===============================================================================


                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                    FORM 10-Q

              (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                       For the Quarter Ended June 30, 2000

                                       OR

              ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                        For the Transition Period from to


Commission          Registrant, State of Incorporation,     I.R.S. Employer
File Number         Address  and  Telephone Number          Identification No.


1-8809              SCANA Corporation                       57-0784499
                    (A South Carolina Corporation)
                    1426 Main Street
                    Columbia, South Carolina 29201
                    (803) 217-9000

1-3375              South Carolina Electric & Gas Company   57-0248695
                    (A South Carolina Corporation)
                    1426 Main Street
                    Columbia, South Carolina 29201
                    (803) 217-9000

         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. Yes X No

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

                            Description of              Shares Outstanding
Registrant                  Common Stock                  at July 31 ,
2000

 SCANA Corporation          Without Par Value              104,729,131

South Carolina Electric     Par Value $4.50 Per Share      40,296,1471
  & Gas Company

1Held beneficially and of record by SCANA Corporation.

         This combined Form 10-Q is separately  filed by SCANA  Corporation  and
South Carolina Electric & Gas Company.  Information contained herein relating to
SCANA  Corporation  or any of its direct or  indirect  subsidiaries,  other than
South  Carolina  Electric & Gas  Company  and its  consolidated  operations,  is
provided  solely by SCANA  Corporation  and shall be deemed not  included in the
Form 10-Q of South Carolina Electric & Gas Company.


================================================================================

<PAGE>



                                      INDEX

                                                                          Page
PART 1.  FINANCIAL INFORMATION

SCANA Corporation Financial Section........................................  3

Item 1.  Financial Statements

  Consolidated Balance Sheets as of June 30, 2000
   and December 31, 1999 ..................................................  4

  Consolidated Statements of Income and Retained Earnings for the
   Periods Ended June 30, 2000 and 1999....................................  6

  Consolidated Statements of Cash Flows for the Periods Ended
   June 30, 2000 and 1999..................................................  7

 Notes to Consolidated Financial Statements................................  8

Item 2.  Management's Discussion and Analysis of Financial Condition
           and Results of Operations........................................15

Item 3.  Quantitative and Qualitative Disclosures About Market Risk.........23

South Carolina Electric & Gas Company Financial Section.....................25

Item 1.  Financial Statements

 Consolidated Balance Sheets as of  June 30, 2000 and December 31, 1999 ....26

 Consolidated Statements of Income and Retained Earnings for the
   Periods Ended June 30, 2000 and 1999.....................................28

 Consolidated Statements of Cash Flows for the Periods Ended June 30,
   2000 and 1999........................................................    29

 Notes to Consolidated Financial Statements.................................30

Item 2.  Management's Discussion and Analysis of Financial Condition
          and Results of Operations.........................................34

Item 3.  Quantitative and Qualitative Disclosures About Market Risk.........38


PART II.  OTHER INFORMATION

Item 1.  Legal Proceedings..................................................39

Item 4.  Submission of Matters to a Vote of Security Holders................39

Item 6.  Exhibits and Reports on Form 8-K...................................40

Signatures..................................................................41

Exhibit Index...............................................................43









<PAGE>





















                                SCANA CORPORATION
                                FINANCIAL SECTION




<PAGE>






                          PART I. FINANCIAL INFORMATION


Item 1.  Financial Statements

<TABLE>

                                SCANA CORPORATION
                           CONSOLIDATED BALANCE SHEETS
                    As of June 30, 2000 and December 31, 1999
                                   (Unaudited)


------------------------------------------------------------------------------------------
                                                             June 30,     December 31,
                                                               2000           1999
------------------------------------------------------------------------------------------
Assets                                                         (Millions of Dollars)
Utility Plant:
<S>                                                             <C>          <C>
    Electric                                                    $4,650       $4,633
    Gas                                                          1,394          632
    Other                                                          183          191
-----------------------------------------------------------------------------------------
        Total                                                    6,227        5,456
    Less accumulated depreciation and amortization               2,148        1,829
-----------------------------------------------------------------------------------------
        Total                                                    4,079        3,627
    Construction work in progress                                  244          159
    Nuclear fuel, net of accumulated amortization                   57           43
    Acquisition adjustment, net of accumulated amortization        482           22
-----------------------------------------------------------------------------------------
        Utility Plant, Net                                       4,862        3,851
-----------------------------------------------------------------------------------------

Nonutility Property, net of accumulated depreciation                62           61
Investments                                                        814          938
-----------------------------------------------------------------------------------------
  Nonutility Property and Investments, net of  accumulated
     depreciation                                                  876          999
-----------------------------------------------------------------------------------------

Current Assets:
    Cash and temporary cash investments                             75          116
    Receivables (including unbilled revenues)                      407          320
    Inventories (at average cost):
        Fuel                                                        96           82
        Materials and supplies                                      54           51
    Prepayments                                                     27           18
    Deferred income taxes                                           17           16
-----------------------------------------------------------------------------------------
        Total Current Assets                                       676          603
-----------------------------------------------------------------------------------------

Deferred Debits:
    Emission allowances                                             28            31
    Environmental                                                   31            24
    Nuclear plant decommissioning fund                              68            64
    Pension asset, net                                             172           144
    Other regulatory assets                                        169           175
    Other                                                          129           120
-----------------------------------------------------------------------------------------
        Total Deferred Debits                                      597           558
-----------------------------------------------------------------------------------------
            Total                                               $7,011        $6,011
=========================================================================================


</TABLE>





<PAGE>



<TABLE>
<CAPTION>




                                SCANA CORPORATION
                           CONSOLIDATED BALANCE SHEETS
                    As of June 30, 2000 and December 31, 1999
                                   (Unaudited)



------------------------------------------------------------------------------ -----------------
                                                                June 30,         December 31,
                                                                  2000               1999
------------------------------------------------------------------------------ -----------------
Capitalization and Liabilities                                    (Millions of Dollars)
Stockholders' Investment:
<S>                                                               <C>           <C>
    Common Equity                                                 $2,059        $2,099
    Preferred stock (not subject to purchase or sinking funds)       106           106
-------------------------------------------------------------------------------------------
        Total Stockholders' Investment                             2,165         2,205
Preferred Stock, net (subject to purchase or sinking funds)           11            11
    SCE&G-Obligated Mandatorily Redeemable Preferred
    Securities of SCE&G's Subsidiary Trust, SCE&G Trust
    I, holding solely $50 million principal amount
    of the 7.55%
    Junior Subordinated Debentures of SCE&G, due 2027                 50            50
Long-Term Debt, net                                                2,562         1,563
-------------------------------------------------------------------------------------------
        Total Capitalization                                       4,788         3,829
-------------------------------------------------------------------------------------------

Current Liabilities:
    Short-term borrowings                                            313           266
    Current portion of long-term debt                                209           303
    Accounts payable                                                 220           189
    Customer deposits                                                 19            16
    Taxes accrued                                                     50            86
    Interest accrued                                                  41            29
    Dividends declared                                                32            31
    Other                                                             20            13
-------------------------------------------------------------------------------------------
       Total Current Liabilities                                     904           933
-------------------------------------------------------------------------------------------

Deferred Credits:
    Deferred income taxes                                            837           805
    Deferred investment tax credits                                  117           116
    Postretirement benefits                                          110            98
    Reserve for nuclear plant decommissioning                         68            64
    Regulatory liabilities                                            73            64
    Other                                                            114           102
-------------------------------------------------------------------------------------------
        Total Deferred Credits                                     1,319         1,249
-------------------------------------------------------------------------------------------
           Total                                                  $7,011        $6,011
===========================================================================================

See Notes to Consolidated Financial Statements.



</TABLE>






<PAGE>


<TABLE>
<CAPTION>
                                                   SCANA CORPORATION
                                CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS
                                     For the Periods Ended June 30, 2000 and 1999
                                                      (Unaudited)

     ---------------------------------------------------------------------------------- ---------------------------
                                                                 Three Months Ended          Six Months Ended
                                                                      June 30,                   June 30,
                                                                 2000         1999          2000          1999
     -------------------------------------------------------------------- ------------- ------------- -------------
                                                                 Millions of Dollars, Except Per Share Amounts)
     Operating Revenues:
<S>                                                              <C>          <C>           <C>          <C>
         Electric                                                $  320       $  293        $   614      $ 559
         Gas - Regulated                                          164            82           476           212
         Gas - Nonregulated                                       178            60           394           209
     -------------------------------------------------------------------- -------------- ------------ -------------
             Total Operating Revenues                             662          435          1,484          980
     -------------------------------------------------------------------- -------------- ------------ -------------
     Operating Expenses:
         Fuel used in electric generation                           72          72             143          133
         Purchased power                                            11          11              17           14
         Gas purchased for resale                                  278         117            657          346
         Other operation and maintenance                           120         98            229            194

         Depreciation and amortization                              53          42            108            84
         Other taxes                                                29          26              58           52
     -------------------------------------------------------------------- -------------- ------------ -------------
             Total Operating Expenses                              563         366          1,212          823
     -------------------------------------------------------------------- -------------- ------------ -------------
     Operating Income                                               99          69            272          157
     -------------------------------------------------------------------- -------------- ------------ -------------

     Other Income, including allowance for equity funds
                 used during construction                             8           7            18            16
     -------------------------------------------------------------------- -------------- ------------ -------------

     Income Before Interest Charges, Income Taxes
       and Preferred Stock                                          107          76            290           173
     Dividends
     -------------------------------------------------------------------- -------------- ------------ -------------

     Interest Charges (Credits):
         Interest expense on long-term debt                          51         32             95            63
         Other interest expense, including allowance
           for borrowed funds used during construction               4          3             14             6

     -------------------------------------------------------------------- -------------- ------------ -------------
             Total Interest Charges, Net                             55         35            109            69
     -------------------------------------------------------------------- -------------- ------------ -------------

     Income Before Income Taxes and Preferred Stock Dividends        52           41          181          104
     Income Taxes                                                    21          14            72            37
     -------------------------------------------------------------------- -------------- ------------ -------------

     Income Before Preferred Dividend Requirements
         on Mandatorily Redeemable Preferred Securities              31        27           109             67
     Preferred Dividend Requirement of SCE&G -
       Obligated Mandatorily  Redeemable Preferred Securities         1          1             2              2
     ----------------------------------------------------------------------------- -------------- ------------ -------------

     Income Before Preferred Stock Cash Dividends of Subsidiary      30        26           107             65
     Preferred Stock Cash Dividends of Subsidiary (At Stated Rates)   2        4             4               2
     ----------------------------------------------------------------------------- -------------- ------------ -------------
     Income Before Cumulative Effect of Accounting Change                      28        24           103              61
     Cumulative Effect of Accounting Change, net of taxes  (Note 2)                        -            29              -
                                                                           -
     ----------------------------------------------------------------------------- -------------- ------------ -------------
     Net Income                                                                28         24          132              61
     Retained Earnings at Beginning of Period                                794         675          720            678
     Common Stock Cash Dividends Declared                                                (40)          (60)           (80)
                                                                          (30)
     ============================================================================= ============== ============ =============
     Retained Earnings at End of Period                                   $   792     $    659       $   792       $    659
     ============================================================================= ============== ============ =============

     Weighted Average Number of Common Shares Outstanding (Millions)        104.7       103.6          104.4          103.6
     Earnings Per Weighted Average Share of Common Stock (Basic and
         Diluted) Before Cumulative Effect of Accounting Change           $            $    .23      $    .99     $ .59
                                                                             .27
     Cumulative Effect of Accounting Change (Note 2)                            -                                       -
                                                                                   -              .28
     Earnings Per Weighted Average Share of Common Stock  (Basic and      $            $    .23      $  1.27        $
     Diluted)                                                          .27                                     .59
     Cash Dividends Declared Per Share of Common Stock                   $.2875        $.3850        $.5750         $.7700
     ============================================================================= ============== ============ =============
     See Notes to Consolidated Financial Statements.

</TABLE>


<PAGE>

<TABLE>
<CAPTION>

                                                   SCANA CORPORATION
                                         CONSOLIDATED STATEMENTS OF CASH FLOWS
                                      For the Periods Ended June 30, 2000 and 1999
                                                      (Unaudited)
------------------------------------------------------------------------------------------------
                                                                          Six Months Ended
                                                                              June 30,
                                                                          2000         1999
--------------------------------------------------------------------------------- -------------
                                                                        (Millions of Dollars)
Cash Flows From Operating Activities:
<S>                                                                      <C>             <C>
  Net income                                                             $132            $61
    Adjustments to reconcile net income to net cash
      provided from operating activities, net of effect
        of subsidiary acquisition:
        Cumulative effect of accounting change                             (29)             -
        Depreciation and amortization                                     120              88
        Amortization of nuclear fuel                                        10              8
        Deferred income taxes, net                                          16             20
        Pension asset                                                      (28)          (13)
        Other regulatory assets                                             (5)            32
        Regulatory liabilities                                               9              4
        Post-retirement benefits                                             8              6
        Allowance for funds used during construction                        (3)            (5)
        Over (under) collections, fuel adjustment clauses                   11              -
        Changes in certain current assets and liabilities:
            (Increase) decrease in receivables                              11              36
            (Increase) decrease in inventories                             20                -
            Increase (decrease) in accounts payable                       (19)            (75)
            Increase (decrease) in taxes accrued                           (41)           (30)
        Other, net                                                           6            (66)
---------------------------------------------------------------------------------- -------------
    Net Cash Provided From Operating Activities                           218              66
---------------------------------------------------------------------------------- -------------

Cash Flows From Investing Activities:
    Utility property additions and construction
      expenditures, net of AFC                                           (132)          (118)
    Increase in other property and investments                            (24)           (38)
    Purchase of subsidiary,  net of cash acquired                        (690)            -
    Sale of subsidiary assets                                                1             12
---------------------------------------------------------------------------------- -------------
    Net Cash Used For Investing Activities                               (845)          (144)
---------------------------------------------------------------------------------- -------------

Cash Flows From Financing Activities:
    Proceeds:
        Issuance of  First Mortgage Bonds                                 148             99
        Issuance of notes and loans                                       699            150
    Repayments:
        First Mortgage Bonds                                             (100)            -
        Other long-term debt                                               (2)           (3)
    Dividend payments:
        Common stock                                                      (64)           (80)
        Preferred stock of subsidiary                                      (4)            (4)
    Short-term borrowings, net                                            (91)           (90)
    Fuel and emission allowance financings, net                            -              14
---------------------------------------------------------------------------------- -------------
    Net Cash Provided From  Financing Activities                          586             86
---------------------------------------------------------------------------------- -------------
Net Increase (Decrease) In Cash And Temporary Cash Investments            (41)             8
Cash And Temporary Cash Investments At January 1                          116             62
---------------------------------------------------------------------------------- -------------
Cash And Temporary Cash Investments At June 30                           $ 75            $70
================================================================================== =============

Supplemental Cash Flow Information:
Cash paid for - Interest (net of capitalized interest
                  of $2 for 2000 and 1999)                                $95            $67
                           - Income taxes                                  76             13
    Noncash investing activities
- Unrealized gain/(loss) on securities available for sale, net of taxes    111            80


    In  conjunction  with the  acquisition  of Public  Service  Company of North
Carolina, Inc., liabilities were assumed as follows:
                Fair value of assets acquired                 $ 1,171
                Cash paid for capital stock                      (212)
                Stock issued for consideration                   (475)
                                                              --------
                     Liabilities assumed                      $   484
                                                              ========

See Notes to Consolidated Financial Statements.

</TABLE>



<PAGE>


                                SCANA CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  June 30, 2000
                                   (Unaudited)

         The  following  notes should be read in  conjunction  with the Notes to
Consolidated Financial Statements appearing in SCANA Corporation's (the Company)
Annual  Report on Form 10-K for the year  ended  December  31,  1999.  These are
interim  financial  statements,  and  due to the  seasonality  of the  Company's
business, the amounts reported in the 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  except as  described  in Notes 2, 3 and 4,  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 No. 71 (SFAS 71). The accounting standard requires
        cost-based  rate-regulated  utilities to  recognize  in their  financial
        statements  revenues  and  expenses in  different  time  periods than do
        enterprises that are not  rate-regulated.  As a result,  the Company has
        recorded,  as of June  30,  2000,  approximately  $201  million  and $73
        million of regulatory  assets and liabilities,  respectively,  including
        amounts  recorded  for  deferred  income tax assets and  liabilities  of
        approximately $131 million and $48 million,  respectively.  The electric
        and gas  regulatory  assets  (excluding  deferred  income tax assets) of
        approximately  $25  million  and $44  million,  respectively,  are being
        recovered  through  rates,  and the Public  Service  Commission of South
        Carolina (PSC) has approved  accelerated  recovery of  approximately  $3
        million of the electric regulatory assets. 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 in the period that a write-off  would be required,
        but it is not expected  that cash flows or financial  position  would be
        materially affected.

        B.  Other Comprehensive Income

        Other comprehensive  income includes net income and all other changes in
        equity except those resulting from  investments by and  distributions to
        stockholders.  Other comprehensive  income/(loss) of the Company totaled
        $(10)  million and $21  million for the three and six months  ended June
        30,  2000,  respectively,  and $86 million and $141 million for the same
        periods in 1999. For each period,  other  comprehensive  income included
        net income and  unrealized  gains/(losses)  on securities  available for
        sale. Accumulated other comprehensive income of the Company totaled $357
        million and $166 million at June 30, 2000 and 1999, respectively.

        C.   Recently Issued Accounting Bulletin

          In December 1999 the  Securities  and Exchange  Commission  (SEC)
          issued Staff  Accounting  Bulletin No. 101,  "Revenue  Recognition  in
          Financial  Statements."  In June 2000 the SEC amended the  Bulletin to
          delay the  implementation  date until no later than the fourth quarter
          of fiscal years beginning after December 15, 1999. The Bulletin, which
          will be  implemented  by the  Company by the  fourth  quarter of 2000,
          provides  the  SEC  staff's  views  in  applying   generally  accepted
          accounting  principles to selected  revenue  recognition  issues.  The
          Company  does not  expect  the  adoption  of this  Bulletin  to have a
          material impact on the Company's results of operations,  cash flows or
          financial position.

        D.  Reclassifications

        Certain  amounts from prior  periods have been  reclassified  to conform
with the 2000 presentation.


<PAGE>



2.      Cumulative Effect of Accounting Change

        Effective  January 1, 2000 the Company  changed its method of accounting
        for  operating  revenues  from  cycle  billing  to  full  accrual.   The
        cumulative  effect of this change was $29 million,  net of tax. Accruing
        unbilled  revenues more closely matches revenues and expenses.  Unbilled
        revenues  represent the estimated  amount  customers will be charged for
        service received, but that has not yet been billed, as of the end of the
        accounting   period.   Previously  these  revenues  were  recognized  as
        operating revenues as customers were billed.

        If this method had been  applied  retroactively,  net income  would have
        been $29 million ($0.28 per share) and $83 million ($0.80 per share) for
        the three and six months ended June 30, 1999, respectively,  compared to
        $24  million  ($0.23  per  share) and $61  million  ($0.59  per  share),
        respectively, as previously reported.

3.      ACQUISITION

        On February 10, 2000 the Company  completed  its  acquisition  of Public
        Service Company of North Carolina, Inc. (PSNC) in a business combination
        accounted  for as a purchase.  PSNC became a wholly owned  subsidiary of
        the Company. PSNC is a public utility engaged primarily in transporting,
        distributing   and  selling   natural  gas  to   approximately   351,000
        residential, commercial and industrial customers in 31 counties in North
        Carolina.   Pursuant  to  the  Agreement   and  Plan  of  Merger,   PSNC
        shareholders were paid approximately $212 million in cash and 17,413,013
        shares of SCANA  common  stock.  The results of  operations  of PSNC are
        included in the accompanying financial statements as of January 1, 2000,
        the effective  date of  acquisition . The total cost of the  acquisition
        was approximately $700 million, which exceeded the fair value of the net
        assets by approximately $467 million. The excess is being amortized over
        35 years on a straight line basis.

        Operating  revenues and net income  previously  reported by the separate
        companies  and  the  combined  amounts  presented  in  the  accompanying
        Consolidated  Statements of Income,  including the cumulative  effect of
        accounting change (See Note 2), are as follows:
<TABLE>

  ------------------------------------------------------------------------------------------
                                                                For the Six Months Ended
                                                                      June 30, 1999
  (Millions of Dollars, Except Per Share Amounts)   SCANA     PSNC   Adjustments1 Combined
  -------------------------------------------------------------------------------------------
<S>                                                 <C>       <C>         <C>      <C>
  Operating revenues                                $980      $188        $ -      $1,168
  Income before cumulative effect                     61       24        (22)           63
  Cumulative effect of accounting change              22        -           -           22
  Net income                                          83        24        (22)          85
  Earnings per share                                0.80      1.15           -        0.81
  ===========================================================================================
   1  Adjustments  include  interest  charges  (net of  income  tax  effect)  on
additional debt issued in conjunction with the
   acquisition and amortization of the acquisition adjustment.
</TABLE>

4.     RATE MATTERS

        On December 30, 1999 PSNC filed an  application  with the North Carolina
        Utilities  Commission  (NCUC) to extend  natural gas service to Madison,
        Jackson  and  Swain  Counties.  Pursuant  to  state  statutes,  the NCUC
        required PSNC to forfeit its exclusive  franchises to serve six counties
        in western  North  Carolina  effective  January 31, 2000  because  these
        counties were not receiving  any natural gas service.  Madison,  Jackson
        and Swain  Counties were included in the forfeiture  order.  On June 29,
        2000  the  NCUC  approved  PSNC's  requests  for  reinstatement  of  its
        exclusive  franchises  for  Madison,  Jackson  and  Swain  Counties  and
        disbursement of up to $28.4 million from PSNC's  expansion fund for this
        project.   PSNC  estimates  that  the  cost  of  this  project  will  be
        approximately $31.4 million.

         On December 7, 1999 the NCUC issued an order  approving the acquisition
        of PSNC by the Company. As specified in the NCUC order, PSNC will reduce
        its rates by  approximately  $2 million  ($1  million in August 2000 and
        another  $1  million  in  August  2001) and has  agreed  to a  five-year
        moratorium  on general  rate cases.  General rate relief can be obtained
        during this period to recover costs  associated with materially  adverse
        governmental  actions and force majeure events. On December 30, 1999 the
        Carolina Utility Customers  Association,  Inc. (CUCA) filed an appeal of
        this order with the North  Carolina  Court of Appeals.  On June 15, 2000
        CUCA filed a motion to withdraw its appeal.  On  September  14, 1999 the
        PSC approved an  accelerated  capital  recovery plan for South  Carolina
        Electric & Gas Company's (SCE&G) Cope Generating  Station.  The plan was
        implemented  beginning January 1, 2000 for a three-year  period. The PSC
        approved an accelerated capital recovery  methodology wherein SCE&G will
        increase  depreciation  of its Cope  Generating  Station  in  excess  of
        amounts   that  would  be  recorded   based  upon   currently   approved
        depreciation  rates. The amount of the accelerated  depreciation will be
        determined  by  SCE&G  based  on the  level of  revenues  and  operating
        expenses, not to exceed $36 million annually without the approval of the
        PSC.  Any unused  portion of the $36  million in any given year could be
        carried forward for possible use in the subsequent year. The accelerated
        capital  recovery plan will be accomplished  through  existing  customer
        rates.

         On October  30, 1998 the NCUC  issued an order in PSNC's  general  rate
        case filed in April 1998. The order, effective November 1, 1998, granted
        PSNC  additional  revenue of $12.4  million and  allowed a 9.82  percent
        overall  rate of  return  on  PSNC's  net  utility  investment.  It also
        approved the  continuation of the Weather  Normalization  Adjustment and
        Rider D Mechanisms and full margin  transportation rates. PSNC's Rider D
        rate  mechanism  authorizes  the recovery of all prudently  incurred gas
        costs from customers on a monthly basis.  Any difference in amounts paid
        and  collected for these costs is deferred for  subsequent  refund to or
        collection from customers. On February 4, 2000, in response to an appeal
        by CUCA, the Supreme Court of North Carolina affirmed the NCUC order.

         On  November  6, 1997 the NCUC issued an order  permitting  PSNC,  on a
        trial basis, to establish its commodity cost of gas for large commercial
        and industrial  customers on the basis of market prices for natural gas.
        This  procedure  allows PSNC to manage its  deferred gas costs better by
        ensuring  that the amount paid for natural gas to serve these  customers
        approximates  the  amount  collected  from  them.   PSNC's  request  for
        permanent  approval  of this  mechanism  was  approved by the NCUC in an
        order issued April 6, 2000.

        In September 1992 the PSC issued an order granting SCE&G a $.25 increase
        in transit fares from $.50 to $.75 in Columbia, South Carolina; however,
        the PSC also  required  $.40 fares for low income  customers  and denied
        SCE&G's request to reduce the number of routes and frequency of service.
        The new rates were placed into effect in October  1992.  SCE&G  appealed
        the PSC's order to the Circuit Court, which in May 1995 ordered the case
        back to the PSC for  reconsideration of several issues including the low
        income rider program,  routing  changes,  and the $.75 fare. The Supreme
        Court  declined to review an appeal of the Circuit  Court  decision  and
        dismissed the case. The PSC and other intervenors filed another Petition
        for  Reconsideration,  which the Supreme Court denied. The PSC and other
        intervenors  filed another appeal to the Circuit Court which the Circuit
        Court denied in an order dated May 9, 1996.  In this order,  the Circuit
        Court upheld its previous  orders and remanded  them to the PSC.  During
        August  1996 the PSC heard oral  arguments  on the orders on remand from
        the  Circuit  Court.  On  September  30,  1996 the PSC  issued  an order
        affirming   its  previous   orders  and  denied   SCE&G's   request  for
        reconsideration.  SCE&G has appealed these two PSC orders to the Circuit
        Court where they are awaiting action.

5.      RETAINED EARNINGS:

        The Restated  Articles of  Incorporation of the Company do not limit the
        dividends that may be payable on its common stock. However, the Restated
        Articles of  Incorporation  of SCE&G and the  Indenture  underlying  its
        First and  Refunding  Mortgage  Bonds  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 June 30,  2000,  approximately  $31  million of  retained
        earnings  were  restricted  by this  requirement  as to  payment of cash
        dividends on SCE&G's common stock.



<PAGE>


6.      INVESTMENTS IN EQUITY SECURITIES:

        At June 30, 2000, SCANA  Communications  Holdings,  Inc. (SCH), a wholly
        owned,  indirect subsidiary of SCANA, held the following  investments in
        ITC Holding Company, Inc. (ITC) and its affiliates:

        o Powertel,  Inc.  (Powertel) is a publicly  traded  company that
          owns and operates  personal  communications  services (PCS) systems in
          several major Southeastern markets. SCH owns approximately 4.9 million
          common shares of Powertel at a cost of  approximately  $75.3  million.
          Powertel  common  stock closed at $70.9375 per share on June 30, 2000,
          resulting in a pre-tax  unrealized  holding gain of $273.5  million (a
          decline of $144.3 million from December 31, 1999).  Accumulated  other
          comprehensive  income includes the after-tax  amount of all unrealized
          holding gains and losses on common shares.  In addition,  SCH owns the
          following series of non-voting  convertible  preferred  shares, at the
          approximate  cost  noted:  100,000  shares  series B ($75.1  million);
          50,000 shares series D ($22.5 million);  and 50,000 shares 6.5 percent
          series E ($75.0  million).  Dividends on preferred series E shares are
          paid in  common  shares of  Powertel.  Preferred  series B shares  are
          convertible  in March 2002 at a conversion  price of $16.50 per common
          share or approximately  4.5 million common shares.  Preferred series D
          shares are  convertible in March 2002 at a conversion  price of $12.75
          per common share or approximately 1.7 million common shares. Preferred
          series E shares are convertible in June 2003 at a conversion  price of
          $22.01 per common share or  approximately  3.4 million  common shares.
          The market value of the  convertible  preferred  shares of Powertel is
          not readily determinable.  However, as converted,  the market value of
          the   underlying   common   shares  for  the   preferred   shares  was
          approximately  $689.3  million  at  June  30,  2000,  resulting  in an
          unrecorded pre-tax holding gain of $516.7 million (a decline of $286.0
          million from December 31, 1999).

        o ITC^DeltaCom,  Inc. (ITCD) is a fiber optic  telecommunications
          provider.  SCH owns approximately 5.1 million common shares of ITCD at
          a cost of  approximately  $43.0  million.  ITCD common stock closed at
          $22.3125 per share on June 30, 2000, resulting in a pre-tax unrealized
          holding  gain of  $71.1  million  (a  decline  of $27.2  million  from
          December 31, 1999).  Accumulated other  comprehensive  income includes
          the  after-tax  amount of all  unrealized  holding gains and losses on
          common  shares.  In addition,  SCH owns  1,480,771  shares of series A
          preferred  stock  of ITCD at a cost of  approximately  $11.2  million.
          Series A preferred shares are convertible in March 2002 into 2,961,542
          shares of ITCD common  stock.  The market  value of series A preferred
          stock of ITCD is not readily determinable.  However, as converted, the
          market value of the underlying common stock for the series A preferred
          stock was approximately  $66.1 million at June 30, 2000,  resulting in
          an  unrecorded  pre-tax  holding  gain of $54.9  million (a decline of
          $15.7 million from December 31, 1999).

        o Knology Inc. (Knology), previously Knology Holdings, Inc., is a
          broad-band  service  provider  of  cable  television,   telephone  and
          internet  services.  SCH owns  71,050  units  of  Knology.  Each  unit
          consists of one 11.875% Senior  Discount Note due 2007 and one warrant
          entitling the holder to purchase  .003734 shares of preferred stock of
          Knology.  The cost of this investment was  approximately  $40 million.
          Prior to  February  24,  2000,  SCH owned  451,800  shares of series A
          preferred stock of Knology at a cost of approximately $1.1 million. On
          February 24, 2000 Knology Holdings, Inc. was spun off from ITC and was
          renamed  Knology,  Inc.  As a result of this spin  off,  SCH  received
          approximately  6.8 million shares of Knology series A preferred stock.
          The market value of these investments is not readily determinable.

       o  ITC  has  an  ownership   interest  in  several   Southeastern
          communications  companies.  SCH owns  approximately 3.1 million common
          shares,  645,153 series A convertible  preferred  shares,  and 133,664
          series B convertible  preferred shares of ITC. These  investments cost
          approximately   $5.8  million,   $7.2   million,   and  $4.0  million,
          respectively.  Preferred series A shares are convertible in March 2002
          at a conversion price of $2.73 per common share or  approximately  3.2
          million common shares.  Preferred  series B shares are  convertible in
          March  2002 at a  conversion  price  of  $8.86  per  common  share  or
          approximately  0.7 million common  shares.  The market values of these
          investments are not readily determinable.



<PAGE>


7.      CONTINGENCIES:

        With respect to commitments at June 30, 2000,  reference is made to Note
        10 of  Notes  to  Consolidated  Financial  Statements  appearing  in the
        Company's  Annual  Report on Form 10-K for the year ended  December  31,
        1999. Contingencies at June 30, 2000 are as follows:

        A.  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
        $9.5 billion.  Each reactor licensee is currently liable for up to $88.1
        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 V. C. Summer Nuclear
        Station  (Summer  Station),  would be  approximately  $58.7  million per
        incident, but not more than $6.7 million per year.

        SCE&G  currently  maintains  policies  (for  itself and on behalf of the
        South Carolina Public Service Authority) with Nuclear Electric Insurance
        Limited  (NEIL).  These  policies  covering  the  nuclear  facility  for
        property  damage,   excess  property  damage  and  outage  costs  permit
        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 $8.1 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  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 could  have a material  adverse  impact on the  Company's  results of
        operations, cash flows and financial position.

        B.  Environmental

        SCE&G has an  environmental  assessment  program to identify  and assess
        current and former  operations  sites that could  require  environmental
        cleanup.  As site  assessments are initiated,  estimates are made of the
        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  primarily to regulated  operations.
        Such amounts are deferred and amortized with recovery  provided  through
        rates.   SCE&G  has  also  recovered   portions  of  its   environmental
        liabilities through  settlements with various insurance carriers.  SCE&G
        has  recovered  all  amounts   previously   deferred  for  its  electric
        operations. SCE&G expects to recover all deferred amounts related to its
        gas  operations  by  December  2005.  Deferred  amounts,  net of amounts
        recovered through rates and insurance settlements, totaled $20.2 million
        at June 30, 2000. The deferral  includes the estimated costs  associated
        with the following matters.

        o In September  1992 the  Environmental  Protection  Agency (EPA)
          notified  SCE&G,  the City of Charleston  and the  Charleston  Housing
          Authority  of their  potential  liability  for the  investigation  and
          cleanup of the Calhoun Park area site in Charleston,  South  Carolina.
          This site encompasses  approximately 30 acres and includes  properties
          which were  locations  for  industrial  operations,  including  a wood
          preserving   (creosote)   plant,   one   of   SCE&G's   decommissioned
          manufactured  gas plants (MGP),  properties owned by the National Park
          Service and the City of Charleston,  and private properties.  The site
          has not been placed on the National  Priorities List, but may be added
          in the future. The Potentially  Responsible  Parties (PRPs) negotiated
          an  administrative  order by  consent  for the  conduct  of a Remedial
          Investigation/Feasibility  Study  and a  corresponding  Scope of Work.
          Field work began in  November  1993,  and the EPA  approved a Remedial
          Investigation  Report in February 1997 and a Feasibility  Study Report
          in June 1998.  In July 1998 the EPA approved  SCE&G's  Removal  Action
          Work  Plan for  soil  excavation.  SCE&G  completed  Phase  One of the
          Removal Action in 1998 at a cost of approximately $1.5 million.  Phase
          Two, which cost  approximately $3.5 million,  included  excavation and
          installation  of  several  permanent  barriers  to  mitigate  coal tar
          seepage.  On September  30, 1998 a Record of Decision was issued which
          sets forth the EPA's  view of the extent of each PRP's  responsibility
          for  site  contamination  and the  level to  which  the  site  must be
          remediated. SCE&G estimates that the Record of Decision will result in
          costs  of  approximately  $13.3  million,  of which  approximately  $4
          million  remains.  On January  13,  1999 the EPA  issued a  Unilateral
          Administrative Order for Remedial Design and Remedial Action directing
          SCE&G to design and carry out a plan of  remediation  for the  Calhoun
          Park  site.   The  Order  is  temporarily   stayed   pending   further
          negotiations  between SCE&G and the EPA.  However,  SCE&G  submitted a
          Comprehensive  Remedial  Design Work Plan (RDWP) on December  17, 1999
          and proceeded with  implementation  pending agency approval.  The RDWP
          was  approved  by  the  EPA  in  July  2000,  and  its  implementation
          continues.

          In October  1996 the City of  Charleston  and SCE&G  settled  all
          environmental claims the City may have had against SCE&G involving the
          Calhoun  Park  area for a  payment  of $26  million  over  four  years
          (1996-1999)  by SCE&G to the City.  SCE&G is recovering  the amount of
          the  settlement,  which does not encompass site assessment and cleanup
          costs,  through rates in the same manner as other amounts  accrued for
          site assessments and cleanup. As part of the environmental settlement,
          SCE&G  constructed  an 1,100 space parking  garage on the Calhoun Park
          site  (construction  was completed in April 2000) and  transferred the
          facility to the City in exchange for a 20-year  municipal  bond backed
          by  revenues  from the  parking  garage and a mortgage  on the parking
          garage. The total amount of the bond is still being finalized,  but is
          not to exceed $16.9 million, the maximum expected project cost.

        o SCE&G owns three other  decommissioned  MGP sites which contain
          residues  of  by-product  chemicals.  For the site  located in Sumter,
          South  Carolina,  effective  September 15, 1998,  SCE&G entered into a
          Remedial  Action Plan Contract with the South  Carolina  Department of
          Health and Environmental Control (DHEC) pursuant to which it agreed to
          undertake  a  full  site   investigation  and  remediation  under  the
          oversight  of  DHEC.  Site  investigation  and   characterization  are
          proceeding  according  to  schedule.  Upon  selection  and  successful
          implementation of a site remedy, DHEC will give SCE&G a Certificate of
          Completion  and  a  covenant  not  to  sue.  SCE&G  is  continuing  to
          investigate  the other two  sites,  and is  monitoring  the nature and
          extent of residual contamination.

       In addition,  PSNC owns, or has owned,  all or portions of seven sites in
       North   Carolina  on  which  MGPs  were  formerly   operated.   Intrusive
       investigation  (including  drilling,  sampling and analysis) has begun at
       only  one  site  and  the  remaining  sites  have  been  evaluated  using
       historical  records and  observations of current site  conditions.  These
       evaluations  have revealed that MGP residuals are present or suspected at
       several of the sites.  The North Carolina  Department of Environment  and
       Natural  Resources has  recommended  that no further action be taken with
       respect to one site. In March and April 1994, an environmental consulting
       firm retained by PSNC estimated that the aggregate cost of  investigating
       and  monitoring   the  extent  of   environmental   degradation   and  of
       implementing  remedial procedures with respect to the remaining sites may
       range  from  $3.7  million  to  $50.1  million  over  a  30-year  period.
       Subsequently,  an environmental due diligence review of PSNC conducted in
       February 1999  estimated that the cost to remediate the sites would range
       between $11.3  million and $21.9  million.  During the second  quarter of
       2000, the review was finalized and the estimated  liability was recorded.
       PSNC is unable to determine  the rate at which costs may be incurred over
       this time period.  The  estimated  cost range has not been  discounted to
       present  value.  The  range  includes  the  cost  of  investigating   and
       monitoring  the  sites  at the low end of the  range  and  investigating,
       monitoring and  extensively  remediating the sites at the high end of the
       range.  PSNC's  associated  actual costs for these sites will depend on a
       number of factors, such as actual site conditions, third-party claims and
       recoveries  from  other  PRPs.  An order of the NCUC  dated May 11,  1993
       authorized   deferral  accounting  for  all  costs  associated  with  the
       investigation and remediation of MGP sites. As of June 30, 2000, PSNC has
       recorded a liability and  associated  regulatory  asset of $10.2 million,
       which  reflects  the  minimum  amount of the  range  net of  shared  cost
       recovery from other PRPs..


<PAGE>



       The NCUC concluded that it is proper and in the public  interest to allow
       recovery of prudently  incurred  clean-up costs from current customers as
       reasonable  operating expenses even though the MGP sites are not used and
       useful in providing gas service to current customers.  However,  the NCUC
       will not allow  recovery of carrying costs on deferred  amounts.  Amounts
       incurred to date are not material. Management intends to request recovery
       of additional  MGP clean-up costs not recovered from other PRPs in future
       rate case  filings,  and believes that all costs deemed by the NCUC to be
       prudently incurred will be recoverable in gas rates.

8.  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 Electric  Operations and
Gas  Distribution  segments.  Therefore,  net income is not  allocated  to these
segments.  The Company uses net income to measure  profitability  for its Energy
Marketing  segment,  which  includes  the  Company's  unregulated  gas  sales in
Georgia.  Affiliate  revenue is derived  from  transactions  between  reportable
segments  as well as  transactions  between  separate  legal  entities  that are
combined into the same reportable segment.
Assets for the period ended June 30, 1999 did not change significantly.

<TABLE>
<CAPTION>

                        Disclosure of Reportable Segments
                              (Millions of Dollars)
-------------------------------- ------------- ------------- --------------------------------------------
Three months ended    Electric       Gas           Gas         Energy    All   Adjustments/ Consolidated
  June 30, 2000      Operations  Distribution  Transmission  Marketing  Other  Eliminations    Total
-------------------------------- ----------- --------- ----------- ------- ------------ ---------

<CAPTION>
<S>                     <C>        <C>         <C>            <C>                           <C>
External  Revenue       $  320     $  106      $  58          $178          -        -      $   662
Intersegment Revenue       139          1         39             -          -     $(179)          -
Operating Income (Loss)    102         (5)         8           n/a          -        (6)         99
Net Income                 n/a        n/a          4            (3)     $ (13)       40          28
Segment Assets           4,820      1,518        246           157      1,089      (819)      7,011
------------------------------------------------------- ----------- --------- ------------ -----------

------------------------------- ------------- ------------- ---------------------------------------------
Three months ended   Electric       Gas           Gas         Energy    All   Adjustments/ Consolidated
  June 30, 1999     Operations  Distribution  Transmission  Marketing  Other  Eliminations    Total
------------------------------- ------------------------ ----------- ------- ------------ ------------

<S>                        <C>       <C>         <C>         <C>                            <C>
External Revenue           $293      $44         $38         $60          -          -      $ 435
Intersegment Revenue         79        1          29           -          -      $(109)         -
Operating Income (Loss)      84       (1)          4         n/a          -        (18)        69
Net Income                  n/a      n/a           2         (11)      $ (3)        36         24
Segment Assets            4,404      390         224          68        938       (546)     5,478
---------------------------------- --------- ---------- ----------- --------- ------------ ------------

------------------------------- ------------- ------------- ----------- ------- ------------ ----------
Six months ended     Electric     Gas          Gas         Energy      All   Adjustments/  Consolidated
 June 30, 2000      Operations Distribution Transmission  Marketing    Other  Eliminations1    Total
-------------------------------------------------- ----------- --------- ------------ -------------

<S>                     <C>       <C>        <C>          <C>                               <C>
External  Revenue       $614      $361       $115         $394          -           -       $1,484
Intersegment Revenue     216         1        101            2          -       $(320)           -
Operating Income         193        54         16          n/a          -           9          272
Net Income               n/a       n/a          8            6      $ (25)        143          132
Segment Assets         4,820     1,518        246          157       1,089       (819)       7,011
--------------------------------------------------- ----------- --------- ------------ -------------


------------------------------- ------------- ------------- ----------- ------- ------------ ----------
Six months ended     Electric      Gas         Gas         Energy      All   Adjustments/  Consolidated
 June 30, 1999      Operations Distribution Transmission  Marketing    Other  Eliminations     Total
--------------------------- --------- -------- ----------- --------- ------------ -------------

<S>                      <C>       <C>        <C>         <C>                                <C>
External Revenue         $559      $130       $82         $209          -            -       $  980
Intersegment Revenue      148         1        10          n/a          -          (40)         157
Net Income                n/a       n/a         5          (25)      $ (2)          83           61
Segment Assets          4,404       390       224           68        938         (546)       5,478
----------------------------------------------------- ----------- --------- ------------ -------------
1 Includes cumulative effect of accounting change

</TABLE>

<PAGE>



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  (the Company)  Annual Report on Form 10-K for
the year ended December 31, 1999.

        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 in areas served by SCANA's subsidiaries,
(4) the impact of competition from other energy suppliers, (5) the management of
the Company's operations, (6) variations in prices of natural gas and fuels used
for electric  generation,  (7) growth  opportunities for the Company's regulated
and  non-regulated  subsidiaries,  (8) the  results of  financing  efforts,  (9)
changes in the Company's accounting  policies,  (10) weather conditions in areas
served   by   the   Company's   subsidiaries   ,   (11)   performance   of   the
telecommunications   companies  in  which  the  Company  has  made   significant
investments,   (12)  inflation,   (13)  exposure  to  environmental  issues  and
liabilities,  (14) changes in environmental regulations and (15) the other risks
and uncertainties  described from time to time in the Company's periodic reports
filed with the Securities  and Exchange  Commission.  The Company  disclaims any
obligation to update any forward-looking statements.

               MATERIAL CHANGES IN CAPITAL RESOURCES AND LIQUIDITY
                             SINCE DECEMBER 31, 1999


North Carolina Gas Market

        On February 10, 2000 the Company  completed  its  acquisition  of Public
Service  Company  of North  Carolina,  Inc.  (PSNC) in a  transaction  valued at
approximately $900 million, including the assumption of debt. The transaction is
being accounted for as a purchase. PSNC is operated as a wholly owned subsidiary
of the Company. As a result of the transaction,  the Company became a registered
public utility  holding  company under the Public Utility Holding Company Act of
1935 (PUHCA).

Georgia Retail Gas Market

        Energy  Marketing's  Georgia retail gas operations  maintained a base of
customers ranging from approximately 431,000 at January 1, 2000 to approximately
426,000 at June 30, 2000. This compares to the corresponding period in 1999 when
the customer base grew from  approximately  78,000 at January 1 to approximately
287,000 at June 30. In  addition,  Georgia  retail gas  operations  reported net
income of  approximately  $6.6  million for the six months  ended June 30, 2000,
compared to a net loss of  approximately  $22.7  million  for the  corresponding
period in 1999.  This  increase  resulted  from  lowering  costs  and  improving
efficiency  by  transitioning  from start-up to ongoing  operations  and from an
improved  margin on natural gas sales.  Due to the seasonality of the retail gas
business in Georgia, management anticipates incurring losses through much of the
remainder of the year 2000, and breaking even for the year.


<PAGE>


Regional Transmission Organization

         On February 9, 2000 the Federal  Energy  Regulatory  Commission  (FERC)
issued FERC Order 2000.  The Order  requires  utilities  which operate  electric
transmission  systems  to submit  plans by  October  16,  2000 for the  possible
formation of a regional  transmission  organization  (RTO). On July 18, 2000 the
Company and two other  southeastern  electric  utilities  (the three  utilities)
announced plans to create GridSouth,  LLC. When formed,  GridSouth will function
as an independent regional transmission company.  Initially, the three utilities
will continue to own their  respective  transmission  networks,  while GridSouth
will provide  planning and  operational  oversight of the electric  transmission
grid.  The  three  utilities  plan to file a plan  with  FERC  later  this  year
regarding formation of GridSouth.

LIQUIDITY AND CAPITAL RESOURCES

        On July 18, 2000 the South  Carolina  Public  Service  Commission  (PSC)
approved a 16.8  percent  increase in natural gas prices  charged by SCE&G.  The
increase became effective on August 1, 2000.

        On July 5, 2000 the PSC  approved  SCE&G's  request to  implement  lower
depreciation  rates  for  its  gas  operations.  The new  rates  were  effective
retroactively  to  January  1,  2000 and will  result in a  reduction  in annual
depreciation expense of approximately $2.9 million.

        On September 14, 1999 the PSC approved an accelerated  capital  recovery
plan for SCE&G's Cope Generating  Station.  The plan was implemented  January 1,
2000 for a three-year period.  The PSC approved an accelerated  capital recovery
methodology  wherein SCE&G will  increase  depreciation  of its Cope  Generating
Station  in excess of  amounts  that  would be  recorded  based  upon  currently
approved depreciation rates. The amount of the accelerated  depreciation will be
determined by SCE&G based on the level of revenues and operating  expenses,  not
to exceed $36  million  annually  without the  approval  of the PSC.  Any unused
portion  of the $36  million in any given  year  could be  carried  forward  for
possible use in the succeeding year. The accelerated  capital recovery plan will
be accomplished through existing customer rates.

        On August 7, 1996 the City of Charleston  executed  30-year electric and
gas franchise agreements with SCE&G. In consideration for the electric franchise
agreement,  SCE&G is paying the City $25 million over seven years (1996  through
2002) and has donated to the City the existing transit assets in Charleston. The
$25  million  is  included  in  electric  plant-in-service.   In  settlement  of
environmental  claims the City may have had against SCE&G  involving the Calhoun
Park area, where SCE&G and its predecessor companies operated a manufactured gas
plant until the 1960's,  SCE&G paid the City $26 million over a four-year period
(1996 through 1999). As part of the environmental settlement,  SCE&G constructed
an 1,100  space  parking  garage  on the  Calhoun  Park site  (construction  was
completed  in April 2000) and  transferred  the facility to the City in exchange
for a 20-year  municipal  bond backed by revenues from the parking  garage and a
mortgage  on the  parking  garage.  The total  amount of the bond is still being
finalized,  but is not to exceed $16.9  million,  the maximum  expected  project
cost.


<PAGE>


        The  following  table  summarizes  how the Company  generated  funds for
property  additions and  construction  expenditures  during the six months ended
June 30, 2000 and 1999:

--------------------------------------------------------------------------------
                                                     Six Months Ended
                                                         June 30,
(Millions of Dollars)                            2000               1999
------------------------------------------------------------- ------------------

Net cash provided from operating activities      $218               $ 66
Net cash provided from financing activities       586                 86
Cash provided from sale of subsidiary assets        1                 12
Cash and temporary cash investments available
   at the beginning of the period                 116                 62
============================================================= ==================
Net cash available for  property additions
    and construction                             $921               $226
expenditures
============================================================= ==================

Funds used for purchase of subsidiary             690                  -
Funds used for utility property additions
   and construction expenditures,
   net of noncash allowance for funds
   used during construction                      $132               $ 118
============================================================= ==================

Funds used for nonutility property additions     $ 24                   $  38
============================================================= ==================

       On  December  1, 1999 SCANA  signed a credit  agreement  with banks for a
maximum of $300  million for a three-year  term loan,  all of which was drawn on
February 10, 2000 to consummate SCANA's acquisition of PSNC.

       On February 8, 2000 SCANA issued $400 million of two-year  floating  rate
notes  maturing  February  8,  2002.  The  interest  rate on the  notes is reset
quarterly based on a three-month  LIBOR plus 50 basis points.  The proceeds from
these privately sold notes were used to consummate SCANA's acquisition of PSNC.

       On June 14, 2000 SCE&G issued $150 million of First Mortgage Bonds having
an annual  interest  rate of 7.50  percent and  maturing on June 15,  2005.  The
proceeds  from the sale of these bonds were used to pay the  maturity of SCE&G's
$100 million First Mortgage Bonds due June 15, 2000, to reduce  short-term  debt
and for general corporate purposes.

       On July 13, 2000 the Company issued $300 million  two-year  floating rate
notes maturing on July 15, 2002. The interest rate is reset quarterly based on a
three-month  LIBOR  plus 65 basis  points.  Proceeds  from the debt were used to
repay medium-term notes totaling $170 million, to reduce short-term debt and for
general corporate purposes.

       In July 2000 PSNC established a $125 million short-term  commercial paper
program to replace the lines of credit it had with  various  banks.  On July 31,
2000 PSNC issued $119.5 million under its commercial paper program.
The proceeds from the issue were used to repay short-term bank loans.

        Pursuant to rules of the Securities and Exchange Commission, as a result
of PSNC's  acquisition by SCANA,  PSNC's  registration  statement (as amended on
June 7, 1999)  covering up to an aggregate  of $150 million of senior  unsecured
debt securities is no longer effective.

        The Company anticipates that the remainder of its 2000 cash requirements
will be met through internally  generated funds and the incurrence of additional
short-term and long-term debt. The Company anticipates  incurring short-term and
long-term debt to refinance long-term debt obligations. The timing and amount of
such  financings  will depend  upon market  conditions  and other  factors.  The
Company expects that it has or can obtain adequate  sources of financing to meet
its projected cash  requirements  for the next 12 months and for the foreseeable
future.  The ratio of earnings to fixed charges for the 12 months ended June 30,
2000 was 3.22.


<PAGE>



Environmental Matters

     In July 2000 the  Environmental  Protection Agency (EPA) sent the Company a
request  seeking  information  on the Company's  repair and  maintenance  of its
coal-fired  plants since 1978. This is part of the EPA's New Source Review (NSR)
enforcement  initiative,  in which the EPA claims that utilities and others have
committed widespread violations of the Clean Air Act permitting requirements for
the past quarter  century.  In November  1999 the EPA filed suit  against  seven
utilities  and issued an  administrative  order to  Tennessee  Valley  Authority
alleging numerous NSR permitting  violations.  The EPA's allegations run counter
to previous EPA  guidance  regarding  the  applicability  of the NSR  permitting
requirements.  The Company,  along with several other  utilities,  has routinely
undertaken the type of repair, replacement and maintenance projects that the EPA
now claims are illegal. A suit has not been instituted against the Company,  and
while it is too early to predict any potential EPA action,  the Company believes
that all of its electric  generation units are properly  permitted and have been
properly  maintained.  Because this matter is in its most preliminary stage with
respect to the Company,  management cannot estimate the effects of these matters
on future consolidated results of operations or financial position.

         In  October  1998,  the EPA  issued a final  ruling on  regional  ozone
control that requires revised State  Implementation  Plans (SIPs) for 22 eastern
states and the District of Columbia.  This EPA ruling was challenged in court by
various  states,  industry  and other  interests,  including  the state of South
Carolina.  In March  2000,  the court  upheld  most  aspects of the EPA's  rule.
Petitioners  asked the court to rehear the case and overturn the March decision,
but in June the court declined to rehear the case and lifted its earlier stay of
the states' obligation to revise their SIPs. Industry and State petitioners have
not decided at this time what additional review they may seek.

         The EPA has undertaken  other  ozone-related  actions having  virtually
identical  goals to its October 1998 action.  These  actions have  likewise been
challenged in court by the same or similar parties.  The final resolution of the
October 1998 action is expected to resolve these other ozone-related  actions as
well. The South Carolina  Department of Health and Environmental  Control (DHEC)
is considering  methods by which to reduce utility  emissions of nitrogen oxide.
The date for a final state rulemaking is uncertain,  but will be likely in 2001.
SCE&G will undertake additional nitrogen oxide control projects during 2000 and
2001,  at a cost of  approximately  $100  million as an interim  step to address
possible  contributions  to ozone formation in South Carolina.  Depending on the
resolution of these  matters,  costs to SCE&G may reach $190 million to meet the
full requirements of the 1998 Ozone ruling  expenditures for these projects will
be capitalized, and are expected to be completed by 2003.

Investments in Equity Securities

        At June 30, 2000, SCANA  Communications  Holdings,  Inc. (SCH), a wholly
owned,  indirect  subsidiary  of SCANA,  held the following  investments  in ITC
Holding Company, Inc. (ITC) and its affiliates:

     o    Powertel,  Inc.  (Powertel) is a publicly traded company that owns and
          operates  personal  communications  services  (PCS) systems in several
          major Southeastern  markets. SCH owns approximately 4.9 million common
          shares of Powertel at a cost of approximately $75.3 million.  Powertel
          common stock closed at $70.9375 per share on June 30, 2000,  resulting
          in a pre-tax  unrealized  holding gain of $273.5 million (a decline of
          $144.3   million  from   December   31,   1999).   Accumulated   other
          comprehensive  income includes the after-tax  amount of all unrealized
          holding gains and losses on common shares.  In addition,  SCH owns the
          following series of non-voting  convertible  preferred  shares, at the
          approximate  cost  noted:  100,000  shares  series B ($75.1  million);
          50,000 shares series D ($22.5 million);  and 50,000 shares 6.5 percent
          series E ($75.0  million).  Dividends on preferred series E shares are
          paid in  common  shares of  Powertel.  Preferred  series B shares  are
          convertible  in March 2002 at a conversion  price of $16.50 per common
          share or approximately  4.5 million common shares.  Preferred series D
          shares are  convertible in March 2002 at a conversion  price of $12.75
          per common share or approximately 1.7 million common shares. Preferred
          series E shares are convertible in June 2003 at a conversion  price of
          $22.01 per common share or  approximately  3.4 million  common shares.
          The market value of the  convertible  preferred  shares of Powertel is
          not readily determinable.  However, as converted,  the market value of
          the   underlying   common   shares  for  the   preferred   shares  was
          approximately  $689.3  million  at  June  30,  2000,  resulting  in an
          unrecorded pre-tax holding gain of $516.7 million (a decline of $286.0
          million from December 31, 1999).

     o    ITC^DeltaCom,   Inc.  (ITCD)  is  a  fiber  optic   telecommunications
          provider.  SCH owns approximately 5.1 million common shares of ITCD at
          a cost of  approximately  $43.0  million.  ITCD common stock closed at
          $22.3125 per share on June 30, 2000, resulting in a pre-tax unrealized
          holding  gain of  $71.1  million  (a  decline  of $27.2  million  from
          December 31, 1999).  Accumulated other  comprehensive  income includes
          the  after-tax  amount of all  unrealized  holding gains and losses on
          common  shares.  In addition,  SCH owns  1,480,771  shares of series A
          preferred  stock  of ITCD at a cost of  approximately  $11.2  million.
          Series A preferred shares are convertible in March 2002 into 2,961,542
          shares of ITCD common  stock.  The market  value of series A preferred
          stock of ITCD is not readily determinable.  However, as converted, the
          market value of the underlying common stock for the series A preferred
          stock was approximately $66.1million at June 30, 2000, resulting in an
          unrecorded  pre-tax  holding gain of $54.9 million (a decline of $15.7
          million from December 31, 1999).

     o    Knology  Inc.  (Knology),  previously  Knology  Holdings,  Inc.,  is a
          broad-band  service  provider  of  cable  television,   telephone  and
          internet  services.  SCH owns  71,050  units  of  Knology.  Each  unit
          consists of one 11.875% Senior  Discount Note due 2007 and one warrant
          entitling the holder to purchase  .003734 shares of preferred stock of
          Knology.  The cost of this investment was  approximately  $40 million.
          Prior to  February  24,  2000,  SCH owned  451,800  shares of series A
          preferred stock of Knology at a cost of approximately $1.1 million. On
          February 24, 2000 Knology Holdings, Inc. was spun off from ITC and was
          renamed  Knology,  Inc. As a result of this spin off, SCH received 6.8
          million shares of Knology series A preferred  stock.  The market value
          of these investments is not readily determinable.

     o    ITC has an ownership interest in several  Southeastern  communications
          companies.  SCH owns approximately 3.1 million common shares,  645,153
          series  A  convertible   preferred   shares,   and  133,664  series  B
          convertible   preferred   shares  of  ITC.  These   investments   cost
          approximately   $5.8  million,   $7.2   million,   and  $4.0  million,
          respectively.  Preferred series A shares are convertible in March 2002
          at a conversion price of $2.73 per common share or  approximately  3.2
          million common shares.  Preferred  series B shares are  convertible in
          March  2002 at a  conversion  price  of  $8.86  per  common  share  or
          approximately  0.7 million common  shares.  The market values of these
          investments are not readily determinable.


<PAGE>



                              RESULTS OF OPERATIONS
                FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2000
                AS COMPARED TO THE CORRESPONDING PERIODS IN 1999

Earnings and Dividends

        Earnings  per share of common  stock for the three and six months  ended
June 30, 2000 and 1999 were as follows:

--------------------------------------------------------------------------------
                                          Three Months Ended   Six Months Ended
                                          2000      1999      2000       1999
--------------------------------------------------------------------------------

Earnings derived from:
    Operations                            $.27      $.23     $ .99       $.59
    Change in accounting                   -          -        .28          -
================================================================================
    Earnings per weighted average share   $.27      $.23     $1.27       $.59
================================================================================

        Earnings  from  operations  for the three and six months  ended June 30,
2000 increased overall due to improved results from the Company's entry into the
Georgia  retail  gas  market  (improved  $.08 and  $.28,  respectively)  and its
acquisition of PSNC (decreased $.05 and increased $.20,  respectively).  Results
for these periods are further explained below.

        Earnings  from  operations  for the three  months  ended  June 30,  2000
increased  $.04. This was primarily  attributable  to improved  electric and gas
margins ($.16 and $.23, respectively).  These increases were partially offset by
increased  operations and maintenance  expense ($.13),  interest expense ($.12),
depreciation expense ($.06) property taxes ($.02 ) and other ($.02).

        Earnings  from  operations  for the  six  months  ended  June  30,  2000
increased  $.40. This was primarily  attributable  to improved  electric and gas
margins ($.25 and $.81, respectively).  These increases were partially offset by
increased operations and maintenance  expenses ($.21),  interest expense ($.24),
depreciation expense ($.14), property taxes ($.03) and other ($.04).

        Earnings  from a change in  accounting  resulted  from the  recording of
unbilled revenues by SCANA's retail utility subsidiaries (See Note 2 of NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS).

        Allowance  for  funds  used  during  construction  (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.  Both the equity and the debt
portions of AFC are noncash items of  nonoperating  income which have the effect
of increasing  reported net income.  AFC represented  approximately 1% and 5% of
income  before  income  taxes for the six months  ended June 30,  2000 and 1999,
respectively.

        The  Company's  Board of  Directors  declared  the  following  quarterly
dividends on common stock:

-------------------- -------------- ------------------ ------------------
Declaration          Dividend       Record             Payment
Date                 Per Share      Date               Date
-------------------- -------------- ------------------ ------------------
February 22, 2000     $.2875        March 10, 2000     April 1, 2000
April 27, 2000        $.2875        June 9, 2000       July 1, 2000
-------------------- -------------- ------------------ ------------------



<PAGE>


Electric Operations

        Changes in the electric operations sales margins (including transactions
with  affiliates  and excluding  unbilled  revenue) for the three and six months
ended June 30, 2000, when compared to the corresponding periods in 1999, were as
follows:
<TABLE>

------------------------------ --------------------------------------- ----------------------------
                                         Three Months Ended           Six Months Ended
(Dollars in Millions)           2000      1999        Change     2000     1999       Change
------------------------------ -------- ----------------------- -------- -------- -----------------

<S>                            <C>      <C>      <C>     <C>    <C>      <C>      <C>      <C>
Electric operating revenue     $319.8   $292.8   $27.0   9.2%   $614.1   $559.0   $55.1    9.9%
Less:  Fuel used in generation   72.7     72.3    0.4    0.6%    142.8    133.4     9.4    7.0%
           Purchased power       10.7     10.6    0.1    0.9%     17.4     14.3    3.1    21.7%
------------------------------ -------- ---------------         -------- -------- -------
Margin                         $236.4   $209.9   $26.5  12.6%   $453.9   $411.3   $42.6   10.4%
------------------------------ ======== ===============-------- ======== ======== ===============
</TABLE>

        Electric operations sales margins increased for the three and s months
ended  June 30,  2000,  when  compared  to the  corresponding  periods  in 1999,
primarily as a result of more favorable weather and customer growth.

Gas Distribution

        Changes in the gas distribution  sales margins  (including  transactions
with  affiliates  and excluding  unbilled  revenue) for the three and six months
ended June 30, 2000, when compared to the corresponding periods in 1999, were as
follows:
<TABLE>

--------------------------------- ------------------------- -------------------------------------
                                        Three Months Ended                Six Months Ended
(Dollars in Millions)              2000      1999      Change       2000      1999      Change
--------------------------------- ---------------- ------------- -------- -------------------------

Gas distribution operating
<S>                               <C>       <C>      <C>           <C>       <C>       <C>
   revenue                        $106.3    $44.3    $62.0    *    $361.9    $130.4    $231.5   *
 Less: Gas purchased for resale     66.2     29.0     37.2    *     218.9      78.1     140.8   *
 --------------------------------- ---------------- --------       -------- -------------------
Margin                            $ 40.1    $15.3    $24.8    *    $143.0    $ 52.3    $ 90.7   *
--------------------------------- ================ =========----- ======== =================== =====
* Greater than 100%
</TABLE>

        Gas  distribution  sales margins for the three and six months ended June
30, 2000 increased from 1999 levels  primarily as a result of the acquisition of
PSNC  (which  contributed  $28.2  million  and  $91.7  million  to  the  change,
respectively).  The resulting  decreases were primarily due to cooler weather in
the second quarter, which was partially offset by customer growth.

Gas Transmission

        Changes in the gas transmission  sales margins  (including  transactions
with affiliates) for the three and six months ended June 30, 2000, when compared
to the corresponding periods in 1999, were as follows:
<TABLE>

-------------------------------- ---------------------------------------- ------------------------------------------
                                           Three Months Ended             Six Months Ended
(Dollars in Millions)             2000   1999         Change        2000     1999        Change
-------------------------------- ---------------- ------------------------- --------------------------

Gas transmission operating
<S>                              <C>       <C>      <C>    <C>      <C>       <C>       <C>    <C>
   Revenue                       $98.7     $67.6    $31.1  46.0%    $215.7    $160.6    $55.1  34.3%
 Less: Gas purchased for resale   84.5     56.9     27.6   48.5%     186.6     137.4     49.2  35.8%
------------------------------- ---------------- ---------        ------------------- -------
Margin                           $14.2     $10.7    $ 3.5  32.7%   $  29.1   $  23.2    $ 5.9  25.4%
-------------------------------- ================ ========--------========= ================== =======
</TABLE>

        Gas  transmission  sales margins for the three and six months ended June
30, 2000 increased from 1999 levels primarily as a result of improved industrial
margins due to an improved competitive position relative to alternate fuels.



<PAGE>


Energy Marketing

        Changes  in the energy  marketing  sales  margins  for the three and six
months ended June 30, 2000, when compared to the corresponding  periods in 1999,
were as follows:
<TABLE>

------------------------------- ------------------------------------- ------------------------------------------
                                       Three Months Ended            Six Months Ended
(Dollars in Millions)             2000      1999   Change        2000      1999      Change
------------------------------- ---------------- ------------- ---------- -------- ------------------

<S>                             <C>      <C>      <C>          <C>        <C>      <C>      <C>
Gas and electric sales revenue  $177.9   $60.0    $117.9    *  $394.0     $209.5   $184.5   88.1%
 Less: Gas and electricity
    purchased for resale         168.2    60.9     107.3    *   354.1      208.7    145.4   69.7%
------------------------------- ---------------- ---------     ---------- -------- --------
Margin                          $  9.7   $(0.9)   $ 10.6    *  $ 39.9     $  0.8   $ 39.1     *
------------------------------- ================= =========----========== ======== ======== =========
*Greater than 100%
</TABLE>

        Energy  marketing  sales margins for the three and six months ended June
30, 2000  increased  primarily  as a result of  improved  margins in the Georgia
retail natural gas market. See LIQUIDITY AND CAPITAL RESOURCES.

Other Operating Expenses

        Changes in other  operating  expenses for the three and six months ended
June 30,  2000,  when  compared to the  corresponding  periods in 1999,  were as
follows:

<TABLE>

-------------------------------- -------------------------------------- ----------------------------------------
                                        Three Months Ended                      Six Months Ended
(Dollars in Millions)             2000      1999         Change        2000       1999           Change
-------------------------------- -------- ------------------------- ---------- ---------- ------------------

<S>                              <C>       <C>      <C>      <C>     <C>        <C>        <C>      <C>
Other operation and maintenance  $119.6    $ 97.7   $21.9    22.4%   $228.6     $193.8     $34.8    18.0%
Depreciation and amortization      52.8      42.1    10.7    25.4%    107.6       84.0      23.6    28.1%
Other taxes                        28.9      25.3     3.6    14.2%     58.2       52.4       5.8    11.1%
-------------------------------- -------- -----------------         ---------- ---------- --------
Total                            $201.3    $165.1   $36.2    21.9%   $394.4     $330.2     $64.2    19.4%
-
-------------------------------- ======== ================= ------- ========== ========== ======== =========
</TABLE>

        Other  operating  expenses  for the three and six months  ended June 30,
2000  increased  from 1999 levels  primarily as a result of the  acquisition  of
PSNC. This acquisition  accounted for the following  increases:  Other operation
and maintenance ($18.5 million and $35.0 million), Depreciation and amortization
($10.4  million  and $20.9  million),  and Other  taxes  ($1.7  million and $3.3
million).

        Apart from the PSNC acquisition, changes in other operating expenses for
the three months ended June 30, 2000  compared to the  corresponding  period for
1999 were as follows:  Other operation and maintenance  expenses  increased $3.4
million.  This increase was primarily  attributable  to increased  operating and
maintenance  costs for electric  generation and  distribution  facilities  ($5.4
million),  and was partially  offset by decreased  operating  expenses at Energy
Marketing ($1.8 million).  Depreciation and amortization expenses increased $0.3
million  due to  normal  property  additions,  which was  partially  offset by a
reduction  in  SCE&G's  gas  depreciation   rates  (See  LIQUIDITY  AND  CAPITAL
RESOURCES). Other taxes increased $1.9 million due to increased property taxes.

        Apart from the PSNC acquisition, changes in other operating expenses for
the six months ended June 30, 2000 compared to the corresponding period for 1999
were as follows: Other operation and maintenance expense decreased $0.2 million.
This decrease  results from  decreased  operating  expenses at Energy  Marketing
($10.3  million),   increased   operating  and  maintenance  cost  for  electric
generation and distribution facilities ($10.6 million), and other.  Depreciation
and  amortization  expenses  increased  $2.7  million  due  to  normal  property
additions, which was partially offset by a reduction in SCE&G's gas depreciation
rates  retroactive  to January 1, 2000 (See  LIQUIDITY  AND CAPITAL  RESOURCES).
Other taxes increased $2.5 million due to increased property taxes.



<PAGE>


Interest Expense

        Interest expense, excluding the debt component of AFC, for the three and
six months ended June 30, 2000 increased  approximately  $19.5 million and $39.3
million,  respectively,  when  compared  to the  corresponding  periods in 1999.
Approximately  $4.6  million  and $9.7  million  was  attributable  to PSNC debt
assumed by the  Company  during the  acquisition.  The  remaining  increase  was
primarily  due to the issuance of debt in the first  quarter of 2000 to complete
the acquisition of PSNC.

Income Taxes

        Income taxes for the three and six months ended June 30, 2000  increased
approximately $6.5 million and $34.8 million, respectively, when compared to the
corresponding  periods in 1999. These increases are primarily due to the changes
in operating income.

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  the
Company's 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.
<TABLE>

                                                                  June 30, 2000
                                                         Expected Maturity Date
                                    -------- ------- -------------------------------- ---------- ----------------------
                                                          (Dollars in Millions)
                                                                                       There-                  Fair
Liabilities                          2000     2001     2002       2003       2004       after      Total      Value
                                    -------- ------- ---------- ---------- ---------- ---------- ---------- -----------

Long-Term Debt:
<S>        <C>                        <C>     <C>       <C>        <C>       <C>       <C>        <C>        <C>
Fixed Rate ($)                        34.2    38.0      36.9       296.8     186.3     1,426.1    2,018.3    1,730.7
Average Fixed Interest Rate (%)       7.15    7.31      7.22        6.38      7.58        7.37       7.23
Variable Rate ($)                    150.0     -       550.0      150.0        -          -         850.0      850.0
Average Variable Interest Rate (%)    6.56     -        7.12       7.02        -          -          7.00

                                                              June 30, 1999
                                                         Expected Maturity Date
                                   --------- ------- -------------------------------- ---------- ----------------------
                                                          (Dollars in Millions)
                                                                                       There-                  Fair
Liabilities                          1999     2000     2001       2002       2003       after      Total      Value
                                   --------- ------- ---------- ---------- ---------- ---------- ---------- -----------

Long-Term Debt:
<S>        <C>                       <C>      <C>      <C>        <C>         <C>      <C>        <C>        <C>
Fixed Rate ($)                       87.9     363.5    27.5       27.5        284.4    1,265.8    2,056.6    1,969.2
Average Fixed Interest Rate (%)      6.93      5.77    6.86       6.86         6.29       7.35       7.00
</TABLE>

     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.

     In  addition,  the Company has  invested  in a  telecommunications  company
approximately  $40 million for 11.875% senior  discount notes due 2007. The fair
value of these notes  approximates  their carrying  value. An increase in market
interest  rates  would  result in a decrease  in fair value of these notes and a
corresponding adjustment, net of tax, to other comprehensive income.



<PAGE>


     Commodity  price  risk - The table  below  provides  information  about the
Company's  financial  instruments  that are  sensitive to changes in natural gas
prices. Weighted average settlement/strike prices are per 10,000 mmbtu.
<TABLE>

               As of June 30, 2000                  Expected Maturity in 2000                           Expected
Maturity in 2001
                           Weighted Avg        Contract      Fair     Weighted Avg        Contract      Fair
                           Settlement Price     Amount      Value     Settlement Price     Amount       Value
--------------------------------------------- ----------- ----------- ------------------ ----------- ------------
Natural Gas Derivatives:             (Millions of Dollars)                            (Millions of Dollars)

Future Contracts:
<S>                             <C>             <C>         <C>            <C>              <C>         <C>
   Long                         $4.481          $25.6       $26.8          $4.141           $1.8        $2.3
   Short                        $4.536          $ 2.2       $ 3.7             -              -            -
SET Futures Contracts (1):
   Long                            -              -           -               -              -            -
   Short                        $4.476          $ 0 .4      $ 0 .6            -              -            -
--------------------------------------------- ----------- ----------- ------------------ ----------- ------------


Natural Gas Derivatives:                       Weighted Avg Strike Price                   Contract Amount
---------------------------------------- -------------------------------------- --------------------------------------
                                                                                        (Millions of Dollars)

Options:
<S>                                                     <C>                                     <C>
  Purchased call (long)                                 $2.577                                  $4.4
  Sold call (short)                                     $2.593                                  $3.4
---------------------------------------- -------------------------------------- --------------------------------------


         As of June 30, 1999                  Expected Maturity in 1999                             Expected Maturity
in 2000
                               Weighted Avg        Contract      Fair     Weighted Avg        Contract      Fair
                               Settlement Price     Amount      Value     Settlement Price     Amount       Value
------------------------------ ------------------ ----------- ----------- ------------------ ----------- ------------
Natural Gas Derivatives:                 (Millions of Dollars)                            (Millions of Dollars)

Future Contracts:
<S>                                 <C>             <C>         <C>            <C>             <C>          <C>
   Long                             $2.529          $21.2       $25.1          $2.693          $11.2        $12.7
   Short                            $2.523          $ 9.0       $ 9.4          $2.726          $ 2.5        $ 2.5
SET Futures Contracts (1):
   None
------------------------------ ------------------ ----------- ----------- ------------------ ----------- ------------
</TABLE>

 (1) SCANA Energy Trading, LLC (SET) is a 70% owned subsidiary of SCANA Energy
Marketing, Inc.  Amounts shown are at 100%.

     Equity price risk - Investments in telecommunications companies' marketable
equity  securities  are carried at their market value of $723.4  million.  A ten
percent  decline in market  value would result in a $72.3  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.




<PAGE>















                      SOUTH CAROLINA ELECTRIC & GAS COMPANY
                                FINANCIAL SECTION













<PAGE>

<TABLE>
<CAPTION>

Item 1.  Financial Statements

                      SOUTH CAROLINA ELECTRIC & GAS COMPANY
                           CONSOLIDATED BALANCE SHEETS
                    As of June 30, 2000 and December 31, 1999
                                   (Unaudited)

-----------------------------------------------------------------------------------------------------------

June 30,                December 31,
                                                                        2000                  1999
------------------------------------------------------------------------------------ -----------------------
Assets                                                                     (Millions of Dollars)
Utility Plant:
<S>                                                                    <C>                   <C>
    Electric                                                           $4,357                $4,337
    Gas                                                                    393                   392
    Other                                                                  182                   191
------------------------------------------------------------------------------------ -----------------------
        Total                                                            4,932                 4,920
    Less accumulated depreciation and amortization                       1,669                 1,611
------------------------------------------------------------------------------------ -----------------------
        Total                                                            3,263                 3,309
    Construction work in progress                                          212                   149
    Nuclear fuel, net of accumulated amortization                           57                    43
------------------------------------------------------------------------------------ -----------------------
        Utility Plant, Net                                              3,532                  3,501
------------------------------------------------------------------------------------ -----------------------

Nonutility Property and Investments, net of accumulated
    depreciation                                                            23                    19
----------------------------------------------------------------------------------- -----------------------

Current Assets:
    Cash and temporary cash investments                                     43                    78
    Receivables (including unbilled revenues)                              235                   195
    Inventories (at average cost):
        Fuel                                                                27                   30
        Materials and supplies                                              45                   48
    Prepayments                                                             16                    8
    Deferred income taxes                                                   16                   16
----------------------------------------------------------------------------------- -----------------------
        Total Current Assets                                              382                   375
----------------------------------------------------------------------------------- -----------------------

Deferred Debits:
    Emission allowances                                                     28                   31
    Environmental                                                           21                   24
    Nuclear plant decommissioning fund                                      68                   64
    Pension asset, net                                                     163                  144
    Other regulatory assets                                                151                  164
    Other                                                                   88                   82
----------------------------------------------------------------------------------- -----------------------
        Total Deferred Debits                                              519                   509
----------------------------------------------------------------------------------- -----------------------
            Total                                                       $4,456                $4,404
=================================================================================== =======================

</TABLE>











<PAGE>

<TABLE>
<CAPTION>



                      SOUTH CAROLINA ELECTRIC & GAS COMPANY
                           CONSOLIDATED BALANCE SHEETS
                    As of June 30, 2000 and December 31, 1999
                                   (Unaudited)


--------------------------------------------------------------------------------------- -------------------- -------------------
                                                                                             June 30,           December 31,
                                                                                               2000                 1999
--------------------------------------------------------------------------------------- -------------------- -------------------
Capitalization and Liabilities                                                                   (Millions of Dollars)
Stockholders' Investment:
<S>                                                                                           <C>                   <C>
    Common equity                                                                             $1,611                $1,558
    Preferred stock (not subject to purchase or sinking funds)                                     106                  106
--------------------------------------------------------------------------------------- -------------------- -------------------
        Total Stockholders' Investment                                                          1,717                1,664
Preferred Stock, net (subject to purchase or sinking funds)                                         11                   11
SCE&G-Obligated   Mandatorily   Redeemable   Preferred   Securities  of  SCE&G's
    Subsidiary Trust, SCE&G Trust I, holding solely $50 million principal amount
    of the 7.55%
    Junior Subordinated Debentures of SCE&G, due 2027                                               50                   50
Long-Term Debt, net                                                                             1,269                1,121
--------------------------------------------------------------------------------------- -------------------- -------------------
          Total Capitalization                                                                  3,047                2,846
--------------------------------------------------------------------------------------- -------------------- -------------------

Current Liabilities:
    Short-term borrowings                                                                          136                  213
    Current portion of long-term debt                                                               28                  128
    Accounts payable                                                                                75                   78
    Accounts payable - affiliated companies                                                         26                   33
    Customer deposits                                                                               16                   17
    Taxes accrued                                                                                   69                   60
    Interest accrued                                                                                22                   22
    Dividends declared                                                                              35                   28
    Other                                                                                           10                   10
--------------------------------------------------------------------------------------- -------------------- -------------------
          Total Current Liabilities                                                                417                  589
--------------------------------------------------------------------------------------- -------------------- -------------------

Deferred Credits:
    Deferred income taxes                                                                          574                 560
    Deferred investment tax credits                                                                106                 108
    Reserve for nuclear plant decommissioning                                                       68                   64
    Postretirement benefits                                                                        102                   98
    Regulatory liabilities                                                                          68                  59
    Other                                                                                           74                  80
--------------------------------------------------------------------------------------- -------------------- -------------------
          Total Deferred Credits                                                                  992                  969
--------------------------------------------------------------------------------------- -------------------- -------------------
                Total                                                                         $4,456               $4,404
======================================================================================= ==================== ===================

See Notes to Consolidated Financial Statements.

</TABLE>





<PAGE>

<TABLE>

                                         SOUTH CAROLINA ELECTRIC & GAS COMPANY
                                CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS
                                     For the Periods Ended June 30, 2000 and 1999
                                                      (Unaudited)

-------------------------------------------------------------------- ------------------------ ---------------------------
                                                                       Three Months Ended          Six Months Ended
                                                                            June 30,                   June 30,
                                                                       2000         1999          2000          1999
-------------------------------------------------------------------- ---------- ------------- ------------- -------------
                                                                       (Millions of Dollars, Except Per Share Amounts)

Operating Revenues:
<S>                                                                    <C>          <C>           <C>           <C>
    Electric                                                           $320         $293          $614          $559
    Gas                                                                   51           45          151           130
-------------------------------------------------------------------- ---------- ------------- ------------- -------------
        Total Operating Revenues                                         371         338           765           689
-------------------------------------------------------------------- ---------- ------------- ------------- -------------

Operating Expenses:
    Fuel used in electric generation                                      55           55          112            99
    Purchased power (including affiliated purchases)                      37           37            67           66
    Gas purchased from affiliate  for resale                              39           29          100            78
    Other operation  and maintenance                                      81           76          154           143

    Depreciation and amortization                                         39           38            79           76
    Other taxes                                                           24           23           50            47
-------------------------------------------------------------------- ---------- ------------- ------------- -------------
        Total Operating Expenses                                         275         258           562          509
-------------------------------------------------------------------- ---------- ------------- ------------- -------------

Operating Income                                                          96          80           203          180
-------------------------------------------------------------------- ---------- ------------- ------------- -------------

Other Income, including allowance for equity funds
           used during construction                                        2            3            8            5
-------------------------------------------------------------------- ---------- ------------- ------------- -------------

Income Before Interest Charges, Income Taxes
    and Preferred  Stock Dividends                                       98            83         211           185
-------------------------------------------------------------------- ---------- ------------- ------------- -------------

Interest Charges (Credits):
    Interest expense on long-term debt                                    25           24           49           47
    Other interest expense, including allowance for borrowed
       funds used during construction                                      1            1            3            3

-------------------------------------------------------------------- ---------- ------------- ------------- -------------
        Total Interest Charges, Net                                       26           25           52           50
-------------------------------------------------------------------- ---------- ------------- ------------- -------------

Income Before Income Taxes and Preferred Stock Dividends                  72              58      159            135
Income Taxes                                                              27           20           58           48
-------------------------------------------------------------------- ---------- ------------- ------------- -------------

Income Before Preferred Dividend Requirements
    on Mandatorily Redeemable Preferred Securities                        45          38          101            87
Preferred Dividend Requirement of SCE&G - Obligated
    Mandatorily Redeemable Preferred Securities                            1            1            2           2
-------------------------------------------------------------------- ---------- ------------- ------------- -------------

Income Before Cumulative Effect of Accounting Change                      44          37            99           85
Cumulative Effect of Accounting Change, net of taxes  (Note 2)              -          -             22          -
-------------------------------------------------------------------- ---------- ------------- ------------- -------------

Net Income                                                                44          37           121           85
Preferred Stock Cash Dividends (At stated rates)                           (2)         (2)           (4)         (4)
-------------------------------------------------------------------- ---------- ------------- ------------- -------------
Earnings Available for Common Stock                                       42          35            117          81
Retained Earnings at Beginning of Period                                 593         501            550          491
Common Stock Cash Dividends Declared                                     (32)        (36)           (64)         (72)
==================================================================== ========== ============= ============= =============
Retained Earnings at End of Period                                     $603         $500          $603          $500
==================================================================== ========== ============= ============= =============

See Notes to Consolidated Financial Statements.

</TABLE>

<PAGE>


                      SOUTH CAROLINA ELECTRIC & GAS COMPANY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                  For the Periods Ended June 30, 2000 and 1999
                                   (Unaudited)

-------------------------------------------------------------------------------
                                                               Six Months Ended
                                                                   June 30,
                                                                 2000     1999
--------------------------------------------------------------------------------

(Millions of Dollars)
Cash Flows From Operating Activities:
   Net income                                                    $121     $ 85
      Adjustments to reconcile net income to net
       cash provided from operating activities:
          Cumulative effect of accounting change                  (22)       -
          Depreciation and amortization                            80       77
          Amortization of nuclear fuel                             10        7
          Deferred income taxes, net                               14       15
          Pension asset                                           (19)     (13)
          Post retirement benefits                                  4        6
          Other regulatory assets                                  11       10
          Other regulatory liabilities                              9        4
          Allowance for funds used during construction             (3)      (4)
          Over (under) collections, fuel adjustment clauses        11        -
          Changes in certain current assets and liabilities:
              (Increase) decrease in receivables                  (18)      13
              (Increase) decrease in inventories                    6        -
              Increase (decrease) in accounts payable             (10)     (33)
              Increase (decrease) in taxes accrued                  9      (17)
          Other, net                                              (29)     (51)
--------------------------------------------------------------------------------
       Net Cash Provided From Operating Activities                174       99
--------------------------------------------------------------------------------

Cash Flows From Investing Activities:
       Utility property additions and construction
        expenditures, net of AFC                                 (113)    (116)
        Other property and investments                             (4)       -
-------------------------------------------------------------------------------
       Net Cash Used For Investing Activities                    (117)    (116)
-------------------------------------------------------------------------------

Cash Flows From Financing Activities:
     Proceeds:
         Issuance of First Mortgage Bonds                         148       99
     Repayments:
          First Mortgage Bonds                                   (100)       -
          Other long-term debt                                     (2)      (3)
     Dividend payments:
         Common stock                                             (57)     (72)
         Preferred stock                                           (4)      (4)
     Short-term borrowings, net                                   (77)     (30)
     Fuel and emission allowance financings, net                   -        15
-------------------------------------------------------------------------------
     Net Cash Provided From (Used For) Financing Activities       (92)       5
-------------------------------------------------------------------------------

Net Decrease In Cash And Temporary Cash Investments              (35)      (12)
Cash And Temporary Cash Investments At January 1                  78        36
================================================================================
Cash And Temporary Cash Investments At June 30                 $  43     $  24
================================================================================

Supplemental Cash Flow Information:
    Cash paid for - Interest (net of capitalized interest
                     of $2 for 2000 and 1999)                   $  50      $ 48
                           - Income taxes                          17        18

See Notes to Consolidated Financial Statements.



<PAGE>



                                         SOUTH CAROLINA ELECTRIC & GAS COMPANY
                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                                     June 30, 2000
                                                      (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, 1999. These are interim financial statements,  and due to the seasonality of
the Company's business,  the amounts reported in the 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 except as described in Notes 2 and
3, 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 No. 71 (SFAS 71). The accounting  standard requires
       cost-based  rate-regulated  utilities  to  recognize  in their  financial
       statements  revenues  and  expenses in  different  time  periods  than do
       enterprises  that are not  rate-regulated.  As a result,  the Company has
       recorded, as of June 30, 2000, approximately $173 million and $68 million
       of regulatory  assets and liabilities,  respectively,  including  amounts
       recorded for deferred income tax assets and liabilities of  approximately
       $121  million  and  $43  million,  respectively.  The  electric  and  gas
       regulatory assets (excluding deferred income tax assets) of approximately
       $25 million and $26 million,  respectively,  are being recovered  through
       rates,  and the Public  Service  Commission of South  Carolina  (PSC) has
       approved accelerated recovery of approximately $3 million of the electric
       regulatory  assets.  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 in the
       period that a write-off  would be required,  but it is not expected  that
       cash flows or financial position would be materially affected.

           B. Recently Issued Accounting Bulletin

       The  Securities  and Exchange  Commission  (SEC) issued Staff  Accounting
       Bulletin No. 101,  "Revenue  Recognition  in Financial  Statements."  The
       Bulletin,  which will be implemented by the Company by the fourth quarter
       of 2000,  provides the SEC's staff views in applying  generally  accepted
       accounting principles to selected revenue recognition issues. The Company
       does not expect the adoption of this  Bulletin to have a material  impact
       on the Company's results of operations, cash flows or financial position.

       C.  Reclassifications

       Certain amounts from prior periods have been reclassified to conform with
the 2000 presentation.

2.   Cumulative Effect of Accounting Change

        Effective  January 1, 2000 the Company  changed its method of accounting
        for  operating  revenues  from  cycle  billing  to  full  accrual.   The
        cumulative  effect of this change was $22 million,  net of tax. Accruing
        unbilled  revenues more closely matches revenues and expenses.  Unbilled
        revenues  represent the estimated  amount  customers will be charged for
        service received, but that has not yet been billed, as of the end of the
        accounting   period.   Previously  these  revenues  were  recognized  as
        operating revenues as customers were billed.

        If this method had been  applied  retroactively,  net income  would have
        been $42  million and $107  million  for the three and six months  ended
        June 30, 1999, respectively,  compared to $37 million and $85 million as
        previously reported.



<PAGE>


3.   RATE MATTERS

        On September 14, 1999 the PSC approved an accelerated  capital  recovery
        plan for the Company's Cope Generating Station. The plan was implemented
        beginning January 1, 2000 for a three-year  period.  The PSC approved an
        accelerated  capital  recovery  methodology  wherein  the  Company  will
        increase  depreciation  of its Cope  Generating  Station  in  excess  of
        amounts   that  would  be  recorded   based  upon   currently   approved
        depreciation  rates. The amount of the accelerated  depreciation will be
        determined  by the Company  based on the level of revenues and operating
        expenses, not to exceed $36 million annually without the approval of the
        PSC.  Any unused  portion of the $36  million in any given year could be
        carried forward for possible use in the subsequent year. The accelerated
        capital  recovery plan will be accomplished  through  existing  customer
        rates.

        In  September  1992 the PSC issued an order  granting the Company a $.25
        increase in transit fares from $.50 to $.75 in Columbia, South Carolina;
        however,  the PSC also required $.40 fares for low income  customers and
        denied  the  Company's  request  to reduce  the  number  of  routes  and
        frequency  of service.  The new rates were placed into effect in October
        1992. The Company  appealed the PSC's order to the Circuit Court,  which
        in May 1995  ordered  the case  back to the PSC for  reconsideration  of
        several issues including the low income rider program,  routing changes,
        and the $.75 fare. The Supreme Court declined to review an appeal of the
        Circuit  Court  decision  and  dismissed  the  case.  The PSC and  other
        intervenors  filed  another  Petition  for  Reconsideration,  which  the
        Supreme Court denied. The PSC and other intervenors filed another appeal
        to the Circuit  Court which the Circuit  Court  denied in an order dated
        May 9, 1996. In this order, the Circuit Court upheld its previous orders
        and  remanded  them to the PSC.  During  August  1996 the PSC heard oral
        arguments on the orders on remand from the Circuit  Court.  On September
        30,  1996 the PSC  issued an order  affirming  its  previous  orders and
        denied the  Company's  request  for  reconsideration.  The  Company  has
        appealed  these  two PSC  orders to the  Circuit  Court  where  they are
        awaiting action.

4.  RETAINED EARNINGS

       The Restated  Articles of  Incorporation of the Company and the Indenture
       underlying  its First and Refunding  Mortgage  Bonds  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 June 30,  2000,  approximately  $31  million  of  retained
       earnings  were  restricted  by this  requirement  as to  payment  of cash
       dividends on common stock.

5.   CONTINGENCIES

       With respect to commitments  at June 30, 2000,  reference is made to Note
       10 of  Notes  to  Consolidated  Financial  Statements  appearing  in  the
       Company's  Annual  Report on Form 10-K for the year  ended  December  31,
       1999.
       Contingencies at June 30, 2000 are as follows:

       A. 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 $9.5 billion.
       Each  reactor  licensee is currently  liable for up to $88.1  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 the V. C. Summer  Nuclear  Station
       (Summer Station),  would be approximately $58.7 million per incident, but
       not more than $6.7 million per year.

        The Company  currently  maintains  policies (for itself and on behalf of
        the South  Carolina  Public  Service  Authority)  with Nuclear  Electric
        Insurance  Limited (NEIL).  These policies covering the nuclear facility
        for  property  damage,  excess  property  damage and outage costs permit
        assessment 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 $8.1 million.



<PAGE>


        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 could have a material  adverse impact on the
        Company's results of operations, cash flows and financial position.

        B.  Environmental

        The  Company has an  environmental  assessment  program to identify  and
        assess   current  and  former   operations   sites  that  could  require
        environmental cleanup. As site assessments are initiated,  estimates are
        made of the  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  primarily to
        regulated  operations.  Such  amounts are deferred  and  amortized  with
        recovery provided through rates. The Company has also recovered portions
        of  its  environmental  liabilities  through  settlements  with  various
        insurance  carriers.  The Company has recovered  all amounts  previously
        deferred for its electric operations. The Company expects to recover all
        deferred  amounts  related  to its  gas  operations  by  December  2005.
        Deferred  amounts,  net of amounts recovered through rates and insurance
        settlements,  totaled $20.2 million at June 30, 2000. The deferral
        includes the estimated costs associated with the following matters.

     o    In September 1992 the  Environmental  Protection Agency (EPA) notified
          the  Company,  the  City  of  Charleston  and the  Charleston  Housing
          Authority  of their  potential  liability  for the  investigation  and
          cleanup of the Calhoun Park area site in Charleston,  South  Carolina.
          This site encompasses  approximately 30 acres and includes  properties
          which were  locations  for  industrial  operations,  including  a wood
          preserving  (creosote)  plant,  one  of the  Company's  decommissioned
          manufactured  gas plants (MGP),  properties owned by the National Park
          Service and the City of Charleston,  and private properties.  The site
          has not been placed on the National  Priorities List, but may be added
          in the future. The Potentially  Responsible  Parties (PRPs) negotiated
          an  administrative  order by  consent  for the  conduct  of a Remedial
          Investigation/Feasibility  Study  and a  corresponding  Scope of Work.
          Field work began in  November  1993,  and the EPA  approved a Remedial
          Investigation  Report in February 1997 and a Feasibility  Study Report
          in June 1998.  In July 1998 the EPA  approved  the  Company's  Removal
          Action Work Plan for soil excavation.  The Company completed Phase One
          of the Removal Action in 1998 at a cost of approximately $1.5 million.
          Phase Two, which cost approximately $3.5 million,  included excavation
          and  installation of several  permanent  barriers to mitigate coal tar
          seepage.  On September  30, 1998 a Record of Decision was issued which
          sets forth the EPA's  view of the extent of each PRP's  responsibility
          for  site  contamination  and the  level to  which  the  site  must be
          remediated.  The Company  estimates  that the Record of Decision  will
          result in costs of approximately $13.3 million, of which approximately
          $4 million  remains.  On January 13, 1999 the EPA issued a  Unilateral
          Administrative Order for Remedial Design and Remedial Action directing
          the  Company  to design  and carry out a plan of  remediation  for the
          Calhoun Park site.  The Order is temporarily  stayed  pending  further
          negotiations  between the Company  and the EPA.  However,  the Company
          submitted a Comprehensive Remedial Design Work Plan (RDWP) on December
          17, 1999 and proceeded with  implementation  pending agency  approval.
          The RDWP was approved by the EPA in July 2000, and its  implementation
          continues.

          In October 1996 the City of  Charleston  and the Company  settled
          all  environmental  claims the City may have had  against  the Company
          involving the Calhoun Park area for a payment of $26 million over four
          years  (1996-1999)  by  the  Company  to  the  City.  The  Company  is
          recovering the amount of the settlement, which does not encompass site
          assessment  and  cleanup  costs,  through  rates in the same manner as
          other amounts accrued for site assessments and cleanup. As part of the
          environmental  settlement,  the  Company  constructed  an 1,100  space
          parking garage on the Calhoun Park site (construction was completed in
          April 2000) and transferred the facility to the City in exchange for a
          20-year  municipal bond backed by revenues from the parking garage and
          a mortgage  on the  parking  garage.  The total  amount of the bond is
          still being finalized but is not to exceed $16.9 million,  the maximum
          expected project cost.

     o    The Company owns three other  decommissioned  MGP sites which  contain
          residues  of  by-product  chemicals.  For the site  located in Sumter,
          South Carolina, effective September 15, 1998, the Company entered into
          a Remedial Action Plan Contract with the South Carolina  Department of
          Health and Environmental Control (DHEC) pursuant to which it agreed to
          undertake  a  full  site   investigation  and  remediation  under  the
          oversight  of  DHEC.  Site  investigation  and   characterization  are
          proceeding  according  to  schedule.  Upon  selection  and  successful
          implementation  of a  site  remedy,  DHEC  will  give  the  Company  a
          Certificate  of  Completion  and a covenant not to sue. The Company is
          continuing to investigate  the other two sites,  and is monitoring the
          nature and extent of residual contamination.

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 Electric  Operations and
Gas  Distribution  segments.  Therefore,  net income is not  allocated  to these
segments.  Affiliate  revenue is derived from  transactions  between  reportable
segments  as well as  transactions  between  separate  legal  entities  that are
combined into the same reportable segment.  Assets for the period did not change
significantly.

                        Disclosure of Reportable Segments
                              (Millions of Dollars)

--------------------------------- ----------------------------------------------
Three months ended      Electric      Gas       All   Adjustments/ Consolidated
  June 30, 2000        Operations Distribution Other  Eliminations     Total
--------------------------------- ----------------------------------------------

External  Revenue        $320        $51        -          -          $371
Intersegment Revenue        51        -         -       $(51)           -
Operating Income (Loss)     99       (2)        -         (1)           96
---------------------------- ---------- ------------ ------ -------------- -----


--------------------------------- ----------------------------------------------
Three months ended      Electric      Gas        All  Adjustments/ Consolidated
  June 30, 1999        Operations Distribution  Other Eliminations     Total
--------------------------------- ----------------------------------------------

External Revenue          $293        $45        -         -          $338
Intersegment Revenue        52          -        -      $(52)           -
Operating Income (Loss)     82        (1)        -        (1)           80
--------------------------------- ----------------------------------------------


------------------------------- ------------ -----------------------------------
Six months ended      Electric      Gas        All   Adjustments/ Consolidated
 June 30, 2000       Operations Distribution  Other  Eliminations     Total
------------------------------- ------------ -----------------------------------

External  Revenue      $614       $151          -           -         $765
Intersegment Revenue    106          -          -       $(106)          -
Operating Income        185         21          -          (3)         203
------------------------------------------- -----------------------------------


--------------------------------- ----------------------------------------------
 Six months ended     Electric        Gas       All   Adjustments/ Consolidated
  June 30, 1999      Operations   Distribution Other  Eliminations     Total
--------------------------------- ----------------------------------------------

External Revenue        $559         $130       -          -          689
Intersegment Revenue      96           -        -      $ (96)           -
Operating Income         161           20       -         (1)         180
--------------------------------- ----------------------------------------------





<PAGE>


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, 1999.

        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 in SCE&G's service  territory,  (4) the
impact of competition from other energy suppliers, (5) the management of SCE&G's
operations,  (6) variations in prices of natural gas and fuels used for electric
generation, (7) growth opportunities,  (8) the results of financing efforts, (9)
changes in SCE&G's accounting policies,  (10) weather conditions in areas served
by SCE&G, (11) inflation, (12) exposure to environmental issues and liabilities,
(13)  changes  in  environmental  regulations  and  (14)  the  other  risks  and
uncertainties described from time to time in SCE&G's periodic reports filed with
the Securities and Exchange Commission. SCE&G disclaims any obligation to update
any forward-looking statements.

               MATERIAL CHANGES IN CAPITAL RESOURCES AND LIQUIDITY
                             SINCE DECEMBER 31, 1999

LIQUIDITY AND CAPITAL RESOURCES

       On July 18,  2000 the South  Carolina  Public  Service  Commission  (PSC)
approved a 16.8  percent  increase in natural gas prices  charged by SCE&G.  The
increase became effective on August 1, 2000.

       On July 5, 2000 the PSC  approved  SCE&G's  request  to  implement  lower
depreciation  rates  for  its  gas  operations.  The new  rates  were  effective
retroactively  to  January  1,  2000 and will  result in a  reduction  in annual
depreciation expense of approximately $2.9 million.

       On September 14, 1999 the PSC approved an  accelerated  capital  recovery
plan for SCE&G's Cope Generating Station. The plan will be implemented beginning
January 1, 2000 for a three-year period. The PSC approved an accelerated capital
recovery  methodology  wherein  SCE&G  will  increase  depreciation  of its Cope
Generating  Station  in excess of  amounts  that  would be  recorded  based upon
currently   approved   depreciation   rates.   The  amount  of  the  accelerated
depreciation  will be  determined  by SCE&G based on the level of  revenues  and
operating  expenses,  not to exceed $36 million annually without the approval of
the PSC.  Any  unused  portion  of the $36  million  in any given  year could be
carried forward for possible use in the succeeding year. The accelerated capital
recovery plan will be accomplished through existing customer rates.

        On August 7, 1996 the City of Charleston  executed  30-year electric and
gas franchise agreements with SCE&G. In consideration for the electric franchise
agreement,  SCE&G is paying the City $25 million over seven years (1996  through
2002) and has donated to the City the existing transit assets in Charleston. The
$25  million  is  included  in  electric  plant-in-service.   In  settlement  of
environmental  claims the City may have had against SCE&G  involving the Calhoun
Park area, where SCE&G and its predecessor companies operated a manufactured gas
plant until the 1960's,  SCE&G paid the City $26 million over a four-year period
(1996 through 1999). As part of the environmental settlement,  SCE&G constructed
an 1,100  space  parking  garage  on the  Calhoun  Park site  (construction  was
completed  in April 2000) and  transferred  the facility to the City in exchange
for a 20-year  municipal  bond backed by revenues from the parking  garage and a
mortgage  on the  parking  garage.  The total  amount of the bond is still being
finalized,  but is not to exceed $16.9  million,  the maximum  expected  project
cost.

<PAGE>


        The following table summarizes how SCE&G generated funds for its utility
property  additions and  construction  expenditures  during the six months ended
June 30, 2000 and 1999:

--------------------------------------------------------------------------------
                                                         Six Months Ended
                                                             June 30,
                                                         2000       1999
------------------------------------------------------------------ ------------
                                                         (Millions of Dollars)

Net cash provided from operating activities              $174      $ 99
Net cash provided from (used for)
  financing activities                                    (92)        5
Cash and temporary cash investments
  available at the beginning of the period                 78        36
--------------------------------------------------------------------------
Net cash available for utility property
  additions and construction expenditures                 $160     $140
--------------------------------------------------------------------------
Funds used for utility property additions and
  construction expenditures, net of
  noncash allowance for funds used during construction    $113     $116
--------------------------------------------------------------------------
Funds used for nonutility property additions
   and investments                                         $ 4     $ -
==========================================================================

       On June 14, 2000 SCE&G issued $150 million of First Mortgage Bonds having
an annual  interest  rate of 7.50  percent and  maturing on June 15,  2005.  The
proceeds  from the sale of these bonds were used to pay the  maturity of SCE&G's
$100 million First Mortgage Bonds due June 15, 2000, to reduce  short-term  debt
and for general corporate purposes.

        SCE&G  anticipates that the remainder of its 2000 cash requirements will
be met through  internally  generated  funds and the  incurrence  of  additional
short-term  and long-term  debt. The timing and amount of such  financings  will
depend upon market  conditions and other  factors.  SCE&G expects that it has or
can obtain adequate sources of financing to meet its projected cash requirements
for the next twelve months and for the foreseeable future. The ratio of earnings
to fixed charges for the twelve months ended June 30, 2000 was 4.22.

Regional Transmission Organization

         On February 9, 2000 the Federal  Energy  Regulatory  Commission  (FERC)
issued FERC Order 2000.  The Order  requires  utilities  which operate  electric
transmission  systems  to submit  plans by  October  16,  2000 for the  possible
formation of a regional transmission  organization (RTO). On July 18, 2000 SCE&G
and two other southeastern  electric  utilities (the three utilities)  announced
plans to create  GridSouth,  LLC.  When formed,  GridSouth  will  function as an
independent regional transmission company.  Initially,  the three utilities will
continue to own their  respective  transmission  networks,  while GridSouth will
provide planning and operational  oversight of the electric  transmission  grid.
The three  utilities  plan to file a plan with FERC  later  this year  regarding
formation of GridSouth.

Environmental Matters

     In July 2000 the  Environmental  Protection Agency (EPA) sent the Company a
request seeking  information on SCE&G's repair and maintenance of its coal-fired
plants since 1978. This is part of the EPA's New Source Review (NSR) enforcement
initiative,  in which the EPA claims that  utilities  and others have  committed
widespread violations of the Clean Air Act permitting  requirements for the past
quarter century. In November 1999 the EPA filed suit against seven utilities and
issued an administrative  order to Tennessee Valley Authority  alleging numerous
NSR permitting  violations.  The EPA's  allegations  run counter to previous EPA
guidance regarding the applicability of the NSR permitting requirements.  SCE&G,
along with several other utilities, has routinely undertaken the type of repair,
replacement and maintenance projects that the EPA now claims are illegal. A suit
has not been instituted  against SCE&G, and while it is too early to predict any
potential EPA action,  SCE&G believes that all of its electric  generation units
are properly permitted and have been properly maintained. Because this matter is
in its most preliminary stage with respect to SCE&G,  management cannot estimate
the effects of these  matters on future  consolidated  results of  operations or
financial position.


<PAGE>



         In  October  1998,  the EPA  issued a final  ruling on  regional  ozone
control that requires revised State  Implementation  Plans (SIPs) for 22 eastern
states and the District of Columbia.  This EPA ruling was challenged in court by
various  states,  industry  and other  interests,  including  the state of South
Carolina.  In March  2000,  the court  upheld  most  aspects of the EPA's  rule.
Petitioners  asked the court to rehear the case and overturn the March decision,
but in June the court declined to rehear the case and lifted its earlier stay of
the states' obligation to revise their SIPs. Industry and State petitioners have
not decided at this time what additional review they may seek.

         The EPA has undertaken  other  ozone-related  actions having  virtually
identical  goals to its October 1998 action.  These  actions have  likewise been
challenged in court by the same or similar parties.  The final resolution of the
October 1998 action is expected to resolve these other ozone-related  actions as
well. The South Carolina  Department of Health and Environmental  Control (DHEC)
is considering  methods by which to reduce utility  emissions of nitrogen oxide.
The date for a final state rulemaking is uncertain,  but will be likely in 2001.
SCE&G will undertake additional nitrogen oxide control projects during 2000 and
2001,  at a cost of  approximately  $100  million as an interim  step to address
possible  contributions  to ozone formation in South Carolina.  Depending on the
resolution of these  matters,  costs to SCE&G may reach $190 million to meet the
full requirements of the 1998 Ozone ruling  expenditures for these projects will
be capitalized, and are expected to be completed by 2003.

                              RESULTS OF OPERATIONS
                FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2000
                AS COMPARED TO THE CORRESPONDING PERIODS IN 1999

Earnings and Dividends

         Net income for the three and six  months  ended June 30,  2000 and 1999
were as follows:

                               Three Months Ended        Six Months Ended
(Millions of Dollars)       2000     1999    Change    2000     1999     Change
--------------------------------------------------------------------------------

Net income derived from:
     Operations             $44.3    $36.5    $7.8    $ 98.5    $84.3     $14.2
     Change in accounting     -        -       -        22.3      -        22.3
--------------------------------------------------------------------------------
     Total net              $44.3    $36.5    $7.8    $120.8    $84.3     $36.5
income
================================================================ ========== ====

         Net income from operations increased $7.8 million and $14.2 million for
the three and six months ended June 30, 2000, respectively, when compared to the
corresponding  periods in 1999.  This was  primarily  attributable  to  improved
electric margins ($15.8 million and $25.3 million),  and was partially offset by
increased  income taxes ($6.2  million and $10.8  million)  and other  operating
expenses.

         Earnings  from a  change  in  accounting  resulted  from  recording  of
unbilled revenue (See Note 2 of NOTES TO CONSOLIDATED FINANCIAL STATEMENTS).

         Allowance  for  funds  used  during  construction  (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.  Both the equity and the debt
portions of AFC are noncash items of  nonoperating  income which have the effect
of increasing  reported net income.  AFC represented  approximately 2% of income
before income taxes for the three and six months ended June 30, 2000 and 1999.

         SCE&G's  Board of Directors  authorized  payment of dividends on common
stock held by SCANA, as follows:

------------------- ----------------- ------------------- ----------------------
Declaration         Dividend          Quarter             Payment
Date                Amount            Ended               Date
------------------- ----------------- ------------------- ----------------------
February 17, 2000   $32.0 million     March 31, 2000      April 1, 2000
April 27, 2000      $32.0 million     June  30, 2000      July 1, 2000
------------------- ----------------- ------------------- ----------------------



<PAGE>


Electric Operations

           Changes  in  the  electric   operations   sales  margins   (including
transactions  with affiliates and excluding  unbilled revenue) for the three and
six months ended June 30, 2000,  when compared to the  corresponding  periods in
1999, were as follows:
<TABLE>

----------------------------------------------------------------------- ---------------------------
                                      Three Months Ended                Six Months Ended
(Dollars in Millions)             2000    1999      Change       2000     1999        Change
---------------------------------------------------------------------------------------------------

<S>                              <C>     <C>     <C>     <C>     <C>      <C>     <C>       <C>
Electric operating revenue       $319.8  $292.9  $26.9   9.2%    $614.1   $559.1  $55.0     9.8%
Less:  Fuel used in generation     55.2    54.4    0.8   1.5%     112.2     99.0   13.2    13.3%
          Purchased power          37.6    37.1    0.5   1.3%      66.6     65.8    0.8     1.2%
-------------------------------------------------------        --------------------------
Margin                           $227.0  $201.4  $25.6  12.7%    $435.3   $394.3  $41.0    10.4%
-------------------------------========================--------===================================
</TABLE>

           Electric  operations  sales  margins  increased for the three and six
months ended June 30, 2000, when compared to the corresponding  periods in 1999,
primarily as a result of more favorable weather and customer growth.

Gas Distribution

           Changes in the gas  distribution  sales margins  (excluding  unbilled
revenue) for the three and six months ended June 30, 2000,  when compared to the
corresponding periods in 1999, were as follows:
<TABLE>

----------------------------------------------------------------------------------------------
                                    Three Months Ended               Six Months Ended
(Dollars in Millions)           2000      1999     Change        2000    1999      Change
----------------------------------------------------------- -------- -------- ----------------

<S>                             <C>     <C>    <C>      <C>     <C>      <C>     <C>     <C>
Gas operating  revenue          $51.0   $44.6  $ 6.4    14.3%   $151.5   $130.4  $21.1   16.2%
 Less: Gas purchased for resale  38.6    29.3    9.3    31.7%    100.3     78.1  22.2    28.4%
-------------------------------------------------------        -------- ----------------
Margin                          $12.4   $15.3  $(2.9)  (19.0%)  $ 51.2   $ 52.3  $(1.1)  (2.1%)
-------------------------------========================------- ======== =======================
</TABLE>

     Gas distribution  sales margins for the three and six months ended June 30,
2000 decreased from the  corresponding  periods in 1999 primarily as a result of
cooler  weather in the second  quarter,  which was partially  offset by customer
growth.

 Other Operating Expenses

     Changes in other operating expenses for the three and six months ended June
30, 2000 when compared to the corresponding periods in 1999, were as follows:
<TABLE>

---------------------------------------------------------------------------------------------------
                                          Three Months Ended              Six Months Ended
(Dollars in Millions)              2000     1999        Change       2000       1999      Change
------------------------------------------ ---------------------- ----------- --------- -----------

<S>                               <C>      <C>      <C>    <C>      <C>       <C>       <C>     <C>
Other operation  and maintenance  $ 80.8   $ 75.4   $5.4   7.2%     $154.2    $143.6    $10.6   7.4%
Depreciation and amortization       38.9      0.6   1.6%   79.2       76.4       2.8     3.7%  38.3
Other taxes                         24.4      1.6   7.0%   49.6       47.4       2.2     4.6%  22.8
------------------------------------------ ---------------        ----------- --------- ------
Total                             $144.1   $136.5   $7.6   5.6%     $283.0     $267.4   $15.6   5.8%
---------------------------------========= ===============------- ======= ========= ================
</TABLE>

     Other operation and maintenance expenses for the three and six months ended
June 30, 2000  increased  from 1999 levels  primarily  as a result of  increased
operating  and  maintenance  costs  for  electric  generation  and  distribution
facilities. The increase in depreciation and amortization expenses resulted from
normal  property  additions,  and is  partially  offset  by a  reduction  in gas
depreciation  rates  retroactive  to January 1, 2000 (See  LIQUIDITY AND CAPITAL
RESOURCES).

Income Taxes

     Income  taxes for the three and six months  ended June 30,  2000  increased
approximately $6.2 million and $10.8 million, respectively, when compared to the
corresponding  periods in 1999. These increases are primarily due to the changes
in operating income.


<PAGE>



Item 3.    Quantitative and Qualitative Disclosures About Market Risk

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

     Interest  rate risk - The table below  provides  information  about SCE&G's
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.
<TABLE>
<CAPTION>

                                                        June 30, 2000
                                                    Expected Maturity Date
                          ----------------- ------------------------ ----------------
                                             (Dollars in Millions)
                                                             There-            Fair
Liabilities               2000   2001  2002   2003   2004    after    Total    Value
                          -------------------------------------------------- ----------

Long-Term Debt:
<S>        <C>             <C>   <C>   <C>   <C>     <C>    <C>      <C>      <C>
Fixed Rate ($)             2.5   27.5  27.6  129.5   123.9  1,083.0  1,394.0  1,282.7
Average Interest Rate (%) 6.53   6.73  6.73   6.37   7.52      7.55     7.40


                                                        June 30, 1999
                                                    Expected Maturity Date
                         ------- ------------------------------- ------------------------
                                               (Dollars in Millions)
                                                              There-            Fair
Liabilities                1999   2000   2001   2002  2003    after    Total    Value
                         ------- -------------------------------------------------------

Long-Term Debt:
<S>        <C>             <C>    <C>    <C>    <C>   <C>    <C>      <C>      <C>
Fixed Rate ($)             10.5   195.1  22.6   22.6  124.5  1,043.4  1,418.7  1,456.4
Average Interest Rate (%)  6.17    5.90  6.72   6.72   7.56     7.55     7.29
</TABLE>

     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.








<PAGE>


                                              PART II. OTHER INFORMATION

Item 1.   Legal Proceedings

         SCANA Corporation:

         For information  regarding legal proceedings see Note 2 "Rate Matters,"
         appearing  in the  Company's  Annual  Report  on Form 10-K for the year
         ended  December  31,  1999,  and  Note 7  "Contingencies"  of  Notes to
         Consolidated Financial Statements appearing in this Quarterly Report on
         Form 10-Q.

         South Carolina Electric  & Gas Company:

         For information regarding legal proceedings see Note 2 "Rate Matters, "
         appearing in South Carolina  Electric & Gas Company's  Annual Report on
         Form  10-K  for  the  year  ended   December  31,  1999,   and  Note  5
         "Contingencies" of Notes to Consolidated Financial Statements appearing
         in this Quarterly Report on Form 10-Q.

Item 4.   Submission of Matters to a Vote of  Security-Holders (not applicable
          for South Carolina Electric & Gas Company)

         The Annual Meeting of Shareholders of SCANA Common Stock (No Par Value)
         was held on April 27, 2000.  The  following  matters were voted upon at
         the meeting.

         1, 2 and 3.  To elect eight (8) directors for the terms specified in
         the Proxy Statement.

                                       Number of  Shares     Total
                       Number of Shares     Voting to       Shares
   Nominee              Voting  For    Withhold Authority   Voted

 James A. Bennett        89,976,081    1,617,421           91,593,502
 William C. Burkhardt    89,986,860    1,606,642           91,593,502
 Lynne M. Miller         90,003,639    1,589,863           91,593,502
 Maceo K. Sloan          90,000,473    1,593,029           91,593,502
 William B. Timmerman    86,983,138    4,610,364           91,593,502
 John L. Skolds          89,438,507    2,154,995           91,593,502
 G. Smedes York          89,519,483    2,074,019           91,593,502
 Charles E. Zeigler, Jr. 89,362,363    2,231,139           91,593,502

         4.  To approve the SCANA Long-Term Equity Compensation Plan.

                                                     Number
                                                   of  Shares

                                For                 70,895,654
                                Against             18,961,433
                                Abstain              1,736,415
                                Total               91,593,502

Percent of FOR votes of those shares actually voting for this proposal:  77.40%

         5. To approve the  appointment  of Deloitte & Touche LLP as independent
accountants for the Company.

                                                       Number
                                                     of  Shares

                                For                   90,257,260
                                Against                  886,378
                                Abstain                  449,864
                                Total                 91,593,502

Percent of FOR votes of those shares actually voting for this proposal:  98.54%


<PAGE>


Item 6.    Exhibits and Reports  on Form 8-K

         SCANA Corporation and South Carolina Electric & Gas Company:

         A.  Exhibits

                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.

         B. Reports on Form 8-K during the second quarter 2000 were as follows:

                None



<PAGE>



                                SCANA CORPORATION


                                   SIGNATURES

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




                                         SCANA CORPORATION

(Registrant)




August 11, 2000                          By: s/M. R. Cannon
                                             M.R. Cannon
                                             Controller
                                             (Principal accounting officer)








<PAGE>




                      SOUTH CAROLINA ELECTRIC & GAS COMPANY

                                   SIGNATURES

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



                                 SOUTH CAROLINA ELECTRIC & GAS COMPANY
                                                 (Registrant)




August 11, 2000                     By:   s/Mark R. Cannon
                                          Mark R. Cannon
                                          Controller
                                         (Principal accounting officer)





<PAGE>




                                  EXHIBIT INDEX

           Applicable to
Exhibit     Form 10-Q of
No.    SCANA   SCE&G  Description

2.01     X      X  Agreement and Plan of Merger, dated as of February 16, 1999
                   as amended and restated as of May 10, 1999, by and among
                   Public Service Company of North Carolina, Incorporated, SCANA
                   Corporation , New Sub I, Inc. and New Sub II, Inc. (Filed as
                   Exhibit 2.1 to Registration Statement No. 333-78227)

3.01     X         Restated Articles of Incorporation of SCANA as adopted on
                   April 26, 1989 (Filed as Exhibit 3-A to Registration
                   Statement No. 33-49145)

3.02            X  Restated Articles of Incorporation of SCE&G, as adopted on
                   December 15, 1993  (Filed as Exhibit 3.01 to Registration
                   Statement No. 333-86387)

3.03      X        Articles of Amendment of SCANA, dated April 27, 1995 (Filed
                   as Exhibit 4-B to Registration Statement No. 33-62421)

3.04            X  Articles of Amendment of SCE&G, dated June 7, 1994 filed
                   June 9, 1994  (Filed as Exhibit 3.02 to Registration
                   Statement No. 333-86387)

3.05            X  Articles of Amendment of SCE&G, dated November 9, 1994 (Filed
                   as Exhibit 3.03 to Registration Statement No. 333-86387)

3.06            X  Articles of Amendment of SCE&G, dated December 9, 1994
                  (Filed as Exhibit 3.04 to Registration Statement No.333-86387)

3.07            X  Articles of Correction of SCE&G, dated January 17, 1995
                  (Filed as Exhibit 3.05 to Registration Statement No.333-86387)

3.08            X  Articles of Amendment of SCE&G, dated January  13, 1995 and
                   filed January 17, 1995 (Filed as Exhibit 3.06 to Registration
                   Statement No. 333-86387)

3.09            X  Articles of Amendment of SCE&G, dated March 30, 1995 (Filed
                   as Exhibit 3.07 to Registration Statement No. 333-86387)

3.10            X  Articles of Correction of SCE&G - Amendment to Statement
                   filed March 31, 1995, dated December 13, 1995 (Filed as
                   Exhibit 3.08 to Registration Statement No. 333-86387)

3.11            X  Articles of Amendment of SCE&G, dated December 13, 1995
                  (Filed as Exhibit 3.09 to Registration Statement No.333-86387)

3.12            X  Articles of Amendment of SCE&G, dated February 18, 1997
                  (Filed as Exhibit 3-L to Registration Statement No. 333-24919)

3.13            X  Articles of Amendment of SCE&G, dated February 21, 1997
                   (Filed as Exhibit 3.11 to Registration Statement No.
                   333-86387)

3.14            X  Articles of Amendment of SCE&G, dated April 22, 1997 (Filed
                   as Exhibit 3.12 to Registration Statement No. 333-86387)



<PAGE>



           Applicable to
Exhibit      Form 10-Q of
No.    SCANA   SCE&G  Description

3.15              X   Articles of Amendment of SCE&G, dated April 9, 1998 (Filed
                      as Exhibit 3.13 to Registration Statement No. 333-86387)

3.16              X   Articles of Amendment of SCE&G, dated May 19, 1999 (Filed
                      as Exhibit 3.16 to Form 10-K for the year ended December
                      31, 1999)

3.17              X   Articles of Amendment of SCE&G, dated August 13, 1999
                      (Filed as Exhibit 3.17 to Form 10-K for the year ended
                      December 31, 1999)

3.18              X   Articles of Amendment of SCE&G, dated March 1, 2000 (Filed
                      as Exhibit 3.18 to Form 10-K for the year ended December
                      31, 1999)

3.19      X           By-Laws of SCANA as revised and amended on February 22,
                      2000 (Filed as Exhibit 3.19 to Form 10-K for the year
                      ended December 31, 1999)

3.20              X   By-Laws of SCE&G as amended and adopted on  February 22,
                      2000 (Filed as Exhibit 3.20 to Form 10-K for the year
                      ended December 31, 1999)



<PAGE>


4.01          X             Articles of Exchange of South Carolina Electric and
                            Gas Company and SCANA Corporation (Filed as Exhibit
                            4-A to Post-Effective Amendment No. 1 to
                            Registration Statement No. 2-90438)

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 Statement No.
                            33-32107)

4.03          X      X      Indenture dated as of January 1, 1945, between the
                            South Carolina Power Company  and Central
                            Hanover Bank and Trust, as Trustee, as supplemented
                            by 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)

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
                            Filed as Exhibit 2-C to Registration Statement No.
                            2-26459)

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 whose filenumbers are set
                            forth below:

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
September 1, 1968              Exhibit 4-O        to Registration No. 2-31569
June 1, 1969                   Exhibit 4-C        to Registration No. 33-38580


<PAGE>


Exhibit
No.

 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. 33-49421
 June 1, 1981                   Exhibit 4-D        to Registration No. 2-73321
 March 1, 1982                  Exhibit 4-D        to Registration No. 33-49421
 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
 February 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. 33-57955
 May 1, 1999                    Exhibit 4.04       to Registration No. 333-86387

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)

4.07           X     X     First Supplemental Indenture to Indenture  referred
                           to in Exhibit 4.07 dated as of June 1, 1993 (Filed
                           as Exhibit 4-G to Registration Statement No.33-49421)

4.08           X     X     Second Supplemental Indenture to Indenture referred
                           to in Exhibit  4.07 dated as of June  15, 1993
                           (Filed as Exhibit 4-G to Registration Statement No.
                           33-57955)


<PAGE>





            Applicable to
Exhibit      Form 10-Q of
No.        SCANA   SCE&G  Description
4.09           X     X      Trust Agreement for SCE&G Trust I (Filed as
                            Exhibit 4-G to SCE&G Form 10-K for the year
                            ended December 31, 1997)

4.10           X     X      Certificate of Trust for SCE&G Trust I (Filed
                            as  Exhibit 4-H to SCE&G Form 10-K for the
                            year ended December 31, 1997)

4.11           X     X      Junior Subordinated Indenture for SCE&G Trust
                            I (Filed as Exhibit 4-I to SCE&G Form 10-K
                            for the year ended December 31, 1997)

4.12           X     X      Guarantee Agreement for SCE&G Trust I (Filed as
                            Exhibit 4-J to SCE&G Form 10-K for the
                            year ended December 31, 1997)

4.13           X     X      Amended and Restated Trust Agreement for SCE&G
                            Trust I (Filed as Exhibit 4-K to SCE&G
                            Form 10-K for the year ended December 31, 1997)

10.01          X            SCANA Voluntary Deferral Plan as amended
                            through October 21, 1997 (Filed as Exhibit
                            10.01(a) to Registration Statement No. 333-86803)

10.02          X     X      Supplemental Executive Retirement Plan (Filed
                            as Exhibit 10.01(b) to Registration
                            Statement No. 333-86803)

10.03          X            SCANA Supplementary Voluntary Deferral Plan as
                            amended and restated through October 21,
                            1997 (Filed as Exhibit 10-B to SCANA Form 10-K
                            for the year ended  December 31, 1997)

10.04          X            SCANA Key Executive Severance Benefits Plan as
                            amended and restated effective as of
                            October 21, 1997 (Filed as Exhibit 10.01(c) to
                            Registration Statement No. 333-86803)

10.05                 X     SCANA  Supplementary Key Executive  Severance
                            Benefits Plan as amended and restated effective
                            October 21, 1997 (Filed as Exhibit  10.01(d) to
                            Registration Statement No.
                            333-86803)

10.06          X            SCANA Performance Share Plan as amended and
                            restated effective January 1, 1998  (Filed as
                            Exhibit 10.01(e) to Registration Statement No.
                            333-86803)

10.07                 X     SCANA Key Employee  Retention Plan as amended
                            and  restated  effective as of October 21, 1997
                            (Filed as  Exhibit  10-E to SCANA Form 10-K for
                            the year ended December 31, 1997)

10.08          X            Description of SCANA Whole Life Option (Filed
                            as Exhibit 10-F to SCANA Form 10-K for the
                            year ended December 31, 1991, under cover of
                            Form SE, File No. 1-8809)

10.09                X      Description  of  SCANA  Corporation   Annual
                            Incentive  Plan (Filed as Exhibit 10-G to SCANA
                            Form 10-K for the year ended December 31, 1991,
                            under cover of Form SE, File No. 1-8809)

10.10                X      Service Agreement between SCE&G and SCANA
                            Servcies, Inc., effective April 1, 2000 (Filed
                            herewith on page 49)

27.01          X            Financial Data Schedule (Filed herewith)

27.02                X      Financial Data Schedule (Filed herewith)