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**UNITED      STATES**

**SECURITIES      AND EXCHANGE COMMISSION**

**Washington,      DC 20549**

**FORM      10-K**

| x                                                                   | **ANNUAL                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES****EXCHANGE ACT OF 1934**                                |
|---------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                |                                                                                                                                      |
| **For                the Fiscal Year Ended December 31, 2005** |
|                                                                |
| **OR**                                                              |
|                                                                |
| o                                                                   | **TRANSITION                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE                ACT OF                1934** |
|                                                                |                                                                                                                                      |
| **For                the Transition Period from to**                |

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

| **Title                of each class**                               | **Registrant**                                                               |
|----------------------------------------------------------------------|------------------------------------------------------------------------------|
| Common                Stock, without par value                       | SCANA                Corporation                                             |
| 5%                Cumulative Preferred Stock par value $50 per share | South                Carolina Electric & Gas                Company |

**Securities      registered pursuant to Section 12(g) of the Act:**

| SCANA                Corporation                                            | Large                accelerated filer x            | Accelerated                filer ¨ | Non-accelerated                filer ¨ |
|-----------------------------------------------------------------------------|-----------------------------------------------------|-----------------------------------------|---------------------------------------------|
| South                Carolina Electric & Gas Company               | Large                accelerated filer ¨  | Accelerated                filer ¨ | Non-accelerated                filer x      |
| Public                Service Company of North Carolina, Incorporated  | Large                accelerated filer ¨  | Accelerated                filer ¨ | Non-accelerated                filer x      |

|  **Registrant**                                                  |  **Description                of Common Stock** | **Shares                Outstanding****at                February 20, 2006** |
|-----------------------------------------------------------------------|------------------------------------------------------|------------------------------------------------------------------------------|
| SCANA                Corporation                                      | Without                Par Value                     | 115,032,759                                                                  |
| South                Carolina Electric & Gas Company              | $4.50                Par Value                       | 40,296,147(a)                                                                |
| Public                Service Company of North Carolina, Incorporated | Without                Par Value                     | 1,000(a)                                                                     |

| (a)   | Held                beneficially and of record by SCANA                Corporation. |
|-----------------|-------------------------------------------------------------------------------------|

**Documents      incorporated by reference:**

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

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**TABLE      OF CONTENTS**

|                                                                        |                                                                                                                                                             | **Page** |
|-----------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------|
| DEFINITIONS                                                            | 4                                                                                                                                                                |
| PART                I                                                  |                                                                                                                                                             |
| Item                1.                                                 | Business                                                                                                                                                    | 5        |
| Item                1A.                                                | Risk                Factors                                                                                                                                 | 15       |
| Item                1B.                                                | Unresolved                Staff Comments                                                                                                                    | 19       |
| Item                2.                                                 | Properties                                                                                                                                                  | 20       |
| Item                3.                                                 | Legal                Proceedings                                                                                                                            | 22       |
| Item                4.                                                 | Submission                of Matters to a Vote of Security                Holders                                                                           | 25       |
| Executive                Officers of SCANA                Corporation  | 26                                                                                                                                                               |
| PART                II                                                 |                                                                                                                                                             |
| Item                5.                                                 | Market                for Registrant's Common Equity,                Related Stockholder Matters and Issuer Purchases of Equity Securities                  | 27       |
| Item                6.                                                 | Selected                Financial Data                                                                                                                      | 29       |
| Item                7.                                                      | Management's                Discussion and Analysis of Financial Condition and Results of                Operations                                         |     |
| Item                7A.                                                     | Quantitative                and Qualitative Disclosures About Market Risk                                                                                   |     |
| Item                8.                                                 | Financial                Statements and Supplementary Data                                                                                                  |     |
|                                                                        |  *SCANA                Corporation*                                                                                                                    | 30       |
|                                                                        | *South                Carolina Electric & Gas                Company*                                                                              | 94       |
|                                                                        | *Public                Service Company of North Carolina,                Incorporated*                                                                      | 140      |
| Item                9.                                                 | Changes                in and Disagreements with Accountants on Accounting                and Financial Disclosure                                          | 162      |
| Item                9A.                                                | Controls                and Procedures                                                                                                                      | 162      |
| Item                9B.                                                | Other                Information                                                                                                                            | 165      |
| PART                III                                                |                                                                                                                                                             |
| Item                10.                                                | Directors                and Executive Officers of the                Registrants                                                                           | 166      |
| Item                11.                                                | Executive                Compensation                                                                                                                       | 169      |
| Item                12.                                                | Security                Ownership of Certain Beneficial Owners and                Management and Related Stockholder Matters                                | 175      |
| Item                13.                                                | Certain                Relationships and Related                Transactions                                                                                | 176      |
| Item                14.                                                | Principal                Accountant Fees and Services                                                                                                       | 177      |
| PART                IV                                                 |                                                                                                                                                             |
| Item                15.                                                | Exhibits                and Financial Statement                Schedules                                                                                    | 178      |
| SIGNATURES                                                             | 180                                                                                                                                                              |
| Exhibit                Index                                                | 182                                                                                                                                                              |

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**DEFINITIONS**

| **TERM**                   | **MEANING**                                                             |
|---------------------------------|------------------------------------------------------------------------------|
| AFC                             | Allowance                for Funds Used During Construction                  |
| CAA                             | Clean                Air Act, as amended                                     |
| DHEC                            | South                Carolina Department of Health and Environmental Control |
| DOE                             | United                States Department of Energy                            |
| DOJ                             | United                States Department of Justice                           |
| DT                              | Dekatherm                (one million BTUs)                                  |
| Energy                Marketing | The                divisions of SEMI, excluding SCANA Energy                 |
| EPA                             | United                States Environmental Protection Agency                 |
| FERC                            | United                States Federal Energy Regulatory Commission            |
| Fuel                Company     | South                Carolina Fuel Company, Inc.                        |
| GENCO                           | South                Carolina Generating Company, Inc.                  |
| GPSC                            | Georgia                Public Service Commission                             |
| IRC                             | Internal                Revenue Code, as amended                             |
| IRS                             | Internal                Revenue Service                                      |
| KW                or KWh        | Kilowatt                or Kilowatt-hour                                     |
| LLC                             | Limited                Liability Company                                     |
| LNG                             | Liquefied                Natural Gas                                         |
| MCF                or MMCF      | Thousand                Cubic Feet or Million Cubic Feet                     |
| MGP                             | Manufactured                Gas Plant                                        |
| MMBTU                           | Million                British Thermal Units                                 |
| MW                or MWh        | Megawatt                or Megawatt-hour                                     |
| NCUC                            | North                Carolina Utilities Commission                           |
| NMST                            | Negotiated                Market Sales Tariff                                |
| NRC                             | United                States Nuclear Regulatory Commission                   |
| NSR                             | New                Source Review                                             |
| NYMEX                           | New                York Mercantile Exchange                                  |
| PRP                             | Potentially                Responsible Party                                 |
| PSNC                Energy      | Public                Service Company of North Carolina, Incorporated        |
| Santee                Cooper    | South                Carolina Public Service Authority                       |
| SCANA                           | SCANA                Corporation, the parent company                         |
| SCANA                Energy     | A                division of SEMI which markets natural gas in Georgia       |
| SCE&G                       | South                Carolina Electric & Gas Company                |
| SCG                Pipeline     | SCG                Pipeline, Inc.                                       |
| SCI                             | SCANA                Communications, Inc.                               |
| SCPC                            | South                Carolina Pipeline Corporation                           |
| SCPSC                           | The                Public Service Commission of South Carolina               |
| SEC                             | United                States Securities and Exchange Commission              |
| SEMI                            | SCANA                Energy Marketing, Inc.                             |
| SFAS                            | Statement                of Financial Accounting Standards                   |
| Southern                Natural | Southern                Natural Gas Company                                  |
| Summer                Station   | V.                C. Summer Nuclear Station                                  |
| Transco                         | Transcontinental                Gas Pipeline Corporation                     |
| Williams                Station | A.                M. Williams Generating Station                             |
| WNA                             | Weather                Normalization Adjustment                              |

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**PART      I**

**ITEM      1. BUSINESS**

**CORPORATE      STRUCTURE**

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**ORGANIZATION**

**INVESTOR      INFORMATION**

*www.scana.com*

**SEGMENTS      OF BUSINESS**

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**COMPETITION**

**CAPITAL      REQUIREMENTS**

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**CAPITAL      PROJECTS**

**ELECTRIC      OPERATIONS**

| **CLASSIFICATION**               |   | **2004** |   | **2005** |   |
|----------------------------------|--------|----------|--------|----------|--------|
| Residential                      |   |     | 40     | %        |   | 39 | % |
| Commercial                       |   |     | 30     | %        |   | 29 | % |
| Industrial                       |   |     | 17     | %        |   | 17 | % |
| Sales                for resale  |   |     | 4      | %        |   | 4 | % |
| Other                            |   |     | 2      | %        |   | 2 | % |
| Total                Territorial |   |     | 93     | %        |   | 91 | % |
| NMST                             |   |     | 7      | %        |   | 9 | % |
| Total                            |   |     | 100    | %        |   | 100 | % |

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|                                        |   | **Cost                of Fuel Used** |   |
|---------------------------------------------|--------|--------------------------------------|--------|
|                                        |   | **2003**                             |   | **2004** |   | **2005** |   |
| Per                MMBTU:                   |   |                                 |   |   |   |   |   |
| Nuclear                                     |   | $                                    | .53    |   | $ | .50 |   | $ | .46 |   |
| Coal-SCE&G                              |   |                                 | 1.68   |   |   | 1.92 |   |   | 2.36 |   |
| Coal-GENCO                                  |   |                                 | 1.75   |   |   | 2.12 |   |   | 2.43 |   |
| Gas-SCE&G                               |   |                                 | 7.02   |   |   | 7.31 |   |   | 10.30 |   |
| All                Fuels (weighted average) |   |                                 | 1.58   |   |   | 1.96 |   |   | 2.53 |   |
| Per                Ton:                     |   |                                 |   |   |   |   |   |   |   |   |
| Coal-SCE&G                              |   | $                                    | 42.06  |   | $ | 47.49 |   | $ | 58.51 |   |
| Coal-GENCO                                  |   |                                 | 44.30  |   |   | 52.69 |   |   | 60.68 |   |
| Per                MCF:                     |   |                                 |   |   |   |   |   |   |   |   |
| Gas-SCE&G                               |   | $                                    | 7.76   |   | $ | 7.81 |   | $ | 10.91 |   |

|                                 |   | **%                of Total MWh Generated** |   |
|--------------------------------------|--------|---------------------------------------------|--------|
|                                 |   | **Actual**                                  |   | **Estimated** |   |
|                                 |   | **2003**                                    |   | **2004** |   | **2005** |   | **2006** |   | **2007** |   | **2008** |   |
| Coal                                 |   |                                        | 70     | % |   | 68 | % |   | 68 | % |   | 69 | % |   | 66 | % |   | 63 | % |
| Nuclear                              |   |                                        | 21     | % |   | 21 | % |   | 19 | % |   | 19 | % |   | 20 | % |   | 18 | % |
| Hydro                                |   |                                        | 6      | % |   | 4 | % |   | 5 | % |   | 5 | % |   | 5 | % |   | 5 | % |
| Natural                Gas & Oil |   |                                        | 3      | % |   | 7 | % |   | 8 | % |   | 7 | % |   | 9 | % |   | 14 | % |
|  Total                          |   |                                        | 100    | % |   | 100 | % |   | 100 | % |   | 100 | % |   | 100 | % |   | 100 | % |

| **Commitment**  | **Contractor**                                         | **Remaining                Regions****(a)** | **Expiration                Date** |
|----------------------|--------------------------------------------------------|---------------------------------------------|------------------------------------|
| Enrichment           | United States Enrichment Corporation(b) | 19-20                                       | 2008                               |
| Fabrication          | Westinghouse                Electric Corporation       | 19-22                                       | 2011                               |

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**GAS      OPERATIONS**

|                              |   | **SCANA** |   | **SCE&G** |   | **PSNC Energy** |   |
|-----------------------------------|--------|-----------|--------|---------------|--------|----------------------|--------|
| **CLASSIFICATION**                |   | **2004**  |   | **2005**      |   | **2004**             |   | **2005** |   | **2004** |   | **2005** |   |
| Residential                       |   |      | 40.8   | %             |   | 40.6                 | %      |   | 38.8 | % |   | 36.6 | % |   | 59.3 | % |   | 58.3 | % |
| Commercial                        |   |      | 24.7   | %             |   | 25.5                 | %      |   | 32.3 | % |   | 32.3 | % |   | 28.9 | % |   | 29.4 | % |
| Industrial                        |   |      | 29.3   | %             |   | 29.6                 | %      |   | 28.1 | % |   | 30.6 | % |   | 6.5 | % |   | 8.1 | % |
| Sales                for Resale   |   |      | 1.5    | %             |   | 1.3                  | %      |   | - |   |   | - |   |   | - |   |   | - |   |
| Transportation                Gas |   |      | 3.7    | %             |   | 3.0                  | %      |   | 0.8 | % |   | 0.5 | % |   | 5.3 | % |   | 4.2 | % |
| Total                             |   |      | 100    | %             |   | 100                  | %      |   | 100 | % |   | 100 | % |   | 100 | % |   | 100 | % |

*South      Carolina*

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*North      Carolina*

**REGULATION**

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| **Project**                        | **License                Expiration** | **Project**                  | **License                Expiration** |
|-----------------------------------------|---------------------------------------|------------------------------|---------------------------------------|
| Saluda                (Lake Murray)     | 2010                                  | Stevens                Creek | 2025                                  |
| Fairfield                Pumped Storage | 2020                                  | Neal                Shoals   | 2036                                  |
| Parr                Shoals              | 2020                                  |                         |                                  |

**RATE      MATTERS**

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**ENVIRONMENTAL      MATTERS**

**OTHER      MATTERS**

**ITEM      1A. RISK FACTORS**

***The      risk factors that follow relate in each case to SCANA Corporation and its      subsidiaries (SCANA), and where indicated the risk factors also relate to South      Carolina Electric & Gas Company and its consolidated affiliates (SCE&G)      or Public Service Company of North Carolina, Incorporated and its subsidiaries      (PSNC Energy) or both.***

***Commodity      price changes may affect the operating costs and competitive positions of      SCANA's, SCE&G's and PSNC Energy's energy businesses, thereby adversely      impacting results of operations, cash flows and financial      condition.***

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***SCANA,      SCE&G and PSNC Energy are subject to complex government rate regulation,      which could adversely affect revenues, results of operations and cash      flows.***

***SCANA,      SCE&G and PSNC Energy are vulnerable to interest rate increases which would      increase our borrowing costs, and may not have access to capital at favorable      rates, if at all, both of which may adversely affect results of operations,      cash      flows and financial condition.***

***SCANA      may not be able to reduce its leverage ratio as quickly as planned. This could      result in downgrades of SCANA's debt ratings, thereby increasing its borrowing      costs and adversely affecting its results of operations, cash flows and      financial condition.***

***Operating      results may be adversely affected by abnormal      weather.***

***Potential      competitive changes may adversely affect gas and electricity businesses due      to      the loss of customers, reductions in revenues, or write-down of stranded      assets.***

***SCANA,      SCE&G and PSNC Energy are subject to risks associated with changes in      business climate which could limit access to capital, thereby increasing costs      and adversely affecting results of operations, cash flows and financial      condition.***

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***SCANA,      SCE&G and PSNC Energy do not fully hedge against price changes in      commodities. This could result in increased costs, thereby resulting in lower      margins and adversely affecting results of operations, cash flows and financial      condition.***

***A      downgrade in the credit rating of SCANA, SCE&G or PSNC Energy could      negatively affect its ability to access capital and to operate its businesses,      thereby adversely affecting results of operations, cash flows and financial      condition.***

***Changes      in the environmental laws and regulations to which SCANA, SCE&G and PSNC      Energy are subject could increase costs or curtail activities, thereby adversely      impacting results of operations, cash flows and financial      condition.***

***Changing      regulatory and energy marketing structures could affect the ability of SCANA      and      SCE&G to compete in our electric markets, thereby adversely impacting      results of operations, cash flows and financial      condition.***

***Problems      with operations could cause us to incur substantial costs, thereby adversely      impacting results of operations, cash flows and financial      condition.***

***Covenants      in certain financial instruments may limit SCANA's ability to pay dividends,      thereby adversely impacting the valuation of our common stock and our access      to      capital.***

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***A      significant portion of SCE&G's generating capacity is derived from nuclear      power, the use of which exposes us to regulatory, environmental and business      risks. These risks could increase our costs or otherwise constrain our business,      thereby adversely impacting our results of operations, cash flows and financial      condition.***

| ·   | The                potential harmful effects on the environment and human health resulting                from a release of radioactive materials in connection with the operation                of nuclear facilities and the storage, handling and disposal of                radioactive materials; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Limitations                on the amounts and types of insurance commercially available to cover                losses that might arise in connection with our nuclear operations                or those                of others in the United States; |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Uncertainties                with respect to contingencies if insurance coverage is inadequate;                and |
|--------------------|--------------------------------------------------------------------------------------------------------------------|

| ·   | Uncertainties                with respect to the technological and financial aspects of decommissioning                nuclear plants at the end of their operating                lives. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**ITEM      1B. UNRESOLVED STAFF COMMENTS**

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**ITEM      2. PROPERTIES**

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**ELECTRIC      PROPERTIES**

|   **Facility**           |  **Present****Fuel Capability** |   **Location**        |  **Year****In-Service** | **Net                Generating****Capacity****(Summer Rating) (MW)** |
|-----------------------------------------|-------------------------------------------|---------------------------------|------------------------------|---------------------------------------------------------------------------------|
| Steam                Turbines           |                                      |                            |                         |                                                                            |
| Summer(1)                               | Nuclear                                   | Parr,                SC         | 1984                         | 644                                                                             |
| McMeekin                                | Coal/Gas                                  | Irmo,                SC         | 1958                         | 250                                                                             |
| Canadys                                 | Coal/Gas                                  | Canadys,                SC      | 1962                         | 416                                                                             |
| Wateree                                 | Coal                                      | Eastover,                SC     | 1970                         | 700                                                                             |
| Williams(2)                             | Coal                                      | Goose                Creek, SC  | 1973                         | 615                                                                             |
| Cope                                    | Coal                                      | Cope,                SC         | 1996                         | 420                                                                             |
| Cogen                South(3)           |                                      | Charleston,                SC   | 1999                         | 90                                                                              |
|                                    |                                      |                            |                         |                                                                            |
| Combined                Cycle           |                                      |                            |                         |                                                                            |
| Urquhart(4)                             | Coal/Gas/Oil                              | Beech                Island, SC | 1953/2002                    | 568                                                                             |
| Jasper                                  | Gas/Oil                                   | Hardeeville,                SC  | 2004                         | 880                                                                             |
|                                    |                                      |                            |                         |                                                                            |
| Hydro(5)                                |                                      |                            |                         |                                                                            |
| Saluda                                  |                                      | Irmo,                SC         | 1930                         | 206                                                                             |
| Fairfield                Pumped Storage |                                      | Parr,                SC         | 1978                         | 576                                                                             |

| (3) | SCE&G                receives shaft horse power from Cogen South, LLC to operate SCE&G's                generator. Cogen South, LLC is owned 50% by SCANA and 50% by                MeadWestvaco. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4) | Two                combined-cycle turbines burn natural gas or fuel oil to produce 341                MW of                electric generation and use exhaust heat to power two 75 MW turbines                at                the Urquhart Generating Station. Unit 3 is a coal-fired steam                unit. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (5) | SCE&G                also owns three other hydro units in South Carolina that were placed                in                service in 1905 and 1914 and have an aggregate net generating capacity                of                32 MW. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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**NATURAL      GAS DISTRIBUTION AND TRANSMISSION PROPERTIES**

**ITEM      3. LEGAL PROCEEDINGS**

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**ITEM      4. SUBMISSION OF MATTERSTO A VOTE OF SECURITY      HOLDERS**

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**EXECUTIVE      OFFICERS OF SCANA      CORPORATION**

| **Name**                       | **Age** | **Positions                Held During Past Five Years**                                                                                                                                                                                                                                                                                            | **Dates**                                           |
|-------------------------------------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------|
|                                |    |                                                                                                                                                                                                                                                                                                                                                |                                                |
| William                B. Timmerman | 59      | Chairman                of the Board, President and Chief Executive Officer                                                                                                                                                                                                                                                                    | *-present                                           |
| Joseph                C. Bouknight  | 53      | Senior                Vice President-Human ResourcesVice                President Human Resources-Dan River, Inc.-Danville, VA                                                                                                                                                                                                                 | 2004-present*-2004                                  |
| George                J. Bullwinkel | 57      | President                and Chief Operating Officer-SEMIPresident                and Chief Operating Officer-ServiceCarePresident                and Chief Operating Officer-SCIPresident                and Chief Operating Officer-SCPC and SCG PipelineSenior                Vice President-Governmental Affairs and Economic Development  | 2004-present2002-present*-present2002-2004*-2002    |
| Sarena                D. Burch      | 48      | Senior                Vice President-Fuel Procurement and Asset Management-SCE&G, PSNC                Energy and SCPCDeputy                General Counsel and Assistant Secretary-SCANA Services                                                                                                                                          |  2003-present*-2003                            |
| Stephen                A. Byrne     | 46      | Senior                Vice President-Generation, Nuclear and Fossil Hydro-SCE&GSenior                Vice President-Nuclear Operations                                                                                                                                                                                                     | 2004-present*-2004                                  |
| Paul                V. Fant         | 52      | Senior                Vice President-SCANA ServicesSenior                Vice President Transmission Services - SCE&GPresident                and Chief Operating Officer-SCPC and SCG PipelineExecutive                Vice President-SCPCExecutive                Vice President-SCG Pipeline                                            | 2004-present2004-present2004-present*-20042002-2004 |
| Sharon                K. Jenkins    | 48      | Senior                Vice President-Marketing and Communications-SCANA ServicesVice                President, Marketing-Wireless and Broadband Systems Division-Motorola,                Inc.-Austin, TX                                                                                                                                      | 2003-present *-2003                            |
| Neville                O. Lorick    | 55      | President                and Chief Operating Officer-SCE&G                                                                                                                                                                                                                                                                                 | *-present                                           |
| Kevin                B. Marsh       | 50      | Senior                Vice President and Chief Financial OfficerPresident                and Chief Operating Officer-PSNC Energy                                                                                                                                                                                                               | *-present*-2003                                     |
| Charles                B. McFadden  | 61      | Senior                Vice President-Governmental Affairs and Economic Development-SCANA                ServicesVice                President-Governmental Affairs and Economic Development-SCANA                Services                                                                                                                      |  2003-present*-2003                            |
| Francis                P. Mood, Jr. | 68      | Senior                Vice President, General Counsel and Assistant SecretaryAttorney,                Haynsworth Sinkler Boyd, P.A.-Columbia, SC                                                                                                                                                                                                    | 2005-present*-2005                                  |

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**PART      II**

**ITEM      5. MARKET FOR REGISTRANT'S      COMMON EQUITY, RELATED      STOCKHOLDER MATTERS, **

**AND      ISSUER PURCHASES OF EQUITY SECURITIES**

**COMMON      STOCK INFORMATION**

|                                                                    | **2005**          |              | **2004**          |
|-------------------------------------------------------------------------|-------------------|-------------------|-------------------|
|                                                                    | **4th Qtr.** | **3rd Qtr.** | **2nd Qtr.** | **1st Qtr.** |   | **4th Qtr.** | **3rd Qtr.** | **2nd Qtr.** | **1st Qtr.** |
|                                                                    |              |              |              |   |   |   |   |   |   |
| Price                Range (New York Stock Exchange Composite Listing): |              |              |              |   |   |
|                                                                    |              |              |              |   |   |   |   |   |   |
| High                                                                    | $43.37            | $43.65            | $43.30            | $40.04 |   | $39.71 | $38.09 | $36.88 | $36.29 |
| Low                                                                     | 37.79             | 39.90             | 36.56             | 36.70 |   | 36.39 | 35.66 | 32.82 | 33.42 |

**SECURITIES      RATINGS (As of February 20, 2006)**

|                                          | **SCANA****(1)**        |   | **SCE&G****(1)**  |                    | **PSNC                Energy****(2)** |
|-----------------------------------------------|-------------------------|--------|-----------------------|-------------------------|---------------------------------------|
| **Rating****Agency**                     | **Senior****Unsecured** |   | **Senior****Secured** | **Senior****Unsecured** | **Preferred****Stock**                | **Commercial****Paper** |   | **Senior****Unsecured** | **Commercial****Paper** |
| Moody's                                       | A3                      |   | A1                    | A2                      | Baa1                                  | P-1 |   | A2 | P-1 |
| Standard                & Poors (S&P) | BBB+                    |   | A-                    | BBB+                    | BBB                                   | A-2 |   | A- | A-2 |
| Fitch                                         | A-                      |   | A+                    | A                       | A                                     | F-1 |   | NR | NR |

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| **Long-term                (investment grade)** | **Short-term**     |
|-------------------------------------------------|--------------------|
| **Moody's****(3)**                              | **S&P****(4)** | **Fitch****(4)** | **Moody's** | **S&P** | **Fitch** |
|                                            |               |   |   |   |   |
| Aaa                                             | AAA                | AAA | Prime-1                (P-1) | A-1 | F-1 |
| Aa                                              | AA                 | AA | Prime-2                (P-2) | A-2 | F-2 |
| A                                               | A                  | A | Prime-3                (P-3) | A-3 | F-3 |
| Baa                                             | BBB                | BBB | Not                Prime | B | B |
|                                            |               |   |   | C | C |
|                                            |               |   |   | D | D |

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**ITEM      6. SELECTED FINANCIAL      AND OTHER STATISTICAL      DATA**

|                                                                              | **SCANA**                                                                                            | **SCE&G** |
|-----------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------|---------------|
| **As                  of or for the Year Ended December 31,**                | **2005**                                                                                             | **2004**      | **2003** | **2002** | **2001** | **2005** | **2004** | **2003** | **2002** | **2001** |
|                                                                              | **(Millions                  of dollars, except statistics and per share                  amounts)** |
| **Statement                  of Operation Data**                                  |                                                                                                 |          |   |   |   |   |   |   |   |   |
| Operating                  Revenues                                               | $4,777                                                                                               | $3,885        | $3,416 | $2,954 | $3,451 | $2,421 | $2,089 | $1,832 | $1,683 | $1,715 |
| Operating                  Income                                                 | 436                                                                                                  | 596           | 551 | 514 | 528 | 312 | 475 | 440 | 431 | 439 |
| Other                  Income (Expense)                                           | (162)                                                                                                | (219)         | (138) | (397) | 309 | (121) | (111) | (101) | (90) | (86) |
| Income                  Before Cumulative Effect of Accounting Change             | 320                                                                                                  | 257           | 282 | 88 | 539 | 258 | 232 | 220 | 219 | 222 |
| Net                  Income (Loss) (1)                                            | 320                                                                                                  | 257           | 282 | (142) | 539 | 258 | 232 | 220 | 219 | 222 |
| **Common                  Stock Data**                                            |                                                                                                 |          |   |   |   |   |   |   |   |   |
| Weighted                  Average Number of Common Shares                         |                                                                                                 |          |   |   |   |   |   |   |   |   |
| Outstanding                  (Millions)                                           | 113.8                                                                                                | 111.6         | 110.8 | 106.0 | 104.7 | n/a | n/a | n/a | n/a | n/a |
| Basic                  and Diluted Earnings (Loss) Per Share                  (1) | $2.81                                                                                                | $2.30         | $2.54 | $(1.34) | $5.15 | n/a | n/a | n/a | n/a | n/a |
| Dividends                  Declared Per Share of Common Stock                     | $1.56                                                                                                | $1.46         | $1.38 | $1.30 | $1.20 | n/a | n/a | n/a | n/a | n/a |
| **Balance                  Sheet Data**                                           |                                                                                                 |          |   |   |   |   |   |   |   |   |
| Utility                  Plant, Net                                               | $6,734                                                                                               | $6,762        | $6,417 | $5,474 | $5,263 | $5,580 | $5,621 | $5,293 | $4,729 | $4,065 |
| Total                  Assets                                                     | 9,519                                                                                                | 9,006         | 8,458 | 8,074 | 7,822 | 7,366 | 6,985 | 6,628 | 5,958 | 5,138 |
| Capitalization:                                                                   |                                                                                                 |          |   |   |   |   |   |   |   |   |
| Common                  equity                                                    | $2,677                                                                                               | $2,451        | $2,306 | $2,177 | $2,194 | $2,362 | $2,164 | $2,043 | $1,966 | $1,750 |
| Preferred                  Stock (Not subject to purchase or sinking funds)       | 106                                                                                                  | 106           | 106 | 106 | 106 | 106 | 106 | 106 | 106 | 106 |
| Preferred                  Stock, net (Subject to purchase or sinking funds)      | 8                                                                                                    | 9             | 9 | 9 | 10 | 8 | 9 | 9 | 9 | 10 |
| SCE&G—Obligated                  Mandatorily Redeemable                 |                                                                                                 |          |   |   |   |   |   |   |   |   |
| Preferred                  Securities of SCE&G Trust I                        | -                                                                                                    | -             | - | 50 | 50 | - | - | - | 50 | 50 |
| Long-term                  Debt, net                                              | 2,948                                                                                                | 3,186         | 3,225 | 2,834 | 2,646 | 1,856 | 1,981 | 2,010 | 1,604 | 1,486 |
| Total                  Capitalization                                             | $5,739                                                                                               | $5,752        | $5,646 | $5,176 | $5,006 | $4,332 | $4,260 | $4,168 | $3,735 | $3,402 |
| **Other                  Statistics**                                             |                                                                                                 |          |   |   |   |   |   |   |   |   |
| Electric:                                                                         |                                                                                                 |          |   |   |   |   |   |   |   |   |
| Customers                  (Year-End)                                             | 609,971                                                                                              | 585,264       | 570,940 | 560,224 | 547,388 | 610,025 | 585,326 | 570,994 | 560,248 | 547,411 |
| Total                  sales (Million KWh)                                        | 25,140                                                                                               | 25,031        | 22,516 | 23,085 | 22,928 | 25,158 | 25,050 | 22,531 | 23,085 | 22,928 |
| Generating                  capability—Net MW (Year-End)                    | 5,808                                                                                                | 5,817         | 4,880 | 4,866 | 4,520 | 5,808 | 5,817 | 4,880 | 4,866 | 4,520 |
| Territorial                  peak demand—Net MW                             | 4,820                                                                                                | 4,574         | 4,474 | 4,404 | 4,196 | 4,820 | 4,574 | 4,474 | 4,404 | 4,196 |
| Regulated                  Gas:                                                   |                                                                                                 |          |   |   |   |   |   |   |   |   |
| Customers                  (Year-End)                                             | 714,794                                                                                              | 693,172       | 672,849 | 657,950 | 647,988 | 291,607 | 284,355 | 278,463 | 274,334 | 269,329 |
| Sales,                  excluding transportation (Thousand Therms)           | 1,106,526                                                                                            | 1,124,555     | 1,205,730 | 1,354,400 | 1,183,463 | 410,700 | 399,601 | 399,392 | 398,991 | 368,632 |
| Retail                  Gas Marketing:                                            |                                                                                                 |          |   |   |   |   |   |   |   |   |
| Retail                  customers (Year-End)                                      | 479,382                                                                                              | 472,468       | 415,573 | 374,872 | 385,581 | n/a | n/a | n/a | n/a | n/a |
| Firm                  customer deliveries (Thousand Therms)                  | 379,913                                                                                              | 379,712       | 356,256 | 337,858 | 359,602 | n/a | n/a | n/a | n/a | n/a |
| Nonregulated                  interruptible customer deliveries                   |                                                                                                 |          |   |   |   |   |   |   |   |   |
| (Thousand                  Therms)                                                | 1,010,066                                                                                            | 917,875       | 735,902 | 852,608 | 1,119,719 | n/a | n/a | n/a | n/a | n/a |

table            of contents

**SCANA      CORPORATION**

|                    |                                                                                                                | Page                                                                                                       |
|-------------------------|---------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------|
|                    |                                                                                                                |                                                                                                       |
| Item                7.  | Management's                Discussion and Analysis of Financial                Condition and Results of Operations | 31                                                                                                         |
|                    |                                                                                                                | Overview                                                                                                   | 31 |
|                    |                                                                                                                | Results                of Operations                                                                       | 35 |
|                    |                                                                                                                | Liquidity                and Capital Resources                                                             | 43 |
|                    |                                                                                                                | Environmental                Matters                                                                       | 47 |
|                    |                                                                                                                | Regulatory                Matters                                                                          | 50 |
|                    |                                                                                                                | Critical                Accounting Policies and                Estimates                                   | 52 |
|                    |                                                                                                                | Other                Matters                                                                               | 54 |
|                    |                                                                                                                |                                                                                                       |
| Item                7A. | Quantitative                and Qualitative Disclosures About                Market Risk                            | 55                                                                                                         |
|                    |                                                                                                                |                                                                                                       |
| Item                8.  | Financial                Statements and Supplementary                Data                                           |                                                                                                       |
|                    |                                                                                                                | Report                of Independent Registered Public Accounting                Firm                      | 58 |
|                    |                                                                                                                | Consolidated                Balance Sheets                                                                 | 59 |
|                    |                                                                                                                | Consolidated                Statements of Income                                                           | 61 |
|                    |                                                                                                                | Consolidated                Statements of Cash Flows                                                       | 62 |
|                    |                                                                                                                | Consolidated                Statements of Changes in                Common Equity and Comprehensive Income | 63 |
|                    |                                                                                                                | Notes                to Consolidated Financial                Statements                                   | 64 |
|                    |                                                                                                                |                                                                                                       |

table            of contents

**ITEM      7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL      CONDITION      AND RESULTS **

**OF      OPERATIONS**

**OVERVIEW**

table          of contents

| **%                of Revenues**                    |   | **2005** |     | **2004** |   | **2003**   |   |
|-----------------------------------------------------|--------|----------|----------|----------|--------|------------|--------|
| Regulated                                           |   |     | 69       | %        |   | 71         | %      |   | 73 | % |
| Nonregulated                                        |   |     | 31       | %        |   | 29         | %      |   | 27 | % |
|                                                |   |     |     |     |   |       |   |   |   |   |
| ** ****%                of Net Income (Loss)** |   |     | **2005** |     |   | **2004(a** | **)**  |   | **2003** |   |
| Regulated                                           |   |     | 92       | %        |   | 106        | %      |   | 92 | % |
| Nonregulated                                        |   |     | 8        | %        |   | (6         | )%     |   | 8 | % |
|                                                |   |     |     |     |   |       |   |   |   |   |
| ** ****%                of Assets**            |   |     | **2005** |     |   | **2004**   |   |   | **2003** |   |
| Regulated                                           |   |     | 94       | %        |   | 94         | %      |   | 93 | % |
| Nonregulated                                        |   |     | 6        | %        |   | 6          | %      |   | 7 | % |

| (a) | In                2004, net income for regulated businesses totaled $272.0 million and                net loss for nonregulated businesses totaled $14.9 million. Net loss                for nonregulated businesses included impairments and losses recognized                on                the sale of certain of the Company’s telecommunications investments                ($29.8 million, net of tax) and a charge related to pending                litigation associated with the Company’s 1999 sale of its propane assets                ($11.1 million, net of taxes). See Results of Operations for more                information. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Electric      Operations**

table          of contents

**Gas      Distribution**

**Gas      Transmission**

**Retail      Gas Marketing**

*www.psc.state.ga.us*

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**Energy      Marketing**

**RESULTS      OF OPERATIONS**

|                                                                |   | **2005** |   | **2004** |   | **2003** |   |
|---------------------------------------------------------------------|--------|----------|--------|----------|--------|----------|--------|
| Reported                (GAAP) earnings per share                   |   | $        | 2.81   |     | $      | 2.30     |   | $ | 2.54 |   |
| Add                (Deduct):                                        |   |     |   |     |   |     |   |   |   |   |
| Gains                from sales of telecommunications investments   |   |     | (.03   | )        |   | -        |   |   | (.35 | ) |
| Losses                from sales of telecommunications investments  |   |     | -      |     |   | .14      |   |   | - |   |
| Telecommunications                investment impairments            |   |     | -      |     |   | .13      |   |   | .31 |   |
| Charge                related to pending litigation                 |   |     | -      |     |   | .10      |   |   | - |   |
| GAAP-adjusted                net earnings from operations per share |   | $        | 2.78   |     | $      | 2.67     |   | $ | 2.50 |   |
| Cash                dividends declared (per share)                  |   | $        | 1.56   |     | $      | 1.46     |   | $ | 1.38 |   |

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*Pension      Income*

| **Millions                of dollars**                                           |   | **2005** |   | **2004** |   | **2003** |   |
|----------------------------------------------------------------------------------|--------|----------|--------|----------|--------|----------|--------|
|                                                                             |   |     |   |
| Income                Statement Impact:                                          |   |     |   |     |   |     |   |   |   |   |
| (Component                of) reduction in employee benefit costs                |   | $        | 4.3    |     | $      | 2.9      |   | $ | (2.3 | ) |
| Other                income                                                      |   |     | 11.9   |     |   | 10.8     |   |   | 7.9 |   |
| Balance                Sheet Impact:                                             |   |     |   |     |   |     |   |   |   |   |
| (Component                of) reduction in capital expenditures                  |   |     | 1.3    |     |   | 1.0      |   |   | (0.5 | ) |
| Component                of (reduction in) amount due to Summer Station co-owner |   |     | 0.6    |     |   | 0.4      |   |   | (0.1 | ) |
| Total                Pension Income                                              |   | $        | 18.1   |     | $      | 15.1     |   | $ | 5.0 |   |

*Allowance      for Funds Used During Construction (AFC)*

*Recognition      of Synthetic Fuel Tax Credits*

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* *

|                                                 |   | Recognized4th                Quarter |   | Year                Ended December                31, |   |
|------------------------------------------------------|--------|--------------------------------------|--------|-------------------------------------------------------|--------|
| Millions                of dollars                   |   | 2005                                 |   | 2005                                                  |   |
|                                                 |   |                                 |   |                                                  |   |
| Depreciation                and amortization expense |   | $                                    | (13.2  | )                                                     | $      | (214.0 | ) |
|                                                 |   |                                 |   |                                                  |   |   |   |
| Income                tax benefits:                  |   |                                 |   |                                                  |   |   |   |
| From                synthetic fuel tax credits       |   |                                 | 10.9   |                                                  |   | 179.0 |   |
| From                accelerated depreciation         |   |                                 | 5.0    |                                                  |   | 81.8 |   |
| From                partnership losses               |   |                                 | 1.7    |                                                  |   | 28.9 |   |
| Total                income tax benefits             |   |                                 | 17.6   |                                                  |   | 289.7 |   |
|                                                 |   |                                 |   |                                                  |   |   |   |
| Losses                from Equity Method Investments |   |                                 | (4.4   | )                                                     |   | (75.7 | ) |
|                                                 |   |                                 |   |                                                  |   |   |   |
| Impact                on Net Income                  |   |                                 | -      |                                                  |   | - |   |

**Electric      Operations**

| **Millions                of dollars**       |   | **2005** |    | **% Change** |   | **2004** |   | **% Change** |    | **2003** |   |
|----------------------------------------------|--------|----------|---------|-------------------|--------|----------|--------|-------------------|---------|----------|--------|
| Operating                revenues            |   | $        | 1,908.3 |              |   | 13.1     | %      | $                 | 1,687.7 |     |   | 15.1 | % | $ | 1,466.5 |   |
| Less:                Fuel used in generation |   |     | 618.3   |              |   | 32.4     | %      |              | 466.9   |     |   | 39.7 | % |   | 334.1 |   |
| Purchased                power               |   |     | 37.2    |              |   | (26.6    | )%     |              | 50.7    |     |   | (20.8 | )% |   | 64.0 |   |
| Margin                                       |   | $        | 1,252.8 |              |   | 7.1      | %      | $                 | 1,170.1 |     |   | 9.5 | % | $ | 1,068.4 |   |

| • | 2005 vs 2004 | Margin                increased by $41.4 million due to increased retail electric rates                that went into effect in January 2005, by $24.8 million due to residential                and commercial customer growth and by $16.4 million due to increased                off-system sales. These increases were offset by a $2.4 million decrease                due to unfavorable weather. Fuel used in generation increased $151.4                million due primarily to the increased cost of coal and natural gas                used                for electric generation. Purchased power decreased due to greater                availability of generation                facilities. |
|---------|------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| • | 2004                vs 2003 | Margin                increased by $47.2 million due to increased off-system sales, by                $22.9                million due to increased customer growth and consumption, by                $22.3 million due to favorable weather and by $7.1 million due                to the increase in retail electric base rates effective                February 2003. Fuel used in generation increased by                $103.0 million due to increased availability of generation facilities                and by $30.0 million due to increased cost of coal. Purchased power                decreased due to greater availability of generation                facilities. |
|---------|-----------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| **Classification                (in thousands)**        |   | **2005** |   | **% Change** |   | **2004** |   | **% Change** |   | **2003** |   |
|---------------------------------------------------------|--------|----------|--------|-------------------|--------|----------|--------|-------------------|--------|----------|--------|
| Residential                                             |   |     | 7,634  |              |   | 2.3      | %      |              | 7,460  |     |   | 6.6 | % |   | 6,998 |   |
| Commercial                                              |   |     | 7,047  |              |   | 2.1      | %      |              | 6,900  |     |   | 4.4 | % |   | 6,607 |   |
| Industrial                                              |   |     | 6,651  |              |   | (1.8     | )%     |              | 6,775  |     |   | 3.5 | % |   | 6,548 |   |
| Sales                for resale (excluding interchange) |   |     | 1,487  |              |   | (2.5     | )%     |              | 1,525  |     |   | 6.1 | % |   | 1,438 |   |
| Other                                                   |   |     | 527    |              |   | 0.2      | %      |              | 526    |     |   | 5.2 | % |   | 500 |   |
| Total                territorial                        |   |     | 23,346 |              |   | 0.7      | %      |              | 23,186 |     |   | 5.0 | % |   | 22,091 |   |
| NMST                                                    |   |     | 1,794  |              |   | (2.8     | )%     |              | 1,845  |     |   | * |   |   | 425 |   |
| Total                                                   |   |     | 25,140 |              |   | 0.4      | %      |              | 25,031 |     |   | 11.2 | % |   | 22,516 |   |

| • | 2005                vs 2004 | Territorial                sales volumes increased by 407 MWh primarily due to customer growth                partially offset by 261 MWh due to less favorable                weather. |
|---------|-----------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| • | 2004                vs 2003 | Territorial                sales volumes increased by 334 MWh and 774 MWh due to customer growth                and                weather, respectively. |
|---------|-----------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------|

**Gas      Distribution**

| **Millions                of dollars**        |   | **2005** |    | **% Change** |   | **2004** |   | **% Change** |   | **2003** |   |
|-----------------------------------------------|--------|----------|---------|-------------------|--------|----------|--------|-------------------|--------|----------|--------|
| Operating                revenues             |   | $        | 1,168.6 |              |   | 27.9     | %      | $                 | 913.9  |     |   | 5.2 | % | $ | 869.0 |   |
| Less:                Gas purchased for resale |   |     | 894.6   |              |   | 36.6     | %      |              | 655.1  |     |   | 9.3 | % |   | 599.3 |   |
| Margin                                        |   | $        | 274.0   |              |   | 5.9      | %      | $                 | 258.8  |     |   | (4.0 | )% | $ | 269.7 |   |

| • | 2005 vs 2004 | Margin                increased primarily due to customer growth of $6.9 million at PSNC                Energy,                higher firm margin of $4.7 million at SCE&G and $4.6 million due to                increased retail gas base rates at SCE&G which became effective with                the first billing cycle in November 2005. These increases were offset                by a                $0.8 million decrease due to lower interruptible margin and transportation                revenue at SCE&G. |
|---------|------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| • | 2004 vs 2003 | Margin                decreased primarily due to a decrease in SCE&G’s billing surcharge for                the recovery of environmental remediation expenses of $5.0 million,                lower residential and commercial sales volumes of $2.5 million and                $5.1 million due to milder weather. This was partially offset by                customer growth at PSNC Energy of                $4.0 million. |
|---------|------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **Classification                (in thousands)** |   | **2005** |    | **% Change** |   | **2004** |   | **% Change** |    | **2003** |   |
|--------------------------------------------------|--------|----------|---------|-------------------|--------|----------|--------|-------------------|---------|----------|--------|
| Residential                                      |   |     | 37,860  |              |   | 1.7      | %      |              | 37,231  |     |   | (3.4 | )% |   | 38,542 |   |
| Commercial                                       |   |     | 27,750  |              |   | 1.8      | %      |              | 27,271  |     |   | (1.6 | )% |   | 27,715 |   |
| Industrial                                       |   |     | 20,833  |              |   | 7.8      | %      |              | 19,320  |     |   | (3.9 | )% |   | 20,109 |   |
| Transportation                gas                |   |     | 27,698  |              |   | (1.8     | )%     |              | 28,216  |     |   | 11.1 | % |   | 25,387 |   |
| Sales                for resale                  |   |     | -       |              |   | *        |   |              | 1       |     |   | * |   |   | 1 |   |
| Total                                            |   |     | 114,141 |              |   | 1.9      | %      |              | 112,039 |     |   | 0.3 | % |   | 111,754 |   |

| • | 2005 vs 2004 | Commercial                and industrial volumes increased primarily due to more customers                buying                commodity gas instead of purchasing alternate fuels and instead of                transporting gas purchased from                others. |
|---------|------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| • | 2004 vs 2003 | Residential                and commercial sales volumes decreased primarily due to unfavorable                consumption patterns. Transportation volumes increased primarily                as a                result of interruptible customers using gas instead of alternative                fuels. |
|---------|------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

table          of contents

**Gas      Transmission**

| **Millions                of dollars**        |   | **2005** |   | **% Change** |   | **2004** |   | **% Change** |   | **2003** |   |
|-----------------------------------------------|--------|----------|--------|-------------------|--------|----------|--------|-------------------|--------|----------|--------|
| Operating                revenues             |   | $        | 658.0  |              |   | 19.4     | %      | $                 | 550.9  |     |   | 6.0 | % | $ | 519.8 |   |
| Less:                Gas purchased for resale |   |     | 604.2  |              |   | 21.6     | %      |              | 496.9  |     |   | 5.2 | % |   | 472.2 |   |
| Margin                                        |   | $        | 53.8   |              |   | (0.4     | )%     | $                 | 54.0   |     |   | 13.4 | % | $ | 47.6 |   |

| • | 2005                vs 2004 | Operating                revenues and gas purchased for resale increased primarily due to                higher                commodity gas prices. |
|---------|-----------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------|

| • | 2004                vs 2003 | Margin                increased primarily due to higher transportation and reservation                revenue                as a result of new firm transportation                contracts. |
|---------|-----------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **Classification                (in thousands)** |   | **2005** |   | **% Change** |   | **2004** |   | **% Change** |   | **2003** |   |
|--------------------------------------------------|--------|----------|--------|-------------------|--------|----------|--------|-------------------|--------|----------|--------|
| Commercial                                       |   |     | 54     |              |   | (52.2    | )%     |              | 113    |     |   | 5.6 | % |   | 107 |   |
| Industrial                                       |   |     | 22,748 |              |   | (20.5    | )%     |              | 28,625 |     |   | (8.9 | )% |   | 31,436 |   |
| Transportation                                   |   |     | 24,801 |              |   | (1.8     | )%     |              | 25,252 |     |   | * |   |   | 12,262 |   |
| Sales                for resale                  |   |     | 43,763 |              |   | 1.9      | %      |              | 42,946 |     |   | (9.4 | )% |   | 47,391 |   |
| Total                                            |   |     | 91,366 |              |   | (5.7     | )%     |              | 96,936 |     |   | 6.3 | % |   | 91,196 |   |

| • | 2005 vs 2004 | Industrial                volumes decreased primarily due to higher commodity gas prices relative                to                alternative fuels. |
|---------|------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------|

| • | 2004 vs 2003 | Industrial                volumes decreased primarily due to decreased electric generation.                Transportation volumes increased by 7.5 million DTs due to a new                contract                with a firm transportation customer and by 4.9 million DTs due to new                transportation contracts with resale customers. Sales for resale                volumes                decreased primarily due to the previously mentioned new transportation                contracts with resale customers. |
|---------|------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Retail      Gas Marketing**

| **Millions                of dollars** |   | **2005** |   | **% Change** |   | **2004** |   | **% Change** |   | **2003** |   |
|----------------------------------------|--------|----------|--------|-------------------|--------|----------|--------|-------------------|--------|----------|--------|
| Operating                revenues      |   | $        | 663.8  |              |   | 20.3     | %      | $                 | 552.0  |     |   | 23.1 | % | $ | 448.3 |   |
| Net                income              |   |     | 24.1   |              |   | (16.9    | )%     |              | 29.0   |     |   | 44.3 | % |   | 20.1 |   |

| • | 2005 vs 2004 | Operating                revenues increased primarily as a result of higher average retail                prices                necessitated by higher commodity cost of gas. Net income decreased                primarily due to increased bad debt of $5.9 million, and operating,                marketing and customer service expenses of $4.4 million, offsetting                a                margin increase of $5.2 million, net of                taxes. |
|---------|------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| • | 2004                vs 2003 | Operating                revenues increased primarily as a result of increased volumes and                higher                average retail prices. Net income increased primarily due to higher                margins of $16.7 million, partially offset by increased bad debt of                $2.9 million, increased depreciation expense of $0.7 million and                higher customer service expenses of                $2.0 million. |
|---------|-----------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

table          of contents

**Energy      Marketing**

| **Millions                of dollars** |   | **2005** |   | **%                Change** |   | **2004** |   | **%                Change** |   | **2003** |   |
|----------------------------------------|--------|----------|--------|-----------------------------|--------|----------|--------|-----------------------------|--------|----------|--------|
| Operating                revenues      |   | $        | 945.6  |                        |   | 58.5     | %      | $                           | 596.5  |     |   | 43.5 | % | $ | 415.7 |   |
| Net                loss                |   |     | (0.6   | )                           |   | 70.0     | %      |                        | (2.0   | )        |   | (81.8 | )% |   | (1.1 | ) |

| • | 2005 vs 2004 | Operating                revenues increased due to higher market prices and higher sales volume.                Net loss decreased primarily due to higher margins of $0.6 million                and                lower operating expenses of $0.8                million. |
|---------|------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| • | 2004                vs 2003 | Operating                revenues increased due to higher market prices and higher sales volumes.                Net loss increased primarily due to higher operating expenses of                $2.0 million partially offset by higher margins of                $0.8 million. |
|---------|-----------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Other      Operating Expenses**

| **Millions                of dollars**         |   | **2005** |    | **% Change** |   | **2004** |   | **% Change** |    | **2003** |   |
|------------------------------------------------|--------|----------|---------|-------------------|--------|----------|--------|-------------------|---------|----------|--------|
| Other                operation and maintenance |   | $        | 632.0   |              |   | 4.0      | %      | $                 | 607.5   |     |   | 8.8 | % | $ | 558.3 |   |
| Depreciation                and amortization   |   |     | 509.9   |              |   | 92.3     | %      |              | 265.1   |     |   | 11.2 | % |   | 238.3 |   |
| Other                taxes                     |   |     | 145.0   |              |   | (0.4     | )%     |              | 145.6   |     |   | 4.6 | % |   | 139.2 |   |
| Total                                          |   | $        | 1,286.9 |              |   | 26.4     | %      | $                 | 1,018.2 |     |   | 8.8 | % | $ | 935.8 |   |

| • | 2005 vs 2004 | Other                operation and maintenance expenses increased primarily due to increased                electric generation major maintenance expenses of $6.7 million, increased                expenses associated with the Jasper County Electric Generating Station                completed in May 2004 totaling $2.4 million, increased nuclear operating                and maintenance expenses of $2.4 million, higher expenses related                to                regulatory matters of $1.9 million and higher amortization of regulatory                assets of $3.6 million. The increases were offset primarily by decreased                long-term bonus and incentive plan expenses of $4.8 million and decreased                storm damage expenses of $0.9 million. Depreciation and amortization                increased approximately $214.0 million due to accelerated depreciation                of                the back-up dam at Lake Murray (previously explained at *Recognition                of Synthetic Fuel Tax Credits*),                increased $6.5 million due to the completion of the Jasper County                Electric                Generating Station in May 2004 and $6.1 million due to normal net                property                changes at SCE&G. In addition, as a result of the January 2005 rate                order, SCE&G received approval to amortize previously deferred                purchased power costs and to implement new depreciation rates, resulting                in $17.3 million of additional depreciation and amortization expense                in                the period. |
|---------|------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| • | 2004 vs 2003 | Other                operation and maintenance expenses increased primarily due to increased                labor and benefit expense of $26.3 million, higher bad debt expense                of $5.8 million, increased expenses at the generation plants of                $11.0 million, winter storm expense of $2.5 million and                increased gas marketing and customer billing costs of $4.2 million,                partially offset by increased pension income of $5.2 million.                Depreciation and amortization increased by $13.4 million due to                completion of the Jasper County Electric Generating Station and                $11.1 million as a result of normal net property additions. Other                taxes increased primarily due to increased property                taxes. |
|---------|------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Other      Income (Expense)**

| **Millions                of dollars**            |   | **2005** |   | **% Change** |   | **2004** |   | **% Change** |   | **2003** |   |
|---------------------------------------------------|--------|----------|--------|-------------------|--------|----------|--------|-------------------|--------|----------|--------|
| Gain                (loss) on sale of investments |   | $        | 7.2    |              |   | *        |   | $                 | (21.0  | )        |   | * |   | $ | 59.8 |   |
| Gain                on sale of assets             |   |     | 1.7    |              |   | *        |   |              | 0.7    |     |   | (41.7 | )% |   | 1.2 |   |
| Impairment                of investments          |   |     | -      |              |   | *        |   |              | (26.9  | )        |   | (49.3 | )% |   | (53.1 | ) |
| Other                revenues                     |   |     | 248.1  |              |   | 36.9     | %      |              | 181.2  |     |   | 8.6 | % |   | 166.8 |   |
| Other                expenses                     |   |     | (200.3 | )                 |   | 25.2     | %      |              | (159.9 | )        |   | 30.2 | % |   | (122.8 | ) |
| Total                                             |   | $        | 56.7   |              |   | *        |   | $                 | (25.9  | )        |   | * |   | $ | 51.9 |   |

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**Interest      Expense**

| **Millions                of dollars**         |   | **2005** |   | **% Change** |   | **2004** |   | **% Change** |   | **2003** |   |
|------------------------------------------------|--------|----------|--------|-------------------|--------|----------|--------|-------------------|--------|----------|--------|
| Interest                on long-term debt, net |   | $        | 202.8  |              |   | (2.5     | )%     | $                 | 208.1  |     |   | 1.4 | % | $ | 205.2 |   |
| Other                interest expense          |   |     | 12.6   |              |   | *        |   |              | 4.3    |     |   | (25.9 | )% |   | 5.8 |   |
| Total                                          |   | $        | 215.4  |              |   | 1.4      | %      | $                 | 212.4  |     |   | 0.7 | % | $ | 211.0 |   |

| • | 2005 vs 2004 | Interest                on long-term debt decreased primarily due to the redemption of outstanding                debt in late 2004. Other interest expense increased primarily due                to                increased short-term debt at                SCE&G. |
|---------|------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| • | 2004 vs 2003 | Interest                expense increased primarily due to slightly higher levels of borrowing                outstanding during 2004 until the payment of maturing debt late in                the                year. |
|---------|------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Income      Taxes**

**LIQUIDITY      AND CAPITAL RESOURCES**

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**Estimated      Cash Requirements**

| **Millions                of dollars**      |   | **2006** |   | **2007** |   | **2008** |   |
|---------------------------------------------|--------|----------|--------|----------|--------|----------|--------|
| SCE&G:                                  |   |     |   |     |   |     |   |
| Electric                Plant:              |   |     |   |     |   |     |   |
| Generation                (including GENCO) |   | $        | 128    |     | $      | 86       |   | $ | 193 |   |
| Transmission                                |   |     | 50     |     |   | 44       |   |   | 46 |   |
| Distribution                                |   |     | 115    |     |   | 114      |   |   | 115 |   |
| Other                                       |   |     | 18     |     |   | 11       |   |   | 14 |   |
| Nuclear                Fuel                 |   |     | 27     |     |   | 25       |   |   | 5 |   |
| Gas                                         |   |     | 27     |     |   | 26       |   |   | 31 |   |
| Common                                      |   |     | 22     |     |   | 17       |   |   | 7 |   |
| Other                                       |   |     | 2      |     |   | -        |   |   | - |   |
| Total                SCE&G              |   |     | 389    |     |   | 323      |   |   | 411 |   |
| PSNC                Energy                  |   |     | 70     |     |   | 78       |   |   | 84 |   |
| Other                Companies Combined     |   |     | 44     |     |   | 32       |   |   | 27 |   |
| Total                                       |   | $        | 503    |     | $      | 433      |   | $ | 522 |   |

**Contractual      Cash Obligations**

|  **Millions                of dollars**       |   |  **Total** |   | **Less                than****1                year** |   |  **1-3 years** |   |  **4-5 years** |   | **After****5 years** |   |
|---------------------------------------------------------|--------|-----------------|--------|-------------------------------------------------------|--------|--------------------------|--------|--------------------------|--------|---------------------------|--------|
| Long-term                and short-term debt (including |   |            |   |                                                  |   |                     |   |                     |   |                      |   |
| interest                and preferred stock)            |   | $               | 6,171  |                                                  | $      | 874                      |   | $                        | 925    |                      | $      | 920 |   | $ | 3,452 |   |
| Capital                leases                           |   |            | 2      |                                                  |   | 1                        |   |                     | 1      |                      |   | - |   |   | - |   |
| Operating                leases                         |   |            | 53     |                                                  |   | 15                       |   |                     | 35     |                      |   | 1 |   |   | 2 |   |
| Purchase                obligations                     |   |            | 166    |                                                  |   | 152                      |   |                     | 12     |                      |   | 2 |   |   | - |   |
| Other                commercial commitments             |   |            | 8,955  |                                                  |   | 1,633                    |   |                     | 2,207  |                      |   | 1,124 |   |   | 3,991 |   |
| Total                                                   |   | $               | 15,347 |                                                  | $      | 2,675                    |   | $                        | 3,180  |                      | $      | 2,047 |   | $ | 7,445 |   |

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*“Accounting      for Derivative Instruments and Hedging Activities,”*

| **Millions                of dollars**                                      |   | **2006** |   | **2005** |   |
|-----------------------------------------------------------------------------|--------|----------|--------|----------|--------|
| Property                additions and construction expenditures, net of AFC |   | $        | 485    |     | $      | 385 |   |
| Nuclear                fuel expenditures                                    |   |     | 18     |     |   | 18 |   |
| Investments                                                                 |   |     | 18     |     |   | 18 |   |
| Total                                                                       |   | $        | 521    |     | $      | 421 |   |

| **Millions                of dollars**                         |   | **SCANA** |   | **SCE&G** |   | **PSNC Energy** |   |
|----------------------------------------------------------------|--------|-----------|--------|---------------|--------|----------------------|--------|
| Lines                of credit (total and unused):             |   |      |   |          |   |                 |   |
| Committed                                                      |   |      |   |          |   |                 |   |
| Short-term                                                     |   | $         | 350    |          |   | -                    |   |   | - |   |
| Long-term                (expires June 2010)                   |   |      | -      |          | $      | 525                  |   | $ | 125 |   |
| Uncommitted                                                    |   |      | 103(a  | )             |   | 78(a                 | )      |   | - |   |
| Short-term                borrowings outstanding:              |   |      |   |          |   |                 |   |   |   |   |
| Bank                loans/commercial paper (270 or fewer days) |   | $         | 25     |          | $      | 303.1                |   | $ | 98.6 |   |
| Weighted                average interest rate                  |   |      | 4.43   | %             |   | 4.40                 | %      |   | 4.47 | % |

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*SCANA      Corporation*

*    South      Carolina Electric & Gas Company*

*Public      Service Company of North Carolina, Incorporated*

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**ENVIRONMENTAL      MATTERS**

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| ·   | SCE&G                owns a decommissioned MGP site in the Calhoun Park area of Charleston,                South Carolina. The site is currently being remediated for contamination.                SCE&G anticipates that the remaining remediation activities will be                completed by mid-2006, with certain monitoring and retreatment activities                continuing until 2011. As of December 31, 2005, SCE&G has spent                $21.5 million to remediate the Calhoun Park site, and expects to                spend an                additional $0.3 million. In addition, the National Park Service of                the Department of the Interior made an initial demand to SCE&G for                payment of $9.1 million for certain costs and damages relating to                this site. Any cost arising from this matter is expected to be recoverable                through rates. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | SCE&G                owns three other decommissioned MGP sites in South Carolina which                contain                residues of by-product chemicals. One of the sites has been remediated                and                will undergo routine monitoring until released by DHEC. The other                sites                are currently being investigated under work plans approved by DHEC.                SCE&G anticipates that major remediation activities for the three                sites will be completed in 2010. As of December 31, 2005, SCE&G                has spent $4.5 million related to these three sites, and expects to                spend an additional $11.5 million. Any                cost arising from this matter is expected to be recoverable through                rates. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**REGULATORY      MATTERS**

*South      Carolina Electric & Gas Company*

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*Public      Service Company of North Carolina, Incorporated*

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*South      Carolina Pipeline Corporation*

**CRITICAL      ACCOUNTING POLICIES AND      ESTIMATES**

*“Accounting      for the Effects of Certain Types of Regulation,”*

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*“Employers’      Accounting for Pensions,” *

*“Employers’      Accounting for Postretirement Benefits Other Than Pensions,”*

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**OTHER      MATTERS**

*“Accounting      for Transfers and Servicing of Financial Assets and Extinguishments of      Liabilities,”*
*“Consolidation      of Variable Interest Entities.”*

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**ITEM      7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT      MARKET RISK**

**Interest      Rate Risk**

|                                                                                      | **Expected                  Maturity Date** |
|-------------------------------------------------------------------------------------------|---------------------------------------------|
| **December 31,                  2005****Millions                  of dollars**  |  **2006**                              |  **2007** |  **2008** |  **2009** |  **2010** |  **Thereafter** |  **Total** |  **Fair                  Value** |
| Liabilities                                                                               |                                        |   |   |   |   |   |   |   |
| Long-Term                  Debt:                                                          |                                        |   |   |   |   |   |   |   |
| Fixed                  Rate ($)                                                           | 174.4                                       | 68.6 | 158.6 | 143.6 | 43.6 | 2,524.6 | 3,113.4 | 3,108.8 |
| Average                  Fixed Interest Rate (%)                                          | 8.50                                        | 6.96 | 6.13 | 6.39 | 6.99 | 6.14 | 6.47 |   |
| Variable                  Rate ($)                                                        |                                        |   | 100.0 |   |   |   | 100.0 | 100.0 |
| Average                  Variable Interest Rate (%)                                       |                                        |   | 4.56 |   |   |   | 4.56 |   |
| Interest                  Rate Swaps:                                                     |                                        |   |   |   |   |   |   |   |
| Pay                  Variable/Receive Fixed ($)                                           | 3.2                                         | 28.2 | 3.2 | 3.2 | 3.2 | 6.4 | 47.4 | 0.1 |
| Average                  Pay Interest Rate (%)                                            | 7.72                                        | 7.97 | 7.72 | 7.72 | 7.72 | 7.72 | 7.87 |   |
| Average                  Receive Interest Rate (%)                                        | 8.75                                        | 7.11 | 8.75 | 8.75 | 8.75 | 8.75 | 7.77 |   |

|                                                                                      | **Expected                  Maturity Date** |
|-------------------------------------------------------------------------------------------|---------------------------------------------|
| **December 31,                  2004****Millions                  of dollars**  |  **2005**                              |  **2006** |  **2007** |  **2008** |  **2009** |  **Thereafter** |  **Total** |  **Fair                  Value** |
| Liabilities                                                                               |                                        |   |   |   |   |   |   |   |
| Long-Term                  Debt:                                                          |                                        |   |   |   |   |   |   |   |
| Fixed                  Rate ($)                                                           | 193.6                                       | 174.4 | 68.6 | 158.6 | 143.6 | 2,532.8 | 3,271.6 | 3,404.5 |
| Average                  Fixed Interest Rate (%)                                          | 7.39                                        | 8.50 | 6.96 | 8.12 | 8.21 | 6.24 | 6.62 |   |
| Variable                  Rate ($)                                                        |                                        | 200.0 |   |   |   |   | 200.0 | 200.0 |
| Average                  Variable Interest Rate (%)                                       |                                        | 2.73 |   |   |   |   | 2.73 |   |
| Interest                  Rate Swaps:                                                     |                                        |   |   |   |   |   |   |   |
| Pay                  Variable/Receive Fixed ($)                                           | 3.2                                         | 3.2 | 28.2 | 118.2 | 3.2 | 119.6 | 275.6 | 4.2 |
| Average                  Pay Interest Rate (%)                                            | 5.74                                        | 5.74 | 6.04 | 4.73 | 5.74 | 4.46 | 4.78 |   |
| Average                  Receive Interest Rate (%)                                        | 8.75                                        | 8.75 | 7.11 | 5.89 | 8.75 | 6.45 | 6.36 |   |

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**Commodity      Price Risk**

| Expected                Maturity:                  |                             |                     |   |                            |                         |                       |                      |
|----------------------------------------------------|----------------------------------|--------------------------|--------|---------------------------------|------------------------------|----------------------------|---------------------------|
|                                               |                             |                     |   |                            | Options                      |
|                                               | Futures                Contracts |                     |   | Purchased                Call   | Purchased                Put | Sold                Put    |
| 2006                                               | Long                ($)          | Short                ($) |   |                            | (Long)                ($)    | (Short)                ($) | (Long)                ($) |
|                                               |                             |                     |   |                            |                         |                       |                      |
| Settlement                Price (a)                | 11.07                            | 11.21                    |   | Strike                Price (a) | 9.65                         | -                          | 7.13                      |
| Contract                Amount                     | 22.7                             | 8.2                      |   | Contract                Amount  | 1.0                          | -                          | 1.0                       |
| Fair                Value                          | 23.7                             | 9.0                      |   | Fair                Value       | -                            | -                          | -                         |
|                                               |                             |                     |   |                            |                         |                       |                      |
| 2007                                               |                             |                     |   |                            |                         |                       |                      |
|                                               |                             |                     |   |                            |                         |                       |                      |
| Settlement                Price (a)                | 11.61                            | -                        |   | Strike                Price (a) | -                            | -                          | -                         |
| Contract                Amount                     | 1.0                              | -                        |   | Contract                Amount  | -                            | -                          | -                         |
| Fair                Value                          | 1.0                              | -                        |   | Fair                Value       | -                            | -                          | -                         |
|                                               |                             |                     |   |                            |                         |                       |                      |
| (a)                Weighted                average |                             |                     |   |                            |                         |                       |                      |

| Swaps                                              | 2006   | 2007   |   |
|----------------------------------------------------|--------|--------|--------|
|                                               |   |   |   |
| Commodity                Swaps:                    |   |   |   |
| Pay                fixed/receive variable ($)      | 85.3   | 8.4    |   |
| Average                pay rate (a)                | 11.254 | 8.955  |   |
| Average                received rate (a)           | 11.061 | 10.504 |   |
|                                               |   |   |
| Pay                variable/receive fixed ($)      | 9.2    | -      |
| Average                pay rate (a)                | 11.253 | -      |
| Average                received rate (a)           | 8.665  | -      |
|                                               |   |   |   |
| Basis                Swaps:                        |   |   |   |
| Pay                variable/receive variable ($)   | 137.5  | -      |   |
| Average                pay rate (a)                | 10.681 | -      |   |
| Average                received rate (a)           | 10.660 | -      |   |
|                                               |   |   |
|                                               |   |   |
| (a)                Weighted                average |   |   |

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**ITEM      8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY      DATA**

**REPORT      OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

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**SCANA      Corporation**

**CONSOLIDATED      BALANCE SHEETS**

| **December                31, (Millions of dollars)**                             |   | **2005** |   | **2004** |   |
|----------------------------------------------------------------------------------------|--------|----------|--------|----------|--------|
| **Assets**                                                                        |   |     |   |     |   |
| Utility                Plant In Service                                                |   | $        | 8,999  |     | $      | 8,373 |   |
| Accumulated                Depreciation and Amortization                               |   |     | (2,698 | )        |   | (2,315 | ) |
|                                                                                   |   |     | 6,301  |     |   | 6,058 |   |
| Construction                Work in Progress                                           |   |     | 175    |     |   | 432 |   |
| Nuclear                Fuel, Net of Accumulated Amortization                           |   |     | 28     |     |   | 42 |   |
| Acquisition                Adjustments                                                 |   |     | 230    |     |   | 230 |   |
| Utility                Plant, Net                                                      |   |     | 6,734  |     |   | 6,762 |   |
| Nonutility                Property and Investments:                                    |   |     |   |     |   |   |   |
| Nonutility                property, net of accumulated depreciation of $62 and $50     |   |     | 108    |     |   | 104 |   |
| Assets                held in trust, net-nuclear decommissioning                       |   |     | 52     |     |   | 49 |   |
| Other                investments                                                       |   |     | 87     |     |   | 83 |   |
| Nonutility                Property and Investments, Net                                |   |     | 247    |     |   | 236 |   |
| Current                Assets:                                                         |   |     |   |     |   |   |   |
| Cash                and cash equivalents                                               |   |     | 62     |     |   | 119 |   |
| Receivables,                net of allowance for uncollectible accounts of $25 and $16 |   |     | 881    |     |   | 712 |   |
| Receivables-affiliated                companies                                        |   |     | 24     |     |   | 19 |   |
| Inventories                (at average cost):                                          |   |     |   |     |   |   |   |
| Fuel                                                                                   |   |     | 284    |     |   | 191 |   |
| Materials                and supplies                                                  |   |     | 79     |     |   | 70 |   |
| Emission                allowances                                                     |   |     | 54     |     |   | 9 |   |
| Prepayments                and other                                                   |   |     | 54     |     |   | 52 |   |
| Deferred                income taxes                                                   |   |     | 26     |     |   | 10 |   |
| Total                Current Assets                                                    |   |     | 1,464  |     |   | 1,182 |   |
| Deferred                Debits:                                                        |   |     |   |     |   |   |   |
| Environmental                                                                          |   |     | 28     |     |   | 18 |   |
| Pension                asset, net                                                      |   |     | 303    |     |   | 285 |   |
| Other                regulatory assets                                                 |   |     | 589    |     |   | 372 |   |
| Other                                                                                  |   |     | 154    |     |   | 151 |   |
| Total                Deferred Debits                                                   |   |     | 1,074  |     |   | 826 |   |
| Total                                                                                  |   | $        | 9,519  |     | $      | 9,006 |   |

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| **December                31, (Millions of dollars)**                 |   | **2005** |   | **2004** |   |
|----------------------------------------------------------------------------|--------|----------|--------|----------|--------|
| **Capitalization                and Liabilities**                     |   |     |   |     |   |
| Shareholders’                Investment:                             |   |     |   |     |   |   |   |
| Common                equity                                               |   | $        | 2,677  |     | $      | 2,451 |   |
| Preferred                stock (Not subject to purchase or sinking funds)  |   |     | 106    |     |   | 106 |   |
| Total                Shareholders’ Investment                        |   |     | 2,783  |     |   | 2,557 |   |
| Preferred                Stock, Net (Subject to purchase or sinking funds) |   |     | 8      |     |   | 9 |   |
| Long-Term                Debt, Net                                         |   |     | 2,948  |     |   | 3,186 |   |
| Total                Capitalization                                        |   |     | 5,739  |     |   | 5,752 |   |
| Current                Liabilities:                                        |   |     |   |     |   |   |   |
| Short-term                borrowings                                       |   |     | 427    |     |   | 211 |   |
| Current                portion of long-term debt                           |   |     | 188    |     |   | 204 |   |
| Accounts                payable                                            |   |     | 471    |     |   | 381 |   |
| Accounts                payable-affiliated companies                       |   |     | 26     |     |   | 18 |   |
| Customer                deposits and customer prepayments                  |   |     | 70     |     |   | 66 |   |
| Taxes                accrued                                               |   |     | 112    |     |   | 132 |   |
| Interest                accrued                                            |   |     | 52     |     |   | 51 |   |
| Dividends                declared                                          |   |     | 47     |     |   | 43 |   |
| Other                                                                      |   |     | 107    |     |   | 78 |   |
| Total                Current Liabilities                                   |   |     | 1,500  |     |   | 1,184 |   |
| Deferred                Credits:                                           |   |     |   |     |   |   |   |
| Deferred                income taxes, net                                  |   |     | 940    |     |   | 895 |   |
| Deferred                investment tax credits                             |   |     | 121    |     |   | 121 |   |
| Asset                retirement obligations                                |   |     | 322    |     |   | 124 |   |
| Non-legal                asset retirement obligations                      |   |     | 488    |     |   | 450 |   |
| Postretirement                benefits                                     |   |     | 148    |     |   | 142 |   |
| Other                regulatory liabilities                                |   |     | 117    |     |   | 209 |   |
| Other                                                                      |   |     | 144    |     |   | 129 |   |
| Total                Deferred Credits                                      |   |     | 2,280  |     |   | 2,070 |   |
| Commitments                and Contingencies (Note 10)                     |   |     | -      |     |   | - |   |
| Total                                                                      |   | $        | 9,519  |     | $      | 9,006 |   |

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**SCANA      Corporation**

**CONSOLIDATED      STATEMENTS OF INCOME**

| **Years                Ended December 31, (Millions of dollars, except per share                amounts)**                                       |   | **2005** |   | **2004** |   | **2003** |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------|--------|----------|--------|----------|--------|
| Operating                Revenues:                                                                                                                    |   |     |   |     |   |     |   |
| Electric                                                                                                                                              |   | $        | 1,909  |     | $      | 1,688    |   | $ | 1,466 |   |
| Gas-regulated                                                                                                                                         |   |     | 1,405  |     |   | 1,126    |   |   | 1,086 |   |
| Gas-nonregulated                                                                                                                                      |   |     | 1,463  |     |   | 1,071    |   |   | 864 |   |
| Total                Operating Revenues                                                                                                               |   |     | 4,777  |     |   | 3,885    |   |   | 3,416 |   |
| Operating                Expenses:                                                                                                                    |   |     |   |     |   |     |   |   |   |   |
| Fuel                used in electric generation                                                                                                       |   |     | 618    |     |   | 467      |   |   | 334 |   |
| Purchased                power                                                                                                                        |   |     | 37     |     |   | 51       |   |   | 64 |   |
| Gas                purchased for resale                                                                                                               |   |     | 2,399  |     |   | 1,753    |   |   | 1,532 |   |
| Other                operation and maintenance                                                                                                        |   |     | 632    |     |   | 608      |   |   | 558 |   |
| Depreciation                and amortization                                                                                                          |   |     | 510    |     |   | 265      |   |   | 238 |   |
| Other                taxes                                                                                                                            |   |     | 145    |     |   | 145      |   |   | 139 |   |
| Total                Operating Expenses                                                                                                               |   |     | 4,341  |     |   | 3,289    |   |   | 2,865 |   |
|                                                                                                                                                  |   |     |   |     |   |     |   |   |   |   |
| Operating                Income                                                                                                                       |   |     | 436    |     |   | 596      |   |   | 551 |   |
|                                                                                                                                                  |   |     |   |     |   |     |   |   |   |   |
| Other                Income (Expense):                                                                                                                |   |     |   |     |   |     |   |   |   |   |
| Other                revenues                                                                                                                         |   |     | 248    |     |   | 181      |   |   | 167 |   |
| Other                expenses                                                                                                                         |   |     | (200   | )        |   | (160     | )      |   | (123 | ) |
| Gain                (loss) on sale of investments and assets                                                                                          |   |     | 9      |     |   | (20      | )      |   | 61 |   |
| Investment                impairments                                                                                                                 |   |     | -      |     |   | (27      | )      |   | (53 | ) |
| Preferred                dividends of subsidiary                                                                                                      |   |     | (7     | )        |   | (7       | )      |   | (9 | ) |
| Allowance                for equity funds used during construction                                                                                    |   |     | -      |     |   | 16       |   |   | 19 |   |
| Interest                charges, net of allowance for borrowed funds used during construction                                 of $3, $10 and $11 |   |     | (212   | )        |   | (202     | )      |   | (200 | ) |
| Total                Other Expense                                                                                                                    |   |     | (162   | )        |   | (219     | )      |   | (138 | ) |
|                                                                                                                                                  |   |     |   |     |   |     |   |   |   |   |
| Income                Before Income Taxes (Benefit) and Earnings (Losses) from                  Equity Method Investments                        |   |     | 274    |     |   | 377      |   |   | 413 |   |
| Income                Tax Expense (Benefit)                                                                                                           |   |     | (118   | )        |   | 123      |   |   | 135 |   |
|                                                                                                                                                  |   |     |   |     |   |     |   |   |   |   |
| Income                Before Earnings (Losses) from Equity Method Investments                                                                         |   |     | 392    |     |   | 254      |   |   | 278 |   |
| Earnings                (Losses) from Equity Method Investments                                                                                       |   |     | (72    | )        |   | 3        |   |   | 4 |   |
|                                                                                                                                                  |   |     |   |     |   |     |   |   |   |   |
| Net                Income                                                                                                                             |   | $        | 320    |     | $      | 257      |   | $ | 282 |   |
|                                                                                                                                                  |   |     |   |     |   |     |   |   |   |   |
| Basic                and Diluted Earnings Per Share of Common Stock                                                                                   |   | $        | 2.81   |     | $      | 2.30     |   | $ | 2.54 |   |
|                                                                                                                                                  |   |     |   |     |   |     |   |   |   |   |
| Weighted                Average Common Shares Outstanding (Millions)                                                                                  |   |     | 113.8  |     |   | 111.6    |   |   | 110.8 |   |

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**SCANA      Corporation**

**CONSOLIDATED      STATEMENTS OF CASH FLOWS**

| **For                the Years Ended December 31, (Millions of dollars)**                                                                 |   | **2005** |   | **2004** |   | **2003** |   |
|------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------|--------|----------|--------|----------|--------|
| Cash                Flows From Operating Activities:                                                                                           |   |     |   |     |   |     |   |   |   |   |
| Net                Income                                                                                                                      |   | $        | 320    |     | $      | 257      |   | $ | 282 |   |
| Adjustments                to Reconcile Net Income to Net Cash Provided From Operating Activities:                                             |   |     |   |     |   |     |   |   |   |   |
| Losses                (earnings) from equity method investments                                                                                |   |     | 72     |     |   | (3       | )      |   | (4 | ) |
| Depreciation                and amortization                                                                                                   |   |     | 518    |     |   | 274      |   |   | 249 |   |
| Amortization                of nuclear fuel                                                                                                    |   |     | 18     |     |   | 22       |   |   | 21 |   |
| (Gain)                loss on sale of assets and investments                                                                                   |   |     | (9     | )        |   | 20       |   |   | (61 | ) |
| Impairment                of investments                                                                                                       |   |     | -      |     |   | 27       |   |   | 53 |   |
| Hedging                activities                                                                                                              |   |     | 4      |     |   | 11       |   |   | 4 |   |
| Allowance                for equity funds used during construction                                                                             |   |     | -      |     |   | (16      | )      |   | (19 | ) |
| Carrying                cost recovery                                                                                                          |   |     | (11    | )        |   | -        |   |   | - |   |
| Cash                provided (used) by changes in certain assets and                liabilities:                                               |   |     |   |     |   |     |   |   |   |   |
| Receivables,                net                                                                                                                |   |     | (174   | )        |   | (225     | )      |   | (60 | ) |
| Inventories                                                                                                                                    |   |     | (188   | )        |   | (90      | )      |   | (8 | ) |
| Prepayments                and other                                                                                                           |   |     | -      |     |   | (2       | )      |   | 4 |   |
| Pension                asset                                                                                                                   |   |     | (17    | )        |   | (14      | )      |   | (5 | ) |
| Other                regulatory assets                                                                                                         |   |     | (28    | )        |   | (17      | )      |   | - |   |
| Deferred                income taxes, net                                                                                                      |   |     | 25     |     |   | 74       |   |   | 38 |   |
| Regulatory                liabilities                                                                                                          |   |     | (159   | )        |   | 48       |   |   | 53 |   |
| Postretirement                benefits obligations                                                                                             |   |     | 6      |     |   | 7        |   |   | 4 |   |
| Accounts                payable                                                                                                                |   |     | 79     |     |   | 91       |   |   | (69 | ) |
| Taxes                accrued                                                                                                                   |   |     | (20    | )        |   | 23       |   |   | 6 |   |
| Interest                accrued                                                                                                                |   |     | 1      |     |   | (4       | )      |   | 3 |   |
| Changes                in fuel adjustment clauses                                                                                              |   |     | (7     | )        |   | (3       | )      |   | 23 |   |
| Changes                in other assets                                                                                                         |   |     | (17    | )        |   | 22       |   |   | (6 | ) |
| Changes                in other liabilities                                                                                                    |   |     | 54     |     |   | 77       |   |   | 37 |   |
| Net                Cash Provided From Operating Activities                                                                                     |   |     | 467    |     |   | 579      |   |   | 545 |   |
| Cash                Flows From Investing Activities:                                                                                           |   |     |   |     |   |     |   |   |   |   |
| Utility                property additions and construction expenditures                                                                        |   |     | (366   | )        |   | (478     | )      |   | (668 | ) |
| Proceeds                from sale of assets and investments                                                                                    |   |     | 10     |     |   | 68       |   |   | 74 |   |
| Nonutility                property additions                                                                                                   |   |     | (19    | )        |   | (23      | )      |   | (12 | ) |
| Investments                                                                                                                                    |   |     | (18    | )        |   | (20      | )      |   | (22 | ) |
| Net                Cash Used For Investing Activities                                                                                          |   |     | (393   | )        |   | (453     | )      |   | (628 | ) |
| Cash                Flows From Financing Activities:                                                                                           |   |     |   |     |   |     |   |   |   |   |
| Proceeds                from issuance of common stock                                                                                          |   |     | 84     |     |   | 65       |   |   | 6 |   |
| Proceeds                from issuance of debt                                                                                                  |   |     | 221    |     |   | 136      |   |   | 978 |   |
| Repayments                of debt                                                                                                              |   |     | (470   | )        |   | (169     | )      |   | (856 | ) |
| Redemption/repurchase                of equity securities                                                                                      |   |     | (1     | )        |   | (4       | )      |   | (61 | ) |
| Dividends                on equity securities                                                                                                  |   |     | (181   | )        |   | (168     | )      |   | (158 | ) |
| Short-term                borrowings, net                                                                                                      |   |     | 216    |     |   | 16       |   |   | (14 | ) |
| Net                Cash Used For Financing Activities                                                                                          |   |     | (131   | )        |   | (124     | )      |   | (105 | ) |
| Net                Increase (Decrease) in Cash and Cash Equivalents                                                                            |   |     | (57    | )        |   | 2        |   |   | (188 | ) |
| Cash                and Cash Equivalents, January 1                                                                                            |   |     | 119    |     |   | 117      |   |   | 305 |   |
| Cash                and Cash Equivalents, December 31                                                                                          |   | $        | 62     |     | $      | 119      |   | $ | 117 |   |
| Supplemental                Cash Flow Information:                                                                                             |   |     |   |     |   |     |   |   |   |   |
| Cash                paid for-Interest (net of capitalized interest of $3, $10 and                $11)                                          |   | $        | 213    |     | $      | 206      |   | $ | 197 |   |
|                    -Income                taxes |   |     | 58     |     |   | 24       |   |   | 77 |   |
| Noncash                Investing and Financing Activities:                                                                                     |   |     |   |     |   |     |   |   |   |   |
| Unrealized                gain (loss) on securities available for sale, net of tax                                                             |   |     | -      |     |   | (2       | )      |   | 2 |   |
| Accrued                construction expenditures                                                                                               |   |     | 36     |     |   | 49       |   |   | 34 |   |

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**SCANA      Corporation**

**CONSOLIDATED      STATEMENTS OF CHANGES IN COMMON      EQUITY AND COMPREHENSIVE INCOME **

|                                                                         |   |                            |   |         |   |              |   |                             |   |
|------------------------------------------------------------------------------|--------|---------------------------------|--------|--------------|--------|-------------------|--------|----------------------------------|--------|
|                                                                         |   |                            |   |         |   | **Accumulated**   |   |                             |   |
|                                                                         |   |                            |   |         |   | **Other**         |   |                             |   |
|                                                                         |   | **Common                Stock** |   | **Retained** |   | **Comprehensive** |   |                             |   |
|                                                                         |   | **Shares**                      |   | **Amount**   |   | **Earnings**      |   | **Income                (Loss)** |   | **Total** |   |
|                                                                         |   | **(Millions)**                  |   |
| Balance                as of December 31, 2002                               |   | 111                             |   | $1,192       |   | $984              |   | $1                               |   | $2,177 |   |
| Comprehensive                Income:                                         |   |                            |   |         |   |              |   |                             |   |   |   |
| Net                Income                                                    |   |                            |   |         |   |              |   |                             | 282    |   |   |   |   |   | 282 |   |
| Unrealized                gains on securities, net of taxes $1          |   |                            |   |         |   |              |   |                             |   |   |   | 2 |   |   | 2 |   |
| Unrealized                gains on hedging activities, net of taxes $2  |   |                            |   |         |   |              |   |                             |   |   |   | 3 |   |   | 3 |   |
| Total                Comprehensive Income                                    |   |                            |   |         |   |              |   |                             | 282    |   |   | 5 |   |   | 287 |   |
| Issuance                of Common Stock                                      |   |                            |   |         |   | 6                 |   |                             |   |   |   |   |   |   | 6 |   |
| Repurchase                of Common Stock                                    |   |                            |   |         |   | (11               | )      |                             |   |   |   |   |   |   | (11 | ) |
| Dividends                Declared on Common Stock                            |   |                            |   |         |   |              |   |                             | (153   | ) |   |   |   |   | (153 | ) |
| Balance                as of December 31, 2003                               |   |                            | 111    |         | $      | 1,187             |   | $                                | 1,113  |   | $ | 6 |   | $ | 2,306 |   |
| Comprehensive                Income (Loss):                                  |   |                            |   |         |   |              |   |                             |   |   |   |   |   |   |   |   |
| Net                Income                                                    |   |                            |   |         |   |              |   |                             | 257    |   |   |   |   |   | 257 |   |
| Unrealized                loss on securities, net of taxes $(1)         |   |                            |   |         |   |              |   |                             |   |   |   | (2 | ) |   | (2 | ) |
| Unrealized                loss on hedging activities, net of taxes $(4) |   |                            |   |         |   |              |   |                             |   |   |   | (8 | ) |   | (8 | ) |
| Total                Comprehensive Income                                    |   |                            |   |         |   |              |   |                             | 257    |   |   | (10 | ) |   | 247 |   |
| Issuance                of Common Stock                                      |   |                            | 2      |         |   | 65                |   |                             |   |   |   |   |   |   | 65 |   |
| Repurchase                of Common Stock                                    |   |                            |   |         |   | (4                | )      |                             |   |   |   |   |   |   | (4 | ) |
| Dividends                Declared on Common Stock                            |   |                            |   |         |   |              |   |                             | (163   | ) |   |   |   |   | (163 | ) |
| Balance                as of December 31, 2004                               |   |                            | 113    |         | $      | 1,248             |   | $                                | 1,207  |   | $ | (4 | ) | $ | 2,451 |   |
| Comprehensive                Income (Loss):                                  |   |                            |   |         |   |              |   |                             |   |   |   |   |   |   |   |   |
| Net                Income                                                    |   |                            |   |         |   |              |   |                             | 320    |   |   |   |   |   | 320 |   |
| Unrealized                gains on hedging activities, net of taxes $1  |   |                            |   |         |   |              |   |                             |   |   |   | 1 |   |   | 1 |   |
| Minimum                pension liability adjustment, net of taxes $(1)       |   |                            |   |         |   |              |   |                             |   |   |   | (1 | ) |   | (1 | ) |
| Total                Comprehensive Income                                    |   |                            |   |         |   |              |   |                             | 320    |   |   | - |   |   | 320 |   |
| Issuance                of Common Stock                                      |   |                            | 2      |         |   | 84                |   |                             |   |   |   |   |   |   | 84 |   |
| Dividends                Declared on Common Stock                            |   |                            |   |         |   |              |   |                             | (178   | ) |   |   |   |   | (178 | ) |
| Balance                as of December 31, 2005                               |   |                            | 115    |         | $      | 1,332             |   | $                                | 1,349  |   | $ | (4 | ) | $ | 2,677 |   |

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**NOTES      TO CONSOLIDATED FINANCIAL      STATEMENTS**

**1.**
**      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**

**A. **
**Organization      and Principles of Consolidation**

| **Regulated                businesses**                                                            | **Nonregulated                businesses**             |
|----------------------------------------------------------------------------------------------------|--------------------------------------------------------|
| South                Carolina Electric & Gas Company (SCE&G)                               | SCANA                Energy Marketing, Inc.       |
| South                Carolina Fuel Company, Inc. (Fuel Company)                               | SCANA                Communications, Inc. (SCI)   |
| South                Carolina Generating Company, Inc. (GENCO)                                | ServiceCare,                Inc.                       |
| Public                Service Company of North Carolina, Incorporated (PSNC                Energy) | Primesouth, Inc.                                  |
| South                Carolina Pipeline Corporation (SCPC)                                          | SCANA                Resources, Inc.              |
| SCG                Pipeline, Inc.                                                                  | SCANA                Services, Inc.                    |
|                                                                                               | SCANA                Corporate Security Services, Inc. |

*“Accounting      for the Effects of Certain Types of Regulation,”*

**B.**
**Basis      of Accounting**

|                                                                                |   | **December 31,**                  |   |
|-------------------------------------------------------------------------------------|--------|----------------------------------------|--------|
|                                                                                |   | **2005**                               |   | **2004** |   |
|                                                                                |   | **Millions                of dollars** |   |
| Accumulated                deferred income taxes, net                               |   | $                                      | 138    |   | $ | 126 |   |
| Under-collections-electric                fuel and gas cost adjustment clauses, net |   |                                   | 41     |   |   | 9 |   |
| Deferred                purchased power costs                                       |   |                                   | 17     |   |   | 26 |   |
| Deferred                environmental remediation costs                             |   |                                   | 28     |   |   | 18 |   |
| Asset                retirement obligations and related funding                     |   |                                   | 250    |   |   | 76 |   |
| Non-legal                asset retirement obligations                               |   |                                   | (488   | ) |   | (450 | ) |
| Deferred                synthetic fuel tax benefits, net                            |   |                                   | -      |   |   | (97 | ) |
| Storm                damage reserve                                                 |   |                                   | (38    | ) |   | (33 | ) |
| Franchise                agreements                                                 |   |                                   | 56     |   |   | 58 |   |
| Deferred                regional transmission organization costs                    |   |                                   | 11     |   |   | 14 |   |
| Other                                                                               |   |                                   | (3     | ) |   | (16 | ) |
| Total                                                                               |   | $                                      | 12     |   | $ | (269 | ) |

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*,      “Accounting for Asset Retirement Obligations,” *
*“Accounting      for Conditional Asset Retirement Obligations.”*

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**C.      **
**System      of Accounts**

**D.**
**Utility      Plant and Major Maintenance**

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**E.      **
**Allowance      for Funds Used During Construction (AFC)**

**F.**
**Revenue      Recognition**

**G.**
**Depreciation      and Amortization**

|                              |   | **2005** |   | **2004** |   | **2003** |   |
|-----------------------------------|--------|----------|--------|----------|--------|----------|--------|
| SCE&G                         |   |     | 3.20   | %        |   | 2.99     | %      |   | 3.02 | % |
| GENCO                             |   |     | 2.66   | %        |   | 2.66     | %      |   | 2.66 | % |
| SCPC                              |   |     | 2.01   | %        |   | 2.04     | %      |   | 2.13 | % |
| PSNC                Energy        |   |     | 3.77   | %        |   | 3.87     | %      |   | 4.05 | % |
| Aggregate                of Above |   |     | 3.20   | %        |   | 3.04     | %      |   | 3.10 | % |

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*“Goodwill      and Other Intangible Assets,”*

**H.**
**Nuclear      Decommissioning**

**I.**
**Income      and Other Taxes**

**J.      **
**Debt      Premium, Discount and Expense, Unamortized Loss on Reacquired      Debt**

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**K.      **
**Environmental**

**L.      **
**Cash      and Cash Equivalents**

**M.**
**Commodity      Derivatives**

*“Accounting      for Derivative Instruments and Hedging Activities,”*

**N.**
**New      Accounting Standards**

*“Accounting      Changes and Error Corrections,” *
*“Accounting      Changes,”*
*“Reporting      Accounting Changes in Interim Financial Statements,”*

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| Millions                of dollars             |   | December                31, |   | December                31, |   | December                31, |   |
|------------------------------------------------|--------|-----------------------------|--------|-----------------------------|--------|-----------------------------|--------|
|                                           |   | 2005                        |   | 2004                        |   | 2003                        |   |
|                                           |   | Actual                      |   | Proforma                    |   | Proforma                    |   |
| Assets:                                        |   |                        |   |                        |   |                        |   |
| Within                utility plant            |   | $                           | 45     |                        | $      | 45                          |   | $ | 45 |   |
| Within                accumulated depreciation |   |                        | (23    | )                           |   | (22                         | )      |   | (21 | ) |
| Within                other regulatory assets  |   |                        | 169    |                        |   | 159                         |   |   | 149 |   |
| Total                                          |   | $                           | 191    |                        | $      | 182                         |   | $ | 173 |   |
| Liabilities:                                   |   |                        |   |                        |   |                        |   |   |   |   |
| Asset                retirement obligation     |   | $                           | 191    |                        | $      | 182                         |   | $ | 173 |   |

| Millions                of dollars |   | 2005   |   | 2004   |   |
|------------------------------------|--------|--------|--------|--------|--------|
| Beginning                balance   |   | $      | 124    |   | $      | 117 |   |
| Accretion                expense   |   |   | 7      |   |   | 7 |   |
| Adoption                of FIN 47  |   |   | 191    |   |   | - |   |
| Ending                Balance      |   | $      | 322    |   | $      | 124 |   |

*“Share-Based      Payment,”*
*“Accounting      for Stock-Based Compensation” *
*“Accounting      for Stock Issued to Employees.”*

**O.**
**Equity      Compensation Plan**

*“Accounting      for Stock Issued to Employees,”*
*“Accounting      for Stock-Based Compensation,”*
*“Accounting      for Stock-Based Compensation-Transition and Disclosure.”*

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|                                                            |   | **2005** |   | **2004** |   | **2003** |   |
|-----------------------------------------------------------------|--------|----------|--------|----------|--------|----------|--------|
| Net                income-as reported (millions)                |   | $        | 319.5  |     | $      | 257.1    |   | $ | 282.0 |   |
| Net                income-pro forma (millions)                  |   |     | 319.3  |     |   | 256.0    |   |   | 280.3 |   |
| Basic                and diluted earnings per share-as reported |   |     | 2.81   |     |   | 2.30     |   |   | 2.54 |   |
| Basic                and diluted earnings per share-pro forma   |   |     | 2.80   |     |   | 2.29     |   |   | 2.52 |   |

**P.      **
**Earnings      Per Share**

*“Earnings      Per Share.”*

**Q.      **
**Transactions      with Affiliates**

|                                             |   | **2005**                               |   | **2004** |   | **2003** |   |
|--------------------------------------------------|--------|----------------------------------------|--------|----------|--------|----------|--------|
|                                             |   | **Millions                of dollars** |   |
| Current                assets                    |   | $                                      | 61     |     | $      | 55       |   | $ | 52 |   |
| Non-current                assets                |   |                                   | 339    |     |   | 355      |   |   | 371 |   |
| Current                liabilities               |   |                                   | 56     |     |   | 49       |   |   | 47 |   |
| Non-current                liabilities           |   |                                   | 186    |     |   | 200      |   |   | 213 |   |
| Revenues                                         |   |                                   | 333    |     |   | 314      |   |   | 271 |   |
| Gross                profit                      |   |                                   | 52     |     |   | 31       |   |   | 35 |   |
| Income                (loss) before income taxes |   |                                   | (33    | )        |   | (34      | )      |   | (23 | ) |

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**R.      **
**      Reclassifications**

**S.      **
**Use      of Estimates**

**2.**
**      RATE AND OTHER REGULATORY MATTERS**

*South      Carolina Electric & Gas Company *

| **Rate Per KWh** | **Effective Date**           |
|----------------------------|-----------------------------------|
| $.01678                    | January-April                2004 |
| $.01821                    | May-December                2004  |
| $.01764                    | January-April                2005 |
| $.02256                    | May-December                2005  |

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| **Rate                Per Therm** | **Effective                Date**         |
|-----------------------------------|-------------------------------------------|
| $.877                             | January-October                2004       |
| $.903                             | November                2004-October 2005 |

*Public      Service Company of North Carolina, Incorporated *

| **Rate                Per Therm** | **Effective                Date**         |
|-----------------------------------|-------------------------------------------|
| $.600                             | January-September                2004     |
| $.675                             | October-November                2004      |
| $.825                             | December                2004-January 2005 |
| $.725                             | February-July                2005         |
| $.825                             | August-September                2005      |
| $1.10                             | October                2005               |
| $1.275                            | November-December                2005     |

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*South      Carolina Pipeline Corporation*

**3.**
**      EMPLOYEE BENEFIT PLANS AND EQUITY COMPENSATION PLAN**

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|                                            |   | **Retirement                Benefits** |   | **Other                Postretirement Benefits** |   |
|-------------------------------------------------|--------|----------------------------------------|--------|--------------------------------------------------|--------|
|                                            |   | **2005**                               |   | **2004**                                         |   | **2005** |   | **2004** |   |
|                                            |   | **Millions                of dollars** |   |
| Benefit                obligation, January 1    |   | $                                      | 669.5  |                                             | $      | 619.9 |   | $ | 197.5 |   | $ | 188.4 |   |
| Service                cost                     |   |                                   | 12.2   |                                             |   | 11.1 |   |   | 3.5 |   |   | 3.3 |   |
| Interest                cost                    |   |                                   | 38.3   |                                             |   | 37.4 |   |   | 10.7 |   |   | 11.4 |   |
| Plan                participants' contributions |   |                                   | -      |                                             |   | - |   |   | 2.3 |   |   | 1.1 |   |
| Plan                amendments                  |   |                                   | -      |                                             |   | 8.0 |   |   | (0.3 | ) |   | 4.7 |   |
| Actuarial                loss                   |   |                                   | 27.1   |                                             |   | 24.1 |   |   | 1.5 |   |   | 1.2 |   |
| Benefits                paid                    |   |                                   | (35.6  | )                                                |   | (31.0 | ) |   | (13.1 | ) |   | (12.6 | ) |
| Benefit                obligation, December 31  |   | $                                      | 711.5  |                                             | $      | 669.5 |   | $ | 202.1 |   | $ | 197.5 |   |

|                                                                                                          |   | **2005** |   | **2004** |   |
|---------------------------------------------------------------------------------------------------------------|--------|----------|--------|----------|--------|
| Annual                discount rate used to determine benefit obligations                                     |   |     | 5.60   | %        |   | 5.75 | % |
| Assumed                annual rate of future salary increases for projected benefit                obligation |   |     | 4.00   | %        |   | 4.00 | % |

|                                                       |   | **1%****Increase**                     |   | **1%****Decrease** |   |
|------------------------------------------------------------|--------|----------------------------------------|--------|--------------------|--------|
|                                                       |   | **Millions                of dollars** |   |
| Effect                on postretirement benefit obligation |   | $                                      | 3.5    |               | $      | (3.1 | ) |

*Accounting      and Disclosure Requirements Related to the Medicare Prescription Drug,      Improvement and Modernization Act”*

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|                                                  |   | **Retirement                Benefits** |   |
|-------------------------------------------------------|--------|----------------------------------------|--------|
|                                                  |   | **2005**                               |   | **2004** |   |
|                                                  |   | **Millions                of dollars** |   |
| Fair                value of plan assets, January 1   |   | $                                      | 846.7  |   | $ | 787.7 |   |
| Actual                return on plan assets           |   |                                   | 43.2   |   |   | 90.0 |   |
| Benefits                paid                          |   |                                   | (35.6  | ) |   | (31.0 | ) |
| Fair                value of plan assets, December 31 |   | $                                      | 854.3  |   | $ | 846.7 |   |

|                                                                          |   | **Retirement                Benefits** |   | **Other                Postretirement Benefits** |   |
|-------------------------------------------------------------------------------|--------|----------------------------------------|--------|--------------------------------------------------|--------|
|                                                                          |   | **2005**                               |   | **2004**                                         |   | **2005** |   | **2004** |   |
|                                                                          |   | **Millions                of dollars** |   |
| Funded                status, December 31                                     |   | $                                      | 142.9  |                                             | $      | 177.2 |   | $ | (202.1 | ) | $ | (197.5 | ) |
| Unrecognized                actuarial loss                                    |   |                                   | 88.4   |                                             |   | 28.2 |   |   | 44.4 |   |   | 44.2 |   |
| Unrecognized                prior service cost                                |   |                                   | 71.3   |                                             |   | 78.3 |   |   | 5.2 |   |   | 6.4 |   |
| Unrecognized                net transition obligation                         |   |                                   | 0.6    |                                             |   | 1.4 |   |   | 4.3 |   |   | 5.0 |   |
| Net                asset (liability) recognized in consolidated balance sheet |   | $                                      | 303.2  |                                             | $      | 285.1 |   | $ | (148.2 | ) | $ | (141.9 | ) |

|                                                     |                                   | **Other                Postretirement Benefits*** |
|----------------------------------------------------------|----------------------------------------|---------------------------------------------------|
|   **Expected                Benefit Payments** |   **Pension Benefits**  | **Excluding                Medicare Subsidy**     | **Including                Medicare Subsidy** |
|                                                     | **Millions                of dollars** |
|                                                     |                                   |                                              |   |
| 2006                                                     | $35.9                                  | $11.3                                             | $10.9 |
| 2007                                                     | 37.7                                   | 12.1                                              | 11.7 |
| 2008                                                     | 39.6                                   | 12.8                                              | 12.3 |
| 2009                                                     | 41.6                                   | 13.2                                              | 12.7 |
| 2010                                                     | 43.6                                   | 13.7                                              | 13.2 |
| 2011-2015                                                | 253.5                                  | 72.8                                              | 70.6 |

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*Employer's      Disclosures about Pensions and Other Postretirement Benefits”*

|                                                 |   | **Retirement                Benefits** |   | **Other                Postretirement Benefits** |   |
|------------------------------------------------------|--------|----------------------------------------|--------|--------------------------------------------------|--------|
|                                                 |   | **2005**                               |   | **2004**                                         |   | **2003** |   | **2005** |   | **2004** |   | **2003** |   |
|                                                 |   | **Millions                of dollars** |   |
| Service                cost                          |   | $                                      | 12.2   |                                             | $      | 11.1 |   | $ | 9.5 |   | $ | 3.5 |   | $ | 3.3 |   | $ | 2.7 |   |
| Interest                cost                         |   |                                   | 38.3   |                                             |   | 37.4 |   |   | 36.7 |   |   | 10.7 |   |   | 11.4 |   |   | 11.4 |   |
| Expected                return on assets             |   |                                   | (76.3  | )                                                |   | (71.0 | ) |   | (59.9 | ) |   | n/a |   |   | n/a |   |   | n/a |   |
| Prior                service cost amortization       |   |                                   | 6.9    |                                             |   | 6.6 |   |   | 6.3 |   |   | 0.8 |   |   | 1.4 |   |   | 0.9 |   |
| Amortization                of actuarial (gain) loss |   |                                   | -      |                                             |   | - |   |   | 1.6 |   |   | 1.2 |   |   | 1.9 |   |   | 1.5 |   |
| Transition                amount amortization        |   |                                   | 0.8    |                                             |   | 0.8 |   |   | 0.8 |   |   | 0.8 |   |   | 0.8 |   |   | 0.8 |   |
| Net                periodic benefit (income) cost    |   | $                                      | (18.1  | )                                                | $      | (15.1 | ) | $ | (5.0 | ) | $ | 17.0 |   | $ | 18.8 |   | $ | 17.3 |   |

|                                                |   | **Retirement                Benefits** |                 | **Other                Postretirement Benefits** |   |
|-----------------------------------------------------|--------|----------------------------------------|----------------------|--------------------------------------------------|--------|
|                                                |   | **2005**                               |                 | **2004**                                         |   | **2003** |   | **2005** |   | **2004** |   | **2003** |   |
| Discount                rate                        |   |                                   | 5.75                 | %                                                |   | 6.00 | % |   | 6.50 | % |   | 5.75 | % |   | 6.00 | % |   | 6.50 | % |
| Expected                return on plan assets       |   |                                   | 9.25                 | %                                                |   | 9.25 | % |   | 9.25 | % |   | n/a |   |   | n/a |   |   | n/a |   |
| Rate                of compensation increase        |   |                                   | 4.00                 | %                                                |   | 4.00 | % |   | 4.00 | % |   | 4.00 | % |   | 4.00 | % |   | 4.00 | % |
| Health                care cost trend rate          |   |                                   | n/a                  |                                             |   | n/a |   |   | n/a |   |   | 9.00 | % |   | 9.50 | % |   | 10.00 | % |
| Ultimate                health care cost trend rate |   |                                   | n/a                  |                                             |   | n/a |   |   | n/a |   |   | 5.00 | % |   | 5.00 | % |   | 5.00 | % |
| Year                achieved                        |   |                                   | n/a                  |                                             |   | n/a |   |   | n/a |   |   | 2011 |   |   | 2011 |   |   | 2011 |   |
| Measurement                date                     |   |                                   | Jan                1 |                                             |   | Jan                1 |   |   | Jan                1 |   |   | Jan                1 |   |   | Jan                1 |   |   | Jan                1 |   |

|                              |   | **Target****Allocation** |   | **Percentage of Plan Assets****At                December 31,** |   |
|-----------------------------------|--------|--------------------------|--------|-------------------------------------------------------------------------------------|--------|
| **Asset                Category** |   | **2006**                 |   | **2005**                                                                            |   | **2004** |   |
| Equity                Securities  |   |                     | 70     | %                                                                                   |   | 72 | % |   | 72 | % |
| Debt                Securities    |   |                     | 30     | %                                                                                   |   | 28 | % |   | 28 | % |

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|                                         |   |  **Number                of****Options** |      | **Weighted****Average****Exercise Price** |   |
|----------------------------------------------|--------|-----------------------------------------------|-----------|------------------------------------------------|--------|
| Outstanding-December                31, 2002 |   |                                          | 1,717,910 |                                           | $      | 27.39 |   |
| Exercised                                    |   |                                          | (203,052  | )                                              |   | 27.41 |   |
| Forfeited                                    |   |                                          | (21,173   | )                                              |   | 27.50 |   |
| Outstanding-December                31, 2003 |   |                                          | 1,493,685 |                                           |   | 27.39 |   |
| Exercised                                    |   |                                          | (751,997  | )                                              |   | 26.28 |   |
| Forfeited                                    |   |                                          | (11,241   | )                                              |   | 27.52 |   |
| Outstanding-December                31, 2004 |   |                                          | 730,447   |                                           |   | 27.49 |   |
| Exercised                                    |   |                                          | (297,477  | )                                              |   | 27.40 |   |
| Forfeited                                    |   |                                          | -         |                                           |   | - |   |
| Outstanding-December                31, 2005 |   |                                          | 432,970   |                                           |   | 27.53 |   |

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**4.**
**      LONG-TERM DEBT**

|                                                          |                                                 |                                   | **December                31,**        |
|---------------------------------------------------------------|------------------------------------------------------|----------------------------------------|----------------------------------------|
|                                                          | **Weighted-Average****Interest                Rate** |  **Maturity                Date** |  **2005**                         |  **2004** |
|                                                          |                                                 |                                   | **Millions                of dollars** |
| Medium-Term                Notes (unsecured)(a)               | 6.29%                                                | 2007-2012                              | $940                                   | $1,040 |
| First                Mortgage Bonds (secured)                 | 5.98%                                                | 2009-2035                              | 1,550                                  | 1,700 |
| First                & Refunding Mortgage Bonds (secured) | 9.00%                                                | 2006                                   | 131                                    | 131 |
| GENCO                Notes (secured)                          | 5.97%                                                | 2011-2024                              | 127                                    | 130 |
| Industrial                and Pollution Control Bonds         | 5.24%                                                | 2012-2032                              | 156                                    | 156 |
| Senior                Debentures(b)                           | 7.50%                                                | 2012-2026                              | 122                                    | 126 |
| Fair                value of interest rate swaps(c)           |                                                 |                                   | 25                                     | 32 |
| Other                                                         |                                                 | 2006-2014                              | 107                                    | 94 |
| Total                debt                                     |                                                 |                                   | 3,158                                  | 3,409 |
| Current                maturities of long-term debt           |                                                 |                                   | (188)                                  | (204) |
| Unamortized                Discount                           |                                                 |                                   | (22)                                   | (19) |
| Total                long-term debt, net                      |                                                 |                                   | $2,948                                 | $3,186 |

| (a) | In                2005, includes $100.0 million of variable interest debt and                $25.0 million of fixed rate debt hedged by a variable interest rate                swap. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b) | In              2005, includes $22.4 million of fixed rate debt hedged by variable              interest rate swaps. |
|-----|---------------------------------------------------------------------------------------------------------------------------|

| (c) | In                2005, includes $24.7 million representing unamortized payments                received to terminate previous swaps. See discussion at                Note 9. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **Year** |   | **Amount**                               |   |
|----------|--------|------------------------------------------|--------|
|     |   | **(Millions                of dollars)** |   |
| 2006     |   | $                                        | 188    |   |
| 2007     |   |                                     | 78     |   |
| 2008     |   |                                     | 267    |   |
| 2009     |   |                                     | 183    |   |
| 2010     |   |                                     | 50     |   |

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**5.**
**      LINES OF CREDIT AND SHORT-TERM BORROWINGS**

|                                                                        |   | **2005**                               |   | **2004** |   |
|-----------------------------------------------------------------------------|--------|----------------------------------------|--------|----------|--------|
|                                                                        |   | **Millions                of dollars** |   |
| Lines                of credit (total and unused)                           |   |                                   |   |     |   |
| Committed                                                                   |   |                                   |   |     |   |   |   |
| Short-term                                                                  |   | $                                      | 350    |     | $      | 100 |   |
| Long-term                                                                   |   |                                   | 650    |     |   | 650 |   |
| Uncommitted                                                                 |   |                                   | 103    | (a)      |   | 113 | (a) |
| Bank                loans/commercial paper outstanding (270 or fewer days): |   |                                   |   |     |   |  |  |
| SCANA                                                                       |   | $                                      | 25     |     |   | - |   |
| Weighted                average interest rate                               |   |                                   | 4.43   | %        |   | - |   |
| SCE&G                                                                   |   | $                                      | 196    |     | $      | 122 |   |
| Weighted                average interest rate                               |   |                                   | 4.40   | %        |   | 2.39 | % |
| Fuel                Company                                                 |   | $                                      | 107    |     | $      | 31 |   |
| Weighted                average interest rate                               |   |                                   | 4.39   | %        |   | 2.44 | % |
| PSNC                Energy                                                  |   | $                                      | 99     |     | $      | 58 |   |
| Weighted                average interest rate                               |   |                                   | 4.47   | %        |   | 2.47 | % |
| Total                                                                       |   | $                                      | 427    |     | $      | 211 |   |
| Weighted                average interest rate                               |   |                                   | 4.42   | %        |   | 2.42 | % |

**6.**
**      COMMON EQUITY**

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|                                             |   |  **Unrealized****gains                (losses)****on                securities** |   |  **Cash flow****hedging****activities** |   | **Minimum****Pension****Liability****Adjustment** |   |  **Accumulated                Other****Comprehensive****Income                (loss)** |   |
|--------------------------------------------------|--------|---------------------------------------------------------------------------------------|--------|---------------------------------------------------|--------|---------------------------------------------------|--------|---------------------------------------------------------------------------------------------|--------|
|                                             |   | **Millions                of dollars**                                                |   |                                              |   |
| Balance,                December 31, 2002        |   |                                                                                  | -      |                                              | $      | 1                                                 |   |                                                                                        | -      |   | $ | 1 |   |
| Other                comprehensive income        |   | $                                                                                     | 2      |                                              |   | 3                                                 |   |                                                                                        | -      |   |   | 5 |   |
| Balance,                December 31, 2003        |   |                                                                                  | 2      |                                              |   | 4                                                 |   |                                                                                        | -      |   |   | 6 |   |
| Other                comprehensive loss          |   |                                                                                  | (2     | )                                                 |   | (8                                                | )      |                                                                                        | -      |   |   | (10 | ) |
| Balance,                December 31, 2004        |   |                                                                                  | -      |                                              |   | (4                                                | )      |                                                                                        | -      |   |   | (4 | ) |
| Other                comprehensive income (loss) |   |                                                                                  | -      |                                              |   | 1                                                 |   | $                                                                                           | (1     | ) |   | - |   |
| Balance,                December 31, 2005        |   | $                                                                                     | -      |                                              | $      | (3                                                | )      | $                                                                                           | (1     | ) | $ | (4 | ) |

**7.**
**      PREFERRED STOCK**

| **Par                Value** | **Authorized** | **Available                for Issuance** |
|------------------------------|----------------|-------------------------------------------|
| $100                         | 1,000,000      | -                                         |
| $                50          | 601,613        | 300,000                                   |
| $                25          | 2,000,000      | 2,000,000                                 |

*Preferred      Stock (Not subject to purchase or sinking funds)*

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*Preferred      Stock (Subject to purchase or sinking funds)*

|                                             | **Series**                                                         |                                                       |                                  |
|--------------------------------------------------|--------------------------------------------------------------------|------------------------------------------------------------|---------------------------------------|
|                                             | **4.50%,                4.60% (A)****&                5.125%** | **4.60%                (B)****&                6.00%** |  **Total                Shares** |  **Millions                of Dollars** |
|  **Redemption                Price**   |  **$51.00**                                                   |  **$50.50**                                           |                                  |   |
| Balance                at December 31, 2002 | 83,849                                                             | 116,124                                                    | 199,973                               | $10.0 |
| Shares                Redeemed-$50 par value     | (2,815)                                                            | (3,563)                                                    | (6,378)                               | (0.3) |
| Balance                at December 31, 2003 | 81,034                                                             | 112,561                                                    | 193,595                               | 9.7 |
| Shares                Redeemed-$50 par value     | (2,516)                                                            | (6,600)                                                    | (9,116)                               | (0.5) |
| Balance                at December 31, 2004 | 78,518                                                             | 105,961                                                    | 184,479                               | 9.2 |
| Shares                Redeemed-$50 par value     | (1,475)                                                            | (6,600)                                                    | (8,075)                               | (0.4) |
| Balance                at December 31, 2005 | 77,043                                                             | 99,361                                                     | 176,404                               | $8.8 |

**8.**
**      INCOME TAXES**

|                                                    |   | **2005**                               |   | **2004** |   | **2003** |   |
|---------------------------------------------------------|--------|----------------------------------------|--------|----------|--------|----------|--------|
|                                                    |   | **Millions                of dollars** |   |
| Current                taxes:                           |   |                                   |   |     |   |     |   |
| Federal                                                 |   | $                                      | 10.2   |     | $      | (6.4     | )      | $ | 63.1 |   |
| State                                                   |   |                                   | 11.1   |     |   | (5.2     | )      |   | 12.2 |   |
| Total                current taxes                      |   |                                   | 21.3   |     | $      | (11.6    | )      | $ | 75.3 |   |
| Deferred                taxes, net:                     |   |                                   |   |     |   |     |   |   |   |   |
| Federal                                                 |   |                                   | 1.7    |     |   | 84.5     |   |   | 24.6 |   |
| State                                                   |   |                                   | (6.9   | )        |   | 5.4      |   |   | 0.3 |   |
| Total                deferred taxes                     |   |                                   | (5.2   | )        |   | 89.9     |   |   | 24.9 |   |
| Investment                tax credits:                  |   |                                   |   |     |   |     |   |   |   |   |
| Deferred-state                                          |   |                                   | 5.1    |     |   | 10.0     |   |   | 5.0 |   |
| Amortization                of amounts deferred-state   |   |                                   | (1.9   | )        |   | (2.1     | )      |   | (1.8 | ) |
| Amortization                of amounts deferred-federal |   |                                   | (3.1   | )        |   | (4.0     | )      |   | (4.0 | ) |
| Total                investment tax credits             |   |                                   | 0.1    |     |   | 3.9      |   |   | (0.8 | ) |
| Synthetic                fuel tax credits - federal     |   |                                   | (134.2 | )        |   | 40.5     |   |   | 35.7 |   |
| Total                income tax expense (benefit)       |   | $                                      | (118.0 | )        | $      | 122.7    |   | $ | 135.1 |   |

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|                                                                          |   | **2005**                               |   | **2004** |   | **2003** |   |
|-------------------------------------------------------------------------------|--------|----------------------------------------|--------|----------|--------|----------|--------|
|                                                                          |   | **Millions                of dollars** |   |
| Income                                                                        |   | $319.5                                 |   | $257.1   |   | $282.0   |   |
| Income                tax expense (benefit)                                   |   |                                   | (118.0 | )        |   | 122.7    |   |   | 135.1 |   |
| Preferred                stock dividends                                      |   |                                   | 7.3    |     |   | 7.3      |   |   | 9.1 |   |
| Total                pre-tax income                                           |   | $                                      | 208.8  |     | $      | 387.1    |   | $ | 426.2 |   |
| Income                taxes on above at statutory federal income tax rate     |   | $                                      | 73.1   |     | $      | 135.5    |   | $ | 149.2 |   |
| Increases                (decreases) attributed to:                           |   |                                   |   |     |   |     |   |   |   |   |
| State                income taxes (less federal income tax effect)            |   |                                   | 4.8    |     |   | 5.3      |   |   | 10.2 |   |
| Synthetic                fuel tax credits                                     |   |                                   | (181.9 | )        |   | (2.9     | )      |   | (2.2 | ) |
| Allowance                for equity funds used during construction            |   |                                   | (0.2   | )        |   | (5.5     | )      |   | (6.7 | ) |
| Deductible                dividends-Stock Purchase Savings Plan               |   |                                   | (5.9   | )        |   | (5.5     | )      |   | (4.9 | ) |
| Amortization                of federal investment tax credits                 |   |                                   | (3.1   | )        |   | (4.0     | )      |   | (4.0 | ) |
| Non-taxable                recovery of Lake Murray Dam project carrying costs |   |                                   | (3.8   | )        |   | -        |   |   | - |   |
| Other                differences, net                                         |   |                                   | (1.0   | )        |   | (0.2     | )      |   | (6.5 | ) |
| Total                income tax expense (benefit)                             |   | $                                      | (118.0 | )        | $      | 122.7    |   | $ | 135.1 |   |

|                                                               |   | **2005**                               |    | **2004** |   |
|--------------------------------------------------------------------|--------|----------------------------------------|---------|----------|--------|
|                                                               |   | **Millions                of dollars** |    |
| Deferred                tax assets:                                |   |                                   |    |     |   |
| Nondeductible                reserves                              |   | $                                      | 84.8    |     | $      | 84.5 |   |
| Unamortized                investment tax credits                  |   |                                   | 60.0    |     |   | 60.8 |   |
| Federal                alternative minimum tax credit carryforward |   |                                   | 44.0    |     |   | 12.3 |   |
| Deferred                compensation                               |   |                                   | 28.5    |     |   | 24.0 |   |
| Unbilled                revenue                                    |   |                                   | 12.6    |     |   | 7.0 |   |
| Other                                                              |   |                                   | 31.6    |     |   | 28.4 |   |
| Total                deferred tax assets                           |   |                                   | 261.5   |     |   | 217.0 |   |
| Deferred                tax liabilities:                           |   |                                   |    |     |   |   |   |
| Property,                plant and equipment                       |   |                                   | 971.7   |     |   | 937.9 |   |
| Pension                plan benefit income                         |   |                                   | 109.9   |     |   | 101.4 |   |
| Deferred                fuel costs                                 |   |                                   | 45.1    |     |   | 20.3 |   |
| Other                                                              |   |                                   | 49.3    |     |   | 41.9 |   |
| Total                deferred tax liabilities                      |   |                                   | 1,176.0 |     |   | 1,101.5 |   |
| Net                deferred tax liability                          |   | $                                      | 914.5   |     | $      | 884.5 |   |

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**9.**
**      FINANCIAL INSTRUMENTS**

|                                                                  |   | **2005**                               |    | **2004**                       |   |
|-----------------------------------------------------------------------|--------|----------------------------------------|---------|--------------------------------|--------|
|                                                                  |   |  **Carrying****Amount**           |    | **Estimated****Fair****Value** |   |  **Carrying****Amount** |   | **Estimated****Fair****Value** |   |
|                                                                  |   | **Millions                of dollars** |    |
| Long-term                debt                                         |   | $                                      | 3,136.0 |                           | $      | 3,308.7 |   | $ | 3,389.5 |   | $ | 3,699.9 |   |
| Preferred                stock (subject to purchase or sinking funds) |   |                                   | 8.2     |                           |   | 8.2 |   |   | 9.2 |   |   | 8.5 |   |

| ·   | Fair                values of long-term debt are based on quoted market prices of the                instruments or similar instruments. For debt instruments for which                no                quoted market prices are available, fair values are based on net                present                value calculations. Carrying values reflect the fair values of interest                rate swaps based on settlement values obtained from counterparties.                Early                settlement of long-term debt may not be possible or may not be considered                prudent. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The                fair value of preferred stock (subject to purchase or sinking funds)                is                estimated using market prices. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Potential                taxes and other expenses that would be incurred in an actual sale                or                settlement have not been                considered. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

*"Accounting      for Certain Investments in Debt and Equity Securities,"*

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*Accounting      for Derivative Instruments and Hedging Activities”*

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**10.**
**      COMMITMENTS AND CONTINGENCIES**

**A.      Nuclear Insurance**

**B.      Environmental**

*South      Carolina Electric & Gas Company*

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*Public      Service Company of North Carolina, Incorporated*

**C.      **
**Franchise      Agreements**

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**D.      **
**Claims      and Litigation**

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**E.**
**Other      Contingency**

**F.        **
**Operating        Lease Commitments**

|        |   | **Millions                of dollars** |   |
|-------------|--------|----------------------------------------|--------|
| 2006        |   | $                                      | 15     |   |
| 2007        |   |                                   | 13     |   |
| 2008        |   |                                   | 12     |   |
| 2009        |   |                                   | 10     |   |
| 2010        |   |                                   | 1      |   |
| Thereafter  |   |                                   | 2      |   |
|  Total |   | $                                      | 53     |   |

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**G.      **
**Purchase      Commitments**

|        |   | **Millions                of dollars** |   |
|-------------|--------|----------------------------------------|--------|
|        |   |                                   |   |
| 2006        |   | $                                      | 1,785  |   |
| 2007        |   |                                   | 839    |   |
| 2008        |   |                                   | 734    |   |
| 2009        |   |                                   | 646    |   |
| 2010        |   |                                   | 583    |   |
| Thereafter  |   |                                   | 4,534  |   |
|  Total |   | $                                      | 9,121  |   |

**11.**
**      SEGMENT OF BUSINESS INFORMATION**

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| **2005**                                     |   | **Electric****Operations** |   | **Gas****Distribution** |   | **Gas****Transmission** |   | **Gas                Retail****Marketing** |   | **Energy****Marketing** |   | **All****Other** |   | **Adjustments/****Eliminations** |   | **Consolidated****Total** |   |
|----------------------------------------------|--------|----------------------------|--------|-------------------------|--------|-------------------------|--------|--------------------------------------------|--------|-------------------------|--------|------------------|--------|----------------------------------|--------|---------------------------|--------|
| Customer                Revenue              |   | $                          | 1,909  |                    | $      | 1,168                   |   | $                                          | 237    |                    | $      | 664              |   | $                                | 799    |                      | $      | 70 |   | $ | (70 | ) | $ | 4,777 |   |
| Intersegment                Revenue          |   |                       | 4      |                    |   | 1                       |   |                                       | 420    |                    |   | -                |   |                             | 146    |                      |   | 324 |   |   | (895 | ) |   | - |   |
| Operating                Income              |   |                       | 299    |                    |   | 75                      |   |                                       | 21     |                    |   | n/a              |   |                             | n/a    |                      |   | n/a |   |   | 41 |   |   | 436 |   |
| Interest                Expense              |   |                       | 13     |                    |   | 21                      |   |                                       | 6      |                    |   | 2                |   |                             | -      |                      |   | 1 |   |   | 169 |   |   | 212 |   |
| Depreciation                and Amortization |   |                       | 450    |                    |   | 49                      |   |                                       | 7      |                    |   | 3                |   |                             | -      |                      |   | 14 |   |   | (13 | ) |   | 510 |   |
| Income                Tax Expense (Benefit)  |   |                       | 4      |                    |   | 18                      |   |                                       | 7      |                    |   | 14               |   |                             | (1     | )                         |   | 13 |   |   | (173 | ) |   | (118 | ) |
| Net                Income (Loss)             |   |                       | n/a    |                    |   | n/a                     |   |                                       | n/a    |                    |   | 24               |   |                             | (1     | )                         |   | (67 | ) |   | 364 |   |   | 320 |   |
| Segment                Assets                |   |                       | 5,531  |                    |   | 1,701                   |   |                                       | 390    |                    |   | 284              |   |                             | 128    |                      |   | 590 |   |   | 895 |   |   | 9,519 |   |
| Expenditures                for Assets       |   |                       | 280    |                    |   | 122                     |   |                                       | 4      |                    |   | -                |   |                             | 1      |                      |   | 19 |   |   | (41 | ) |   | 385 |   |
| Deferred                Tax Assets           |   |                       | n/a    |                    |   | n/a                     |   |                                       | 6      |                    |   | 8                |   |                             | 3      |                      |   | 2 |   |   | 7 |   |   | 26 |   |

| **2004**                                     |   | **Electric****Operations** |   | **Gas****Distribution** |   | **Gas****Transmission** |   | **Gas                Retail****Marketing** |   | **Energy****Marketing** |   | **All****Other** |   | **Adjustments/****Eliminations** |   | **Consolidated****Total** |   |
|----------------------------------------------|--------|----------------------------|--------|-------------------------|--------|-------------------------|--------|--------------------------------------------|--------|-------------------------|--------|------------------|--------|----------------------------------|--------|---------------------------|--------|
| Customer                Revenue              |   | $                          | 1,688  |                    | $      | 914                     |   | $                                          | 212    |                    | $      | 552              |   | $                                | 520    |                      | $      | 58 |   | $ | (59 | ) | $ | 3,885 |   |
| Intersegment                Revenue          |   |                       | 4      |                    |   | -                       |   |                                       | 339    |                    |   | -                |   |                             | 77     |                      |   | 304 |   |   | (724 | ) |   | - |   |
| Operating                Income              |   |                       | 550    |                    |   | 67                      |   |                                       | 19     |                    |   | n/a              |   |                             | n/a    |                      |   | n/a |   |   | (40 | ) |   | 596 |   |
| Interest                Expense              |   |                       | 10     |                    |   | 21                      |   |                                       | 5      |                    |   | 3                |   |                             | -      |                      |   | - |   |   | 163 |   |   | 202 |   |
| Depreciation                and Amortization |   |                       | 208    |                    |   | 47                      |   |                                       | 7      |                    |   | 2                |   |                             | -      |                      |   | 12 |   |   | (11 | ) |   | 265 |   |
| Income                Tax Expense (Benefit)  |   |                       | (2     | )                       |   | 15                      |   |                                       | 5      |                    |   | 18               |   |                             | (1     | )                         |   | (8 | ) |   | 96 |   |   | 123 |   |
| Net                Income (Loss)             |   |                       | n/a    |                    |   | n/a                     |   |                                       | n/a    |                    |   | 29               |   |                             | (2     | )                         |   | (39 | ) |   | 269 |   |   | 257 |   |
| Segment                Assets                |   |                       | 5,365  |                    |   | 1,540                   |   |                                       | 362    |                    |   | 201              |   |                             | 91     |                      |   | 501 |   |   | 946 |   |   | 9,006 |   |
| Expenditures                for Assets       |   |                       | 389    |                    |   | 86                      |   |                                       | 10     |                    |   | -                |   |                             | 3      |                      |   | 19 |   |   | (6 | ) |   | 501 |   |
| Deferred                Tax Assets           |   |                       | n/a    |                    |   | n/a                     |   |                                       | 5      |                    |   | 4                |   |                             | 3      |                      |   | 2 |   |   | (4 | ) |   | 10 |   |

| **2003**                                     |   | **Electric****Operations** |   | **Gas****Distribution** |   | **Gas****Transmission** |   | **Gas                Retail****Marketing** |   | **Energy****Marketing** |   | **All****Other** |   | **Adjustments/****Eliminations** |   | **Consolidated****Total** |   |
|----------------------------------------------|--------|----------------------------|--------|-------------------------|--------|-------------------------|--------|--------------------------------------------|--------|-------------------------|--------|------------------|--------|----------------------------------|--------|---------------------------|--------|
| Customer                Revenue              |   | $                          | 1,466  |                    | $      | 870                     |   | $                                          | 217    |                    | $      | 448              |   | $                                | 416    |                      | $      | 56 |   | $ | (57 | ) | $ | 3,416 |   |
| Intersegment                Revenue          |   |                       | 5      |                    |   | (1                      | )      |                                       | 303    |                    |   | -                |   |                             | -      |                      |   | 277 |   |   | (584 | ) |   | - |   |
| Operating                Income              |   |                       | 426    |                    |   | 77                      |   |                                       | 16     |                    |   | n/a              |   |                             | n/a    |                      |   | 1 |   |   | 31 |   |   | 551 |   |
| Interest                Expense              |   |                       | 7      |                    |   | 21                      |   |                                       | 5      |                    |   | 4                |   |                             | -      |                      |   | 1 |   |   | 162 |   |   | 200 |   |
| Depreciation                and Amortization |   |                       | 183    |                    |   | 47                      |   |                                       | 7      |                    |   | 1                |   |                             | -      |                      |   | 9 |   |   | (9 | ) |   | 238 |   |
| Income                Tax Expense (Benefit)  |   |                       | 2      |                    |   | 19                      |   |                                       | 4      |                    |   | 12               |   |                             | (1     | )                         |   | 9 |   |   | 90 |   |   | 135 |   |
| Net                Income (Loss)             |   |                       | n/a    |                    |   | n/a                     |   |                                       | n/a    |                    |   | 20               |   |                             | (1     | )                         |   | 4 |   |   | 259 |   |   | 282 |   |
| Segment                Assets                |   |                       | 5,038  |                    |   | 1,477                   |   |                                       | 334    |                    |   | 133              |   |                             | 53     |                      |   | 702 |   |   | 721 |   |   | 8,458 |   |
| Expenditures                for Assets       |   |                       | 655    |                    |   | 68                      |   |                                       | 18     |                    |   | -                |   |                             | -      |                      |   | 38 |   |   | (99 | ) |   | 680 |   |
| Deferred                Tax Assets           |   |                       | n/a    |                    |   | n/a                     |   |                                       | 5      |                    |   | 6                |   |                             | 2      |                      |   | 44 |   |   | (57 | ) |   | - |   |

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**12.**
**      QUARTERLY FINANCIAL DATA (UNAUDITED)**

|  **2005                Millions of dollars, except per share amounts** |   | **First****Quarter** |   | **Second****Quarter** |   | **Third****Quarter** |   | **Fourth****Quarter** |   |  **Annual** |   |
|-----------------------------------------------------------------------------|--------|----------------------|--------|-----------------------|--------|----------------------|--------|-----------------------|--------|------------------|--------|
| Total                operating revenues                                     |   | $                    | 1,266  |                  | $      | 891                  |   | $                     | 1,127  |             | $      | 1,493 |   | $ | 4,777 |   |
| Operating                income                                             |   |                 | 28     |                  |   | 85                   |   |                  | 179    |             |   | 144 |   |   | 436 |   |
| Net                income                                                   |   |                 | 101    |                  |   | 44                   |   |                  | 100    |             |   | 75 |   |   | 320 |   |
| Basic                and diluted earnings per share                         |   |                 | .89    |                  |   | .39                  |   |                  | .88    |             |   | .65 |   |   | 2.81 |   |

|  **2004                Millions of dollars, except per share amounts** |   | **First****Quarter** |   | **Second****Quarter** |   | **Third****Quarter** |   | **Fourth****Quarter** |   |  **Annual** |   |
|-----------------------------------------------------------------------------|--------|----------------------|--------|-----------------------|--------|----------------------|--------|-----------------------|--------|------------------|--------|
| Total                operating revenues                                     |   | $                    | 1,136  |                  | $      | 846                  |   | $                     | 857    |             | $      | 1,046 |   | $ | 3,885 |   |
| Operating                income                                             |   |                 | 194    |                  |   | 123                  |   |                  | 161    |             |   | 118 |   |   | 596 |   |
| Net                income                                                   |   |                 | 101    |                  |   | 60                   |   |                  | 54     |             |   | 42 |   |   | 257 |   |
| Basic                and diluted earnings per share                         |   |                 | .91    |                  |   | .54                  |   |                  | .48    |             |   | .37 |   |   | 2.30 |   |

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**SOUTH      CAROLINA ELECTRIC & GAS      COMPANY**

|                    |                                                                                                                      | Page                                                                                  |
|-------------------------|---------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------|
|                    |                                                                                                                      |                                                                                  |
| Item                7.  | Management’s                Discussion and Analysis of Financial                Condition and Results of Operations | 95                                                                                    |
|                    |                                                                                                                      | Overview                                                                              | 95 |
|                    |                                                                                                                      | Results                of Operations                                                  | 96 |
|                    |                                                                                                                      | Liquidity                and Capital Resources                                        | 101 |
|                    |                                                                                                                      | Environmental                Matters                                                  | 104 |
|                    |                                                                                                                      | Regulatory                Matters                                                     | 107 |
|                    |                                                                                                                      | Critical                Accounting Policies and                Estimates              | 108 |
|                    |                                                                                                                      | Other                Matters                                                          | 110 |
|                    |                                                                                                                      |                                                                                  |
| Item                7A. | Quantitative                and Qualitative Disclosures About                Market Risk                                  | 110                                                                                   |
|                    |                                                                                                                      |                                                                                  |
| Item                8.  | Financial                Statements and Supplementary                Data                                                 |                                                                                  |
|                    |                                                                                                                      | Report                of Independent Registered Public Accounting                Firm | 112 |
|                    |                                                                                                                      | Consolidated                Balance Sheets                                            | 113 |
|                    |                                                                                                                      | Consolidated                Statements of Income                                      | 115 |
|                    |                                                                                                                      | Consolidated                Statements of Cash Flows                                  | 116 |
|                    |                                                                                                                      | Consolidated                Statements of Changes in Common                Equity     | 117 |
|                    |                                                                                                                      | Notes                to Consolidated Financial                Statements              | 118 |
|                    |                                                                                                                      |                                                                                  |

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**ITEM      7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION      AND RESULTS **

**OF      OPERATIONS**

**OVERVIEW**

**Electric      Operations**

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**Gas      Distribution**

**RESULTS      OF OPERATIONS**

**Net      Income**

| **Millions                of dollars** |   | **2005** |   | **%                Change** |   | **2004** |   | **%                Change** |   | **2003** |   |
|----------------------------------------|--------|----------|--------|-----------------------------|--------|----------|--------|-----------------------------|--------|----------|--------|
|                                   |   |     |   |                        |   |     |   |                        |   |     |   |
| Net                income              |   | $        | 258.1  |                        |   | 11.0     | %      | $                           | 232.5  |     |   | 4.6 | % | $ | 222.2 |   |

| • | 2005 vs 2004 | Net                income increased primarily due to higher electric and gas margins                of $50.8                million and $5.1 million, respectively, and due to the recognition                of                carrying cost recovery of $10.9 million on the dam remediation project                (see further discussion at *Recognition                of Synthetic Fuel Tax Credits*                in                Results of Operations). These increases were offset by higher major                maintenance expenses of $4.1 million, higher depreciation and amortization                expense of $16.1 million, increased interest expense of $3.3 million,                increased expenses of $5.5 million associated with the Jasper County                Electric Generation Station completed in May 2004, lower equity AFC                of                $14.3 million and higher other expenses of $2.3                million. |
|---------|------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| • | 2004 vs 2003 | Net                income increased primarily due to higher electric margins of                $62.2 million, partially offset by lower gas margins of                $4.6 million, increased operations and maintenance expenses of                $17.4 million, higher depreciation and amortization expense of                $15.3 million, higher other taxes of $3.3 million and lower AFC                of $3.5 million. |
|---------|------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **Millions                of dollars**                                           |   | **2005** |   | **2004** |   | **2003** |   |
|----------------------------------------------------------------------------------|--------|----------|--------|----------|--------|----------|--------|
|                                                                             |   |     |   |
| Income                Statement Impact:                                          |   |     |   |     |   |     |   |
| (Component                of) reduction in employee benefit costs                |   | $        | 5.6    |     | $      | 4.2      |   | $ | (1.0 | ) |
| Other                income                                                      |   |     | 12.2   |     |   | 11.0     |   |   | 8.2 |   |
| Balance                Sheet Impact:                                             |   |     |   |     |   |     |   |   |   |   |
| (Component                of) reduction in capital expenditures                  |   |     | 1.6    |     |   | 1.2      |   |   | (0.3 | ) |
| Component                of (reduction in) amount due to Summer Station co-owner |   |     | 0.6    |     |   | 0.4      |   |   | (0.1 | ) |
| Total                Pension Income                                              |   | $        | 20.0   |     | $      | 16.8     |   | $ | 6.8 |   |

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*Recognition      of Synthetic Fuel Tax Credits*

* *

|                                                      |   | Recognized                 |   | Year                Ended   |   |
|-----------------------------------------------------------|--------|----------------------------|--------|-----------------------------|--------|
| Factors                Increasing (Decreasing) Net Income |   | 4th                Quarter |   | December                31, |   |
| Millions                of dollars                        |   | 2005                       |   | 2005                        |   |
|                                                      |   |                       |   |                        |   |
| Depreciation                and amortization expense      |   | $                          | (13.2  | )                           | $      | (214.0 | ) |
|                                                      |   |                       |   |                        |   |   |   |
| Income                tax benefits:                       |   |                       |   |                        |   |   |   |
| From                synthetic fuel tax credits            |   |                       | 10.9   |                        |   | 179.0 |   |
| From                accelerated depreciation              |   |                       | 5.0    |                        |   | 81.8 |   |
| From                partnership losses                    |   |                       | 1.7    |                        |   | 28.9 |   |
| Total                income tax benefits                  |   |                       | 17.6   |                        |   | 289.7 |   |
|                                                      |   |                       |   |                        |   |   |   |
| Losses                from Equity Method Investments      |   |                       | (4.4   | )                           |   | (75.7 | ) |
|                                                      |   |                       |   |                        |   |   |   |
| Impact                on Net Income                       |   |                       | -      |                        |   | - |   |

**Dividends      Declared**

| **Declaration                  Date** | **Dividend                  Amount** | **Quarter Ended**             | **Payment Date**            |
|---------------------------------------|--------------------------------------|------------------------------------|----------------------------------|
| February                  17, 2005    | $38.0                  million       | March                  31, 2005    | April                  1, 2005   |
| May                  5, 2005          | $38.0                  million       | June                  30, 2005     | July                  1, 2005    |
| July                  27, 2005        | $38.0                  million       | September 30, 2005       | October                  1, 2005 |
| November                  2, 2005     | $38.0                  million       | December                  31, 2005 | January                  1, 2006 |

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**Electric      Operations**

| **Millions                of dollars**       |   | **2005** |    | **%                Change** |   | **2004** |   | **%                Change** |    | **2003** |   |
|----------------------------------------------|--------|----------|---------|-----------------------------|--------|----------|--------|-----------------------------|---------|----------|--------|
|                                         |   |     |    |
| Operating                revenues            |   | $        | 1,912.0 |                        |   | 13.0     | %      | $                           | 1,692.0 |     |   | 15.0 | % | $ | 1,471.7 |   |
| Less:                Fuel used in generation |   |     | 618.1   |                        |   | 32.4     | %      |                        | 466.9   |     |   | 39.7 | % |   | 334.1 |   |
| Purchased                power               |   |     | 37.2    |                        |   | (26.6    | )%     |                        | 50.7    |     |   | (20.8 | )% |   | 64.0 |   |
| Margin                                       |   | $        | 1,256.7 |                        |   | 7.0      | %      | $                           | 1,174.4 |     |   | 9.4 | % | $ | 1,073.6 |   |

| • | 2005 vs 2004 | Margin                increased by $41.4 million due to increased retail electric rates                that                went into effect in January 2005, by $24.8 million due to residential                and                commercial customer growth and by $16.4 million due to increased                off-system sales. These increases were offset by a $2.4 million decrease                due to unfavorable weather. Fuel used in generation increased $151.2                million due primarily to the increased cost of coal and natural gas                used                for electric generation. Purchased power decreased due to greater                availability of generation                facilities. |
|---------|------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| • | 2004                vs 2003 | Margin                increased by $47.2 million due to increased off-system sales, by                $22.9                million due to increased customer growth and consumption, by                $22.3 million due to favorable weather and by $7.1 million due                to the increase in retail electric base rates effective                February 2003. Fuel used in generation increased by                $103.0 million due to increased availability of generation facilities                and by $30.0 million due to increased cost of coal. Purchased power                decreased due to greater availability of generation                facilities. |
|---------|-----------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **Classification                (in thousands)**        |   | **2005** |   | **%                Change** |   | **2004** |   | **%                Change** |   | **2003** |   |
|---------------------------------------------------------|--------|----------|--------|-----------------------------|--------|----------|--------|-----------------------------|--------|----------|--------|
| Residential                                             |   |     | 7,634  |                        |   | 2.3      | %      |                        | 7,460  |     |   | 6.6 | % |   | 6,998 |   |
| Commercial                                              |   |     | 7,065  |                        |   | 2.1      | %      |                        | 6,919  |     |   | 4.5 | % |   | 6,622 |   |
| Industrial                                              |   |     | 6,651  |                        |   | (1.8     | )%     |                        | 6,775  |     |   | 3.5 | % |   | 6,548 |   |
| Sales                for resale (excluding interchange) |   |     | 1,487  |                        |   | (2.5     | )%     |                        | 1,525  |     |   | 6.1 | % |   | 1,438 |   |
| Other                                                   |   |     | 527    |                        |   | 0.2      | %      |                        | 526    |     |   | 5.2 | % |   | 500 |   |
| Total                territorial                        |   |     | 23,364 |                        |   | 0.7      | %      |                        | 23,205 |     |   | 5.0 | % |   | 22,106 |   |
| NMST                                                    |   |     | 1,794  |                        |   | (2.8     | )%     |                        | 1,845  |     |   | * |   |   | 425 |   |
| Total                                                   |   |     | 25,158 |                        |   | 0.4      | %      |                        | 25,050 |     |   | 11.2 | % |   | 22,531 |   |

| • | 2005                vs 2004 | Territorial                sales volumes increased by 407 MWh primarily due to customer growth                partially offset by 261 MWh due to less favorable                weather. |
|---------|-----------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| • | 2004                vs 2003 | Territorial                sales volumes increased by 334 MWh and 774 MWh due to customer growth                and                weather, respectively. |
|---------|-----------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------|

**Gas      Distribution**

| **Millions                of dollars**        |   | **2005** |   | **%                Change** |   | **2004** |   | **%                Change** |   | **2003** |   |
|-----------------------------------------------|--------|----------|--------|-----------------------------|--------|----------|--------|-----------------------------|--------|----------|--------|
|                                          |   |     |   |
| Operating                revenues             |   | $        | 508.8  |                        |   | 28.0     | %      | $                           | 397.4  |     |   | 10.4 | % | $ | 360.1 |   |
| Less:                Gas purchased for resale |   |     | 416.6  |                        |   | 32.8     | %      |                        | 313.6  |     |   | 16.7 | % |   | 268.8 |   |
| Margin                                        |   | $        | 92.2   |                        |   | 10.0     | %      | $                           | 83.8   |     |   | (8.2 | )% | $ | 91.3 |   |

| • | 2005                vs 2004 | Margin                increased $4.7 million due to higher firm margin and $4.6 million                due to                increased retail gas base rates which became effective with the first                billing cycle in November 2005. These increases were offset by a                $0.8                million decrease due to lower interruptible margin and transportation                revenue. |
|---------|-----------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| • | 2004                vs 2003 | Margin                decreased primarily due to a decreased billing surcharge for the                recovery                of environmental remediation expenses of $5.0 million and lower                residential and commercial sales volumes of                $2.5 million. |
|---------|-----------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| **Classification                (in thousands)** | **2005** | **%                Change** | **2004** | **% Change** | **2003** |
|--------------------------------------------------|----------|-----------------------------|----------|-------------------|----------|
| Residential                                      | 12,806   | (0.9)%                      | 12,916   | (2.5)%            | 13,243   |
| Commercial                                       | 12,553   | 3.3%                        | 12,155   | (1.4)%            | 12,322   |
| Industrial                                       | 15,907   | 5.4%                        | 15,087   | 3.9%              | 14,524   |
| Transportation                gas                | 2,032    | (10.6)%                     | 2,272    | 6.1%              | 2,141    |
| Total                                            | 43,298   | 2.0%                        | 42,430   | 0.5%              | 42,230   |

| • | 2005                vs 2004 | Commercial                and industrial volumes increased primarily due to more customers                buying                commodity gas instead of purchasing alternative fuels and instead                of                transporting gas purchased from                others. |
|---------|-----------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| • | 2004                vs 2003 | Residential                and commercial sales volumes decreased primarily due to unfavorable                consumption patterns. Industrial and transportation volumes increased                in                2004 primarily as a result of interruptible customers using gas instead                of                alternative fuels. |
|---------|-----------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Other      Operating Expenses**

| **Millions                of dollars**         |   | **2005** |    | **%                Change** |   | **2004** |   | **%                Change** |   | **2003** |   |
|------------------------------------------------|--------|----------|---------|-----------------------------|--------|----------|--------|-----------------------------|--------|----------|--------|
|                                           |   |     |    |
| Other                operation and maintenance |   | $        | 441.2   |                        |   | 2.4      | %      | $                           | 431.0  |     |   | 7.0 | % | $ | 402.9 |   |
| Depreciation                and amortization   |   |     | 464.8   |                        |   | *        |   |                        | 220.9  |     |   | 12.6 | % |   | 196.2 |   |
| Other                taxes                     |   |     | 131.0   |                        |   | (0.2     | )%     |                        | 131.3  |     |   | 4.2 | % |   | 126.0 |   |
| Total                                          |   | $        | 1,037.0 |                        |   | 32.4     | %      | $                           | 783.2  |     |   | 8.0 | % | $ | 725.1 |   |

| • | 2005 vs 2004 | Other                operation and maintenance expenses increased primarily due to increased                electric generation major maintenance expenses of $6.7 million, increased                expenses associated with the Jasper County Electric Generating Station                completed in May 2004 of $2.4 million, increased nuclear operating                and                maintenance expenses of $2.4 million, higher expenses related to                regulatory matters of $1.9 million and higher amortization of regulatory                assets of $3.6 million. The increases were offset primarily by decreased                long-term bonus and incentive plan expenses of $4.8 million and decreased                storm damage expenses of $0.9 million. Depreciation and amortization                increased approximately $214.0 million due to accelerated depreciation                of                the back-up dam at Lake Murray (previously explained at *Recognition                of Synthetic Fuel Tax Credits*),                increased $6.5 million due to the completion of the Jasper County                Electric                Generating Station in May 2004 and $6.1 million due to normal net                property                changes. In addition, pursuant to the January 2005 rate order, SCE&G                began amortization of previously deferred purchased power costs and                implemented new depreciation rates, resulting in $17.3 million of                additional depreciation and amortization expense in the                period. |
|---------|------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| • | 2004 vs 2003 | Other                operation and maintenance expenses increased primarily due to increased                labor and benefit expense of $19.5 million, $11.0 million of                increased operating expenses at the electric generation plants and                $2.5 million of expenses associated with winter storm restoration,                partially offset by increased pension income of $5.2 million.                Depreciation and amortization increased by $13.4 million due to                completion of the Jasper County Electric Generating Station and                $11.1 million due to normal additions. Other taxes increased                primarily due to property taxes. |
|---------|------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Interest      Expense**

| **Millions                of dollars**         |   | **2005** |   | **%                Change** |   | **2004** |   | **%                Change** |   | **2003** |   |
|------------------------------------------------|--------|----------|--------|-----------------------------|--------|----------|--------|-----------------------------|--------|----------|--------|
|                                           |   |     |   |
| Interest                on long-term debt, net |   | $        | 136.3  |                        |   | (5.9     | )%     | $                           | 144.8  |     |   | 3.7 | % | $ | 139.7 |   |
| Other                interest expense          |   |     | 11.0   |                        |   | *        |   |                        | 3.5    |     |   | (35.2 | )% |   | 5.4 |   |
| Total                                          |   | $        | 147.3  |                        |   | (0.7     | )%     | $                           | 148.3  |     |   | 2.2 | % | $ | 145.1 |   |

| • | 2005 vs 2004 | Interest                on long-term debt decreased primarily due to the redemption of outstanding                debt. Other interest expense increased primarily due to increased                short-term debt. |
|---------|------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| • | 2004                vs 2003 | Interest                on long-term debt increased primarily due to slightly higher levels                of                borrowing outstanding during 2004 until the payment of maturing debt                late                in the year. |
|---------|-----------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Income      Taxes**

**LIQUIDITY      AND CAPITAL RESOURCES**

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**Estimated      Cash Requirements**

|                                        |   | **2006**                               |   | **2007** |   | **2008** |   |
|---------------------------------------------|--------|----------------------------------------|--------|----------|--------|----------|--------|
|                                        |   | **Millions                of dollars** |   |
| SCE&G:                                  |   |                                   |   |     |   |     |   |
| Electric                Plant:              |   |                                   |   |     |   |     |   |
| Generation                (including GENCO) |   | $                                      | 128    |     | $      | 86       |   | $ | 193 |   |
| Transmission                                |   |                                   | 50     |     |   | 44       |   |   | 46 |   |
| Distribution                                |   |                                   | 115    |     |   | 114      |   |   | 115 |   |
| Other                                       |   |                                   | 18     |     |   | 11       |   |   | 14 |   |
| Nuclear                Fuel                 |   |                                   | 27     |     |   | 25       |   |   | 5 |   |
| Gas                                         |   |                                   | 27     |     |   | 26       |   |   | 31 |   |
| Common                                      |   |                                   | 22     |     |   | 17       |   |   | 7 |   |
| Other                                       |   |                                   | 2      |     |   | -        |   |   | - |   |
| Total                                       |   | $                                      | 389    |     | $      | 323      |   | $ | 411 |   |

**Contractual      Cash Obligations**

|  **(Millions                of dollars)**     |   |  **Total** |   | **Less                than****1                year** |   |  **1-3                years** |   |  **4-5                years** |   | **After****5                years** |   |
|---------------------------------------------------------|--------|-----------------|--------|-------------------------------------------------------|--------|------------------------------------|--------|------------------------------------|--------|-------------------------------------|--------|
| Long-term                and short-term debt            |   |            |   |                                                  |   |                               |   |                               |   |                                |   |
| (including                interest and preferred stock) |   | $               | 4,421  |                                                  | $      | 578                                |   | $                                  | 489    |                                | $      | 373 |   | $ | 2,981 |   |
| Capital                leases                           |   |            | 2      |                                                  |   | 1                                  |   |                               | 1      |                                |   | - |   |   | - |   |
| Operating                leases                         |   |            | 44     |                                                  |   | 13                                 |   |                               | 30     |                                |   | 1 |   |   | - |   |
| Purchase                obligations                     |   |            | 95     |                                                  |   | 86                                 |   |                               | 6      |                                |   | 3 |   |   | - |   |
| Other                commercial commitments             |   |            | 672    |                                                  |   | 327                                |   |                               | 285    |                                |   | 14 |   |   | 46 |   |
| Total                                                   |   | $               | 5,234  |                                                  | $      | 1,005                              |   | $                                  | 811    |                                | $      | 391 |   | $ | 3,027 |   |

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|                                                            |   | **2006**                               |   | **2005** |   |
|-----------------------------------------------------------------|--------|----------------------------------------|--------|----------|--------|
|                                                            |   | **Millions                of dollars** |   |
| Property                additions and construction expenditures |   | $                                      | 368    |     | $      | 331 |   |
| Nuclear                fuel expenditures                        |   |                                   | 18     |     |   | 18 |   |
| Investments                                                     |   |                                   | 18     |     |   | 18 |   |
| Total                                                           |   | $                                      | 404    |     | $      | 367 |   |

|                                                |   | **Millions                of dollars** |   |
|-----------------------------------------------------|--------|----------------------------------------|--------|
| Lines                of credit (total and unused):  |   |                                   |   |
| SCE&G                and Fuel Company           |   |                                   |   |
| Committed                (expires June 2010)        |   | $                                      | 525    |   |
| Uncommitted                                         |   |                                   | 78(a   | ) |
| Short-term                borrowings outstanding:   |   |                                   |   |   |
| Commercial                paper (270 or fewer days) |   | $                                      | 303.1  |   |
| Weighted                average interest rate       |   |                                   | 4.40   | % |

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**ENVIRONMENTAL      MATTERS**

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| ·   | SCE&G                owns a decommissioned MGP site in the Calhoun Park area of Charleston,                South Carolina. The site is currently being remediated for contamination.                SCE&G anticipates that the remaining remediation activities will be                completed by mid-2006, with certain monitoring and retreatment activities                continuing until 2011. As of December 31, 2005, SCE&G has spent                approximately $21.5 million to remediate the Calhoun Park site, and                expects to spend an additional $0.3 million. In addition, the                National Park Service of the Department of the Interior made an initial                demand to SCE&G for payment of $9.1 million for certain costs and                damages relating to this site. Any cost arising from this matter                is                expected to be recoverable through                rates. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | SCE&G                owns three other decommissioned MGP sites in South Carolina which                contain                residues of by-product chemicals. One of the sites has been remediated                and                will undergo routine monitoring until released by DHEC. The other                sites                are currently being investigated under work plans approved by DHEC.                SCE&G anticipates that major remediation activities for the three                sites will be completed in 2010. As of December 31, 2005, SCE&G                has spent approximately $4.5 million related to these three sites,                and                expects to spend an additional $11.5 million. Any                cost arising from this matter is expected to be recoverable through                rates. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**REGULATORY      MATTERS**

**CRITICAL      ACCOUNTING POLICIES AND      ESTIMATES**

*“Accounting      for the Effects of Certain Types of Regulation,”*

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*“Employers’      Accounting for Postretirement Benefits Other Than Pensions,”*

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**OTHER      MATTERS**

*“Accounting      for Transfers and Servicing of Financial Assets and Extinguishments of      Liabilities,”*
*“Consolidation      of Variable Interest Entities.”*

**ITEM 7A.      QUANTITATIVE AND QUALITATIVE      DISCLOSURES ABOUT MARKET      RISK**

|                                                                                  | **Expected                Maturity Date** |
|---------------------------------------------------------------------------------------|-------------------------------------------|
| **December 31,                2005****Millions                of dollars**  |  **2006**                            |  **2007** |  **2008** |  **2009** |  **2010** |  **Thereafter** |  **Total** | **Fair****Value** |
| Liabilities                                                                           |                                      |   |   |   |   |   |   |   |
| Long-Term                Debt:                                                        |                                      |   |   |   |   |   |   |   |
| Fixed                Rate ($)                                                    | 169.9                                     | 39.2 | 39.2 | 139.2 | 39.2 | 1,714.4 | 2,141.1 | 2,051.3 |
| Average                Interest Rate (%)                                         | 8.51                                      | 6.86 | 6.86 | 6.33 | 6.86 | 5.88 | 6.17 |   |

|                                                                                  | **Expected                Maturity Date** |
|---------------------------------------------------------------------------------------|-------------------------------------------|
| **December 31,                2004****Millions                of dollars**  |  **2005**                            |  **2006** |  **2007** |  **2008** |  **2009** |  **Thereafter** |  **Total** | **Fair****Value** |
| Liabilities                                                                           |                                      |   |   |   |   |   |   |   |
| Long-Term                Debt:                                                        |                                      |   |   |   |   |   |   |   |
| Fixed                Rate ($)                                                    | 189.2                                     | 169.9 | 39.2 | 39.2 | 139.2 | 1,718.2 | 2,294.9 | 2,285.7 |
| Average                Interest Rate (%)                                         | 7.37                                      | 8.51 | 6.86 | 6.86 | 6.33 | 6.02 | 6.36 |   |

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**ITEM      8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY      DATA**

**REPORT      OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

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**SOUTH      CAROLINA ELECTRIC & GAS COMPANY**

**CONSOLIDATED      BALANCE SHEETS**

| **December 31,                (Millions of dollars)**                                          |   | **2005** |   | **2004** |   |
|----------------------------------------------------------------------------------------------------------|--------|----------|--------|----------|--------|
| **Assets**                                                                                          |   |     |   |     |   |
| Utility                Plant In Service:                                                                 |   | $        | 7,687  |     | $      | 7,096 |   |
| Accumulated                Depreciation and Amortization                                                 |   |     | (2,295 | )        |   | (1,934 | ) |
|                                                                                                     |   |     | 5,392  |     |   | 5,162 |   |
| Construction                Work in Progress                                                             |   |     | 160    |     |   | 417 |   |
| Nuclear                Fuel, Net of Accumulated Amortization                                             |   |     | 28     |     |   | 42 |   |
| Utility                Plant, Net                                                                        |   |     | 5,580  |     |   | 5,621 |   |
| Nonutility                Property and Investments:                                                      |   |     |   |     |   |   |   |
| Nonutility                property, net of accumulated depreciation                                      |   |     | 28     |     |   | 27 |   |
| Assets                held in trust, net-nuclear decommissioning                                         |   |     | 52     |     |   | 49 |   |
| Other                investments                                                                         |   |     | 28     |     |   | 26 |   |
| Nonutility                Property and Investments, Net                                                  |   |     | 108    |     |   | 102 |   |
| Current                Assets:                                                                           |   |     |   |     |   |   |   |
| Cash                and cash equivalents                                                                 |   |     | 19     |     |   | 20 |   |
| Receivables,                net of allowance for uncollectible accounts of $2                and $1 |   |     | 366    |     |   | 292 |   |
| Receivables-affiliated                companies                                                          |   |     | 32     |     |   | 19 |   |
| Inventories                (at average cost):                                                            |   |     |   |     |   |   |   |
| Fuel                                                                                                     |   |     | 62     |     |   | 35 |   |
| Materials                and supplies                                                                    |   |     | 72     |     |   | 64 |   |
| Emission                allowances                                                                       |   |     | 54     |     |   | 9 |   |
| Prepayments                and other                                                                     |   |     | 12     |     |   | 30 |   |
| Deferred                income taxes                                                                     |   |     | 22     |     |   | 5 |   |
| Total                Current Assets                                                                      |   |     | 639    |     |   | 474 |   |
| Deferred                Debits:                                                                          |   |     |   |     |   |   |   |
| Environmental                                                                                            |   |     | 18     |     |   | 11 |   |
| Pension                asset, net                                                                        |   |     | 303    |     |   | 285 |   |
| Due                from affiliates-pension and postretirement benefits                                   |   |     | 31     |     |   | 23 |   |
| Other                regulatory assets                                                                   |   |     | 566    |     |   | 344 |   |
| Other                                                                                                    |   |     | 121    |     |   | 125 |   |
| Total                Deferred Debits                                                                     |   |     | 1,039  |     |   | 788 |   |
| Total                                                                                                    |   | $        | 7,366  |     | $      | 6,985 |   |

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| **December                31, (Millions of dollars)**                      |   | **2005** |   | **2004** |   |
|----------------------------------------------------------------------------|--------|----------|--------|----------|--------|
| **Capitalization                and Liabilities**                     |   |     |   |     |   |
| Shareholders’                Investment:                             |   |     |   |     |   |
| Common                equity                                               |   | $        | 2,362  |     | $      | 2,164 |   |
| Preferred                stock (Not subject to purchase or sinking funds)  |   |     | 106    |     |   | 106 |   |
| Total                Shareholders’ Investment                        |   |     | 2,468  |     |   | 2,270 |   |
| Preferred                Stock, net (Subject to purchase or sinking funds) |   |     | 8      |     |   | 9 |   |
| Long-Term                Debt, net                                         |   |     | 1,856  |     |   | 1,981 |   |
| Total                Capitalization                                        |   |     | 4,332  |     |   | 4,260 |   |
| Minority                Interest                                           |   |     | 82     |     |   | 81 |   |
| Current                Liabilities:                                        |   |     |   |     |   |   |   |
| Short-term                borrowings                                       |   |     | 303    |     |   | 153 |   |
| Current                portion of long-term debt                           |   |     | 183    |     |   | 198 |   |
| Accounts                payable                                            |   |     | 84     |     |   | 106 |   |
| Accounts                payable—affiliated companies                 |   |     | 142    |     |   | 113 |   |
| Customer                deposits and customer prepayments                  |   |     | 35     |     |   | 32 |   |
| Taxes                accrued                                               |   |     | 140    |     |   | 152 |   |
| Interest                accrued                                            |   |     | 35     |     |   | 35 |   |
| Dividends                declared                                          |   |     | 40     |     |   | 38 |   |
| Other                                                                      |   |     | 38     |     |   | 28 |   |
| Total                Current Liabilities                                   |   |     | 1,000  |     |   | 855 |   |
| Deferred                Credits:                                           |   |     |   |     |   |   |   |
| Deferred                income taxes, net                                  |   |     | 801    |     |   | 765 |   |
| Deferred                investment tax credits                             |   |     | 119    |     |   | 119 |   |
| Asset                retirement obligations                                |   |     | 309    |     |   | 124 |   |
| Non-legal                asset retirement obligations                      |   |     | 394    |     |   | 363 |   |
| Due                to affiliates-pension and postretirement benefits       |   |     | 12     |     |   | 14 |   |
| Postretirement                benefits                                     |   |     | 148    |     |   | 142 |   |
| Other                regulatory liabilities                                |   |     | 94     |     |   | 198 |   |
| Other                                                                      |   |     | 75     |     |   | 64 |   |
| Total                Deferred Credits                                      |   |     | 1,952  |     |   | 1,789 |   |
| Commitments                and Contingencies (Note 10)                |   |     | -      |     |   | - |   |
| Total                                                                      |   | $        | 7,366  |     | $      | 6,985 |   |

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**SOUTH      CAROLINA ELECTRIC & GAS COMPANY**

**CONSOLIDATED      STATEMENTS OF INCOME**

| **For                the Years Ended December 31,****(Millions                of dollars)**                                         |   |  **2005** |   |  **2004** |   |  **2003** |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------|--------|----------------|--------|----------------|--------|
| Operating                Revenues:                                                                                                            |   |           |   |           |   |           |   |
| Electric                                                                                                                                      |   | $              | 1,912  |           | $      | 1,692          |   | $ | 1,472 |   |
| Gas                                                                                                                                           |   |           | 509    |           |   | 397            |   |   | 360 |   |
| Total                Operating Revenues                                                                                                       |   |           | 2,421  |           |   | 2,089          |   |   | 1,832 |   |
| Operating                Expenses:                                                                                                            |   |           |   |           |   |           |   |   |   |   |
| Fuel                used in electric generation                                                                                               |   |           | 618    |           |   | 467            |   |   | 334 |   |
| Purchased                power                                                                                                                |   |           | 37     |           |   | 51             |   |   | 64 |   |
| Gas                purchased for resale                                                                                                       |   |           | 417    |           |   | 313            |   |   | 269 |   |
| Other                operation and maintenance                                                                                                |   |           | 441    |           |   | 431            |   |   | 403 |   |
| Depreciation                and amortization                                                                                                  |   |           | 465    |           |   | 221            |   |   | 196 |   |
| Other                taxes                                                                                                                    |   |           | 131    |           |   | 131            |   |   | 126 |   |
| Total                Operating Expenses                                                                                                       |   |           | 2,109  |           |   | 1,614          |   |   | 1,392 |   |
| Operating                Income                                                                                                               |   |           | 312    |           |   | 475            |   |   | 440 |   |
| Other                Income (Expense):                                                                                                        |   |           |   |           |   |           |   |   |   |   |
| Other                revenues                                                                                                                 |   |           | 163    |           |   | 104            |   |   | 91 |   |
| Other                expenses                                                                                                                 |   |           | (140   | )              |   | (90            | )      |   | (74 | ) |
| Allowance                for equity funds used during construction                                                                            |   |           | -      |           |   | 14             |   |   | 18 |   |
| Interest                charges, net of allowance for borrowed funds used during construction                of                $3, $9 and $11 |   |           | (144   | )              |   | (139           | )      |   | (136 | ) |
| Total                Other Expense                                                                                                            |   |           | (121   | )              |   | (111           | )      |   | (101 | ) |
|                                                                                                                                          |   |           |   |           |   |           |   |   |   |   |
| Income                Before Income Taxes (Benefit), Losses from Equity Method                Investments,                                    |   |           |   |           |   |           |   |   |   |   |
|                  Minority Interest and Preferred Stock Dividends                                                                         |   |           | 191    |           |   | 364            |   |   | 339 |   |
| Income                Tax Expense (Benefit)                                                                                                   |   |           | (150   | )              |   | 120            |   |   | 110 |   |
|                                                                                                                                          |   |           |   |           |   |           |   |   |   |   |
| Income                Before Losses from Equity Method Investments, Minority                                                                  |   |           |   |           |   |           |   |   |   |   |
|                  Interest and Preferred Stock Dividends                                                                                  |   |           | 341    |           |   | 244            |   |   | 229 |   |
| Losses                from Equity Method Investments                                                                                          |   |           | (77    | )              |   | (2             | )      |   | (1 | ) |
| Minority                Interest                                                                                                              |   |           | 6      |           |   | 10             |   |   | 8 |   |
|                                                                                                                                          |   |           |   |           |   |           |   |   |   |   |
| Net                Income                                                                                                                     |   |           | 258    |           |   | 232            |   |   | 220 |   |
| Preferred                Stock Cash Dividends                                                                                                 |   |           | 7      |           |   | 7              |   |   | 7 |   |
| Earnings                Available for Common Shareholder                                                                                      |   | $              | 251    |           | $      | 225            |   | $ | 213 |   |

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**SOUTH      CAROLINA ELECTRIC & GAS COMPANY**

**CONSOLIDATED      STATEMENTS OF CASH FLOWS**

| **For                the Years Ended December 31, (Millions of dollars)**                                                                              |   | **2005** |   | **2004** |   | **2003** |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------|--------|----------|--------|----------|--------|
| Cash                Flows From Operating Activities:                                                                                                        |   |     |   |     |   |     |   |
| Net                income                                                                                                                                   |   | $        | 258    |     | $      | 232      |   | $ | 220 |   |
| Adjustments                to Reconcile Net Income to Net Cash Provided From Operating Activities:                                                          |   |     |   |     |   |     |   |   |   |   |
|                  Losses from equity method investments                                                                                                 |   |     | 77     |     |   | 2        |   |   | 1 |   |
|                  Minority interest                                                                                                                     |   |     | 6      |     |   | 10       |   |   | 8 |   |
|                  Depreciation and amortization                                                                                                         |   |     | 465    |     |   | 221      |   |   | 196 |   |
|                  Amortization of nuclear fuel                                                                                                          |   |     | 18     |     |   | 22       |   |   | 21 |   |
|                  Gain on sale of assets                                                                                                                |   |     | (1     | )        |   | (1       | )      |   | (1 | ) |
|                  Allowance for equity funds used during construction                                                                                   |   |     | -      |     |   | (14      | )      |   | (18 | ) |
|                  Carrying cost recovery                                                                                                                |   |     | (11    | )        |   | -        |   |   | - |   |
|                  Cash provided (used) by changes in certain assets and                liabilities:                                                     |   |     |   |     |   |     |   |   |   |   |
|                    Receivables, net                                                                                                          |   |     | (87    | )        |   | (19      | )      |   | (35 | ) |
|                    Inventories                                                                                                               |   |     | (119   | )        |   | (44      | )      |   | - |   |
|                    Prepayments                                                                                                               |   |     | 18     |     |   | (10      | )      |   | 4 |   |
|                    Pension asset                                                                                                             |   |     | (17    | )        |   | (14      | )      |   | (5 | ) |
|                    Other regulatory assets                                                                                                   |   |     | (30    | )        |   | (17      | )      |   | 4 |   |
|                    Deferred income taxes, net                                                                                                |   |     | 19     |     |   | 44       |   |   | 51 |   |
|                    Other regulatory liabilities                                                                                              |   |     | (165   | )        |   | 42       |   |   | 46 |   |
|                    Postretirement benefits                                                                                                   |   |     | 6      |     |   | 7        |   |   | 4 |   |
|                    Accounts payable                                                                                                          |   |     | 6      |     |   | (17      | )      |   | 3 |   |
|                    Taxes accrued                                                                                                             |   |     | (12    | )        |   | 34       |   |   | 4 |   |
|                    Interest accrued                                                                                                          |   |     | -      |     |   | (4       | )      |   | 8 |   |
|                  Changes in fuel adjustment clauses                                                                                                    |   |     | (32    | )        |   | 8        |   |   | 11 |   |
|                  Changes in other assets                                                                                                               |   |     | (13    | )        |   | 13       |   |   | (5 | ) |
|                  Changes in other liabilities                                                                                                          |   |     | 24     |     |   | 36       |   |   | 42 |   |
| Net                Cash Provided From Operating Activities                                                                                                  |   |     | 410    |     |   | 531      |   |   | 559 |   |
| Cash                Flows From Investing Activities:                                                                                                        |   |     |   |     |   |     |   |   |   |   |
|                  Utility property additions and construction expenditures                                                                              |   |     | (330   | )        |   | (434     | )      |   | (589 | ) |
|                  Nonutility property additions                                                                                                         |   |     | 1      |     |   | (5       | )      |   | - |   |
|                  Proceeds from sales of assets                                                                                                         |   |     | 2      |     |   | 2        |   |   | 2 |   |
|                  Investments                                                                                                                           |   |     | (18    | )        |   | (20      | )      |   | (21 | ) |
| Net                Cash Used For Investing Activities                                                                                                       |   |     | (347   | )        |   | (457     | )      |   | (608 | ) |
| Cash                Flows From Financing Activities:                                                                                                        |   |     |   |     |   |     |   |   |   |   |
|                  Proceeds from issuance of debt                                                                                                        |   |     | 121    |     |   | 136      |   |   | 779 |   |
|                  Contribution from parent                                                                                                              |   |     | 95     |     |   | 38       |   |   | 39 |   |
|                  Repayment of debt                                                                                                                     |   |     | (264   | )        |   | (110     | )      |   | (441 | ) |
|                  Redemption of preferred stock                                                                                                         |   |     | (1     | )        |   | -        |   |   | (50 | ) |
|                  Dividends on equity securities                                                                                                        |   |     | (158   | )        |   | (158     | )      |   | (159 | ) |
|                  Distribution to parent                                                                                                                |   |     | -      |     |   | (29      | )      |   | - |   |
|                  Short-term borrowings - affiliate, net                                                                                                |   |     | (7     | )        |   | -        |   |   | (48 | ) |
|                  Short-term borrowings, net                                                                                                            |   |     | 150    |     |   | 13       |   |   | (38 | ) |
| Net                Cash Provided From (Used For) Financing Activities                                                                                       |   |     | (64    | )        |   | (110     | )      |   | 82 |   |
| Net                Increase (Decrease) in Cash and Cash Equivalents                                                                                         |   |     | (1     | )        |   | (36      | )      |   | 33 |   |
| Cash                and Cash Equivalents, January 1                                                                                                         |   |     | 20     |     |   | 56       |   |   | 23 |   |
| Cash                and Cash Equivalents, December 31                                                                                                       |   | $        | 19     |     | $      | 20       |   | $ | 56 |   |
| Supplemental                Cash Flow Information:                                                                                                          |   |     |   |     |   |     |   |   |   |   |
| Cash                paid for - Interest (net of capitalized interest of $3, $9 and                $11)                                                      |   | $        | 140    |     | $      | 144      |   | $ | 125 |   |
|                      -                Income taxes |   |     | 26     |     |   | 22       |   |   | 41 |   |
| Noncash                Investing and Financing Activities:                                                                                                  |   |     |   |     |   |     |   |   |   |   |
|                  Accrued construction expenditures                                                                                                     |   |     | 29     |     |   | 38       |   |   | 30 |   |

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**SOUTH      CAROLINA ELECTRIC & GAS COMPANY**

**CONSOLIDATED      STATEMENTS OF CHANGES IN COMMON      EQUITY**

|                                                       |                                      |       |        |        |         |         |       |
|------------------------------------------------------------|-------------------------------------------|------------|-------------|-------------|--------------|--------------|------------|
|                                                       |                                      |       | **Premium** | **Other**   |         |         |       |
|                                                       |                                      |       | **On**      | **Paid**    | **Capital**  |         | **Total**  |
|                                                       | **Common                  Stock (a****)** | **Common** | **In**      | **Stock**   | **Retained** | **Common**   |
|                                                       | **Shares**                                | **Amount** | **Stock**   | **Capital** | **Expense**  | **Earnings** | **Equity** |
|                                                       | **(Millions)**                            |
|                                                       |                                      |       |        |        |         |         |       |
| Balance                  at December 31, 2002         | 40                                        | $181       | $395        | $627        | $(5)         | $768         | $1,966     |
| Capital                  Contributions From Parent         |                                      |       |        | 9           |         |         | 9          |
| Earnings                  Available for Common Shareholder |                                      |       |        |        |         | 213          | 213        |
| Cash                  Dividends Declared                   |                                      |       |        |        |         | (145)        | (145)      |
| Balance                  at December 31, 2003         | 40                                        | 181        | 395         | 636         | (5)          | 836          | 2,043      |
| Capital                  Contributions From Parent         |                                      |       |        | 38          |         |         | 38         |
| Earnings                  Available for Common Shareholder |                                      |       |        |        |         | 225          | 225        |
| Cash                  Dividends Declared                   |                                      |       |        |        |         | (142)        | (142)      |
| Balance                  at December 31, 2004         | 40                                        | 181        | 395         | 674         | (5)          | 919          | 2,164      |
| Capital                  Contributions From Parent         |                                      |       |        | 95          |         |         | 95         |
| Earnings                  Available for Common Shareholder |                                      |       |        |        |         | 251          | 251        |
| Cash                  Dividends Declared                   |                                      |       |        |        |         | (148)        | (148)      |
| Balance                  at December 31, 2005         | 40                                        | $181       | $395        | $769        | $(5)         | $1,022       | $2,362     |

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**NOTES      TO CONSOLIDATED FINANCIAL      STATEMENTS**

**1.**
**      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**

**A.**
**Organization      and Principles of Consolidation**

*“Consolidation      of Variable Interest Entities,”*

**B.**
**Basis      of Accounting**

*“Accounting      for the Effects of Certain Types of Regulation.”*

|                                                                                                       |   | **December 31,**                  |   |
|------------------------------------------------------------------------------------------------------------|--------|----------------------------------------|--------|
|                                                                                                       |   | **2005**                               |   | **2004** |   |
|                                                                                                       |   | **Millions                of dollars** |   |
| Accumulated                deferred income taxes, net                                                      |   | $                                      | 134    |   | $ | 121 |   |
| Under-(over-)                collections-electric fuel and gas cost adjustment clauses,                net |   |                                   | 56     |   |   | (2 | ) |
| Deferred                purchased power costs                                                              |   |                                   | 17     |   |   | 26 |   |
| Deferred                environmental remediation costs                                                    |   |                                   | 18     |   |   | 11 |   |
| Asset                retirement obligations and related funding                                            |   |                                   | 240    |   |   | 76 |   |
| Non-legal                asset retirement obligations                                                      |   |                                   | (394   | ) |   | (363 | ) |
| Deferred                synthetic fuel tax benefits, net                                                   |   |                                   | -      |   |   | (97 | ) |
| Storm                damage reserve                                                                        |   |                                   | (38    | ) |   | (33 | ) |
| Franchise                agreements                                                                        |   |                                   | 56     |   |   | 58 |   |
| Deferred                regional transmission organization costs                                           |   |                                   | 11     |   |   | 14 |   |
| Other                                                                                                      |   |                                   | (4     | ) |   | (17 | ) |
| Total                                                                                                      |   | $                                      | 96     |   | $ | (206 | ) |

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*“Accounting      for Asset Retirement Obligations,” *
*“Accounting      for Conditional Asset Retirement Obligations.”*

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**C.**
**      System of Accounts**

**D.**
**Utility      Plant and Major Maintenance**

**E.**
**      Allowance for Funds Used During Construction (AFC)**

**F.**
**Revenue      Recognition**

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**G.**
**Depreciation      and Amortization**

**H.**
**Nuclear      Decommissioning**

**I.**
**Income      and Other Taxes**

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**J.**
**Debt      Premium, Discount and Expense, Unamortized Loss on Reacquired      Debt**

**K.**
**      Environmental**

**L.**
**      Cash and Cash Equivalents**

**M.**
**New      Accounting Standards**

*“Accounting      Changes and Error Corrections,” *
*“Accounting      Changes,”*
*“Reporting      Accounting Changes in Interim Financial Statements,”*

*Accounting      for Conditional Asset Retirement Obligations*
*Accounting      for Asset Retirement Obligations*

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|                                           |   | December                31, |   | December                31, |   | December                31, |   |
|------------------------------------------------|--------|-----------------------------|--------|-----------------------------|--------|-----------------------------|--------|
|                                           |   | 2005                        |   | 2004                        |   | 2003                        |   |
|  Millions              of dollars         |   | Actual                      |   | Proforma                    |   | Proforma                    |   |
| Assets:                                        |   |                        |   |                        |   |                        |   |
| Within                utility plant            |   | $                           | 39     |                        | $      | 39                          |   | $ | 39 |   |
| Within                accumulated depreciation |   |                        | (20    | )                           |   | (20                         | )      |   | (19 | ) |
| Within                other regulatory assets  |   |                        | 159    |                        |   | 149                         |   |   | 140 |   |
| Total                                          |   | $                           | 178    |                        | $      | 168                         |   | $ | 160 |   |
| Liabilities:                                   |   |                        |   |                        |   |                        |   |   |   |   |
| Asset                retirement obligation     |   | $                           | 178    |                        | $      | 168                         |   | $ | 160 |   |

| Millions                of dollars |   | 2005   |   | 2004   |   |
|------------------------------------|--------|--------|--------|--------|--------|
| Beginning                balance   |   | $      | 124    |   | $      | 117 |   |
| Accretion                expense   |   |   | 7      |   |   | 7 |   |
| Adoption                of FIN 47  |   | $      | 178    |   |   | - |   |
| Ending                Balance      |   | $      | 309    |   | $      | 124 |   |

*“Share-Based      Payment,”*
*“Accounting      for Stock-Based Compensation” *
*“Accounting      for Stock Issued to Employees.”*

**N.**
**Equity      Compensation Plan**

*“Accounting      for Stock Issued to Employees,”*
*“Accounting      for Stock-Based Compensation,”*
*“Accounting      for Stock-Based Compensation-Transition and Disclosure.”*

|                                                                            |   | **2005** |   | **2004** |   | **2003** |   |
|---------------------------------------------------------------------------------|--------|----------|--------|----------|--------|----------|--------|
| Earnings                Available for Common Shareholder-as reported (millions) |   | $        | 250.8  |     | $      | 225.2    |   | $ | 213.1 |   |
| Earnings                Available for Common Shareholder-pro forma (millions)   |   |     | 250.6  |     |   | 224.1    |   |   | 211.4 |   |

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**O.**
**Affiliated      Transactions**

|                                    |   | **2005**                               |   | **2004** |   | **2003** |   |
|-----------------------------------------|--------|----------------------------------------|--------|----------|--------|----------|--------|
|                                    |   | **Millions                of dollars** |   |
| Current                assets           |   | $                                      | 32     |     | $      | 26       |   | $ | 16 |   |
| Non-current                assets       |   |                                   | 7      |     |   | 10       |   |   | 12 |   |
| Current                liabilities      |   |                                   | 34     |     |   | 28       |   |   | 19 |   |
| Non-current                liabilities  |   |                                   | -      |     |   | -        |   |   | - |   |
| Revenues                                |   |                                   | 267    |     |   | 208      |   |   | 157 |   |
| Gross                loss               |   |                                   | (8     | )        |   | (27      | )      |   | (24 | ) |
| Loss                before income taxes |   |                                   | (55    | )        |   | (54      | )      |   | (45 | ) |

**P.**
**      Reclassifications**

**Q.**
**      Use of Estimates**

**2.**
**RATE      AND OTHER REGULATORY MATTERS**

*Electric*

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| **Rate Per KWh** | **Effective Date**           |
|----------------------------|-----------------------------------|
| $.01678                    | January-April                2004 |
| $.01821                    | May-December                2004  |
| $.01764                    | January-April                2005 |
| $.02256                    | May-December                2005  |

*Gas*

| **Rate                Per Therm** | **Effective                Date**         |
|-----------------------------------|-------------------------------------------|
| $.877                             | January-October                2004       |
| $.903                             | November                2004-October 2005 |

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**3.**
**EMPLOYEE      BENEFIT PLANS**

|                                                  |   | **Retirement                Benefits** |   | **Other                Postretirement Benefits** |   |
|-------------------------------------------------------|--------|----------------------------------------|--------|--------------------------------------------------|--------|
|                                                  |   | **2005**                               |   | **2004**                                         |   | **2005** |   | **2004** |   |
|                                                  |   | **Millions                of dollars** |   |
| Benefit                obligation, January 1     |   | $                                      | 669.5  |                                             | $      | 619.9 |   | $ | 197.5 |   | $ | 188.4 |   |
| Service                cost                           |   |                                   | 12.2   |                                             |   | 11.1 |   |   | 3.5 |   |   | 3.3 |   |
| Interest                cost                          |   |                                   | 38.3   |                                             |   | 37.4 |   |   | 10.7 |   |   | 11.4 |   |
| Plan                participants’ contributions |   |                                   | -      |                                             |   | - |   |   | 2.3 |   |   | 1.1 |   |
| Plan                amendments                        |   |                                   | -      |                                             |   | 8.0 |   |   | (0.3 | ) |   | 4.7 |   |
| Actuarial                loss                         |   |                                   | 27.1   |                                             |   | 24.1 |   |   | 1.5 |   |   | 1.2 |   |
| Benefits                paid                          |   |                                   | (35.6  | )                                                |   | (31.0 | ) |   | (13.1 | ) |   | (12.6 | ) |
| Benefit                obligation, December 31   |   | $                                      | 711.5  |                                             | $      | 669.5 |   | $ | 202.1 |   | $ | 197.5 |   |

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|                                                                                                          |   | **2005** |   | **2004** |   |
|---------------------------------------------------------------------------------------------------------------|--------|----------|--------|----------|--------|
| Annual                discount rate used to determine benefit obligations                                     |   |     | 5.60   | %        |   | 5.75 | % |
| Assumed                annual rate of future salary increases for projected benefit                obligation |   |     | 4.00   | %        |   | 4.00 | % |

|                                                       |   | **1%****Increase**                     |   | **1%****Decrease** |   |
|------------------------------------------------------------|--------|----------------------------------------|--------|--------------------|--------|
|                                                       |   | **Millions                of dollars** |   |
| Effect                on postretirement benefit obligation |   | $                                      | 3.5    |               | $      | (3.1 | ) |

*“Accounting      and Disclosure Requirements Related to the Medicare Prescription Drug,      Improvement and Modernization Act”*

|                                                       |   | **Retirement                Benefits** |   |
|------------------------------------------------------------|--------|----------------------------------------|--------|
|                                                       |   | **2005**                               |   | **2004** |   |
|                                                       |   | **Millions                of dollars** |   |
| Fair                value of plan assets, January 1   |   | $                                      | 846.7  |   | $ | 787.7 |   |
| Actual                return on plan assets                |   |                                   | 43.2   |   |   | 90.0 |   |
| Benefits                paid                               |   |                                   | (35.6  | ) |   | (31.0 | ) |
| Fair                value of plan assets, December 31 |   | $                                      | 854.3  |   | $ | 846.7 |   |

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|                                                                          |   |  **Retirement                Benefits** |   |  **Other                Postretirement Benefits** |   |
|-------------------------------------------------------------------------------|--------|----------------------------------------------|--------|--------------------------------------------------------|--------|
|                                                                          |   | **2005**                                     |   | **2004**                                               |   | **2005** |   | **2004** |   |
|                                                                          |   | **Millions                of dollars**       |   |
| Funded                status, December 31                                |   | $                                            | 142.9  |                                                   | $      | 177.2 |   | $ | (202.1 | ) | $ | (197.5 | ) |
| Unrecognized                actuarial loss                                    |   |                                         | 88.4   |                                                   |   | 28.2 |   |   | 44.4 |   |   | 44.2 |   |
| Unrecognized                prior service cost                                |   |                                         | 71.3   |                                                   |   | 78.3 |   |   | 5.2 |   |   | 6.4 |   |
| Unrecognized                net transition obligation                         |   |                                         | 0.6    |                                                   |   | 1.4 |   |   | 4.3 |   |   | 5.0 |   |
| Net                asset (liability) recognized in consolidated balance sheet |   | $                                            | 303.2  |                                                   | $      | 285.1 |   | $ | (148.2 | ) | $ | (141.9 | ) |

|                                                     |   |                                            |   |  **Other                Postretirement Benefits*** |   |
|----------------------------------------------------------|--------|-------------------------------------------------|--------|---------------------------------------------------------|--------|
|   **Expected                Benefit Payments** |   |   **Pension                Benefits** |   | **Excluding                Medicare Subsidy**           |   | **Including                Medicare Subsidy** |   |
|                                                     |   | **Millions                of dollars**          |   |
| 2006                                                     |   | $                                               | 35.9   |                                                    | $      | 8.6 |   | $ | 8.3 |   |
| 2007                                                     |   |                                            | 37.7   |                                                    |   | 9.2 |   |   | 8.9 |   |
| 2008                                                     |   |                                            | 39.6   |                                                    |   | 9.7 |   |   | 9.3 |   |
| 2009                                                     |   |                                            | 41.6   |                                                    |   | 10.0 |   |   | 9.6 |   |
| 2010                                                     |   |                                            | 43.6   |                                                    |   | 10.3 |   |   | 10.0 |   |
| 2011-2015                                                |   |                                            | 253.5  |                                                    |   | 55.1 |   |   | 53.4 |   |

*“Employer’s      Disclosures about Pensions and Other Postretirement Benefits,”*

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|                                                     |   | **Retirement                Benefits** |   | **Other                Postretirement Benefits** |   |
|----------------------------------------------------------|--------|----------------------------------------|--------|--------------------------------------------------|--------|
|                                                     |   | **2005**                               |   | **2004**                                         |   | **2003** |   | **2005** |   | **2004** |   | **2003** |   |
|                                                     |   | **Millions                of dollars** |   |
| Service                cost                              |   | $                                      | 12.2   |                                             | $      | 11.1 |   | $ | 9.5 |   | $ | 3.5 |   | $ | 3.3 |   | $ | 2.7 |   |
| Interest                cost                             |   |                                   | 38.3   |                                             |   | 37.4 |   |   | 36.7 |   |   | 10.7 |   |   | 11.4 |   |   | 11.4 |   |
| Expected                return on assets                 |   |                                   | (76.3  | )                                                |   | (71.0 | ) |   | (59.9 | ) |   | n/a |   |   | n/a |   |   | n/a |   |
| Prior                service cost amortization           |   |                                   | 6.9    |                                             |   | 6.6 |   |   | 6.3 |   |   | 0.8 |   |   | 1.4 |   |   | 0.9 |   |
| Actuarial                loss                            |   |                                   | -      |                                             |   | - |   |   | 1.6 |   |   | 1.2 |   |   | 1.9 |   |   | 1.5 |   |
| Transition                amount amortization            |   |                                   | 0.8    |                                             |   | 0.8 |   |   | 0.8 |   |   | 0.8 |   |   | 0.8 |   |   | 0.8 |   |
| Amount                attributable to Company affiliates |   |                                   | (1.9   | )                                                |   | (1.7 | ) |   | (1.8 | ) |   | (4.8 | ) |   | (5.5 | ) |   | (5.3 | ) |
| Net                periodic benefit (income) cost        |   | $                                      | (20.0  | )                                                | $      | (16.8 | ) | $ | (6.8 | ) | $ | 12.2 |   | $ | 13.3 |   | $ | 12.0 |   |

|                                                |   | **Retirement                Benefits** |                 | **Other                Postretirement Benefits** |   |
|-----------------------------------------------------|--------|----------------------------------------|----------------------|--------------------------------------------------|--------|
|                                                |   | **2005**                               |                 | **2004**                                         |   | **2003** |   | **2005** |   | **2004** |   | **2003** |   |
| Discount                rate                        |   |                                   | 5.75                 | %                                                |   | 6.00 | % |   | 6.50 | % |   | 5.75 | % |   | 6.00 | % |   | 6.50 | % |
| Expected                return on plan assets       |   |                                   | 9.25                 | %                                                |   | 9.25 | % |   | 9.25 | % |   | n/a |   |   | n/a |   |   | n/a |   |
| Rate                of compensation increase        |   |                                   | 4.00                 | %                                                |   | 4.00 | % |   | 4.00 | % |   | 4.00 | % |   | 4.00 | % |   | 4.00 | % |
| Health                care cost trend rate          |   |                                   | n/a                  |                                             |   | n/a |   |   | n/a |   |   | 9.00 | % |   | 9.50 | % |   | 10.00 | % |
| Ultimate                health care cost trend rate |   |                                   | n/a                  |                                             |   | n/a |   |   | n/a |   |   | 5.00 | % |   | 5.00 | % |   | 5.00 | % |
| Year                achieved                        |   |                                   | n/a                  |                                             |   | n/a |   |   | n/a |   |   | 2011 |   |   | 2011 |   |   | 2011 |   |
| Measurement                date                     |   |                                   | Jan                1 |                                             |   | Jan                1 |   |   | Jan                1 |   |   | Jan                1 |   |   | Jan                1 |   |   | Jan                1 |   |

|                              |   | **Target****Allocation** |   | **Percentage of Plan Assets****At                December 31,** |   |
|-----------------------------------|--------|--------------------------|--------|-------------------------------------------------------------------------------------|--------|
| **Asset                Category** |   | **2006**                 |   | **2005**                                                                            |   | **2004** |   |
| Equity                Securities  |   |                     | 70     | %                                                                                   |   | 72 | % |   | 72 | % |
| Debt                Securities    |   |                     | 30     | %                                                                                   |   | 28 | % |   | 28 | % |

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**4.**
**LONG-TERM      DEBT**

|                                                                 | **Weighted-Average**               | **Maturity** | **December 31,**                    |
|----------------------------------------------------------------------|------------------------------------|--------------|------------------------------------------|
|                                                                 | **Interest                  Rate** | **Date**     | **2005**                                 | **2004** |
|                                                                 |                               |         | **Millions                  of dollars** |
| First                  Mortgage Bonds (secured)                      | 5.98%                              | 2009-2035    | $1,550                                   | $1,700 |
| First &                  Refunding Mortgage Bonds (secured) | 9.00%                              | 2006         | 131                                      | 131 |
| GENCO                  Notes (secured)                               | 5.97%                              | 2011-2024    | 127                                      | 130 |
| Industrial                  and Pollution Control Bonds              | 5.24%                              | 2012-2032    | 156                                      | 156 |
| Other                                                                |                               | 2006-2014    | 97                                       | 81 |
| Total                  debt                                          |                               |         | 2,061                                    | 2,198 |
| Current                  maturities of long-term debt                |                               |         | (183)                                    | (198) |
| Unamortized                  discount                                |                               |         | (22)                                     | (19) |
| Total                  long-term debt, net                           |                               |         | $1,856                                   | $1,981 |

| **Year**                                 |   | **Amount** |   |
|------------------------------------------|--------|------------|--------|
| **(Millions                of dollars)** |   |
| 2006                                     |   | $          | 183    |   |
| 2007                                     |   |       | 49     |   |
| 2008                                     |   |       | 48     |   |
| 2009                                     |   |       | 178    |   |
| 2010                                     |   |       | 45     |   |

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**5.**
**LINES      OF CREDIT AND SHORT-TERM BORROWINGS**

|                                                |   | **2005**                               |   | **2004** |   |
|-----------------------------------------------------|--------|----------------------------------------|--------|----------|--------|
|                                                |   | **Millions                of dollars** |   |
| Lines                of credit (total and unused)   |   |                                   |   |     |   |
| Committed                                           |   | $                                      | 525    |     | $      | 525 |   |
| Uncommitted                                         |   |                                   | 78(a   | )        |   | 113(a | ) |
| Short-term                borrowings outstanding    |   |                                   |   |     |   |   |   |
| Commercial                paper (270 or fewer days) |   | $                                      | 303.1  |     | $      | 152.9 |   |
| Weighted                average interest rate       |   |                                   | 4.40   | %        |   | 2.40 | % |

**6.**
**      RETAINED EARNINGS**

**7.**
**PREFERRED      STOCK**

| **Par                Value**  | **Authorized** | **Available                for Issuance** |
|------------------------------------|----------------|-------------------------------------------|
| $100                               | 1,000,000      | -                                         |
| $                50                | 601,613        | 300,000                                   |
| $                25                | 2,000,000      | 2,000,000                                 |

*Preferred      Stock (Not subject to purchase or sinking funds)*

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*Preferred      Stock (Subject to purchase or sinking funds)*

|                                             | **Series**                                                         |                                                       |                                          |
|--------------------------------------------------|--------------------------------------------------------------------|------------------------------------------------------------|-----------------------------------------------|
|                                             | **4.50%,                4.60% (A)****&                5.125%** | **4.60%                (B)****&                6.00%** |  Total                Shares   |  Millions                of Dollars  |
|  **Redemption                Price**   |  **$51.00**                                                   |  **$50.50**                                           |                                     |    |
| Balance                at December 31, 2002 | 83,849                                                             | 116,124                                                    | 199,973                                       | $10.0 |
| Shares                Redeemed-$50 par value     | (2,815)                                                            | (3,563)                                                    | (6,378)                                       | (0.3) |
| Balance                at December 31, 2003 | 81,034                                                             | 112,561                                                    | 193,595                                       | 9.7 |
| Shares                Redeemed-$50 par value     | (2,516)                                                            | (6,600)                                                    | (9,116)                                       | (0.5) |
| Balance                at December 31, 2004 | 78,518                                                             | 105,961                                                    | 184,479                                       | 9.2 |
| Shares                Redeemed-$50 par value     | (1,475)                                                            | (6,600)                                                    | (8,075)                                       | (0.4) |
| Balance                at December 31, 2005 | 77,043                                                             | 99,361                                                     | 176,404                                       | $8.8 |

**8.**
**INCOME      TAXES**

|                                                    |   | **2005**                               |   | **2004** |   | **2003** |   |
|---------------------------------------------------------|--------|----------------------------------------|--------|----------|--------|----------|--------|
|                                                    |   | **Millions                of dollars** |   |
| Current                taxes:                           |   |                                   |   |     |   |     |   |
| Federal                                                 |   | $                                      | (8.4   | )        | $      | 47.4     |   | $ | 23.7 |   |
| State                                                   |   |                                   | 9.5    |     |   | (4.4     | )      |   | 8.5 |   |
| Total                current taxes                      |   |                                   | 1.1    |     |   | 43.0     |   |   | 32.2 |   |
| Deferred                taxes, net:                     |   |                                   |   |     |   |     |   |   |   |   |
| Federal                                                 |   |                                   | (7.5   | )        |   | 28.1     |   |   | 41.7 |   |
| State                                                   |   |                                   | (9.8   | )        |   | 4.1      |   |   | 0.7 |   |
| Total                deferred taxes                     |   |                                   | (17.3  | )        |   | 32.2     |   |   | 42.4 |   |
| Investment                tax credits:                  |   |                                   |   |     |   |     |   |   |   |   |
| Deferred-state                                          |   |                                   | 5.1    |     |   | 10.0     |   |   | 5.0 |   |
| Amortization                of amounts deferred-state   |   |                                   | (1.9   | )        |   | (2.1     | )      |   | (1.8 | ) |
| Amortization                of amounts deferred-federal |   |                                   | (2.7   | )        |   | (3.6     | )      |   | (3.6 | ) |
| Total                investment tax credits             |   |                                   | 0.5    |     |   | 4.3      |   |   | (0.4 | ) |
| Synthetic                fuel tax credits - federal     |   |                                   | (134.2 | )        |   | 40.5     |   |   | 35.7 |   |
| Total                income tax expense (benefit)       |   | $                                      | (149.9 | )        | $      | 120.0    |   | $ | 109.9 |   |

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|                                                                          |   | **2005**                               |   | **2004** |   | **2003** |   |
|-------------------------------------------------------------------------------|--------|----------------------------------------|--------|----------|--------|----------|--------|
|                                                                          |   | **Millions                of dollars** |   |
| Net                income                                                     |   | $                                      | 258.1  |     | $      | 232.5    |   | $ | 220.5 |   |
| Income                tax expense (benefit)                                   |   |                                   | (149.9 | )        |   | 120.0    |   |   | 109.9 |   |
| Minority                interest                                              |   |                                   | 5.5    |     |   | 10.3     |   |   | 8.0 |   |
| Total                pre-tax income                                           |   |                                   | 113.7  |     |   | 362.8    |   | $ | 338.4 |   |
| Income                taxes on above at statutory federal income tax rate     |   | $                                      | 39.8   |     | $      | 127.0    |   | $ | 118.4 |   |
| Increases                (decreases) attributed to:                           |   |                                   |   |     |   |     |   |   |   |   |
| State                income taxes (less federal income tax effect)            |   |                                   | 1.9    |     |   | 4.9      |   |   | 8.0 |   |
| Synthetic                fuel tax credits                                     |   |                                   | (181.9 | )        |   | (2.9     | )      |   | (2.2 | ) |
| Allowance                for equity funds used during construction            |   |                                   | -      |     |   | (5.0     | )      |   | (6.2 | ) |
| Non-taxable                recovery of Lake Murray Dam project carrying costs |   |                                   | (3.8   | )        |   | -        |   |   | - |   |
| Amortization                of federal investment tax credits                 |   |                                   | (2.7   | )        |   | (3.6     | )      |   | (3.6 | ) |
| Amended                returns for prior years                                |   |                                   | (2.1   | )        |   | -        |   |   | - |   |
| Other                differences, net                                         |   |                                   | (1.1   | )        |   | (0.4     | )      |   | (4.5 | ) |
| Total                income tax expense (benefit)                             |   | $                                      | (149.9 | )        | $      | 120.0    |   | $ | 109.9 |   |

|                                                               |   | **2005**                               |    | **2004** |   |
|--------------------------------------------------------------------|--------|----------------------------------------|---------|----------|--------|
|                                                               |   | **Millions                of dollars** |    |
| Deferred                tax assets:                                |   |                                   |    |     |   |
| Nondeductible                reserves                              |   | $                                      | 72.1    |     | $      | 68.8 |   |
| Unamortized                investment tax credits                  |   |                                   | 59.2    |     |   | 59.9 |   |
| Federal                alternative minimum tax credit carryforward |   |                                   | 44.0    |     |   | 12.3 |   |
| Deferred                compensation                               |   |                                   | 25.4    |     |   | 22.0 |   |
| Unbilled                revenue                                    |   |                                   | 16.4    |     |   | 7.0 |   |
| Other                                                              |   |                                   | 8.6     |     |   | 5.6 |   |
| Total                deferred tax assets                           |   |                                   | 225.7   |     |   | 175.6 |   |
| Deferred                tax liabilities:                           |   |                                   |    |     |   |   |   |
| Property,                plant and equipment                       |   |                                   | 824.5   |     |   | 789.5 |   |
| Pension                plan benefit income                         |   |                                   | 110.5   |     |   | 102.4 |   |
| Deferred                fuel costs                                 |   |                                   | 44.5    |     |   | 21.6 |   |
| Other                                                              |   |                                   | 24.4    |     |   | 21.1 |   |
| Total                deferred tax liabilities                      |   |                                   | 1,003.9 |     |   | 934.6 |   |
| Net                deferred tax liability                          |   | $                                      | 778.2   |     | $      | 759.0 |   |

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**9.**
**FINANCIAL      INSTRUMENTS**

|                                                                  |   | **2005**                               |    | **2004**                       |   |
|-----------------------------------------------------------------------|--------|----------------------------------------|---------|--------------------------------|--------|
|                                                                  |   |  **Carrying****Amount**           |    | **Estimated****Fair****Value** |   |  **Carrying****Amount** |   | **Estimated****Fair****Value** |   |
|                                                                  |   | **Millions                of dollars** |    |
| Long-term                debt                                         |   | $                                      | 2,038.3 |                           | $      | 2,125.8 |   | $ | 2,179.4 |   | $ | 2,347.6 |   |
| Preferred                stock (subject to purchase or sinking funds) |   |                                   | 8.2     |                           |   | 8.2 |   |   | 9.2 |   |   | 8.5 |   |

| ·   | Fair                values of long-term debt are based on quoted market prices of the                instruments or similar instruments. For debt instruments for which                no                quoted market prices are available, fair values are based on net                present                value calculations. Early settlement of long-term debt may not be                possible                or may not be considered prudent. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The                fair value of preferred stock (subject to purchase or sinking funds)                is                estimated using market prices. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Potential                taxes and other expenses that would be incurred in an actual sale                or                settlement have not been                considered. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**10.**
**      COMMITMENTS AND CONTINGENCIES**

**A.**
**      Nuclear Insurance**

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**B.**
**Environmental**

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**C.**
**      Franchise Agreements**

**D.**
**Claims      and Litigation**

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**E.**
**Other      Contingency**

**F.**
**Operating      Lease Commitments**

|   |   | **Millions                of dollars** |   |
|--------|--------|----------------------------------------|--------|
| 2006   |   | $                                      | 13     |   |
| 2007   |   |                                   | 11     |   |
| 2008   |   |                                   | 10     |   |
| 2009   |   |                                   | 9      |   |
| 2010   |   |                                   | 1      |   |
|   |   | $                                      | 44     |   |

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**G.**
**Purchase      Commitments**

|       |   | **Millions                of dollars** |   |
|------------|--------|----------------------------------------|--------|
| 2006       |   | $                                      | 414    |   |
| 2007       |   |                                   | 164    |   |
| 2008       |   |                                   | 92     |   |
| 2009       |   |                                   | 35     |   |
| 2010       |   |                                   | 7      |   |
| Thereafter |   |                                   | 55     |   |
|       |   | $                                      | 767    |   |

**11.**
**SEGMENT      OF BUSINESS INFORMATION**

**Disclosure      of Reportable Segments (Millions of dollars)**

|  **2005**                               | **Electric****Operations** | **Gas****Distribution** | **All****Other** | **Adjustments/****Eliminations** | **Consolidated****Total** |
|---------------------------------------------------|----------------------------|-------------------------|------------------|----------------------------------|---------------------------|
| Customer                Revenue                   | $1,912                     | $509                    | -                | -                                | $2,421                    |
| Intersegment                Revenue               | -                          | 1                       | -                | $(1)                             | -                         |
| Operating                Income (Loss)            | 299                        | 16                      | -                | (3)                              | 312                       |
| Interest                Expense                   | 13                         | -                       | -                | 131                              | 144                       |
| Depreciation and                Amortization | 450                        | 15                      | -                | -                                | 465                       |
| Segment                Assets                     | 5,531                      | 408                     | $4               | 1,423                            | 7,366                     |
| Expenditures                for Assets            | 280                        | 58                      | -                | (8)                              | 330                       |
| Deferred                Tax Assets                | n/a                        | n/a                     | -                | 22                               | 22                        |

|  **2004**                                    | **Electric****Operations** | **Gas****Distribution** | **All****Other** | **Adjustments/****Eliminations** | **Consolidated****Total** |
|---------------------------------------------------|----------------------------|-------------------------|------------------|----------------------------------|---------------------------|
| Customer                Revenue                   | $1,692                     | $397                    | -                | -                                | $2,089                    |
| Intersegment                Revenue               | -                          | 1                       | -                | $(1)                             | -                         |
| Operating                Income (Loss)            | 550                        | 14                      | -                | (89)                             | 475                       |
| Interest                Expense                   | 10                         | -                       | -                | 129                              | 139                       |
| Depreciation and                Amortization | 208                        | 13                      | -                | -                                | 221                       |
| Segment                Assets                     | 5,365                      | 354                     | $3               | 1,263                            | 6,985                     |
| Expenditures                for Assets            | 389                        | 35                      | -                | 15                               | 439                       |
| Deferred                Tax Assets                | n/a                        | n/a                     | -                | 5                                | 5                         |

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|  **2003**                               | **Electric****Operations** | **Gas****Distribution** | **All****Other** | **Adjustments/****Eliminations** | **Consolidated****Total** |
|---------------------------------------------------|----------------------------|-------------------------|------------------|----------------------------------|---------------------------|
| Customer                Revenue                   | $1,472                     | $360                    | -                | -                                | $1,832                    |
| Intersegment                Revenue               | -                          | 1                       | -                | $(1)                             | -                         |
| Operating                Income (Loss)            | 426                        | 15                      | -                | (1)                              | 440                       |
| Interest                Expense                   | 7                          | -                       | $2               | 127                              | 136                       |
| Depreciation and                Amortization | 183                        | 13                      | -                | -                                | 196                       |
| Segment                Assets                     | 5,038                      | 323                     | 3                | 1,264                            | 6,628                     |
| Expenditures                for Assets            | 655                        | 20                      | -                | (86)                             | 589                       |
| Deferred                Tax Assets                | n/a                        | n/a                     | -                | -                                | -                         |

**12.**
**      QUARTERLY FINANCIAL DATA (UNAUDITED)**

|  **2005                Millions of dollars**  |   | **First****Quarter** |   | **Second****Quarter** |   | **Third****Quarter** |   | **Fourth****Quarter** |   |  **Annual** |   |
|---------------------------------------------------------|--------|----------------------|--------|-----------------------|--------|----------------------|--------|-----------------------|--------|------------------|--------|
| Total                operating revenues                 |   | $                    | 573    |                  | $      | 523                  |   | $                     | 696    |             | $      | 629 |   | $ | 2,421 |   |
| Operating                income (loss)                  |   |                 | (59    | )                     |   | 78                   |   |                  | 178    |             |   | 115 |   |   | 312 |   |
| Net                income                               |   |                 | 52     |                  |   | 40                   |   |                  | 106    |             |   | 62 |   |   | 260 |   |

|  **2004                Millions of dollars**  |   | **First****Quarter** |   | **Second****Quarter** |   | **Third****Quarter** |   | **Fourth****Quarter** |   |  **Annual** |   |
|---------------------------------------------------------|--------|----------------------|--------|-----------------------|--------|----------------------|--------|-----------------------|--------|------------------|--------|
| Total                operating revenues                 |   | $                    | 527    |                  | $      | 503                  |   | $                     | 555    |             | $      | 504 |   | $ | 2,089 |   |
| Operating                income                         |   |                 | 113    |                  |   | 114                  |   |                  | 162    |             |   | 86 |   |   | 475 |   |
| Net                income                               |   |                 | 54     |                  |   | 57                   |   |                  | 85     |             |   | 36 |   |   | 232 |   |

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**PUBLIC      SERVICE      COMPANY**

**OF      NORTH CAROLINA, INCORPORATED**

|                    |                                                                                         | Page                                                                                  |
|-------------------------|----------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------|
|                    |                                                                                         |                                                                                  |
| Item                7.  | Management’s                Narrative Analysis of Results of                Operations | 141                                                                                   |
|                    |                                                                                         |                                                                                  |
| Item                7A. | Quantitative                and Qualitative Disclosures About                Market Risk     | 144                                                                                   |
|                    |                                                                                         |                                                                                  |
| Item                8.  | Financial                Statements and Supplementary                Data                    |                                                                                  |
|                    |                                                                                         | Report                of Independent Registered Public Accounting                Firm | 146 |
|                    |                                                                                         | Consolidated                Balance Sheets                                            | 147 |
|                    |                                                                                         | Consolidated                Statements of Income                                      | 149 |
|                    |                                                                                         | Consolidated                Statements of Cash Flows                                  | 150 |
|                    |                                                                                         | Consolidated                Statements of Changes in Common                Equity     | 151 |
|                    |                                                                                         | Notes                to Consolidated Financial                Statements              | 152 |
|                    |                                                                                         |                                                                                  |

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**ITEM      7. MANAGEMENT’S NARRATIVE ANALYSIS OF RESULTS OF      OPERATIONS**

**Net      Income**

|                      |   | **2005**                               |   | **% Change** |   | **2004** |   |
|---------------------------|--------|----------------------------------------|--------|-------------------|--------|----------|--------|
|                      |   | **Millions                of dollars** |   |
| Net                income |   | $                                      | 25.7   |              |   | 8.4      | %      | $ | 23.7 |   |

| **Declaration                Date**  | **Distribution**            | **Quarter Ended**            | **Payment Date**          |
|-------------------------------------------|-----------------------------|-----------------------------------|--------------------------------|
| February                17, 2005          | $3.5                million | March                31, 2005     | April                1, 2005   |
| May                5, 2005                | $3.5                million | June                30, 2005      | July                1, 2005    |
| July                27, 2005              | $4.0                million | September                30, 2005 | October                1, 2005 |
| November                2, 2005           | $4.0                million | December                31, 2005  | January                1, 2006 |

**Gas      Distribution**

|                              |   | **2005**                               |   | **2004** |   | **Change** |   | **%                Change** |   |
|-----------------------------------|--------|----------------------------------------|--------|----------|--------|------------|--------|-----------------------------|--------|
|                              |   | **Millions                of dollars** |   |
| Operating                revenues |   | $                                      | 659.8  |     | $      | 516.5      |   | $                           | 143.3  |   |   | 27.7 | % |
| Less:                Cost of gas  |   |                                   | 478.0  |     |   | 341.6      |   |                        | 136.4  |   |   | 39.9 | % |
| Gross                margin       |   | $                                      | 181.8  |     | $      | 174.9      |   | $                           | 6.9    |   |   | 3.9 | % |

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**Income      Taxes**

**Capital      Expansion Program and Liquidity Matters**

**Contractual      Cash Obligations**

|  **(Millions                of dollars)**               |   |  **Total** |   | **Less than****1                year** |   |  **1-3 years** |   |  **4-5 years** |   | **After****5 years** |   |
|-------------------------------------------------------------------|--------|-----------------|--------|---------------------------------------------|--------|--------------------------|--------|--------------------------|--------|---------------------------|--------|
| Long-term                and short-term debt (including interest) |   | $               | 577    |                                        | $      | 121                      |   | $                        | 65     |                      | $      | 182 |   | $ | 209 |   |
| Operating                leases                                   |   |            | 1      |                                        |   | 1                        |   |                     | -      |                      |   | - |   |   | - |   |
| Purchase                obligations                               |   |            | 60     |                                        |   | 55                       |   |                     | 5      |                      |   | - |   |   | - |   |
| Other                commercial commitments                       |   |            | 859    |                                        |   | 408                      |   |                     | 168    |                      |   | 110 |   |   | 173 |   |
| Total                                                             |   | $               | 1,497  |                                        | $      | 585                      |   | $                        | 238    |                      | $      | 292 |   | $ | 382 |   |

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|                                                         |   | **Millions                of dollars** |   |
|--------------------------------------------------------------|--------|----------------------------------------|--------|
|                                                         |   |                                   |   |
| Committed                lines of credit (expires June 2010) |   | $                                      | 125    |   |
| Short-term                borrowings outstanding:            |   |                                   |   |   |
| Commercial                paper (270 or fewer days)          |   | $                                      | 99     |   |
| Weighted                average interest rate                |   |                                   | 4.47   | % |

**Competition**

**Critical      Accounting Policies and Estimates**

*“Accounting      for the Effects of Certain Types of Regulation,”*

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**Item      7A. QUANTITATIVE AND QUALITATIVE      DISCLOSURES ABOUT MARKET      RISK**

|                                                                             | **Expected                Maturity Date** |
|----------------------------------------------------------------------------------|-------------------------------------------|
| **December                31, 2005****Millions                of dollars**  |  **2006**                            |  **2007** |  **2008** |  **2009** |  **2010** |  **Thereafter** |  **Total** | **Fair****Value** |
| Liabilities                                                                      |                                      |   |   |   |   |   |   |   |
| Long-Term                Debt:                                                   |                                      |   |   |   |   |   |   |   |
| Fixed                Rate ($)                                                    | 3.2                                       | 3.2 | 3.2 | 3.2 | 3.2 | 256.4 | 272.4 | 309.4 |
| Average                Fixed Interest Rate (%)                                   | 8.75                                      | 8.75 | 8.75 | 8.75 | 8.75 | 6.9 | 7.0 |   |
| Interest                Rate Swaps:                                              |                                      |   |   |   |   |   |   |   |
| Pay                Variable/Receive Fixed ($)                                    | 3.2                                       | 3.2 | 3.2 | 3.2 | 3.2 | 6.4 | 22.4 | 0.4 |
| Average                Pay Interest Rate (%)                                     | 7.7                                       | 7.7 | 7.7 | 7.7 | 7.7 | 7.7 | 7.7 |   |
| Average                Receive Interest Rate (%)                                 | 8.75                                      | 8.75 | 8.75 | 8.75 | 8.75 | 8.75 | 8.75 |   |

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|                                                                             | **Expected                Maturity Date** |
|----------------------------------------------------------------------------------|-------------------------------------------|
| **December                31, 2004****Millions                of dollars**  |  **2005**                            |  **2006** |  **2007** |  **2008** |  **2009** |  **Thereafter** |  **Total** | **Fair****Value** |
| Liabilities                                                                      |                                      |   |   |   |   |   |   |   |
| Long-Term                Debt:                                                   |                                      |   |   |   |   |   |   |   |
| Fixed                Rate ($)                                                    | 3.2                                       | 3.2 | 3.2 | 3.2 | 3.2 | 259.6 | 275.6 | 325.8 |
| Average                Fixed Interest Rate (%)                                   | 8.75                                      | 8.75 | 8.75 | 8.75 | 8.75 | 6.9 | 7.0 |   |
| Interest                Rate Swaps:                                              |                                      |   |   |   |   |   |   |   |
| Pay                Variable/Receive Fixed ($)                                    | 3.2                                       | 3.2 | 3.2 | 3.2 | 3.2 | 9.6 | 25.6 | 1.2 |
| Average                Pay Interest Rate (%)                                     | 5.74                                      | 5.74 | 5.74 | 5.74 | 5.74 | 5.74 | 5.74 |   |
| Average                Receive Interest Rate (%)                                 | 8.75                                      | 8.75 | 8.75 | 8.75 | 8.75 | 8.75 | 8.75 |   |

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**ITEM      8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY      DATA**

**REPORT      OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

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**PUBLIC      SERVICE COMPANY OF NORTH CAROLINA,      INCORPORATED**

**CONSOLIDATED      BALANCE SHEETS**

| **December 31,                (Millions of dollars)**                      |   | **2005** |   | **2004** |   |
|--------------------------------------------------------------------------------------|--------|----------|--------|----------|--------|
| **Assets**                                                                      |   |     |   |     |   |
| Gas                Utility Plant                                                     |   | $        | 1,006  |     | $      | 947 |   |
| Accumulated                Depreciation                                              |   |     | (282   | )        |   | (262 | ) |
| Acquisition                Adjustment                                                |   |     | 210    |     |   | 210 |   |
| Gas                Utility Plant, Net                                                |   |     | 934    |     |   | 895 |   |
| Nonutility                Property and Investments, Net                              |   |     | 28     |     |   | 27 |   |
| Current                Assets:                                                       |   |     |   |     |   |   |   |
| Cash                and cash equivalents                                             |   |     | 3      |     |   | 2 |   |
| Restricted                cash and temporary investments                             |   |     | 1      |     |   | 8 |   |
| Receivables,                net of allowance for uncollectible accounts of $3 and $2 |   |     | 182    |     |   | 128 |   |
| Receivables—affiliated                companies                                |   |     | 9      |     |   | 7 |   |
| Inventories                (at average cost):                                        |   |     |   |     |   |   |   |
| Stored                gas                                                            |   |     | 92     |     |   | 70 |   |
| Materials                and supplies                                                |   |     | 6      |     |   | 5 |   |
| Deferred                income taxes, net                                            |   |     | -      |     |   | 1 |   |
| Other                                                                                |   |     | 3      |     |   | 3 |   |
| Total                Current Assets                                                  |   |     | 296    |     |   | 224 |   |
| Deferred                Debits:                                                      |   |     |   |     |   |   |   |
| Due                from affiliate-pension asset                                      |   |     | 11     |     |   | 12 |   |
| Regulatory                assets                                                     |   |     | 26     |     |   | 26 |   |
| Other                                                                                |   |     | 3      |     |   | 4 |   |
| Total                Deferred Debits                                                 |   |     | 40     |     |   | 42 |   |
| Total                                                                                |   | $        | 1,298  |     | $      | 1,188 |   |

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| **December                31, (Millions of dollars)**     |   | **2005** |   | **2004** |   |
|-----------------------------------------------------------|--------|----------|--------|----------|--------|
| **Capitalization                and Liabilities**    |   |     |   |     |   |
| Capitalization:                                           |   |     |   |     |   |
| Common                equity                              |   | $        | 528    |     | $      | 513 |   |
| Long-term                debt, net                        |   |     | 270    |     |   | 274 |   |
| Total                Capitalization                       |   |     | 798    |     |   | 787 |   |
| Current                Liabilities:                       |   |     |   |     |   |   |   |
| Short-term                borrowings                      |   |     | 99     |     |   | 58 |   |
| Current                portion of long-term debt          |   |     | 3      |     |   | 3 |   |
| Accounts                payable                           |   |     | 91     |     |   | 66 |   |
| Accounts                payable-affiliated companies      |   |     | 6      |     |   | 8 |   |
| Customer                deposits and customer prepayments |   |     | 14     |     |   | 14 |   |
| Taxes                accrued                              |   |     | 4      |     |   | 4 |   |
| Interest                accrued                           |   |     | 6      |     |   | 6 |   |
| Distributions/dividends                declared           |   |     | 4      |     |   | 4 |   |
| Deferred                income taxes, net                 |   |     | 3      |     |   | - |   |
| Other                                                     |   |     | 6      |     |   | 11 |   |
| Total                Current Liabilities                  |   |     | 236    |     |   | 174 |   |
| Deferred                Credits:                          |   |     |   |     |   |   |   |
| Deferred                income taxes, net                 |   |     | 104    |     |   | 102 |   |
| Deferred                investment tax credits            |   |     | 1      |     |   | 1 |   |
| Due                to affiliate-postretirement benefits   |   |     | 19     |     |   | 19 |   |
| Other                regulatory liabilities               |   |     | 23     |     |   | 11 |   |
| Asset                retirement obligations               |   |     | 13     |     |   | - |   |
| Non-legal                asset retirement obligations     |   |     | 91     |     |   | 84 |   |
| Other                                                     |   |     | 13     |     |   | 10 |   |
| Total                Deferred Credits                     |   |     | 264    |     |   | 227 |   |
| Commitments                and Contingencies (Note 8)     |   |     | -      |     |   | - |   |
| Total                                                     |   | $        | 1,298  |     | $      | 1,188 |   |

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**PUBLIC      SERVICE COMPANY OF NORTH CAROLINA, INCORPORATED**

**CONSOLIDATED      STATEMENTS OF INCOME**

| **For                the Years Ended December 31,****(Millions                of dollars)**        |   |  **2005** |   |  **2004** |   |  **2003** |   |
|--------------------------------------------------------------------------------------------------------------|--------|----------------|--------|----------------|--------|----------------|--------|
| Operating                Revenues                                                                            |   | $              | 660    |           | $      | 516            |   | $ | 509 |   |
| Cost                of Gas                                                                                   |   |           | 478    |           |   | 341            |   |   | 330 |   |
| Gross                Margin                                                                                  |   |           | 182    |           |   | 175            |   |   | 179 |   |
| Operating                Expenses:                                                                           |   |           |   |           |   |           |   |   |   |   |
| Operation                and maintenance                                                                     |   |           | 80     |           |   | 80             |   |   | 75 |   |
| Depreciation                and amortization                                                                 |   |           | 35     |           |   | 34             |   |   | 34 |   |
| Other                taxes                                                                                   |   |           | 8      |           |   | 8              |   |   | 7 |   |
| Total                Operating Expenses                                                                      |   |           | 123    |           |   | 122            |   |   | 116 |   |
| Operating                Income                                                                              |   |           | 59     |           |   | 53             |   |   | 63 |   |
| Other                Income (Expense):                                                                       |   |           |   |           |   |           |   |   |   |   |
| Other                revenues                                                                                |   |           | 12     |           |   | 11             |   |   | 13 |   |
| Other                expenses                                                                                |   |           | (9     | )              |   | (8             | )      |   | (10 | ) |
| Loss                on sale of assets                                                                        |   |           | -      |           |   | (1             | )      |   | - |   |
| Allowance                for equity funds used during construction                                           |   |           | -      |           |   | -              |   |   | 1 |   |
| Interest                charges, net of allowance for borrowed funds used during                construction |   |           | (21    | )              |   | (21            | )      |   | (21 | ) |
| Total                Other Expense                                                                           |   |           | (18    | )              |   | (19            | )      |   | (17 | ) |
|                                                                                                         |   |           |   |           |   |           |   |   |   |   |
| Income                Before Income Taxes and Earnings from Equity Method                Investments         |   |           | 41     |           |   | 34             |   |   | 46 |   |
| Income                Tax Expense                                                                            |   |           | 19     |           |   | 14             |   |   | 19 |   |
| Income                Before Earnings from Equity Method Investments                                         |   |           | 22     |           |   | 20             |   |   | 27 |   |
| Earnings                from Equity Method Investments                                                       |   |           | 4      |           |   | 4              |   |   | 4 |   |
| Net                Income                                                                                    |   | $              | 26     |           | $      | 24             |   | $ | 31 |   |

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**PUBLIC      SERVICE COMPANY OF NORTH CAROLINA, INCORPORATED**

**CONSOLIDATED      STATEMENTS OF CASH FLOWS**

| **For                the Years Ended December 31, (Millions of                dollars)**   |   | **2005** |   | **2004** |   | **2003** |   |
|------------------------------------------------------------------------------------------------------|--------|----------|--------|----------|--------|----------|--------|
| Cash                Flows From Operating Activities:                                                 |   |     |   |     |   |     |   |
| Net                income                                                                            |   | $        | 26     |     | $      | 24       |   | $ | 31 |   |
| Adjustments                to reconcile net income to net cash provided from operating activities:   |   |     |   |     |   |     |   |   |   |   |
| Depreciation                and amortization                                                         |   |     | 37     |     |   | 37       |   |   | 36 |   |
| Loss                on sale of assets                                                                |   |     | -      |     |   | 1        |   |   | - |   |
| Allowance                for funds used during construction                                          |   |     | -      |     |   | -        |   |   | (1 | ) |
| Cash                provided (used) by changes in certain assets and                liabilities      |   |     |   |     |   |     |   |   |   |   |
| Receivables,                net                                                                      |   |     | (56    | )        |   | (15      | )      |   | (18 | ) |
| Inventories                                                                                          |   |     | (25    | )        |   | (15      | )      |   | (18 | ) |
| Regulatory                assets                                                                     |   |     | (5     | )        |   | 2        |   |   | - |   |
| Regulatory                liabilities                                                                |   |     | 1      |     |   | 1        |   |   | - |   |
| Accounts                payable                                                                      |   |     | 13     |     |   | 15       |   |   | (9 | ) |
| Deferred                income taxes, net                                                            |   |     | 6      |     |   | 8        |   |   | 5 |   |
| Taxes                accrued                                                                         |   |     | -      |     |   | (6       | )      |   | 5 |   |
| Changes                in gas adjustment clauses                                                     |   |     | 26     |     |   | (11      | )      |   | 11 |   |
| Changes                in other assets                                                               |   |     | 1      |     |   | -        |   |   | - |   |
| Changes                in other liabilities                                                          |   |     | (3     | )        |   | 2        |   |   | 4 |   |
| Net                Cash Provided From Operating Activities                                           |   |     | 21     |     |   | 43       |   |   | 46 |   |
| Cash                Flows From Investing Activities:                                                 |   |     |   |     |   |     |   |   |   |   |
| Construction                expenditures, net of AFC                                                 |   |     | (52    | )        |   | (40      | )      |   | (38 | ) |
| Proceeds                on sale of assets                                                            |   |     | -      |     |   | -        |   |   | 12 |   |
| Nonutility                and other                                                                  |   |     | 5      |     |   | (1       | )      |   | (1 | ) |
| Net                Cash Used For Investing Activities                                                |   |     | (47    | )        |   | (41      | )      |   | (27 | ) |
| Cash                Flows From Financing Activities:                                                 |   |     |   |     |   |     |   |   |   |   |
| Short-term                borrowings, net                                                            |   |     | 41     |     |   | 3        |   |   | 24 |   |
| Contributions                from parent                                                             |   |     | 3      |     |   | 1        |   |   | 1 |   |
| Repayment                of debt                                                                     |   |     | (3     | )        |   | (8       | )      |   | (8 | ) |
| Distributions/dividends                                                                              |   |     | (14    | )        |   | (14      | )      |   | (19 | ) |
| Net                Cash Provided From (Used For) Financing Activities                                |   |     | 27     |     |   | (18      | )      |   | (2 | ) |
| Net                Increase (Decrease) in Cash and Cash Equivalents                                  |   |     | 1      |     |   | (16      | )      |   | 17 |   |
| Cash                and Cash Equivalents, January 1                                                  |   |     | 2      |     |   | 18       |   |   | 1 |   |
| Cash                and Cash Equivalents, December 31                                                |   | $        | 3      |     | $      | 2        |   | $ | 18 |   |
| Supplemental                Cash Flow Information:                                                   |   |     |   |     |   |     |   |   |   |   |
| Cash                paid for: Interest (net of capitalized interest of $1, $1 and                $1) |   | $        | 19     |     | $      | 19       |   | $ | 19 |   |
| Income                taxes                                                                          |   |     | 11     |     |   | 11       |   |   | 8 |   |
|                                                                                                 |   |     |   |     |   |     |   |   |   |   |
| Noncash                Investing and Financing Activities:                                           |   |     |   |     |   |     |   |   |   |   |
| Accrued                construction expenditures                                                     |   |     | 3      |     |   | 3        |   |   | 2 |   |

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**PUBLIC      SERVICE COMPANY OF NORTH CAROLINA, INCORPORATED**

**CONSOLIDATED      STATEMENTS OF CHANGES IN COMMON EQUITY**

|                                                  |                            |               |                      |         |          |
|-------------------------------------------------------|---------------------------------|--------------------|---------------------------|--------------|---------------|
|                                                  |                            |               |                      |         |          |
|                                                  |                            |               |                      |         |          |
|                                                  |                            |               | **Accumulated**           |         |          |
|                                                  |                            | **Capital**        | **Other**                 | **Retained** | **Total**     |
|                                                  | **Common                Stock** | **in Excess** | **Comprehensive**         | **Earnings** | **Common**    |
|                                                  | **Shares**                      | **Amount**         | **of                Par** | **Loss**     | **(Deficit)** | **Equity** |
|                                                  | **(Millions)**                  |
| Balance                at December 31, 2002           | 1,000                           | -                  | $686                      | $(1)         | $(198)        | $487 |
| Capital                Contributions From Parent, net |                            |               | 1                         |         |          | 1 |
| Net                Income                             |                            |               |                      |         | 31            | 31 |
| Cash                Distributions/Dividends Declared  |                            |               | (17)                      |         |          | (17) |
| Balance                at December 31, 2003           | 1,000                           | -                  | $670                      | $(1)         | $(167)        | $502 |
| Capital                Contributions From Parent, net |                            |               | 1                         |         |          | 1 |
| Net                Income                             |                            |               |                      |         | 24            | 24 |
| Cash                Distributions/Dividends Declared  |                            |               | (14)                      |         |          | (14) |
| Balance                at December 31, 2004           | 1,000                           | -                  | $657                      | $(1)         | $(143)        | $513 |
| Capital                Contributions From Parent, net |                            |               | 3                         |         |          | 3 |
| Net                Income                             |                            |               |                      |         | 26            | 26 |
| Cash                Distributions/Dividends Declared  |                            |               | (14)                      |         |          | (14) |
| Balance                at December 31, 2005           | 1,000                           | -                  | $646                      | $(1)         | $(117)        | $528 |

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**NOTES      TO CONSOLIDATED FINANCIAL      STATEMENTS**

**1.**
**      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**

**A.**
**Organization      and Principles of Consolidation**

**B.**
**Basis      of Accounting**

*“Accounting      for the Effects of Certain Types of Regulation.”*

|                                                                      |   | **December 31,**                  |   |
|---------------------------------------------------------------------------|--------|----------------------------------------|--------|
|                                                                      |   | **2005**                               |   | **2004** |   |
|                                                                      |   | **Millions                of dollars** |   |
| Excess                deferred income taxes                               |   | $                                      | (2     | ) | $ | (1 | ) |
| Under-                (over-) collections-gas cost adjustment clause, net |   |                                   | (15    | ) |   | 11 |   |
| Deferred                environmental remediation costs                   |   |                                   | 10     |   |   | 8 |   |
| Asset                retirement obligations                               |   |                                   | 10     |   |   | - |   |
| Non-legal                asset retirement obligations                     |   |                                   | (91    | ) |   | (84 | ) |
| Total                                                                     |   | $                                      | (88    | ) | $ | (66 | ) |

*“Accounting      for Asset Retirement Obligations,”*
*“Accounting      for Conditional Asset Retirement Obligations.”*

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**C.      **
**System      of Accounts**

**D.      **
**Utility      Plant**

**E.      **
**Allowance      for Funds Used During Construction (AFC)**

**F.**
**Revenue      Recognition**

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**G.**
**Depreciation      and Amortization**

**H.      **
**Income      Taxes**

**I.      **
**Debt      Premium, Discount and Expense, Unamortized Loss on Reacquired      Debt**

**J.      **
**Environmental**

**K.**
**Cash      and Cash Equivalents**

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**L.**
**New      Accounting Standards**

*“Accounting      Changes and Error Corrections,” *
*“Accounting      Changes,”*
*“Reporting      Accounting Changes in Interim Financial Statements,”*

|                                           |   | December                31, |   | December                31, |   | December                31, |   |
|------------------------------------------------|--------|-----------------------------|--------|-----------------------------|--------|-----------------------------|--------|
|                                           |   | 2005                        |   | 2004                        |   | 2003                        |   |
|  Millions                of dollars       |   | Actual                      |   | Proforma                    |   | Proforma                    |   |
| Assets:                                        |   |                        |   |                        |   |                        |   |
| Within                utility plant            |   | $                           | 5      |                        | $      | 5                           |   | $ | 5 |   |
| Within                accumulated depreciation |   |                        | (2     | )                           |   | (2                          | )      |   | (2 | ) |
| Within                other regulatory assets  |   |                        | 10     |                        |   | 10                          |   |   | 9 |   |
| Total                                          |   | $                           | 13     |                        | $      | 13                          |   | $ | 12 |   |
| Liabilities:                                   |   |                        |   |                        |   |                        |   |   |   |   |
| Asset                retirement obligation     |   | $                           | 13     |                        | $      | 13                          |   | $ | 12 |   |

|  Millions              of dollars |   | 2005   |   | 2004   |   |
|----------------------------------------|--------|--------|--------|--------|--------|
| Beginning                balance       |   |   | -      |   |   | - |   |
| Adoption                of FIN 47      |   | $      | 13     |   |   | - |   |
| Ending                Balance          |   | $      | 13     |   |   | - |   |

**M.**
**Related      Party Transactions**

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|                                      |   | **2005**                               |   | **2004** |   | **2003** |   |
|-------------------------------------------|--------|----------------------------------------|--------|----------|--------|----------|--------|
|                                      |   | **Millions                of dollars** |   |
| Current                assets             |   | $                                      | 19     |     | $      | 17       |   | $ | 22 |   |
| Non-current                assets         |   |                                   | 179    |     |   | 185      |   |   | 190 |   |
| Current                liabilities        |   |                                   | 12     |     |   | 11       |   |   | 14 |   |
| Non-current                liabilities    |   |                                   | 76     |     |   | 83       |   |   | 89 |   |
| Revenues                                  |   |                                   | 35     |     |   | 35       |   |   | 36 |   |
| Gross                profit               |   |                                   | 35     |     |   | 35       |   |   | 36 |   |
| Income                before income taxes |   |                                   | 18     |     |   | 18       |   |   | 18 |   |

**N.      **
**Reclassifications**

**O.**
**Use      of Estimates**

**2.**
**RATE      AND OTHER REGULATORY MATTERS**

| **Rate                Per Therm** | **Effective                Date**         |
|-----------------------------------|-------------------------------------------|
| $.600                             | January-September                2004     |
| $.675                             | October-November                2004      |
| $.825                             | December                2004-January 2005 |
| $.725                             | February-July                2005         |
| $.825                             | August-September                2005      |
| $1.10                             | October                2005               |
| $1.275                            | November-December                2005     |

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**3.**
**EMPLOYEE      BENEFIT PLANS**

**4.**
**LONG-TERM      DEBT**

|                                                | **Weighted-Average**             | **Maturity** | **December 31,**                  |
|-----------------------------------------------------|----------------------------------|--------------|----------------------------------------|
|                                                | **Interest                Rate** | **Date**     | **2005**                               | **2004** |
|                                                |                             |         | **Millions                of dollars** |
| Medium-Term                Notes (unsecured)        | 6.63%                            | 2011         | $150                                   | $150 |
| Senior                Debentures(a)                 | 7.50%                            | 2006-2026    | 122                                    | 126 |
| Fair                value of interest rate swaps    |                             |         | 1                                      | 1 |
| Total                debt                           |                             |         | 273                                    | 277 |
| Current                maturities of long-term debt |                             |         | (3)                                    | (3) |
| Total                long-term debt                 |                             |         | $270                                   | $274 |

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**5.**
**LINES      OF CREDIT AND SHORT-TERM BORROWINGS**

|                                                        |   | **2005**                               |   | **2004** |   |
|-------------------------------------------------------------|--------|----------------------------------------|--------|----------|--------|
|                                                        |   | **Millions                of dollars** |   |
| Committed                lines of credit (total and unused) |   | $                                      | 125.0  |     | $      | 125.0 |   |
| Short-term                borrowings outstanding:           |   |                                   |   |     |   |   |   |
| Commercial                paper (270 or fewer days)         |   | $                                      | 98.6   |     | $      | 57.8 |   |
| Weighted                average interest rate               |   |                                   | 4.47   | %        |   | 2.47 | % |

**6.**
**INCOME      TAXES**

|                                              |   | **2005**                               |   | **2004** |   | **2003** |   |
|---------------------------------------------------|--------|----------------------------------------|--------|----------|--------|----------|--------|
|                                              |   | **Millions                of dollars** |   |
| Current                taxes:                     |   |                                   |   |     |   |     |   |
| Federal                                           |   | $                                      | 10.2   |     | $      | 3.2      |   | $ | 12.1 |   |
| State                                             |   |                                   | 1.5    |     |   | 2.5      |   |   | 3.3 |   |
| Total                current taxes                |   |                                   | 11.7   |     |   | 5.7      |   |   | 15.4 |   |
| Deferred                taxes, net:               |   |                                   |   |     |   |     |   |   |   |   |
| Federal                                           |   |                                   | 5.3    |     |   | 9.1      |   |   | 4.0 |   |
| State                                             |   |                                   | 1.8    |     |   | 0.1      |   |   | - |   |
| Total                deferred taxes               |   |                                   | 7.1    |     |   | 9.2      |   |   | 4.0 |   |
| Investment                tax credit amortization |   |                                   | (0.3   | )        |   | (0.3     | )      |   | (0.3 | ) |
| Total                income tax expense           |   | $                                      | 18.5   |     | $      | 14.6     |   | $ | 19.1 |   |

|                                                                      |   | **2005**                               |   | **2004** |   | **2003** |   |
|---------------------------------------------------------------------------|--------|----------------------------------------|--------|----------|--------|----------|--------|
|                                                                      |   | **Millions                of dollars** |   |
| Income                                                                    |   | $                                      | 25.7   |     | $      | 23.7     |   | $ | 30.9 |   |
| Income                tax expense                                         |   |                                   | 18.5   |     |   | 14.6     |   |   | 19.1 |   |
| Total                pre-tax income                                       |   | $                                      | 44.2   |     | $      | 38.3     |   | $ | 50.0 |   |
| Income                taxes on above at statutory federal income tax rate |   | $                                      | 15.5   |     | $      | 13.4     |   | $ | 17.5 |   |
| Increases                (decreases) attributed to:                       |   |                                   |   |     |   |     |   |   |   |   |
| State                income taxes (less federal income tax effect)        |   |                                   | 2.1    |     |   | 1.7      |   |   | 2.2 |   |
| Amortization                of federal investment tax credits             |   |                                   | (0.3   | )        |   | (0.3     | )      |   | (0.3 | ) |
| Other                differences, net                                     |   |                                   | 1.2    |     |   | (0.2     | )      |   | (0.3 | ) |
| Total                income tax expense                                   |   | $                                      | 18.5   |     | $      | 14.6     |   | $ | 19.1 |   |

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|                                          |   | **2005**                              |   | **2004** |   |
|-----------------------------------------------|--------|---------------------------------------|--------|----------|--------|
|                                          |   | **Million                of dollars** |   |
| Deferred                tax assets:           |   |                                  |   |     |   |
| Nondeductible                reserves         |   | $                                     | 2.7    |     | $      | 2.4 |   |
| Other                                         |   |                                  | 4.7    |     |   | 5.4 |   |
| Total                deferred tax assets      |   |                                  | 7.4    |     |   | 7.8 |   |
| Deferred                tax liabilities:      |   |                                  |   |     |   |   |   |
| Property,                plant and equipment  |   |                                  | 95.3   |     |   | 94.5 |   |
| Other                                         |   |                                  | 19.4   |     |   | 14.0 |   |
| Total                deferred tax liabilities |   |                                  | 114.7  |     |   | 108.5 |   |
| Net                deferred tax liability     |   | $                                     | 107.3  |     | $      | 100.7 |   |

**7.**
**FINANCIAL      INSTRUMENTS**

|                          | **2005**                               | **2004**                       |
|-------------------------------|----------------------------------------|--------------------------------|
|                          |  **Carrying****Amount**           | **Estimated****Fair****Value** |  **Carrying****Amount** | **Estimated****Fair****Value** |
|                          | **Millions                of dollars** |
| Long-term                debt | 272.8                                  | 309.8                          | 276.8 | 327.0 |

**8.**
**      COMMITMENTS AND CONTINGENCIES**

**A.**
**      Environmental**

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**B.**
**      Claims and Litigation**

**C.**
**      Purchase Commitments**

|       |   | **                                   Millions of dollars** |   |
|------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| 2006       |   |                                                                                                                                                      |   |   | $ | 463.3 |   |
| 2007       |   |                                                                                                                                                      |   |   |   | 57.2 |   |
| 2008       |   |                                                                                                                                                      |   |   |   | 55.3 |   |
| 2009       |   |                                                                                                                                                      |   |   |   | 59.6 |   |
| 2010       |   |                                                                                                                                                      |   |   |   | 55.2 |   |
| Thereafter |   |                                                                                                                                                      |   |   |   | 228.2 |   |
| Total      |   |                                                                                                                                                      |   |   | $ | 918.8 |   |

**9.**
**      SEGMENT OF BUSINESS INFORMATION**

**Disclosure      of Reportable Segments (Millions of dollars)**

|  **2005**                          | **Gas****Distribution** | **All****Other** | **Adjustments/****Eliminations** | **Consolidated****Total** |
|----------------------------------------------|-------------------------|------------------|----------------------------------|---------------------------|
| External                Revenue              | $660                    | -                | -                                | $660                      |
| Depreciation                and Amortization | 35                      | -                | -                                | 35                        |
| Operating                Income              | 59                      | n/a              | -                                | 59                        |
| Net                Income                    | n/a                     | -                | $26                              | 26                        |
| Interest                Expense              | 21                      | -                | -                                | 21                        |
| Segment                Assets                | 1,194                   | $28              | 76                               | 1,298                     |
| Expenditures                for Assets       | 64                      | -                | -                                | 64                        |
| Deferred                Tax Assets           | -                       | -                | -                                | -                         |

|  **2004**                          | **Gas****Distribution** | **All****Other** | **Adjustments/****Eliminations** | **Consolidated****Total** |
|----------------------------------------------|-------------------------|------------------|----------------------------------|---------------------------|
| External                Revenue              | $516                    | -                | -                                | $516                      |
| Depreciation                and Amortization | 34                      | -                | -                                | 34                        |
| Operating                Income              | 53                      | n/a              | -                                | 53                        |
| Net                Income                    | n/a                     | -                | $24                              | 24                        |
| Interest                Expense              | 21                      | -                | -                                | 21                        |
| Segment                Assets                | 1,091                   | $28              | 69                               | 1,188                     |
| Expenditures                for Assets       | 50                      | -                | -                                | 50                        |
| Deferred                Tax Assets           | 1                       | -                | -                                | 1                         |

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|  **2003**                          | **Gas****Distribution** | **All****Other** | **Adjustments/****Eliminations** | **Consolidated****Total** |
|----------------------------------------------|-------------------------|------------------|----------------------------------|---------------------------|
| External                Revenue              | $509                    | -                | -                                | $509                      |
| Depreciation                and Amortization | 34                      | -                | -                                | 34                        |
| Operating                Income              | 63                      | n/a              | -                                | 63                        |
| Net                Income                    | n/a                     | -                | $31                              | 31                        |
| Interest                Expense              | 21                      | -                | -                                | 21                        |
| Segment                Assets                | 1,067                   | $28              | 57                               | 1,152                     |
| Expenditures                for Assets       | 48                      | -                | -                                | 48                        |
| Deferred                Tax Assets           | 3                       | -                | -                                | 3                         |

**10.**
**      QUARTERLY FINANCIAL DATA (UNAUDITED)**

|  **2005                Millions** **of                dollars** |   | **First****Quarter** |   | **Second****Quarter** |   | **Third****Quarter** |   | **Fourth****Quarter** |   |  **Annual** |   |
|---------------------------------------------------------------------------|--------|----------------------|--------|-----------------------|--------|----------------------|--------|-----------------------|--------|------------------|--------|
| Total                operating revenues                                   |   | $                    | 246    |                  | $      | 84                   |   | $                     | 60     |             | $      | 270 |   | $ | 660 |   |
| Operating                income (loss)                                    |   |                 | 43     |                  |   | 1                    |   |                  | (4     | )                |   | 19 |   |   | 59 |   |
| Net                income (loss)                                          |   |                 | 24     |                  |   | (2                   | )      |                  | (6     | )                |   | 10 |   |   | 26 |   |

|  **2004                Millions** **of                dollars** |   | **First****Quarter** |   | **Second****Quarter** |   | **Third****Quarter** |   | **Fourth****Quarter** |   |  **Annual** |   |
|---------------------------------------------------------------------------|--------|----------------------|--------|-----------------------|--------|----------------------|--------|-----------------------|--------|------------------|--------|
| Total                operating revenues                                   |   | $                    | 226    |                  | $      | 69                   |   | $                     | 53     |             | $      | 168 |   | $ | 516 |   |
| Operating                income (loss)                                    |   |                 | 42     |                  |   | (3                   | )      |                  | (6     | )                |   | 20 |   |   | 53 |   |
| Net                income (loss)                                          |   |                 | 23     |                  |   | (4                   | )      |                  | (6     | )                |   | 11 |   |   | 24 |   |

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**PART      II, ITEMS 9 AND 9A, PART III AND PART      IV**

**SCANA      CORPORATION**

**SOUTH      CAROLINA ELECTRIC & GAS COMPANY**

**PUBLIC      SERVICE COMPANY OF NORTH CAROLINA, INCORPORATED**

**ITEM      9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON      ACCOUNTING AND FINANCIAL DISCLOSURE**

**ITEM      9A. CONTROLS AND PROCEDURES**

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**MANAGEMENT      REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING**

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**REPORT      OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

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**ITEM      9B. OTHER INFORMATION**

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**PART      III**

**ITEM      10. DIRECTORS AND EXECUTIVE OFFICERS OF THE      REGISTRANT**

**CODE      OF ETHICS**

*www.scana.com*

**DIRECTORS**

| **Name                and Year First****Became                Director** |  **Age** |  **Principal                Occupation; Directorships**                                                                                                                                                                                                          |
|--------------------------------------------------------------------------|---------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Bill                L. Amick(1990)                                       | 62            | For                more than five years, Chairman of the Board of Amick Farms, Inc.,                Amick                Processing, Inc. and Amick Broilers, Inc., Batesburg, SC (vertically                integrated broiler operation).                      |
|                                                                     |          | Director,                SCANA Corporation; PSNC Energy; Blue Cross and Blue Shield of South                Carolina.                                                                                                                                                 |
| James                A. Bennett(1997)                                    | 44            | Since                August 2002, Executive Vice President and Director of Public Affairs,                First Citizens Bank, Columbia, SC.                                                                                                                     |
|                                                                     |          | From                May 2000 to July 2002, President and Chief Executive Officer of South                Carolina Community Bank, Columbia, SC.                                                                                                                  |
|                                                                     |          | Director,                SCANA Corporation; PSNC Energy.                                                                                                                                                                                                         |
| William                C. Burkhardt*(2000)                               | 68            | Since                May 2004, Chairman and Chief Executive Officer of Titan Holdings,                LLC,                Raleigh, NC (real estate investment company).                                                                                          |
|                                                                     |          | From                October 2003 until his May 2004 retirement, Chief Executive Officer                of                Capital Bank, Raleigh, NC.                                                                                                              |
|                                                                     |          | From                May 2000 until October 2003 Mr. Burkhardt pursued personal                interests.                                                                                                                                                         |
|                                                                     |          | From                1980 until his May 2000 retirement, President and Chief Executive                Officer                of Austin Quality Foods, Inc., Cary, NC (production and distribution                company of baked snacks for the food industry).  |
|                                                                     |          | Director,                SCANA Corporation; PSNC Energy; Capital Bank, Raleigh, NC and Plaza                Belmont II, Kansas City, MO.                                                                                                                              |

| Sharon                A. Decker(2005) | 48     | Elected                to the Board on December 20, 2005. Since September 2004, Founder                and                principal of The Tapestry Group LLC, Rutherfordton, NC (motivational                speaking company).  |
|---------------------------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                  |   | From                August 1999 to September 2004 President of Tanner Holdings and Doncaster,                Rutherfordton, NC (apparel manufacturers).                                                                           |
|                                  |   | Director,                SCANA Corporation; PSNC Energy; Coca-Cola Bottling Company Consolidated,                Inc., Charlotte, NC and Family Dollar Stores, Inc., Charlotte,                NC.                                |

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| D.                Maybank Hagood*(1999) | 44     | For                more than five years, President and Chief Executive Officer of William                M.                Bird and Company, Inc. (wholesale distributor of floor covering materials)                and its subsidiary Southern Diversified Distributors, LLC, (provider                of                logistics services) both in Charleston, SC.                                                                                                                                                                                                                                                                                      |
|-----------------------------------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                    |   | Director,                SCANA Corporation; PSNC Energy.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| W.                Hayne Hipp(1983)      | 65     | Mr.                Hipp is a private investor. Prior to it’s acquisition in January 2006, Mr.                Hipp was Chairman , Chief Executive Officer and a director of The                Liberty                Corporation, Greenville, SC. (a broadcasting holding company). Mr.                Hipp                held these positions for more than five years.                                                                                                                                                                                                                                                                             |
|                                    |   | Director,                SCANA Corporation; PSNC Energy.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| Lynne                M. Miller*(1997)   | 54     | Since                August 2005, Senior Business Consultant to Quanta Capital Holdings,                Inc.,                Reston, VA (a specialty insurer).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|                                    |   | From                April 2004 through July 2005, President of Quanta Technical Services                LLC.,                Reston VA.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|                                    |   | From                September 2003 through March 2004, Chief Executive Officer of                Environmental Strategies Consulting, LLC, a division of Quanta Technical                Services LLC. Ms. Miller co-founded Environmental Strategies Corporation                (an environmental consulting firm) and served as President from 1986                until                1995 and as Chief Executive Officer from 1995 until September 2003                when                the firm was acquired by Quanta Capital Holdings, Inc. and its name                was                changed to Environmental Strategies Consulting LLC.   |
|                                    |   | Director,                SCANA Corporation; PSNC Energy; Adams National Bank (a subsidiary                of                Abigail Adams National Bancorp, Inc.), Washington, DC.                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| Maceo                K. Sloan*(1997)    | 56     | For                more than five years, Chairman, President and Chief Executive Officer                of                Sloan Financial Group, Inc. (financial holding company) and Chairman,                Chief Executive Officer and Chief Investment Officer of both NCM                Capital                Management Group, Inc. and NCM Capital Advisers, Inc. (investment                management companies), Durham, NC.                                                                                                                                                                                                                   |
|                                    |   | Director,                SCANA Corporation; PSNC Energy; M&F Bancorp, Inc. and its subsidiary,                Mechanics and Farmers Bank; and Trustee of Teachers Insurance Annuity                Association-College Retirement Equity Fund and (TIAA-CREF) funds                boards,                Durham, NC.                                                                                                                                                                                                                                                                                                                                        |

| Harold                C. Stowe*(1999) | 59     | Since                February 2005 retired as President of Canal Holdings, LLC, Conway,                SC                (forest products industry company).          |
|---------------------------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                  |   | For                more than five years, President of Canal Holdings, LLC and its predecessor                company, Conway, SC (forest products industry company).  |
|                                  |   | Director,                SCANA Corporation; PSNC Energy; New South Companies, Inc., Charlotte,                NC;                Ruddick Corporation, Charlotte, NC.  |

| William                B. Timmerman(1991) | 59     | For                more than five years, Chairman of the Board, President and Chief                Executive                Officer of SCANA Corporation, Columbia, SC.                                                                                                                                                                                                                                                           |
|-------------------------------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                      |   | Director,                SCANA Corporation; PSNC Energy.                                                                                                                                                                                                                                                                                                                                                                          |
| G.                Smedes York(2000)       | 65     | For                more than five years, President and Treasurer of York Properties,                Inc.,                Raleigh, NC. (full-service commercial and residential real estate                company). Chairman of the Board ofYork                Simpson Underwood (residential                brokerage company) and McDonald-York, Inc. (general contractor) both                in                Raleigh, NC.  |
|                                      |   | Director,                SCANA Corporation; PSNC Energy.                                                                                                                                                                                                                                                                                                                                                                          |

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**EXECUTIVE      OFFICERS **

| **Name**                       | **Age** | **Positions                Held During Past Five Years**                                                                                                                                                                                          | **Dates**                               |
|--------------------------------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------|
| W.                B. Timmerman | 59      | Chairman                of the Board and Chief Executive Officer                                                                                                                                                                             | *-present                               |
| J.                C. Bouknight | 53      | Senior                Vice President-Human ResourcesVice                President Human Resources-Dan River, Inc.-Danville, VA                                                                                                               | 2004-present*-2004                      |
| S.                D. Burch     | 48      | Senior                Vice President, Fuel Procurement and Asset ManagementDeputy                General Counsel and Assistant Secretary                                                                                                     | 2003-present*-2003                      |
| S.                A. Byrne     | 46      | Senior                Vice President-Generation, Nuclear and Fossil HydroSenior                Vice President-Nuclear Operations                                                                                                             | 2004-present*-2004                      |
| P.                V. Fant      | 52      | Senior                Vice President Transmission Services President                and Chief Operating Officer-SCPC and SCG PipelineExecutive                Vice President-SCPCExecutive                Vice President-SCG Pipeline, Inc.  | 2004-present2004-present*-20042002-2004 |
| N.                O. Lorick    | 55      | President                and Chief Operating Officer                                                                                                                                                                                         | *-present                               |
| K.                B. Marsh     | 50      | Senior                Vice President and Chief Financial Officer Controller                                                                                                                                                                  | *-present                               |
| F.                P. Mood, Jr. | 68      | Senior                Vice President, General Counsel and Assistant SecretaryAttorney,                Haynsworth Sinkler Boyd, P.A.                                                                                                               | 2005-present*-2005                      |

**SECTION      16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE**

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**ITEM      11. EXECUTIVE COMPENSATION**

**Summary      Compensation Table**

|                                                                         |                             |  **Annual                Compensation** | **Long-Term                Compensation Awards** |                                                  |
|------------------------------------------------------------------------------|----------------------------------|----------------------------------------------|--------------------------------------------------|-------------------------------------------------------|
|     **Name                and Principal Position**  |     **Year** |    **Salary****($)**          |                                             |    **Bonus                (1)****($)** | **Securities****Underlying****Option/****SARS****(#)** |   **LTIP****Payouts                (2)****($)** |  **All****Other****Compensation                (3)****($)** |
| W.                B. Timmerman                                               | 2005                             | 997,654                                      | (4)                                              | 1,278,443                                             | - | 1,509,703 | 124,560 |
| Chairman,                President and                                       | 2004                             | 931,583                                      |                                             | 948,494                                               | - | - | 108,828 |
| Chief                Executive Officer- SCANA                                | 2003                             | 858,219                                      |                                             | 718,493                                               | - | 1,150,242 | 102,904 |
|                                                                         |                             |                                         |                                             |                                                  |   |   |   |
| N.                O. Lorick                                                  | 2005                             | 498,077                                      |                                             | 487,500                                               | - | 535,875 | 60,674 |
| President                and Chief Operating                                 | 2004                             | 470,833                                      |                                             | 378,625                                               | - | - | 55,324 |
| Officer-SCE&G                                                            | 2003                             | 419,808                                      |                                             | 300,036                                               | - | 325,384 | 50,219 |
|                                                                         |                             |                                         |                                             |                                                  |   |   |   |
| K.                B. Marsh                                                   | 2005                             | 498,077                                      |                                             | 487,500                                               | - | 535,875 | 53,884 |
| Senior                Vice President and Chief                               | 2004                             | 470,833                                      |                                             | 378,625                                               | - | - | 48,534 |
| Financial                Officer-SCANA                                       | 2003                             | 419,808                                      |                                             | 300,036                                               | - | 325,384 | 45,185 |
|                                                                         |                             |                                         |                                             |                                                  |   |   |   |
| S.                A. Byrne                                                   | 2005                             | 399,216                                      |                                             | 300,300                                               | - | 296,099 | 48,909 |
| Senior                Vice President-                                        | 2004                             | 362,728                                      |                                             | 225,660                                               | - | - | 33,366 |
| Generation,                Nuclear and Fossil                                | 2003                             | 323,351                                      |                                             | 180,675                                               | - | 169,634 | 30,993 |
| Hydro-SCE&G                                                              |                             |                                         |                                             |                                                  |   |   |   |
|                                                                         |                             |                                         |                                             |                                                  |   |   |   |
| J.                C. Bouknight                                               | 2005                             | 286,184                                      |                                             | 195,750                                               | - | - | 24,921 |
| Senior                Vice President, Human                                  | 2004                             | 170,769                                      |                                             | 129,200                                               | - | - | 42,978 |
| Resources                - SCANA                                             | 2003                             | -                                            |                                             | -                                                     | - | - | - |

| (3) | All                other compensation for the named executive officers consists of matching                contributions to defined contribution plans and life insurance premiums                on                policies owned by named executive officers. The following are premium                amounts for 2005: Messrs. Timmerman - $7,791; Byrne - $0; Lorick                - $8,072;                Marsh - $1,282 and Bouknight - $0. The following are matching contribution                amounts for 2005: Messrs. Timmerman - $116,769, Byrne - $48,909;                Lorick -                $52,602; Marsh - $52,602 and Bouknight - $24,921. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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**Aggregated      Option/SAR Exercises in Last Fiscal Year and FY-End Option/SAR      Values**

| **(a)**                        | **(b)**                                                              | **(c)**                                         | **(d)**                                                                                                                | **(e)**                                                                                                                                                   |
|--------------------------------|----------------------------------------------------------------------|-------------------------------------------------|------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------|
|                           |                                                                 |                                            | **Number                of****Securities****Underlying****Unexercised****Option/SARs****At                FY-End (#)** |   **Value                of Unexercised****In-the-Money                Options/****SARs                at****FY-End                ($)****(2)** |
|  **Name**            | **Shares                Acquired****On                Exercise (#)** | **Value****Realized                ($)****(1)** | **Exercisable/****Unexercisable**                                                                                      | **Exercisable/****Unexercisable**                                                                                                                         |
| W.                B. Timmerman | -                                                                    | -                                               | 123,067/0                                                                                                              | 1,459,757/0                                                                                                                                               |
| N.                O. Lorick    | 25,939                                                               | 295,185                                         | 0/0                                                                                                                    | 0/0                                                                                                                                                       |
| K.                B. Marsh     | 25,939                                                               | 297,779                                         | 0/0                                                                                                                    | 0/0                                                                                                                                                       |
| S.                A. Byrne     | 27,938                                                               | 317,369                                         | 42,992/0                                                                                                               | 509,885/0                                                                                                                                                 |
| J.                C. Bouknight | -                                                                    | -                                               | -                                                                                                                      | -                                                                                                                                                         |

**Long-Term      Incentive Plans Awards**

**LONG-TERM      INCENTIVE PLANS**

**AWARDS      IN LAST FISCAL YEAR**

|                             |                                                                                                     |                                                                                                                | **Estimated                Future Payouts Under****Non-Stock                Price-Based Plans** |
|----------------------------------|----------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------|
|    **Name**  | **Number                of****Shares,****Units                or****Other****Rights                (#)** | **Performance****or                Other****Period                Until****Maturation****or                Payout** |    **Threshold****(#)**                                                          |    **Target****(#)** |    **Maximum****(#)** |
| W.                B. Timmerman   | 71,558                                                                                                   | 2005-2007                                                                                                           | 35,779                                                                                          | 71,558 | 107,337 |
| N.                O. Lorick      | 22,302                                                                                                   | 2005-2007                                                                                                           | 11,151                                                                                          | 22,302 | 33,453 |
| K.                B. Marsh       | 22,302                                                                                                   | 2005-2007                                                                                                           | 11,151                                                                                          | 22,302 | 33,453 |
| S.                A. Byrne       | 12,144                                                                                                   | 2005-2007                                                                                                           | 6,072                                                                                           | 12,144 | 18,216 |
| J.                C. Bouknight   | 7,244                                                                                                    | 2005-2007                                                                                                           | 3,622                                                                                           | 7,244 | 10,866 |

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**Defined      Benefit Plans**

**Termination,      Severance and Change in Control Arrangements**

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| ·   | An                amount equal to three times the sum of: (i) the participant's annual                base salary in effect as of the date of the Change in Control and                (ii) the officer's target annual incentive award in effect as of the                date of the Change in Control under the Short-Term Annual Incentive                Plan. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| ·   | An                amount equal to the projected cost for medical, long-term disability                and                certain life insurance coverage for three years following the Change                in                Control as though the participant had continued to be a SCANA                employee. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | An                amount equal to the participant's Supplemental Executive Retirement                Plan                benefit accrued to the date of the Change in Control, increased by                the                present value of projected benefits that would otherwise accrue under                the                plan (based on the plan's actuarial assumptions) assuming that the                participant remained employed until reaching age 65, and offset by                the                value of the participant's Retirement Plan                benefit. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | A                benefit distribution of all amounts credited to the participant's                Executive Deferred Compensation Plan account as of the date of the                Change                in Control. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | A                benefit distribution under the Long-Term Equity Compensation Plan                equal to                100% of the target performance share award                for all performance periods not completed as of the date of the Change                in                Control, if any. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Under                the Long-Term Equity Compensation Plan, all nonqualified stock options                awarded would become immediately exercisable and remain exercisable                throughout their original term. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | A                benefit distribution under the Short-Term Annual Incentive Plan equal                to                100% of the target award in effect as of the date of the Change in                Control. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Compensation      Committee Interlocks and Insider Participation**

**Director      Compensation**

***Board      Fees***

| ·   | an                annual retainer of $45,000; |
|--------------------|-----------------------------------------------|

| ·   | a                fee of $6,500 for attendance at a regular quarterly meeting of the                board                of directors; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------|

| ·   | a                fee of $6,000 for attendance at all-day meetings of the board of                directors                other than regular meetings; |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | a                fee of $3,000 for attendance at a committee meeting held on a day                other                than a day a regular meeting of the Board is held; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | a                fee of $3,000 for attendance at half day meetings of the board other                than                regular meetings; |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | a                fee $300 for telephonic meetings of the board of directors or a committee                that last fewer than 30 minutes; |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------|

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| ·   | a                fee of $600 for telephonic meetings of the board of directors or                a                committee that last more than 30 minutes;                and |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | reimbursement                of reasonable expenses incurred in connection with all of the                above. |
|--------------------|------------------------------------------------------------------------------------------------------------------|

***Director      Compensation and Deferral Plans***

***Other      Director Compensation***

***Endowment      Plan***

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**ITEM      12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND      MANAGEMENT AND RELATED STOCKHOLDER MATTERS**

|         **Plan                Category** |   **Number                of securities****t****o                be issued****upon                exercise****of                outstanding****options,                warrants**** ****and                rights** |   **Weighted-average****exercise                price****of                outstanding**** ****options,                warrants****and                rights** |  **Number                of securities****remaining                available****for                future issuance under equity compensation plans****(excluding                securities****reflected                in column (a))** |
|----------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                             | **(a)**                                                                                                                                                                                                                            | **(b)**                                                                                                                                                                       | **(c)**                                                                                                                                                                                                                                      |
| Equity                compensation plans approved by security holders:           |                                                                                                                                                                                                                               |                                                                                                                                                                          |                                                                                                                                                                                                                                         |
| Long-Term                Equity Compensation Plan                                | 432,970                                                                                                                                                                                                                            | $27.53                                                                                                                                                                        | 3,210,827                                                                                                                                                                                                                                    |
| Non-Employee                Director Compensation Plan                           | n/a                                                                                                                                                                                                                                | n/a                                                                                                                                                                           | 122,566                                                                                                                                                                                                                                      |
| Equity                compensation plans not approved by security holders        | n/a                                                                                                                                                                                                                                | n/a                                                                                                                                                                           | n/a                                                                                                                                                                                                                                          |
| Total                                                                            | 432,970                                                                                                                                                                                                                            | $27.53                                                                                                                                                                        | 3,333,393                                                                                                                                                                                                                                    |

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**SHARE      OWNERSHIP OF DIRECTORS, NOMINEES AND EXECUTIVE OFFICERS**

|    **Name**                   | **Amount                and Nature****of                Beneficial****Ownership                of SCANA****Common                Stock*****(1)(2)(3)(4)(5)** |   |    **Name**               | **Amount                and Nature****of                Beneficial****Ownership                of SCANA****Common                Stock*****(1)(2)(3)(4)(5)** |
|----------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------|
| B.                L. Amick **(6)**           | 11,016                                                                                                                                                       |   | N.                O. Lorick              | 19,513                                                                                                                                                       |
| J.                A. Bennett **(6)**         | 2,603                                                                                                                                                        |   | K.                B. Marsh               | 18,633                                                                                                                                                       |
| J.                C. Bouknight               | 553                                                                                                                                                          |   | L.                M. Miller              | 3,666                                                                                                                                                        |
| W.                C. Burkhardt **(6)**  | 13,121                                                                                                                                                       |   | M.                K. Sloan **(6)**  | 1,831                                                                                                                                                        |
| S.                A. Byrne                   | 51,916                                                                                                                                                       |   | H.                C. Stowe               | 2,732                                                                                                                                                        |
| S.                A. Decker                  | 1,112                                                                                                                                                        |   | W.                B. Timmerman           | 181,441                                                                                                                                                      |
| D.                M. Hagood **(6)**     | 1,540                                                                                                                                                        |   | G.                S. York                | 13,204                                                                                                                                                       |
| W.                H. Hipp                    | 14,058                                                                                                                                                       |   |                                     |                                                                                                                                                         |

| (1) | Includes                182 shares owned by close relatives of                Mr. Lorick. |
|-----|------------------------------------------------------------------------------------------------|

| (2) | Includes                shares purchased through February 22, 2006, by the Trustee under                SCANA's Stock Purchase Savings                Plan. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | Hypothetical                shares acquired under the SCANA Director Compensation and Deferral                Plan                are not included in the above table. As of February 3, 2006, each                of the                following directors had acquired under the plan the number of hypothetical                shares following his or her name: Messrs. Amick -13,091; Bennett                -13,171; Burkhardt -16,074; Hagood - 4,089; Hipp - 11,527; Sloan                - 14,490;                Stowe - 11,538; York - 14,750; Ms. Decker - 0 and Ms. Miller -                15,357. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4) | Includes                shares subject to options that are currently exercisable or that                will                become exercisable within 60 days in the following amounts:                Messrs. Timmerman-123,067; and                Byrne-42,992. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (5) | Hypothetical                shares acquired under the SCANA Executive Deferred Compensation Plan                are                not included in the above table. As of February 3, 2006, each of                the                following officers had acquired under the plan, the number of hypothetical                shares following his or her name: Messrs. Timmerman-37,654;                Lorick-9,176; Marsh-4,946; and                Byrne-6,025. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (6) | Indicates                a member of the Human Resources                Committee. |
|-----|------------------------------------------------------------------------------------|

**ITEM      13. CERTAIN RELATIONSHIPS AND RELATED      TRANSACTIONS**

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**ITEM      14. PRINCIPAL ACCOUNTANT FEES AND      SERVICES**

|                                                |   | **2005**      |      | **2004**                       |   |
|-----------------------------------------------------|--------|---------------|-----------|--------------------------------|--------|
|                                                |   | **SCE&G** |      | **PSNC                Energy** |   | **SCE&G** |   | **PSNC                Energy** |   |
| Audit                Fees(1)                        |   | $             | 1,389,564 |                           | $      | 268,441 |   | $ | 1,380,354 |   | $ | 284,512 |   |
| Audit-Related                Fees(2)                |   |          | 50,073    |                           |   | 10,793 |   |   | 70,565 |   |   | 6,240 |   |
| Tax                Fees(3)                          |   |          | 51,727    |                           |   | 3,968 |   |   | 2,582 |   |   | 535 |   |
| All              Other Fees     |   |          | -    |                           |   | -  |   |   | -  |   |   | -  |   |
| Total                Fees                           |   | $             | 1,491,364 |                           | $      | 283,202 |   | $ | 1,453,501 |   | $ | 291,287 |   |

| (1) | Fees                for audit services billed in 2005 and 2004 consisted of audits of                annual                financial statements, comfort letters, statutory and regulatory audits,                consents and other services related to Securities and Exchange Commission                ("SEC") filings and accounting                research. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Fees                primarily for employee benefit plan audits for 2005 and                2004. |
|-----|--------------------------------------------------------------------------------------------------|

| (3) | Fees for                tax compliance and tax research                services. |
|-----|---------------------------------------------------------------------------------------|

|   | In                2005 and 2004, all of the Audit Fees, Audit Related Fees and Tax                Fees were                approved by the Audit Committee. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------|

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**PART      IV**

**ITEM      15. EXHIBITS AND FINANCIAL      STATEMENT      SCHEDULES**

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**Schedule II—Valuation      and Qualifying Accounts**

|                                                                                | **Additions**                  |                                          |
|-------------------------------------------------------------------------------------|--------------------------------|-----------------------------------------------|
|   **Description**                                                    |  **Beginning****Balance** |  **Charged                to****Income** | **Charged                to****Other****Accounts** |  **Deductions****from                Reserves** |  **Ending****Balance** |
| **SCANA:**                                                                          |                           |                                          |   |   |   |
| Reserves                deducted from related assets on the balance sheet:          |                           |                                          |   |   |   |
| Uncollectible                accounts                                               |                           |                                          |   |   |   |
| 2005                                                                                | 15,740,636                     | 26,705,178                                    | - | 17,581,989 | 24,863,825 |
| 2004                                                                                | 16,398,983                     | 16,181,865                                    | - | 16,840,212 | 15,740,636 |
| 2003                                                                                | 16,749,601                     | 15,998,233                                    | - | 16,348,851 | 16,398,983 |
|                                                                                |                           |                                          |   |   |   |
| Reserve                for investment impairment                                    |                           |                                          |   |   |   |
| 2005                                                                                | -                              | -                                             | - | - | - |
| 2004                                                                                | 125,000                        | -                                             | - | 125,000 | - |
| 2003                                                                                | 4,477,050                      | 125,000                                       | - | 4,477,050 | 125,000 |
|                                                                                |                           |                                          |   |   |   |
| Reserves                other than those deducted from assets on the balance sheet: |                           |                                          |   |   |   |
| Reserve                for injuries and damages                                     |                           |                                          |   |   |   |
| 2005                                                                                | 8,121,122                      | 6,038,014                                     | - | 7,830,775 | 6,328,361 |
| 2004                                                                                | 8,980,495                      | 6,694,152                                     | - | 7,553,525 | 8,121,122 |
| 2003                                                                                | 7,067,466                      | 6,368,705                                     | - | 4,455,676 | 8,980,495 |
|                                                                                |                           |                                          |   |   |   |
| **SCE&G:**                                                                      |                           |                                          |   |   |   |
| Reserves                deducted from related assets on the balance sheet:          |                           |                                          |   |   |   |
| Uncollectible                accounts                                               |                           |                                          |   |   |   |
| 2005                                                                                | 1,182,064                      | 3,518,845                                     | - | 3,126,840 | 1,574,069 |
| 2004                                                                                | 951,176                        | 2,891,370                                     | - | 2,660,482 | 1,182,064 |
| 2003                                                                                | 694,000                        | 4,666,778                                     | - | 4,409,602 | 951,176 |
|                                                                                |                           |                                          |   |   |   |
| Reserves                other than those deducted from assets on the balance sheet: |                           |                                          |   |   |   |
| Reserve                for injuries and damages                                     |                           |                                          |   |   |   |
| 2005                                                                                | 5,749,088                      | 3,378,138                                     | - | 4,235,150 | 4,892,076 |
| 2004                                                                                | 6,339,466                      | 4,300,548                                     | - | 4,890,926 | 5,749,088 |
| 2003                                                                                | 4,635,061                      | 5,181,696                                     | - | 3,477,291 | 6,339,466 |
|                                                                                |                           |                                          |   |   |   |
| **PSNC                Energy:**                                                |                           |                                          |   |   |   |
| Reserves                deducted from related assets on the balance sheet:          |                           |                                          |   |   |   |
| Uncollectible                accounts                                               |                           |                                          |   |   |   |
| 2005                                                                                | 1,978,730                      | 2,981,769                                     | - | 2,516,288 | 2,444,211 |
| 2004                                                                                | 2,230,423                      | 2,323,547                                     | - | 2,575,240 | 1,978,730 |
| 2003                                                                                | 1,512,238                      | 3,828,398                                     | - | 3,110,213 | 2,230,423 |
|                                                                                |                           |                                          |   |   |   |
| Reserves                other than those deducted from assets on the balance sheet: |                           |                                          |   |   |   |
| Reserve                for injuries and damages                                     |                           |                                          |   |   |   |
| 2005                                                                                | 1,190,586                      | 639,349                                       | - | 583,630 | 1,246,305 |
| 2004                                                                                | 1,404,157                      | 1,073,433                                     | - | 1,287,004 | 1,190,586 |
| 2003                                                                                | 1,239,698                      | 810,000                                       | - | 645,541 | 1,404,157 |

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**SIGNATURES**

|   | SCANA                CORPORATION |
|--------|----------------------------------|
|   | BY:                              |  /s/W.                B. TimmermanW.                B. Timmerman, Chairman of the Board,President,                Chief Executive Officer and Director |
|   | DATE:                            | March                1, 2006 |

|   |  /s/W.                B. TimmermanW.                B. Timmerman, Chairman of the Board,President,                Chief Executive Officer and Director (Principal Executive                Officer) |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |  /s/K.                B. MarshK.                B. Marsh, Senior Vice Presidentand                Chief Financial Officer(Principal                Financial Officer)                               |
|   |  /s/J.                E. Swan, IVJ.                E. Swan, IV, Controller(Principal                Accounting Officer)                                                                             |

| Other                Directors*: |
|----------------------------------|
|                             | B.                L. Amick |   | W.                M. Hipp |
|                             | J.                A. Bennett |   | L.                M. Miller |
|                             | W.                C. Burkhardt |   | M.                K. Sloan |
|                             | S.                A. Decker |   | H.                C. Stowe |
|                             | D.                M. Hagood |   | G.                S. York |

| DATE: | March                1, 2006 |
|-------|------------------------------|

table            of contents

**SIGNATURES**

|   | SOUTH                CAROLINA ELECTRIC & GAS COMPANY |
|--------|---------------------------------------------------------------|
|   | BY:                                                           |  /s/N.                O. LorickN.                O. LorickPresident                and Chief Operating Officer |
|   | DATE:                                                         | March                1, 2006 |

|   |   |  /s/W.                B. TimmermanW.                B. Timmerman, Chairman of the Board,Chief                Executive Officer and Director(Principal                Executive Officer) |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |  /s/K.                B. MarshK.                B. Marsh, Senior Vice Presidentand                Chief Financial Officer(Principal                Financial Officer)                   |
|   |   |  /s/J.                E. Swan, IVJ.                E. Swan, IV, Controller(Principal                Accounting Officer)                                                                 |

| Other                Directors*: |
|----------------------------------|
|                             | B.                L. Amick |   | W.                M. Hipp |
|                             | J.                A. Bennett |   | L.                M. Miller |
|                             | W.                C. Burkhardt |   | M.                K. Sloan |
|                             | S.                A. Decker |   | H.                C. Stowe |
|                             | D.                M. Hagood |   | G.                S. York |

| DATE: | March                1, 2006 |
|-------|------------------------------|

table            of contents

**SIGNATURES**

|   | PUBLIC                SERVICE COMPANY OF NORTH CAROLINA, INCORPORATED |
|--------|-----------------------------------------------------------------------|
|   | BY:                                                                   |  /s/D.                R. HarrisD.                R. HarrisPresident                and Chief Operating Officer |
|   | DATE:                                                                 | March                1, 2006 |

|   |  /s/W.                B. TimmermanW.                B. Timmerman, Chairman of the Board,Chief                Executive Officer and Director(Principal                Executive Officer) |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |  /s/K.                B. MarshK.                B. Marsh, Senior Vice President and Chief Financial Officer (Principal                Financial Officer)                                |
|   |  /s/J.                E. Swan, IVJ.                E. Swan, IV, Controller(Principal                Accounting Officer)                                                                 |

| Other                Directors*: |
|----------------------------------|
|                             | B.                L. Amick |   | W.                M. Hipp |
|                             | J.                A. Bennett |   | L.                M. Miller |
|                             | W.                C. Burkhardt |   | M.                K. Sloan |
|                             | S.                A. Decker |   | H.                C. Stowe |
|                             | D.                M. Hagood |   | G.                S. York |

| DATE: | March                1, 2006 |
|-------|------------------------------|

table            of contents

**EXHIBIT      INDEX**

|               | **Applicable                to Form 10-K of** |                |               |                                                                                                                                                                                                                                                                                                          |
|--------------------|---------------------------------------------------------|---------------------|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **Exhibit****No.** |  **SCANA**                                         |  **SCE&G** | **PSNC****Energy** |  **Description**                                                                                                                                                                                                                                                                                         |   |   |
|               |                                                    |                |               |                                                                                                                                                                                                                                                                                                          |
| 3.01               | X                                                       |                |               | Restated                Articles of Incorporation of SCANA Corporation as adopted on                April 26, 1989 (Filed as Exhibit 3-A to Registration Statement                No. 33-49145 and incorporated by reference herein)                                                           |
| 3.02               | X                                                       |                |               | Articles                of Amendment dated April 27, 1995 (Filed as Exhibit 4-B to                Registration Statement No. 33-62421 and incorporated by reference                herein)                                                                                                     |
| 3.03               |                                                    | X                   |               | Restated                Articles of Incorporation of South Carolina Electric & Gas                Company, as adopted on May 3, 2001 (Filed as Exhibit 3.01 to                Registration Statement No. 333-65460 and incorporated by reference                herein)               |
| 3.04               |                                                    | X                   |               | Articles                of Amendment effective as of the dates indicated below and filed                as                exhibits to the Registration Statements or Exchange Act reports set                forth                below and are incorporated by reference herein                              |
|               |                                                    |                |               | May 22,                2001                                                                                                                                                                                                                                                                              | Exhibit 3.02 | to                Registration No. 333-65460 |
|               |                                                    |                |               | June 14,                2001                                                                                                                                                                                                                                                                             | Exhibit 3.04 | to                Registration No. 333-65460 |
|               |                                                    |                |               | August 30,                2001                                                                                                                                                                                                                                                                           | Exhibit 3.05 | to                Registration No. 333-101449 |
|               |                                                    |                |               | March 13,                2002                                                                                                                                                                                                                                                                            | Exhibit 3.06 | to                Registration No. 333-101449 |
|               |                                                    |                |               | May 9,                2002                                                                                                                                                                                                                                                                               | Exhibit 3.07 | to                Registration No. 333-101449 |
|               |                                                    |                |               | June 4,                2002                                                                                                                                                                                                                                                                              | Exhibit 3.08 | to                Registration No. 333-101449 |
|               |                                                    |                |               | August 12,                2002                                                                                                                                                                                                                                                                           | Exhibit 3.09 | to                Registration No. 333-101449 |
|               |                                                    |                |               | March 13,                2003                                                                                                                                                                                                                                                                            | Exhibit 3.03 | to                Registration No. 333-108760 |
|               |                                                    |                |               | May 22,                2003                                                                                                                                                                                                                                                                              | Exhibit 3.04 | to                Registration No. 333-108760 |
|               |                                                    |                |               | June 18,                2003                                                                                                                                                                                                                                                                             | Exhibit 3.05 | to                Registration No. 333-108760 |
|               |                                                    |                |               | August 7,                2003                                                                                                                                                                                                                                                                            | Exhibit 3.06 | to                Registration No. 333-108760 |
|               |                                                    |                |               | May 18,                2004                                                                                                                                                                                                                                                                              | Exhibit 3.05 | to                Form 10-Q for the quarter ended June 30, 2004 |
|               |                                                    |                |               | June 18,                2004                                                                                                                                                                                                                                                                             | Exhibit 3.06 | to                Form 10-Q for the quarter ended June 30, 2004 |
|               |                                                    |                |               | August 12,                2004                                                                                                                                                                                                                                                                           | Exhibit 3.05 | to                Form 10-Q for the quarter ended Sept. 30,                2004 |
|               |                                                    |                |               | March                9, 2005                                                                                                                                                                                                                                                                                  | Exhibit                3.11 | to                Form 10-Q for the quarter ended Sept. 30,                2005 |
|               |                                                    |                |               | May                16, 2005                                                                                                                                                                                                                                                                                   | Exhibit                3.12 | to                Form 10-Q for the quarter ended Sept. 30,                2005 |
|               |                                                    |                |               | June                15, 2005                                                                                                                                                                                                                                                                                  | Exhibit                3.13 | to                Form 10-Q for the quarter ended Sept. 30,                2005 |
|               |                                                    |                |               | August                16, 2005                                                                                                                                                                                                                                                                                | Exhibit                3.14 | to                Form 10-Q for the quarter ended Sept. 30,                2005 |
|               |                                                    |                |               |                                                                                                                                                                                                                                                                                                          |   |   |
| 3.05               |                                                    | X                   |               | Articles                of Amendment dated February 26, 2004 (Filed as Exhibit 3.05 on Form                10-K for the year ended December 31, 2004.                                                                                                                                                    |
| 3.06               |                                                    | X                   |               | Articles                of Correction filed on June 1, 2001 correcting May 22, 2001                Articles of Amendment (Filed as Exhibit 3.03 to Registration                Statement No. 333-65460 and incorporated by reference                herein)                               |
| 3.07               |                                                    | X                   |               | Articles                of Correction filed on February 17, 2004 correcting Articles of                Amendment for the dates indicated below and filed as exhibits to                the 2003                Form 10-K as set forth below and are incorporated by reference                herein |
|               |                                                    |                |               | May 3,                2001                                                                                                                                                                                                                                                                               | Exhibit 3.06 |   |
|               |                                                    |                |               | May 22,                2001                                                                                                                                                                                                                                                                              | Exhibit 3.07 |   |
|               |                                                    |                |               | June 14,                2001                                                                                                                                                                                                                                                                             | Exhibit 3.08 |   |
|               |                                                    |                |               | August 30,                2001                                                                                                                                                                                                                                                                           | Exhibit 3.09 |   |
|               |                                                    |                |               | March 13,                2002                                                                                                                                                                                                                                                                            | Exhibit 3.10 |   |
|               |                                                    |                |               | May 9,                2002                                                                                                                                                                                                                                                                               | Exhibit 3.11 |   |
|               |                                                    |                |               | June 4,                2002                                                                                                                                                                                                                                                                              | Exhibit 3.12 |   |

table            of contents

|               | **Applicable                to Form 10-K of** |                |
|--------------------|----------------------------------------------------|---------------------|
| **Exhibit****No.** |  **SCANA**                                    |  **SCE&G** | **PSNC****Energy** |  **Description** |   |   |
|               |                                               |                |   |   |   |   |
|               |                                               |                |   | August 12,                2002 | Exhibit 3.13 |   |
|               |                                               |                |   | March 13,                2003 | Exhibit 3.14 |   |
|               |                                               |                |   | May 22,                2003 | Exhibit 3.15 |   |
|               |                                               |                |   | June 18,                2003 | Exhibit 3.16 |   |
|               |                                               |                |   | August 7,                2003 | Exhibit 3.17 |   |
|               |                                               |                |   |   |
| 3.08               | X                                                  |                |   | By-Laws                of SCANA as revised and amended on December 13, 2000 (Filed as                Exhibit 3.01 to Registration Statement No. 333-68266 and                incorporated by reference herein) |
| 3.09               |                                               | X                   |   | By-Laws                of SCE&G as revised and amended on February 22, 2001 (Filed as                Exhibit 3.05 to Registration Statement No. 333-65460 and                incorporated by reference herein) |
| 3.10               |                                               |                | X | By-Laws                of PSNC Energy as revised and amended on February 22, 2001 (Filed as                Exhibit 3.01 to Registration Statement No. 333-68516 and                incorporated by reference herein) |
| 4.01               | X                                                  | X                   |   | Articles                of Exchange of South Carolina Electric & Gas Company and SCANA                Corporation (Filed as Exhibit 4-A to Post-Effective Amendment                No. 1 to Registration Statement No. 2-90438 and incorporated by                reference herein) |
| 4.02               | X                                                  |                |   | Indenture                dated as of November 1, 1989 between SCANA Corporation and The Bank                of New York, as Trustee (Filed as Exhibit 4-A to Registration                No. 33-32107 and incorporated by reference herein) |
| 4.03               | X                                                  | X                   |   | Indenture                dated as of January 1, 1945, between the South Carolina Power Company                and Central Hanover Bank and Trust Company, as Trustee, as supplemented                by                three Supplemental Indentures dated respectively as of May 1, 1946,                May 1, 1947 and July 1, 1949 (Filed as Exhibit 2-B to                Registration Statement No. 2-26459 and incorporated by reference                herein) |
| 4.04               | X                                                  | X                   |   | Fourth                Supplemental Indenture dated as of April 1, 1950, to Indenture                referred to in Exhibit 4.03, pursuant to which SCE&G assumed said                Indenture (Exhibit 2-C to Registration Statement No. 2-26459 and                incorporated by reference herein) |
| 4.05               | X                                                  | X                   |   | Fifth                through Fifty-third Supplemental Indenture referred to in                Exhibit 4.03 dated as of the dates indicated below and filed as                exhibits to the Registration Statements set forth below and are                incorporated by reference herein |
|               |                                               |                |   | December 1,                1950 | Exhibit 2-D | to                Registration No. 2-26459 |
|               |                                               |                |   | July 1,                1951 | Exhibit 2-E | to                Registration No. 2-26459 |
|               |                                               |                |   | June 1,                1953 | Exhibit 2-F | to                Registration No. 2-26459 |
|               |                                               |                |   | June 1,                1955 | Exhibit 2-G | to                Registration No. 2-26459 |
|               |                                               |                |   | November 1,                1957 | Exhibit 2-H | to                Registration No. 2-26459 |
|               |                                               |                |   | September 1,                1958 | Exhibit 2-I | to                Registration No. 2-26459 |
|               |                                               |                |   | September 1,                1960 | Exhibit 2-J | to                Registration No. 2-26459 |
|               |                                               |                |   | June 1,                1961 | Exhibit 2-K | to                Registration No. 2-26459 |
|               |                                               |                |   | December 1,                1965 | Exhibit 2-L | to                Registration No. 2-26459 |
|               |                                               |                |   | June 1,                1966 | Exhibit 2-M | to                Registration No. 2-26459 |
|               |                                               |                |   | June 1,                1967 | Exhibit 2-N | to                Registration No. 2-29693 |
|               |                                               |                |   | September 1,                1968 | Exhibit 4-O | to                Registration No. 2-31569 |
|               |                                               |                |   | June 1,                1969 | Exhibit 4-C | to                Registration No. 33-38580 |
|               |                                               |                |   | December 1,                1969 | Exhibit 4-O | to                Registration No. 2-35388 |
|               |                                               |                |   | June 1,                1970 | Exhibit 4-R | to                Registration No. 2-37363 |
|               |                                               |                |   | March 1,                1971 | Exhibit 2-B-17 | to                Registration No. 2-40324 |
|               |                                               |                |   | January 1,                1972 | Exhibit 2-B | to                Registration No. 33-38580 |

table            of contents

|               | **Applicable                    to Form 10-K of** |                |
|--------------------|--------------------------------------------------------|---------------------|
| **Exhibit****No.** |  **SCANA**                                        |  **SCE&G** | **PSNC****Energy** |  **Description** |   |   |
|               |                                                   |                |   |   |   |   |
|               |                                                   |                |   | July 1,                    1974 | Exhibit 2-A-19 | to                    Registration No. 2-51291 |
|               |                                                   |                |   | May 1,                    1975 | Exhibit 4-C | to                    Registration No. 33-38580 |
|               |                                                   |                |   | July 1,                    1975 | Exhibit 2-B-21 | to                    Registration No. 2-53908 |
|               |                                                   |                |   | February 1,                    1976 | Exhibit 2-B-22 | to                    Registration No. 2-55304 |
|               |                                                   |                |   | December 1,                    1976 | Exhibit 2-B-23 | to                    Registration No. 2-57936 |
|               |                                                   |                |   | March 1,                    1977 | Exhibit 2-B-24 | to                    Registration No. 2-58662 |
|               |                                                   |                |   | May 1,                    1977 | Exhibit 4-C | to                    Registration No. 33-38580 |
|               |                                                   |                |   | February 1,                    1978 | Exhibit 4-C | to                    Registration No. 33-38580 |
|               |                                                   |                |   | June 1,                    1978 | Exhibit 2-A-3 | to                    Registration No. 2-61653 |
|               |                                                   |                |   | April 1,                    1979 | Exhibit 4-C | to                    Registration No. 33-38580 |
|               |                                                   |                |   | June 1,                    1979 | Exhibit 2-A-3 | to                    Registration No. 33-38580 |
|               |                                                   |                |   | April 1,                    1980 | Exhibit 4-C | to                    Registration No. 33-38580 |
|               |                                                   |                |   | June 1,                    1980 | Exhibit 4-C | to                    Registration No. 33-38580 |
|               |                                                   |                |   | December 1,                    1980 | Exhibit 4-C | to                    Registration No. 33-38580 |
|               |                                                   |                |   | April 1,                    1981 | Exhibit 4-D | to                    Registration No. 33-38580 |
|               |                                                   |                |   | June 1,                    1981 | Exhibit 4-D | to                    Registration No. 33-49421 |
|               |                                                   |                |   | March 1,                    1982 | Exhibit 4-D | to                    Registration No. 2-73321 |
|               |                                                   |                |   | April 15,                    1982 | Exhibit 4-D | to                    Registration No. 33-49421 |
|               |                                                   |                |   | May 1,                    1982 | Exhibit 4-D | to                    Registration No. 33-49421 |
|               |                                                   |                |   | December 1,                    1984 | Exhibit 4-D | to                    Registration No. 33-49421 |
|               |                                                   |                |   | December 1,                    1985 | Exhibit 4-D | to                    Registration No. 33-49421 |
|               |                                                   |                |   | June 1,                    1986 | Exhibit 4-D | to                    Registration No. 33-49421 |
|               |                                                   |                |   | February 1,                    1987 | Exhibit 4-D | to                    Registration No. 33-49421 |
|               |                                                   |                |   | September 1,                    1987 | Exhibit 4-D | to                    Registration No. 33-49421 |
|               |                                                   |                |   | January 1,                    1989 | Exhibit 4-D | to                    Registration No. 33-49421 |
|               |                                                   |                |   | January 1,                    1991 | Exhibit 4-D | to                    Registration No. 33-49421 |
|               |                                                   |                |   | July 15,                    1991 | Exhibit 4-D | to                    Registration No. 33-49421 |
|               |                                                   |                |   | August 15,                    1991 | Exhibit 4-D | to                    Registration No. 33-49421 |
|               |                                                   |                |   | April 1,                    1993 | Exhibit 4-E | to                    Registration No. 33-49421 |
|               |                                                   |                |   | July 1,                    1993 | Exhibit 4-D | to                    Registration No. 33-49421 |
|               |                                                   |                |   | May 1,                    1999 | Exhibit 4.04 | to                    Registration No. 333-86387 |
|               |                                                   |                |   |   |
| 4.06               | X                                                      | X                   |   | Indenture                    dated as of April 1, 1993 from South Carolina Electric & Gas                    Company to NationsBank of Georgia, National Association (Filed                    as                    Exhibit 4-F to Registration Statement No. 33-49421 and                    incorporated by reference herein) |
| 4.07               | X                                                      | X                   |   | First                    Supplemental Indenture to Indenture referred to in Exhibit 4.06 dated                    as of June 1, 1993 (Filed as Exhibit 4-G to Registration                    Statement No. 33-49421 and incorporated by reference                    herein) |
| 4.08               | X                                                      | X                   |   | Second                    Supplemental Indenture to Indenture referred to in Exhibit 4.06 dated                    as of June 15, 1993 (Filed as Exhibit 4-G to Registration                    Statement No. 33-57955 and incorporated by reference                    herein) |
| 4.09               | X                                                      |                | X | Indenture                    dated as of January 1, 1996 between PSNC and First Union National                    Bank of North Carolina, as Trustee (Filed as Exhibit 4.08 to                    Registration Statement No. 333-45206 and incorporated by reference                    herein) |

table            of contents

|                                       | **Applicable                  to Form 10-K of ** |                      |
|--------------------------------------------|-------------------------------------------------------|---------------------------|
| **Exhibit****No. **                   |  **SCANA **                                 |  **SCE&G ** | **PSNC****Energy**  |  Description |
| 4.10                                       | X                                                |                      |  X |  First                through Fourth Supplement Indenture referred to in Exhibit 4.09 dated                as                of the dates indicated below and filed as exhibits to the Registration                Statements whose file number are set forth below and are incorporated                by                reference herein |
|                                       |                                                  |                      |   |  January                  1, 1996          Exhibit                  4.09       to Registration No.                  333-45206December                  15, 1996     Exhibit                  4.10       to Registration No.                  333-45206February                  10, 2000       Exhibit                  4.11       to Registration No.                  333-45206February                  12, 2001       Exhibit                  4.05       to Registration No.                  333-68516 |
| 4.11                                       |                                                  |                      | X | PSNC                  $150 million medium-term note issued February 16, 2001 (Filed as                  Exhibit 4.06 to Registration Statement No. 333-68516 and                  incorporated by reference herein) |
| 4.12                                       |                                                  |                      | X | Amended                  and Restated Five-Year Credit Agreement dated June 30, 2005 (Filed                  as                  Exhibit 4.12 to Form Q for the quarter ended June 30, 2005 and                  incorporated by reference herein) |
| *10.01                                     | X                                                     | X                         | X | SCANA                  Executive Deferred Compensation Plan as amended February 20, 2003                  (Filed as Exhibit 10.01 to Form 10-Q for the quarter ended                  June 30, 2003 and incorporated by reference                  herein) |
| *10.02                                     | X                                                     | X                         | X | SCANA                  Director Compensation and Deferral Plan as amended January 1, 2001                  (Filed as Exhibit 4.03 to Registration Statement No. 333-18973                  and incorporated by reference herein) |
| *10.03                                     | X                                                     | X                         | X | Amendment                  to SCANA Director Compensation and Deferral Plan adopted April 29,                  2004 (Filed as Exhibit 10.03 to Form 10-Q for the quarter ended                  March 31, 2004 and incorporated by reference                  herein) |
| *10.04                                     | X                                                     | X                         | X | Amendment                  to SCANA Director Compensation Plan as adopted November 2, 2005                  (Filed as                  Exhibit 10.03a to Form 10-Q for the quarter ended September 30,                  2005 and                  incorporated by reference herein) |
| *10.05                                     | X                                                     | X                         | X | SCANA                  Supplementary Executive Retirement Plan as amended July 1, 2001                  (Filed as Exhibit 10.02 to Form 10-Q for the quarter ended                  September 30, 2001 and incorporated by reference                  herein) |
| *10.06                                     | X                                                     | X                         | X | SCANA                  Key Executive Severance Benefits Plan as amended July 1, 2001 (Filed                  as Exhibit 10.03 to Form 10-Q for the quarter ended                  September 30, 2001 and incorporated by reference                  herein) |
| *10.07                                     | X                                                     | X                         | X | SCANA                  Supplementary Key Severance Benefits Plan as amended July 1, 2001                  (Filed as Exhibit 10.03a to Form 10-Q for the quarter ended                  September 30, 2001 and incorporated by reference                  herein) |
| *10.08                                     | X                                                     | X                         | X | SCANA                  Long-Term Equity Compensation Plan dated January 2000 (Filed as                  Exhibit 4.04 to Registration Statement No. 333-37398 and                  incorporated by reference herein) |
|                      *10.09 | X                                                | X                    |                    X |  Amendment                to SCANA Long-Term Equity Compensation Plan adopted April 28, 2004                (Filed                as Exhibit 10.08 to Form 10-Q for the quarter ended March 31, 2004                and                incorporated by reference herein) |
| *10.10                                     | X                                                | X                    |                    X |  Description                of SCANA Whole Life Option (Filed as Exhibit 10-F for the year ended                December 31, 1991, under cover of Form SE, Filed No. 1-8809 and                incorporated by reference herein) |

table          of contents

|               | **Applicable                  to Form 10-K of** |          |
|--------------------|------------------------------------------------------|---------------|
| **Exhibit****No.** | **SCANA**                                            | **SCE&G** | **PSNC****Energy** |  **Description** |
| *10.11             | X                                               | X        |  X |  SCANA                Corporation Short-Term Annual Incentive Plan as amended and restated                effective January 1, 2005 (Filed as Exhibit 10.10 to Form 10-Q for                the                quarter ended September 30, 2005 and incorporated by reference                herein) |
| *10.12             | X                                               | X        |  X |  Description                of Amendment to SCANA Corporation Executive Annual Incentive Plan                (Filed                on Form 8-K dated February 23, 2005 and incorporated by reference                herein) |
| 10.13              |                                                 |          | X | Operating                  Agreement of Pine Needle LNG Company, LLC dated August 8, 1995 (Filed                  as Exhibit 10.01 to Registration Statement No. 333-45206 and                  incorporated by reference herein) |
| 10.14              |                                                 |          | X | Amendment                  to Operating Agreement of Pine Needle LNG Company, LLC dated                  October 1, 1995 (Filed as Exhibit 10.02 to Registration                  Statement No. 333-45206 and incorporated by reference                  herein) |
| 10.15              |                                                 |          | X | Amended                  Operating Agreement of Cardinal Extension Company, LLC dated                  December 19, 1996 (Filed as Exhibit 10.03 to Registration                  Statement No. 333-45206 and incorporated by reference                  herein) |
| 10.16              |                                                 |          | X | Amended                  Construction, Operation and Maintenance Agreement by and between                  Cardinal                  Operating Company and Cardinal Extension Company, LLC dated                  December 19, 1996 (Filed as Exhibit 10.04 to Registration                  Statement No. 333-45206 and incorporated by reference                  herein) |
| 10.17              |                                                 |          | X | Service                  Agreement between PSNC and SCANA Services, Inc., effective                  January 1, 2004 (Filed as Exhibit 10.15 to Form 10-Q for                  the quarter ended March 31, 2004 and incorporated by reference                  herein) |
| 10.18              |                                                 | X             |   | Service                  Agreement between SCE&G and SCANA Services, Inc., effective                  January 1, 2004 (Filed as Exhibit 10.16 to Form 10-Q for                  the quarter ended March 31, 2004 and incorporated by reference                  herein) |
| 12.01              | X                                                    |          |   | Statement                  Re Computation of Ratios |
| 12.02              |                                                 | X             |   | Statement                  Re Computation of Ratios |
| 12.03              |                                                 |          | X | Statement                  Re Computation of Ratios |
| 21.01              | X                                                    |          |   | Subsidiaries                  of the registrant (Filed herewith under the heading “Corporate Structure”                  in Part I, Item I of this Form 10-K and incorporated by                  reference herein) |
| 23.01              | X                                                    |          |   | Consents                  of Experts and Counsel (Consent of Independent Registered Public                  Accounting Firm) |
| 23.02              |                                                 | X             |   | Consents                  of Experts and Counsel (Consent of Independent Registered Public                  Accounting Firm) |
| 23.03              |                                                 |          | X | Consents                  of Experts and Counsel (Consent of Independent Registered Public                  Accounting Firm) |
| 24.01              | X                                                    | X             | X | Power                  of Attorney (Filed herewith) |
| 31.01              | X                                                    |          |   | Certification                  of Principal Executive Officer Required by Rule 13a-14 (Filed                  herewith) |

table            of contents

|               | **Applicable                to Form 10-K of** |                |
|--------------------|----------------------------------------------------|---------------------|
| **Exhibit****No.** |  **SCANA**                                    |  **SCE&G** | **PSNC****Energy** |  **Description** |   |   |
|               |                                               |                |   |   |
| 31.02              | X                                                  |                |   | Certification                of Principal Financial Officer Required by Rule 13a-14 (Filed                herewith) |
| 31.03              |                                               | X                   |   | Certification                of Principal Executive Officer Required by Rule 13a-14 (Filed                herewith) |
| 31.04              |                                               | X                   |   | Certification                of Principal Financial Officer Required by Rule 13a-14 (Filed                herewith) |
| 31.05              |                                               |                | X | Certification                of Principal Executive Officer Required by Rule 13a-14 (Filed                herewith) |
| 31.06              |                                               |                | X | Certification                of Principal Financial Officer Required by Rule 13a-14 (Filed                herewith) |
| 32.01              | X                                                  |                |   | Certification                of Principal Executive Officer Pursuant to 18 U.S.C.                Section 1350 (Furnished herewith) |
| 32.02              | X                                                  |                |   | Certification                of Principal Financial Officer Pursuant to 18 U.S.C.                Section 1350 (Furnished herewith) |
| 32.03              |                                               | X                   |   | Certification                of Principal Executive Officer Pursuant to 18 U.S.C.                Section 1350 (Furnished herewith) |
| 32.04              |                                               | X                   |   | Certification                of Principal Financial Officer Pursuant to 18 U.S.C.                Section 1350 (Furnished herewith) |
| 32.05              |                                               |                | X | Certification                of Principal Executive Officer Pursuant to 18 U.S.C.                Section 1350 (Furnished herewith) |
| 32.06              |                                               |                | X | Certification                of Principal Financial Officer Pursuant to 18 U.S.C.                Section 1350 (Furnished                herewith) |

table          of contents