91882--3/2/2006--PUBLIC_SERVICE_CO_OF_NORTH_CAROLINA

related topics

{condition, economic, financial}

{debt, indebtedness, cash}

{cost, regulation, environmental}

{gas, price, oil}

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. 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. 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. 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.

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91882--3/2/2006--PUBLIC_SERVICE_CO_OF_NORTH_CAROLINA_INC