofore been filed with the Securities and Exchange Commission and which are designated by reference to their exhibit numbers in prior filings are hereby incorporated herein by reference and made a part hereof.

As permitted under Item 601(b)(4)(iii) of Regulation S-K, instruments defining the rights of holders of long-term debt of less than 10% of the total consolidated assets of SCANA, for itself and its subsidiaries, of SCE&G, for itself and its subsidiaries, and of PSNC Energy, for itself and

56

its subsidiaries, have been omitted and SCANA, SCE&G and PSNC Energy agree to furnish a copy of such instruments to the Commission upon request.

B.    Reports on Form 8-K during the first quarter 2004 were as follows:

SCANA Corporation:
Date of report:	February 13, 2004
Items reported:	Items 7 & 12
South Carolina Electric & Gas Company:
Date of report:	February 13, 2004
Items reported:	Items 7 & 12
Public Service Company of North Carolina, Incorporated:
Date of report:	February 13, 2004
Items reported:	Items 7 & 12

57

SIGNATURES

        Pursuant to the requirements of the Securities Exchange Act of 1934, each of the registrants has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	SCANA CORPORATION SOUTH CAROLINA ELECTRIC & GAS COMPANY PUBLIC SERVICE COMPANY OF NORTH CAROLINA, INCORPORATED (Registrants)
May 5, 2004	By:	/s/  JAMES E. SWAN, IV James E. Swan, IV Controller (Principal accounting officer)

58

EXHIBIT INDEX

	Applicable to Form 10-Q of
Exhibit No.	SCANA	SCE&G	PSNC Energy	Description
3.01	X			Restated Articles of Incorporation of SCANA Corporation as adopted on April 26, 1989 (Filed as Exhibit 3-A to Registration Statement No. 33-49145 and incorporated by reference herein)
3.02	X			Articles of Amendment dated April 27, 1995 (Filed as Exhibit 4-B to Registration Statement No. 33-62421 and incorporated by reference herein)
3.03		X		Restated Articles of Incorporation of South Carolina Electric & Gas Company, as adopted on May 3, 2001 (Filed as Exhibit 3.01 to Registration Statement No. 333-65460 and incorporated by reference herein)
3.04		X		Articles of Amendment effective as of the dates indicated below and filed as exhibits to the Registration Statements set forth below and are incorporated by reference herein
				May 22, 2001	Exhibit 3.02	to Registration No. 333-65460
				June 14, 2001	Exhibit 3.04	to Registration No. 333-65460
				August 30, 2001	Exhibit 3.05	to Registration No. 333-101449
				March 13, 2002	Exhibit 3.06	to Registration No. 333-101449
				May 9, 2002	Exhibit 3.07	to Registration No. 333-101449
				June 4, 2002	Exhibit 3.08	to Registration No. 333-101449
				August 12, 2002	Exhibit 3.09	to Registration No. 333-101449
				March 13, 2003	Exhibit 3.05	to Registration No. 333-108760
				May 22, 2003	Exhibit 3.05	to Registration No. 333-108760
				June 18, 2003	Exhibit 3.06	to Registration No. 333-108760
				August 7, 2003	Exhibit 3.06	to Registration No. 333-108760
3.05	X			Articles of Correction filed on June 1, 2001 correcting May 22, 2001 Articles of Amendment (Filed as Exhibit 3.03 to Registration Statement No. 333-65460 and incorporated by reference herein)
3.06		X		Articles of Correction filed on February 17, 2004 correcting the Articles of Amendment dated as indicated below and filed as exhibits to Form 10-K for the year ended December 31, 2003 and are incorporated by reference herein
				May 3, 2001	Exhibit 3.06
				May 22, 2001	Exhibit 3.07
				June 14, 2001	Exhibit 3.08
				August 30, 2001	Exhibit 3.09
				March 13, 2002	Exhibit 3.10
				May 9, 2002	Exhibit 3.11
				June 4, 2002	Exhibit 3.12
				August 12, 2002	Exhibit 3.13
				March 13, 2003	Exhibit 3.14
				May 22, 2003	Exhibit 3.15

59

				June 18, 2003	Exhibit 3.16
				August 7, 2003	Exhibit 3.17
3.07	X			By-Laws of SCANA as revised and amended on December 13, 2000 (Filed as Exhibit 3.01 to Registration Statement No. 333-68266 and incorporated by reference herein)
3.08		X		By-Laws of SCE&G as revised and amended on February 22, 2001 (Filed as Exhibit 3.05 to Registration Statement No. 333-65460 and incorporated by reference herein)
3.09			X	By-Laws of PSNC Energy as revised and amended on February 22, 2001 (Filed as Exhibit 3.01 to Registration Statement No. 333-68516 and incorporated by reference herein)
4.01	X	X		Articles of Exchange of South Carolina Electric & Gas Company and SCANA Corporation (Filed as Exhibit 4-A to Post-Effective Amendment No. 1 to Registration Statement No. 2-90438 and incorporated by reference herein)
4.02	X			Indenture dated as of November 1, 1989 between SCANA Corporation and The Bank of New York, as Trustee (Filed as Exhibit 4-A to Registration No. 33-32107 and incorporated by reference herein)
4.03	X	X		Indenture dated as of January 1, 1945, between the South Carolina Power Company and Central Hanover Bank and Trust Company, as Trustee, as supplemented by three Supplemental Indentures dated respectively as of May 1, 1946, May 1, 1947 and July 1, 1949 (Filed as Exhibit 2-B to Registration Statement No. 2-26459 and incorporated by reference herein)
4.04	X	X		Fourth Supplemental Indenture dated as of April 1, 1950, to Indenture referred to in Exhibit 4.03, pursuant to which SCE&G assumed said Indenture (Exhibit 2-C to Registration Statement No. 2-26459 and incorporated by reference herein)
4.05	X	X		Fifth through Fifty-third Supplemental Indenture referred to in Exhibit 4.03 dated as of the dates indicated below and filed as exhibits to the Registration Statements set forth below and are incorporated by reference herein
				December 1, 1950	Exhibit 2-D	to Registration No. 2-26459
				July 1, 1951	Exhibit 2-E	to Registration No. 2-26459
				June 1, 1953	Exhibit 2-F	to Registration No. 2-26459
				June 1, 1955	Exhibit 2-G	to Registration No. 2-26459
				November 1, 1957	Exhibit 2-H	to Registration No. 2-26459
				September 1, 1958	Exhibit 2-I	to Registration No. 2-26459
				September 1, 1960	Exhibit 2-J	to Registration No. 2-26459
				June 1, 1961	Exhibit 2-K	to Registration No. 2-26459
				December 1, 1965	Exhibit 2-L	to Registration No. 2-26459
				June 1, 1966	Exhibit 2-M	to Registration No. 2-26459
				June 1, 1967	Exhibit 2-N	to Registration No. 2-29693

60

September 1, 1968	Exhibit 4-O	to Registration No. 2-31569
June 1, 1969	Exhibit 4-C	to Registration No. 33-38580
December 1, 1969	Exhibit 4-O	to Registration No. 2-35388
June 1, 1970	Exhibit 4-R	to Registration No. 2-37363
March 1, 1971	Exhibit 2-B-17	to Registration No. 2-40324
January 1, 1972	Exhibit 2-B	to Registration No. 33-38580
July 1, 1974	Exhibit 2-A-19	to Registration No. 2-51291
May 1, 1975	Exhibit 4-C	to Registration No. 33-38580
July 1, 1975	Exhibit 2-B-21	to Registration No. 2-53908
February 1, 1976	Exhibit 2-B-22	to Registration No. 2-55304
December 1, 1976	Exhibit 2-B-23	to Registration No. 2-57936
March 1, 1977	Exhibit 2-B-24	to Registration No. 2-58662
May 1, 1977	Exhibit 4-C	to Registration No. 33-38580
February 1, 1978	Exhibit 4-C	to Registration No. 33-38580
June 1, 1978	Exhibit 2-A-3	to Registration No. 2-61653
April 1, 1979	Exhibit 4-C	to Registration No. 33-38580
June 1, 1979	Exhibit 2-A-3	to Registration No. 33-38580
April 1, 1980	Exhibit 4-C	to Registration No. 33-38580
June 1, 1980	Exhibit 4-C	to Registration No. 33-38580
December 1, 1980	Exhibit 4-C	to Registration No. 33-38580
April 1, 1981	Exhibit 4-D	to Registration No. 33-38580
June 1, 1981	Exhibit 4-D	to Registration No. 33-49421
March 1, 1982	Exhibit 4-D	to Registration No. 2-73321
April 15, 1982	Exhibit 4-D	to Registration No. 33-49421
May 1, 1982	Exhibit 4-D	to Registration No. 33-49421
December 1, 1984	Exhibit 4-D	to Registration No. 33-49421
December 1, 1985	Exhibit 4-D	to Registration No. 33-49421
June 1, 1986	Exhibit 4-D	to Registration No. 33-49421
February 1, 1987	Exhibit 4-D	to Registration No. 33-49421
September 1, 1987	Exhibit 4-D	to Registration No. 33-49421
January 1, 1989	Exhibit 4-D	to Registration No. 33-49421
January 1, 1991	Exhibit 4-D	to Registration No. 33-49421
July 15, 1991	Exhibit 4-D	to Registration No. 33-49421
August 15, 1991	Exhibit 4-D	to Registration No. 33-49421
April 1, 1993	Exhibit 4-E	to Registration No. 33-49421
July 1, 1993	Exhibit 4-D	to Registration No. 33-49421
May 1, 1999	Exhibit 4.04	to Registration No. 333-86387

61

4.06	X	X		Indenture dated as of April 1, 1993 from South Carolina Electric & Gas Company to NationsBank of Georgia, National Association (Filed as Exhibit 4-F to Registration Statement No. 33-49421 and incorporated by reference herein)
4.07	X	X		First Supplemental Indenture to Indenture referred to in Exhibit 4.06 dated as of June 1, 1993 (Filed as Exhibit 4-G to Registration Statement No. 33-49421 and incorporated by reference herein)
4.08	X	X		Second Supplemental Indenture to Indenture referred to in Exhibit 4.06 dated as of June 15, 1993 (Filed as Exhibit 4-G to Registration Statement No. 33-57955 and incorporated by reference herein)
4.09	X		X	Indenture dated as of January 1, 1996 between PSNC and First Union National Bank of North Carolina, as Trustee (Filed as Exhibit 4.08 to Registration Statement No. 333-45206 and incorporated by reference herein)
4.10	X		X	First through Fourth Supplemental Indenture referred to in Exhibit 4.09 dated as of the dates indicated below and filed as exhibits to the Registration Statements whose file numbers are set forth below and are incorporated by reference herein
				January 1, 1996	Exhibit 4.09	to Registration No. 333-45206
				December 15, 1996	Exhibit 4.10	to Registration No. 333-45206
				February 10, 2000	Exhibit 4.11	to Registration No. 333-45206
				February 12, 2001	Exhibit 4.05	to Registration No. 333-68516
4.11	X		X	PSNC $150 million medium-term note issued February 16, 2001 (Filed as Exhibit 4.06 to Registration Statement No. 333-68516 and incorporated by reference herein)
*10.01	X	X	X	SCANA Executive Deferred Compensation Plan as amended February 20, 2003 (Filed as Exhibit 10.01 to Form 10-Q for the quarter ended June 30, 2003 and incorporated by reference herein)
*10.02	X	X	X	SCANA Director Compensation and Deferral Plan as amended January 1, 2001 (Filed as Exhibit 4.03 to Registration Statement No. 333-18973 and incorporated by reference herein)
*10.03	X	X	X	Amendment to SCANA Director Compensation and Deferral Plan adopted April 29, 2004 (Filed herewith)
*10.04	X	X	X	SCANA Supplementary Executive Retirement Plan as amended July 1, 2001 (Filed as Exhibit 10.02 to Form 10-Q for the quarter ended September 30, 2001 and incorporated by reference herein)
*10.05	X	X	X	SCANA Key Executive Severance Benefits Plan as amended July 1, 2001 (Filed as Exhibit 10.03 to Form 10-Q for the quarter ended September 30, 2001 and incorporated by reference herein)

62

*10.06	X	X	X	SCANA Supplementary Key Severance Benefits Plan as amended July 1, 2001 (Filed as Exhibit 10.03a to Form 10-Q for the quarter ended September 30, 2001 and incorporated by reference herein)
*10.07	X	X	X	SCANA Long-Term Equity Compensation Plan dated January 2000 (Filed as Exhibit 4.04 to Registration Statement No. 333-37398 and incorporated by reference herein)
*10.08	X	X	X	Amendment to SCANA Long-Term Equity Compensation Plan adopted April 29, 2004 (Filed herewith)
*10.09	X	X	X	Description of SCANA Whole Life Option (Filed as Exhibit 10-F to Form 10-K for the year ended December 31, 1991, under cover of Form SE, File No. 1-8809 and incorporated by reference herein)
*10.10	X	X	X	Description of SCANA Corporation Executive Annual Incentive Plan (Filed as Exhibit 10-G to Form 10-K for the year ended December 31, 1991, under cover of Form SE, File No. 1-8809 and incorporated by reference herein)
10.11			X	Operating Agreement of Pine Needle LNG Company, LLC dated August 8, 1995 (Filed as Exhibit 10.01 to Registration Statement No. 333-45206 and incorporated by reference herein)
10.12			X	Amendment to Operating Agreement of Pine Needle LNG Company, LLC dated October 1, 1995 (Filed as Exhibit 10.02 to Registration Statement No. 333-45206 and incorporated by reference herein)
10.13			X	Amended Operating Agreement of Cardinal Extension Company, LLC dated December 19, 1996 (Filed as Exhibit 10.03 to Registration Statement No. 333-45206 and incorporated by reference herein)
10.14			X	Amended Construction, Operation and Maintenance Agreement by and between Cardinal Operating Company and Cardinal Extension Company, LLC dated December 19, 1996 (Filed as Exhibit 10.04 to Registration Statement No. 333-45206 and incorporated by reference herein)
10.15			X	Service Agreement between PSNC and SCANA Services, Inc., effective January 1, 2004 (Filed herewith)
10.16		X		Service Agreement between SCE&G and SCANA Services, Inc., effective January 1, 2004 (Filed herewith)
31.01	X			Certification of Principal Executive Officer Required by Rule 13a-14 (Filed herewith)
31.02	X			Certification of Principal Financial Officer Required by Rule 13a-14 (Filed herewith)
31.03		X		Certification of Principal Executive Officer Required by Rule 13a-14 (Filed herewith)
31.04		X		Certification of Principal Financial Officer Required by Rule 13a-14 (Filed herewith)

63

31.05			X	Certification of Principal Executive Officer Required by Rule 13a-14 (Filed herewith)
31.06			X	Certification of Principal Financial Officer Required by Rule 13a-14 (Filed herewith)
32.01	X			Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350 (Furnished herewith)
32.02	X			Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350 (Furnished herewith)
32.03		X		Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350 (Furnished herewith)
32.04		X		Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350 (Furnished herewith)
32.05			X	Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350 (Furnished herewith)
32.06			X	Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350 (Furnished herewith)

*

Management Contract or Compensatory Plan or Arrangement

64

QuickLinks

INDEX
SCANA CORPORATION FINANCIAL SECTION
PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures

SOUTH CAROLINA ELECTRIC & GAS COMPANY FINANCIAL SECTION

Item 1. Financial Statements

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures

PUBLIC SERVICE COMPANY OF NORTH CAROLINA, INCORPORATED FINANCIAL SECTION

Item 1. Financial Statements

Item 2. Management's Narrative Analysis of Results of Operations.
Item 4. Controls and Procedures

PART II. OTHER INFORMATION

Item 1. Legal Proceedings
Item 2. Purchases of Equity Securities by the Issuer and Affiliated Purchases
Item 3, 4 and 5 are not applicable.
Item 6. Exhibits and Reports on Form 8-K

SIGNATURES
EXHIBIT INDEX

EX-10.03

QuickLinks -- Click here to rapidly navigate through this document

Exhibit 10.03

AMENDMENT NO. 1
TO
SCANA CORPORATION DIRECTOR COMPENSATION AND DEFERRAL PLAN

        Pursuant to the authority granted to the Board of Directors of SCANA Corporation (the "Company") in Section 10.10 of the SCANA Corporation Director Compensation and Deferral Plan (the "Plan"), the Plan is hereby amended as set forth below (the "Amendment").

I.

This Amendment shall become effective if, and when, it is approved by the Company's shareholders. Until it is approved by the Company's shareholders, the Plan as currently in effect shall remain in effect.

II.

Subject to Section I above, Section 3.4 of the Plan is amended by deleting the section in its entirety and substituting in lieu thereof the following:

3.4

Stock.    Company Stock issued pursuant to the Plan may be either original issue or stock purchased on the open market. The Company has reserved an aggregate of 250,000 shares of original issue Company Stock for issuance pursuant to the Plan and has registered 100,000, and will register an additional 150,000, shares with the Securities and Exchange Commission on a Form S-8. The maximum number of shares that may be issued pursuant to this Plan is 250,000 shares subject to adjustment as provided in Section 3.6. In the event of a change in the capital structure of the Company (as provided in Section 3.6), the shares resulting from such change shall be deemed to be Company Stock within the meaning of the Plan. The aggregate number of shares of Company Stock reserved shall be reduced by the issuance of shares under the Plan.

III.

Subject to Section I above, Section 3.7 of the Plan is deleted in its entirety.

IV.

The Company reserves the right by action of the Board of Directors to amend further at any time any of the terms and provisions of the Plan as amended hereby. Except as expressly or by necessary implication amended hereby, the Plan shall continue in full force and effect.

QuickLinks

Exhibit 10.03

AMENDMENT NO. 1 TO SCANA CORPORATION DIRECTOR COMPENSATION AND DEFERRAL PLAN

EX-10.08

QuickLinks -- Click here to rapidly navigate through this document

Exhibit 10.08

RESOLVED, that pursuant to Section 15.1 of the Plan, the Human Resources Committee ("Committee") adopts the following amended [the change noted by underlined text] and restated definition of Fair Market Value for Section 2.16 of the Plan:

"Fair Market Value" shall be determined on the basis of the opening sale price on the principal securities exchange on which the Shares are traded or, if there is no such sale on the relevant date, then on the last previous day on which a sale was reported, except that as to the "cashless" exercise of Nonqualified Stock Options pursuant to Section 6.6 of the Plan, the "Fair Market Value" of Shares for determining the Compensation amount recognized by the Participant shall be the actual trade price on the principal securities exchange of Shares sold to provide cash to the Participant. , and further except that as to the "non-cashless" exercise of Nonqualified Stock Options pursuant to Section 6.6 of the Plan, the "Fair Market Value" of Shares shall be the closing price on the principal securities exchange on which the Shares are traded for that trading date coinciding with the exercise date prospectively indicated by the Participant in his/her "Notice of Intention to Exercise" letter, or if no sales of Shares occur on said date, then for the next subsequent trading date on which such sales occur.

QuickLinks

Exhibit 10.08

EX-10.15

QuickLinks -- Click here to rapidly navigate through this document

Exhibit 10.15

Service Agreement

        This Service Agreement (this "Agreement") is entered into as of the 1st day of January, 2004, by and between Public Service Company of North Carolina, Incorporated, a South Carolina corporation (the "Company") and SCANA Services, Inc., a South Carolina corporation ("SCANA Services").

        WHEREAS, SCANA Services is a direct or indirect wholly owned subsidiary of SCANA Corporation;

        WHEREAS, SCANA Services has been formed for the purpose of providing administrative, management and other services to subsidiaries of SCANA Corporation; and

        WHEREAS, the Company believes that it is in the interest of the Company to provide for an arrangement whereby the Company may, from time to time and at the option of the Company, agree to purchase such administrative, management and other services from SCANA Services:

        NOW, THEREFORE, in consideration of the mutual covenants contained herein and other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:

        I.    SERVICES.    SCANA Services supplies, or will supply, certain administrative, management or other services to Company similar to those supplied to other subsidiaries of SCANA Corporation. Such services are and will be provided to the Company only at the request of the Company. Exhibit I hereto list and describe all of the services that are available from SCANA Services.

        II.    PERSONNEL.    SCANA Services provides and will provide such services by utilizing the services of their executives, accountants, financial advisers, technical advisers, attorneys and other persons with the necessary qualifications.

        If necessary, SCANA Services, after consultation with the Company, may also arrange for the services of nonaffiliated experts, consultants and attorneys in connection with the performance of any of the services supplied under this Agreement.

        III.    COMPENSATION AND ALLOCATION.    As and to the extent required by law, SCANA Services provides and will provide such services at cost. Exhibit I hereof contains rules for determining and allocating such costs.

        IV.    NORTH CAROLINA PROVISISONS

(A)

PSNC agrees hereby that:

        (1)   it will not incur a charge hereunder except in accordance with North Carolina law and the rules, regulations and orders of the North Carolina Utilities Commission (the "NCUC") promulgated thereunder;

        (2)   it will not seek to reflect in rates any cost incurred hereunder to the extent disallowed by the NCUC; and

        (3)   it will not incur a charge hereunder, except for charges determined in accordance with Rules 90 and 91 of the Act (Public Utility Holding Company Act of 1935).

        (B)  PSNC and SCANA Services acknowledge that as a result of the agreements contained in Sections IV(A) and (A)(3), PSNC will not accept services from SCANA Services if the cost to be charged for the service, as calculated pursuant to Rules 90 and 91 of the Act, differs from the amount of charges PSNC is permitted to incur under North Carolina law and the rules, regulations and orders of the NCUC promulgated thereunder.

        V.    TERMINATION AND MODIFICATION.    The Company may terminate this Agreement by providing 60 days written notice of such termination to SCANA Services. SCANA Services may terminate this Agreement by providing 60 days written notice of such termination to the Company.

        This agreement is subject to termination or modification at any time to the extent its performance may conflict with the provisions of the Public Utility Holding Company Act of 1935, as amended, or with any rule, regulation or order of the Securities and Exchange Commission adopted before or after the making of this Agreement. This Agreement shall be subject to the approval of any state commission or other state regulatory body whose approval is, by the laws of said state, a legal prerequisite to the execution and delivery or the performance of this Agreement.

        VI.    SERVICE REQUESTS.    The Company and SCANA Services initially prepared a Service Request listing services to be provided to the Company by SCANA Services and any special arrangements related to the provision of such services. On or before November 1^st of each year, SCANA Services will prepare a revised Service Request listing services to be provided to the Company by SCANA Services and any special arrangements related to the provision of such services for the following calendar year, based on services provided during the past calendar year. The Company and SCANA Services may supplement the Service Request during the year to reflect any additional or special services that the Company wishes to obtain from SCANA Services, and the arrangements relating thereto.

        VII.    BILLING AND PAYMENT.    Unless otherwise set forth in a Service Request, payment for services provided by SCANA Services shall be by making remittance of the amount billed or by making appropriate accounting entries on the books of the Company and SCANA Services. Billing will be made on a monthly basis, with the bill to be rendered by the 25th of the month, and remittance or accounting entries completed within 30 days of billing.

        VIII.    NOTICE.    Where written notice is required by this Agreement, all notices, consents, certificates, or other communications hereunder shall be in writing and shall be deemed given when mailed by United States registered or certified mail, postage prepaid, return receipt requested, addressed as follows:

1.	To the Company:
	Jerry W. Richardson President and Chief Operating Officer Public Service Company of North Carolina 800 Gaston Road Gastonia, NC 28053
2.	To SCANA Services:
	H. Thomas Arthur Senior Vice President and General Counsel SCANA Corporation 1426 Main Street Columbia, SC 29201

        IX.    GOVERNING LAW.    This Agreement shall be governed by and construed in accordance with the laws of the State of South Carolina, without regard to their conflict of laws provisions.

        X.    MODIFICATION.    No amendment, change or modification of this Agreement shall be valid, unless made in writing and signed by all parties hereto.

        XI.    ENTIRE AGREEMENT.    This Agreement, together with its exhibits, constitutes the entire understanding and agreement of the parties with respect to its subject matter, and effective upon the execution of this Agreement by the respective parties hereof and thereto, any and all prior agreements, understandings or representations with respect to this subject matter are hereby terminated and canceled in their entirety and are of no further force or effect.

        XII.    WAIVER.    No waiver by any party hereto of a breach of any provision of this Agreement shall constitute a waiver of any preceding or succeeding breach of the same or any other provision hereof.

        XIII.    ASSIGNMENT.    This Agreement shall inure to the benefit and shall be binding upon the parties and their respective successors and assigns. No assignment of this Agreement or any party's rights, interests or obligations hereunder may be made without the other party's consent, which shall not be unreasonably withheld, delayed or conditioned.

IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed as of this 19th day of December.

SCANA SERVICES, INC.
By:	/s/  GINA CHAMPION Name: Gina Champion Title: Assistant General Counsel
PUBLIC SERVICE COMPANY OF NORTH CAROLINA, INC.
By:	/s/  JERRY W. RICHARDSON Name: Jerry W. Richardson Title: President and Chief Operating Officer

EXHIBIT I

Description of Services, Cost Accumulation, Assignment and
Allocation Methodologies for

SCANA Services, Inc.

        This document sets forth the methodologies used to accumulate the costs of services performed by SCANA Services, Inc. ("SCANA Services") and to assign or allocate such costs to other subsidiaries and business units within SCANA Corporation ("Client Entities").

Cost of Services Performed

        SCANA Services maintains an accounting system that enables costs to be identified by Cost Center, Account Number or Project, Activity, Resource, and Event ("Account Codes"). The primary inputs to the accounting system are time records of hours worked by SCANA Services employees, accounts payable transactions and journal entries. Charges for labor are made at the employees' effective hourly rate, including the cost of pensions, other employee benefits and payroll taxes. To the extent practicable, costs of services are directly assigned to the applicable Account Codes. The full cost of providing services also includes certain indirect costs, e.g., departmental overheads, administrative and general costs, and taxes. Indirect costs are associated with the services performed in proportion to the directly assigned costs of the services or other relevant cost allocators.

Cost Assignment and Allocation

        SCANA Services costs will be directly assigned, distributed or allocated to Client Entities in the manner prescribed below.

        1.     Costs accumulated in Account Codes for services specifically performed for a single Client Entity will be directly assigned or charged to such Client Entity.

        2.     Costs accumulated in Account Codes for services specifically performed for two or more Client Entities will be distributed among and charged to such Client Entities using methods determined on a case-by-case basis consistent with the nature of the work performed and based on one of the allocation methods described below.

        3.     Costs accumulated in Account Codes for services of a general nature which are applicable to all Client Entities or to a class or classes of Client Entities will be allocated among and charged to such Client Entities by application of one or more of the allocation methods described below.

Allocation Methods

        The following methods will be applied, as indicated in the Description of Services section that follows, to allocate costs for services of a general nature.

        1.     Information Systems Charge-back Rates—Rates for services, including but not limited to Software, Consulting, Mainframe, Midtier and Network Connectivity Services, are based on the costs of labor, materials and Information Services overheads related to the provision of each service. Such rates are applied based on the specific equipment employed and the measured usage of services by Client Entities. These rates will be determined annually based on actual experience and may be adjusted for any known and reasonably quantifiable events, or at such time as may be required due to significant changes.

        2.     Margin Revenue Ratio—"Margin" is equal to the excess of sales revenues over the applicable cost of sales, i.e., cost of fuel for generation and gas for resale. The numerator is equal to margin revenues for a specific Client Entity and the denominator is equal to the combined margin revenues of all the applicable Client Entities. This ratio will be evaluated annually based on actual results of operations for the previous calendar year and may be adjusted for any known and

reasonably quantifiable events, or at such time, based on results of operations for a subsequent twelve-month period, as may be required due to significant changes.

        3.     Number of Customers Ratio—A ratio based on the number of retail electric and/or gas customers. This ratio will be determined annually based on the actual number of customers at the end of the previous calendar year and may be adjusted for any known and reasonably quantifiable events, or at such time as may be required due to significant changes.

        4.     Number of Employees Ratio—A ratio based on the number of employees benefiting from the performance of a service. This ratio will be determined annually based on actual counts of applicable employees at the end of the previous calendar year and may be adjusted for any known and reasonably quantifiable events, or at such time as may be required due to significant changes.

        5.     Three-Factor Formula—This formula will be determined annually based on the average of gross property (original cost of plant in service, excluding depreciation), payroll charges (salaries and wages, including overtime, shift premium and holiday pay, but not including pension, benefit and company-paid payroll taxes) and gross revenues during the previous calendar year and may be adjusted for any known and reasonably quantifiable events, or at such time as may be required due to significant changes.

        6.     Modified Three-Factor Method—a ratio for the allocation of non-directly assigned corporate governance costs. The Modified Three-Factor Method provides for an allocation of cost to the parent company; the Three-Factor Method does not. The formula will be determined annually based on the average of gross property (original cost of plant in service, excluding depreciation), payroll charges (salaries and wages, including overtime, shift premium and holiday pay, but not including pension, benefit and company paid payroll taxes) and gross revenues during the previous calendar year. For the purpose of the Modified Three-Factor Method, the dividends resulting from operations of the subsidiaries are used as a proxy for revenues for the parent company.

        7.     Telecommunications Charge-back Rates—Rates for use of telecommunications services other than those encompassed by Information Systems Charge-back Rates are based on the costs of labor, materials, outside services and Telecommunications overheads. Such rates are applied based on the specific equipment employment and the measured usage of services by Client Entities. These rates will be determined annually based on actual experience and may be adjusted for any known and reasonably quantifiable events, or at such time as may be required due to significant changes.

        8.     Gas Sales Ratio—A ratio based on the actual number of dekatherms of natural gas sold by the applicable gas distribution or marketing operations. This ratio will be determined annually based on actual results of operations for the previous calendar year and may be adjusted for any known and reasonably quantifiable events, or at such time, based on results of operations for a subsequent twelve-month period, as may be required due to significant changes.

Description of Services

        A description of each of the services performed by SCANA Services, which may be modified from time to time, is presented below. As discussed above, where identifiable, costs will be directly assigned or distributed to Client Entities. For costs accumulated in Account Codes which are for services of a general nature that cannot be directly assigned or distributed, the method or methods of allocation are also set forth. Substitution or changes may be made in the methods of allocation hereinafter specified, as may be appropriate, and will be provided to state regulatory agencies and to each affected Client Entity and appropriate notice (through 60-day letter or otherwise) will be given to the SEC.

        1.     Information Systems Services—Provides electronic data processing services. Costs of a general nature are allocated using the Information Systems Charge-back Rates.

        2.     Customer Services—Provides billing, mailing, remittance processing, call center and customer communication services for electric and gas customers. Costs of a general nature are allocated using the Margin Revenue Ratio.

        3.     Marketing and Sales—Establishes strategies, provides oversight for marketing, sales and branding of utility and related services and conducts marketing and sales programs. Costs of a general nature are allocated using the Number of Customers Ratio.

        4.     Employee Services—Includes Human Resources which establishes and administers policies and oversees compliance with regulations in the areas of employment, compensation and benefits, processes payroll and administers corporate training. Also includes employee communications, facilities management and mail services. Costs of a general nature are allocated using the Number of Employees Ratio or the Modified Three-Factor Method as appropriate.

        5.     Corporate Compliance—Oversees compliance with all laws, regulations and policies applicable to all of SCANA Corporation's businesses and directs compliance training. Costs of general nature are allocated using the Modified Three-Factor Method.

        6.     Purchasing—Provides procurement services. Costs of a general nature are allocated using the Three-Factor Formula.

        7.     Financial Services—Provides treasury, accounting, tax, financial planning, rate and auditing services. Costs of a general nature are allocated using the Three-Factor Formula or the Modified Three-Factor Method as appropriate.

        8.     Risk Management—Provides services related to the identification and mitigation of risk, and the development and implementation of risk management strategy. Encompasses credit and collections, risk analyses, insurance, claims, security, environmental and safety services. Costs of a general nature are allocated using the Three Factor Method or the Modified Three-Factor Method as appropriate.

        9.     Public Affairs—Maintains relationships with government policy makers, conducts lobbying activities and provides community relations functions. Costs of a general nature are allocated using the Three-Factor Formula or the Modified Three-Factor Method as appropriate.

        10.   Legal Services—Provides various legal services and general legal oversight; handles claims. Costs of a general nature are allocated using the Modified Three-Factor Formula.

        11.   Investor Relations—Maintains relationships with the financial community and provides shareholder services. Costs of a general nature are allocated using the Modified Three-Factor Formula.

        12.   Telecommunications—Provides telecommunications services, primarily the use of telephone equipment. Costs are allocated using the Telecommunications Charge-back Rates.

        13.   Gas Supply and Capacity Management—Provides gas supply and capacity management services. Costs of a general nature are allocated using the Gas Sales Ratio.

        14.   Strategic Planning—Develops corporate strategies and business plans. Costs of a general nature are allocated using the Modified Three-Factor Formula.

        15.   Executive—Provides executive and general administrative services. Costs of a general nature are allocated using the Modified Three-Factor Formula.

EXHIBIT II

FORM OF INITIAL SERVICE REQUEST

        The undersigned requests all of the services listed in Exhibit I from SCANA Services Company. The services requested hereunder shall commence on January 1, 2004 and be provided through December 31, 2004.

PUBLIC SERVICE COMPANY OF NORTH CAROLINA, INC.
By:	/s/  JERRY W. RICHARDSON Name: Jerry W. Richardson Title: President and Chief Operating Officer

QuickLinks

Exhibit 10.15

Service Agreement
Description of Services, Cost Accumulation, Assignment and Allocation Methodologies for SCANA Services, Inc.
FORM OF INITIAL SERVICE REQUEST

EX-10.16

QuickLinks -- Click here to rapidly navigate through this document

Exhibit 10.16

Service Agreement

        This Service Agreement (this "Agreement") is entered into as of the 1st day of January 2004 by and between South Carolina Electric & Gas Company, a South Carolina corporation (the "Company") and SCANA Services, Inc., a South Carolina corporation ("SCANA Services").

        WHEREAS, SCANA Services is a direct or indirect wholly owned subsidiary of SCANA Corporation;

        WHEREAS, SCANA Services has been formed for the purpose of providing administrative, management and other services to subsidiaries of SCANA Corporation; and

        WHEREAS, the Company believes that it is in the interest of the Company to provide for an arrangement whereby the Company may, from time to time and at the option of the Company, agree to purchase such administrative, management and other services from SCANA Services:

        NOW, THEREFORE, in consideration of the mutual covenants contained herein and other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:

        I.    SERVICES.    SCANA Services supplies, or will supply, certain administrative, management or other services to Company similar to those supplied to other subsidiaries of SCANA Corporation. Such services are and will be provided to the Company only at the request of the Company. Exhibit I hereto lists and describes all of the services that are available from SCANA Services.

        II.    PERSONNEL.    SCANA Services provides and will provide such services by utilizing the services of their executives, accountants, financial advisers, technical advisers, attorneys and other persons with the necessary qualifications.

        If necessary, SCANA Services, after consultation with the Company, may also arrange for the services of nonaffiliated experts, consultants and attorneys in connection with the performance of any of the services supplied under this Agreement.

        III.    COMPENSATION AND ALLOCATION.    As and to the extent required by law, SCANA Services provides and will provide such services at cost. Exhibit I hereof contains rules for determining and allocating such costs.

        IV.    TERMINATION AND MODIFICATION.    The Company may terminate this Agreement by providing 60 days written notice of such termination to SCANA Services. SCANA Services may terminate this Agreement by providing 60 days written notice of such termination to the Company.

        This agreement is subject to termination or modification at any time to the extent its performance may conflict with the provisions of the Public Utility Holding Company Act of 1935, as amended, or with any rule, regulation or order of the Securities and Exchange Commission adopted before or after the making of this Agreement. This Agreement shall be subject to the approval of any state commission or other state regulatory body whose approval is, by the laws of said state, a legal prerequisite to the execution and delivery or the performance of this Agreement.

        V.    SERVICE REQUESTS.    The Company and SCANA Services initially prepared a Service Request listing services to be provided to the Company by SCANA Services and any special arrangements related to the provision of such services. On or before November 1^st of each year, SCANA Services will prepare a revised Service Request listing services to be provided to the Company by SCANA Services and any special arrangements related to the provision of such services for the following calendar year, based on services provided during the past calendar year. The Company and SCANA Services may supplement the Service Request during the year to reflect any additional or special services that the Company wishes to obtain from SCANA Services, and the arrangements relating thereto.

        VI.    BILLING AND PAYMENT.    Unless otherwise set forth in a Service Request, payment for services provided by SCANA Services shall be by making remittance of the amount billed or by making appropriate accounting entries on the books of the Company and SCANA Services. Billing will be made on a monthly basis, with the bill to be rendered by the 25th of the month, and remittance or accounting entries completed within 30 days of billing.

        VII.    NOTICE.    Where written notice is required by this Agreement, all notices, consents, certificates, or other communications hereunder shall be in writing and shall be deemed given when mailed by United States registered or certified mail, postage prepaid, return receipt requested, addressed as follows:

1.	To the Company:
	Neville O. Lorick President and Chief Operating Officer South Carolina Electric & Gas Company 1426 Main Street Columbia, SC 29201
2.	To SCANA Services:
	H. Thomas Arthur Senior Vice President and General Counsel SCANA Corporation 1426 Main Street Columbia, SC 29201

        VIII.    GOVERNING LAW.    This Agreement shall be governed by and construed in accordance with the laws of the State of South Carolina, without regard to their conflict of laws provisions.

        IX.    MODIFICATION.    No amendment, change or modification of this Agreement shall be valid, unless made in writing and signed by all parties hereto.

        X.    ENTIRE AGREEMENT.    This Agreement, together with its exhibits, constitutes the entire understanding and agreement of the parties with respect to its subject matter, and effective upon the execution of this Agreement by the respective parties hereof and thereto, any and all prior agreements, understandings or representations with respect to this subject matter are hereby terminated and canceled in their entirety and are of no further force or effect.

        XI.    WAIVER.    No waiver by any party hereto of a breach of any provision of this Agreement shall constitute a waiver of any preceding or succeeding breach of the same or any other provision hereof.

        XII.    ASSIGNMENT.    This Agreement shall inure to the benefit and shall be binding upon the parties and their respective successors and assigns. No assignment of this Agreement or any party's rights, interests or obligations hereunder may be made without the other party's consent, which shall not be unreasonably withheld, delayed or conditioned.

        XIII.    SEVERABILITY.    If any provision or provisions of this Agreement shall be held by a court of competent jurisdiction to be invalid, illegal, or unenforceable, the validity, legality, and enforceability of the remaining provisions shall in no way be affected or impaired thereby.

IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed as of this 19th day of December.

SCANA SERVICES, INC.
By:	/s/  GINA CHAMPION Name: Gina Champion Title: Assistant General Counsel
SOUTH CAROLINA ELECTRIC & GAS COMPANY
By:	/s/  NEVILLE O. LORICK Name: Neville O. Lorick Title: President and Chief Operating Officer

EXHIBIT I

Description of Services, Cost Accumulation, Assignment and
Allocation Methodologies for

SCANA Services, Inc.

        This document sets forth the methodologies used to accumulate the costs of services performed by SCANA Services, Inc. ("SCANA Services") and to assign or allocate such costs to other subsidiaries and business units within SCANA Corporation ("Client Entities").

Cost of Services Performed

        SCANA Services maintains an accounting system that enables costs to be identified by Cost Center, Account Number or Project, Activity, Resource, and Event ("Account Codes"). The primary inputs to the accounting system are time records of hours worked by SCANA Services employees, accounts payable transactions and journal entries. Charges for labor are made at the employees' effective hourly rate, including the cost of pensions, other employee benefits and payroll taxes. To the extent practicable, costs of services are directly assigned to the applicable Account Codes. The full cost of providing services also includes certain indirect costs, e.g., departmental overheads, administrative and general costs, and taxes. Indirect costs are associated with the services performed in proportion to the directly assigned costs of the services or other relevant cost allocators.

Cost Assignment and Allocation

        SCANA Services costs will be directly assigned, distributed or allocated to Client Entities in the manner prescribed below.

        1.     Costs accumulated in Account Codes for services specifically performed for a single Client Entity will be directly assigned or charged to such Client Entity.

        2.     Costs accumulated in Account Codes for services specifically performed for two or more Client Entities will be distributed among and charged to such Client Entities using methods determined on a case-by-case basis consistent with the nature of the work performed and based on one of the allocation methods described below.

        3.     Costs accumulated in Account Codes for services of a general nature which are applicable to all Client Entities or to a class or classes of Client Entities will be allocated among and charged to such Client Entities by application of one or more of the allocation methods described below.

Allocation Methods

        The following methods will be applied, as indicated in the Description of Services section that follows, to allocate costs for services of a general nature.

        1.     Information Systems Charge-back Rates—Rates for services, including but not limited to Software, Consulting, Mainframe, Midtier and Network Connectivity Services, are based on the costs of labor, materials and Information Services overheads related to the provision of each service. Such rates are applied based on the specific equipment employed and the measured usage of services by Client Entities. These rates will be determined annually based on actual experience and may be adjusted for any known and reasonably quantifiable events, or at such time as may be required due to significant changes.

        2.     Margin Revenue Ratio—"Margin" is equal to the excess of sales revenues over the applicable cost of sales, i.e., cost of fuel for generation and gas for resale. The numerator is equal to margin revenues for a specific Client Entity and the denominator is equal to the combined margin revenues of all the applicable Client Entities. This ratio will be evaluated annually based on actual results of operations for the previous calendar year and may be adjusted for any known and

reasonably quantifiable events, or at such time, based on results of operations for a subsequent twelve-month period, as may be required due to significant changes.

        3.     Number of Customers Ratio—A ratio based on the number of retail electric and/or gas customers. This ratio will be determined annually based on the actual number of customers at the end of the previous calendar year and may be adjusted for any known and reasonably quantifiable events, or at such time as may be required due to significant changes.

        4.     Number of Employees Ratio—A ratio based on the number of employees benefiting from the performance of a service. This ratio will be determined annually based on actual counts of applicable employees at the end of the previous calendar year and may be adjusted for any known and reasonably quantifiable events, or at such time as may be required due to significant changes.

        5.     Three-Factor Formula—This formula will be determined annually based on the average of gross property (original cost of plant in service, excluding depreciation), payroll charges (salaries and wages, including overtime, shift premium and holiday pay, but not including pension, benefit and company-paid payroll taxes) and gross revenues during the previous calendar year and may be adjusted for any known and reasonably quantifiable events, or at such time as may be required due to significant changes.

        6.     Modified Three-Factor Method—a ratio for the allocation of non-directly assigned corporate governance costs. The Modified Three-Factor Method provides for an allocation of cost to the parent company; the Three-Factor Method does not. The formula will be determined annually based on the average of gross property (original cost of plant in service, excluding depreciation), payroll charges (salaries and wages, including overtime, shift premium and holiday pay, but not including pension, benefit and company paid payroll taxes) and gross revenues during the previous calendar year. For the purpose of the Modified Three-Factor Method, the dividends resulting from operations of the subsidiaries are used as a proxy for revenues for the parent company.

        7.     Telecommunications Charge-back Rates—Rates for use of telecommunications services other than those encompassed by Information Systems Charge-back Rates are based on the costs of labor, materials, outside services and Telecommunications overheads. Such rates are applied based on the specific equipment employment and the measured usage of services by Client Entities. These rates will be determined annually based on actual experience and may be adjusted for any known and reasonably quantifiable events, or at such time as may be required due to significant changes.

        8.     Gas Sales Ratio—A ratio based on the actual number of dekatherms of natural gas sold by the applicable gas distribution or marketing operations. This ratio will be determined annually based on actual results of operations for the previous calendar year and may be adjusted for any known and reasonably quantifiable events, or at such time, based on results of operations for a subsequent twelve-month period, as may be required due to significant changes.

Description of Services

        A description of each of the services performed by SCANA Services, which may be modified from time to time, is presented below. As discussed above, where identifiable, costs will be directly assigned or distributed to Client Entities. For costs accumulated in Account Codes which are for services of a general nature that cannot be directly assigned or distributed, the method or methods of allocation are also set forth. Substitution or changes may be made in the methods of allocation hereinafter specified, as may be appropriate, and will be provided to state regulatory agencies and to each affected Client Entity and appropriate notice (through 60-day letter or otherwise) will be given to the SEC.

        1.     Information Systems Services—Provides electronic data processing services. Costs of a general nature are allocated using the Information Systems Charge-back Rates.

        2.     Customer Services—Provides billing, mailing, remittance processing, call center and customer communication services for electric and gas customers. Costs of a general nature are allocated using the Margin Revenue Ratio.

        3.     Marketing and Sales—Establishes strategies, provides oversight for marketing, sales and branding of utility and related services and conducts marketing and sales programs. Costs of a general nature are allocated using the Number of Customers Ratio.

        4.     Employee Services—Includes Human Resources which establishes and administers policies and oversees compliance with regulations in the areas of employment, compensation and benefits, processes payroll and administers corporate training. Also includes employee communications, facilities management and mail services. Costs of a general nature are allocated using the Number of Employees Ratio or the Modified Three-Factor Method as appropriate.

        5.     Corporate Compliance—Oversees compliance with all laws, regulations and policies applicable to all of SCANA Corporation's businesses and directs compliance training. Costs of general nature are allocated using the Modified Three-Factor Method.

        6.     Purchasing—Provides procurement services. Costs of a general nature are allocated using the Three-Factor Formula.

        7.     Financial Services—Provides treasury, accounting, tax, financial planning, rate and auditing services. Costs of a general nature are allocated using the Three-Factor Formula or the Modified Three-Factor Method as appropriate.

        8.     Risk Management—Provides services related to the identification and mitigation of risk, and the development and implementation of risk management strategy. Encompasses credit and collections, risk analyses, insurance, claims, security, environmental and safety services. Costs of a general nature are allocated using the Three Factor Method or the Modified Three-Factor Method as appropriate.

        9.     Public Affairs—Maintains relationships with government policy makers, conducts lobbying activities and provides community relations functions. Costs of a general nature are allocated using the Three-Factor Formula or the Modified Three-Factor Method as appropriate.

        10.   Legal Services—Provides various legal services and general legal oversight; handles claims. Costs of a general nature are allocated using the Modified Three-Factor Formula.

        11.   Investor Relations—Maintains relationships with the financial community and provides shareholder services. Costs of a general nature are allocated using the Modified Three-Factor Formula.

        12.   Telecommunications—Provides telecommunications services, primarily the use of telephone equipment. Costs are allocated using the Telecommunications Charge-back Rates.

        13.   Gas Supply and Capacity Management—Provides gas supply and capacity management services. Costs of a general nature are allocated using the Gas Sales Ratio.

        14.   Strategic Planning—Develops corporate strategies and business plans. Costs of a general nature are allocated using the Modified Three-Factor Formula.

        15.   Executive—Provides executive and general administrative services. Costs of a general nature are allocated using the Modified Three-Factor Formula.

EXHIBIT II

FORM OF INITIAL SERVICE REQUEST

        The undersigned requests all of the services listed in Exhibit I from SCANA Services Company. The services requested hereunder shall commence on January 1, 2004 and be provided through December 31, 2004.

SOUTH CAROLINA ELECTRIC & GAS COMPANY
By:	/s/  NEVILLE O. LORICK Name: Neville O. Lorick Title: President and Chief Operating Officer

QuickLinks

Exhibit 10.16

Service Agreement
Description of Services, Cost Accumulation, Assignment and Allocation Methodologies for SCANA Services, Inc.
FORM OF INITIAL SERVICE REQUEST

EX-31.01

QuickLinks -- Click here to rapidly navigate through this document

Exhibit 31.01

CERTIFICATION

I, William B. Timmerman, certify that:

1.

I have reviewed this quarterly report on Form 10-Q of SCANA Corporation;

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.

The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)

Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(c)

Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.

The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent function):

(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: May 5, 2004

/s/  WILLIAM B. TIMMERMAN William B. Timmerman
Chairman of the Board, President,
Chief Executive Officer and Director

QuickLinks

Exhibit 31.01

CERTIFICATION

EX-31.02

QuickLinks -- Click here to rapidly navigate through this document

Exhibit 31.02

CERTIFICATION

I, Kevin B. Marsh, certify that:

1.

I have reviewed this quarterly report on Form 10-Q of SCANA Corporation;

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

2.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.

The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)

Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(c)

Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.

The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent function):

(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: May 5, 2004

/s/  KEVIN B. MARSH Kevin B. Marsh
Senior Vice President and
Chief Financial Officer

QuickLinks

Exhibit 31.02

CERTIFICATION

EX-31.03

QuickLinks -- Click here to rapidly navigate through this document

Exhibit 31.03

CERTIFICATION

I, William B. Timmerman, certify that:

1.

I have reviewed this quarterly report on Form 10-Q of South Carolina Electric & Gas Company;

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.

The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)

Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(c)

Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.

The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent function):

(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: May 5, 2004

/s/  WILLIAM B. TIMMERMAN William B. Timmerman
Chairman of the Board,
Chief Executive Officer and Director

QuickLinks

Exhibit 31.03

CERTIFICATION

EX-31.04

QuickLinks -- Click here to rapidly navigate through this document

Exhibit 31.04

CERTIFICATION

I, Kevin B. Marsh, certify that:

1.

I have reviewed this quarterly report on Form 10-Q of South Carolina Electric & Gas Company;

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.

The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)

Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(c)

Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.

The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent function):

(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: May 5, 2004

/s/  KEVIN B. MARSH Kevin B. Marsh
Senior Vice President
and Chief Financial Officer

QuickLinks

Exhibit 31.04

EX-31.05

QuickLinks -- Click here to rapidly navigate through this document

Exhibit 31.05

CERTIFICATION

I, William B. Timmerman, certify that:

1.

I have reviewed this quarterly report on Form 10-Q of Public Service Company of North Carolina, Incorporated;

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.

The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)

Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(c)

Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.

The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent function):

(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: May 5, 2004

/s/  WILLIAM B. TIMMERMAN William B. Timmerman
Chairman of the Board,
Chief Executive Officer and Director

QuickLinks

Exhibit 31.05

CERTIFICATION

EX-31.06

QuickLinks -- Click here to rapidly navigate through this document

Exhibit 31.06

CERTIFICATION

I, Kevin B. Marsh, certify that:

1.

I have reviewed this quarterly report on Form 10-Q of Public Service Company of North Carolina, Incorporated;

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.

The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)

Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(c)

Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.

The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent function):

(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: May 5, 2004

/s/  KEVIN B. MARSH Kevin B. Marsh
Senior Vice President
and Chief Financial Officer

QuickLinks

Exhibit 31.06

EX-32.01

QuickLinks -- Click here to rapidly navigate through this document

Exhibit 32.01

SCANA CORPORATION

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

        In connection with the Quarterly Report of SCANA Corporation (the "Company") on Form 10-Q for the quarter ended March 31, 2004 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I certify pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, that:

(1)

The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and



(2)

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: May 5, 2004

/s/  WILLIAM B. TIMMERMAN William B. Timmerman
Chairman of the Board, President,
Chief Executive Officer and Director

        A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

QuickLinks

Exhibit 32.01

EX-32.02

QuickLinks -- Click here to rapidly navigate through this document

Exhibit 32.02

SCANA CORPORATION

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

        In connection with the Quarterly Report of SCANA Corporation (the "Company") on Form 10-Q for the quarter ended March 31, 2004 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I certify pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, that:

(1)

The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and



(2)

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: May 5, 2004

/s/  KEVIN B. MARSH Kevin B. Marsh
Senior Vice President
and Chief Financial Officer

        A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

QuickLinks

Exhibit 32.02

EX-32.03

QuickLinks -- Click here to rapidly navigate through this document

Exhibit 32.03

SOUTH CAROLINA ELECTRIC AND GAS COMPANY

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

        In connection with the Quarterly Report of South Carolina Electric and Gas Company (the "Company") on Form 10-Q for the quarter ended March 31, 2004 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I certify pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, that:

(1)

The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and



(2)

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: May 5, 2004

/s/  WILLIAM B. TIMMERMAN William B. Timmerman
Chairman of the Board,
Chief Executive Officer and Director

        A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

QuickLinks

Exhibit 32.03

EX-32.04

QuickLinks -- Click here to rapidly navigate through this document

Exhibit 32.04

SOUTH CAROLINA ELECTRIC AND GAS COMPANY

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

        In connection with the Quarterly Report of South Carolina Electric and Gas Company (the "Company") on Form 10-Q for the quarter ended March 31, 2004 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I certify pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, that:

(1)

The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and



(2)

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: May 5, 2004

/s/  KEVIN B. MARSH Kevin B. Marsh
Senior Vice President
and Chief Financial Officer

        A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

QuickLinks

Exhibit 32.04

EX-32.05

QuickLinks -- Click here to rapidly navigate through this document

Exhibit 32.05

PUBLIC SERVICE COMPANY OF NORTH CAROLINA, INCORPORATED

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

        In connection with the Quarterly Report of Public Service Company of North Carolina, Incorporated (the "Company") on Form 10-Q for the quarter ended March 31, 2004 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I certify pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, that:

(1)

The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and



(2)

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: May 5, 2004

/s/  WILLIAM B. TIMMERMAN William B. Timmerman
Chairman of the Board,
Chief Executive Officer and Director

        A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

QuickLinks

Exhibit 32.05

EX-32.06

QuickLinks -- Click here to rapidly navigate through this document

Exhibit 32.06

PUBLIC SERVICE COMPANY OF NORTH CAROLINA, INCORPORATED

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

        In connection with the Quarterly Report of Public Service Company of North Carolina, Incorporated (the "Company") on Form 10-Q for the quarter ended March 31, 2004 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I certify pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, that:

(1)

The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and



(2)

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: May 5, 2004

/s/  KEVIN B. MARSH Kevin B. Marsh
Senior Vice President
and Chief Financial Officer

        A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

QuickLinks

Exhibit 32.06