Fitch Rates South Carolina Electric & Gas Company's $125MM FMBs 'A+'

Business Wire, June 21, 2006

NEW YORK -- Fitch Ratings has assigned a rating of 'A ' to South Carolina Electric & Gas Company's (SCE&G) $125 million, 6.25% series first mortgage bonds (FMBs) due July 1, 2036. The Rating Outlook is Stable. Proceeds from the issuance along with available cash will be used to redeem $130.7 million, 9% series FMBs due July 15, 2006.

SCE&G's ratings reflect the predictable cash flows from its regulated electric and gas operations, strong financial measures, a constructive regulatory environment, and competitive business position. Commodity price risk is moderate due to the electric and gas fuel adjustment clauses that permit SCE&G to adjust the fuel component of its rates annually to reflect projected electric and gas procurement costs and reliance on coal and nuclear fueled generation to serve customer load. The electric fuel and purchased power clause is not automatic, with projected costs subject to review by the South Carolina Public Service Commission. The gas business also benefits from a weather normalization clause that applies to residential and small commercial customers during the winter months.

Primary credit concerns include environmental risk from the company's ownership of largely coal-based generation and nuclear operating risk. SCE&G's electric rates are below the regional and national averages.

Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.