-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, BAYcI1Rbu/Jng7+p/jl8kNKgOrdUBji73IDvR0enNUy+u99PuEsCAVoVaZCFKdom ogiXk++cEie99Wahit2F2w== 0000091882-02-000005.txt : 20021125 0000091882-02-000005.hdr.sgml : 20021125 20021125170642 ACCESSION NUMBER: 0000091882-02-000005 CONFORMED SUBMISSION TYPE: S-3 PUBLIC DOCUMENT COUNT: 13 FILED AS OF DATE: 20021125 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SOUTH CAROLINA ELECTRIC & GAS CO CENTRAL INDEX KEY: 0000091882 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC & OTHER SERVICES COMBINED [4931] IRS NUMBER: 570248695 STATE OF INCORPORATION: SC FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3 SEC ACT: 1933 Act SEC FILE NUMBER: 333-101449 FILM NUMBER: 02839679 BUSINESS ADDRESS: STREET 1: 1426 MAIN ST CITY: COLUMBIA STATE: SC ZIP: 29201 BUSINESS PHONE: 8032179000 MAIL ADDRESS: STREET 1: 1426 MAIN ST CITY: COLUMBIA STATE: SC ZIP: 29201 S-3 1 fmb02.txt FIRST MORTGAGE BONDS S-3 Registration No. 333- UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM S-3 REGISTRATION STATEMENT Under THE SECURITIES ACT OF 1933 SOUTH CAROLINA ELECTRIC & GAS COMPANY (Exact name of registrant as specified in its charter) South Carolina 57-0248695 (State or other jurisdiction (I.R.S. Employer of incorporation or organization) Identification No.) 1426 Main Street Columbia, South Carolina 29201 (803) 217-9000 (Address, including zip code and telephone number, including area code, of registrant's principal executive offices) H. T. Arthur, Esq. Senior Vice President and General Counsel SCANA Corporation 1426 Main Street Columbia, South Carolina 29201 (803) 217-8547 (Name, address, including zip code, and telephone number, including area code, of agent for service) With copies to: John W. Currie, Esq. James J. Wheaton, Esq. McNair Law Firm, P.A. Troutman Sanders LLP 1301 Gervais Street - 17th Floor 4425 Corporation Lane, Suite 420 Columbia, SC 29201 Virginia Beach, VA 23462 (803)799-9800 (757) 687-7500 Approximate date of commencement of proposed sale to the public: After the effective date of the Registration Statement, as determined by market conditions and other factors. If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. (___) If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. (X) If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. (___) If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. (___) If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. (___) CALCULATION OF REGISTRATION FEE Proposed Proposed Title of maximum maximum each class of Amount offering aggregate Amount of securities to to be price per offering registration be registered registered unit* price* fee First Mortgage Bonds $500,000,000 100% $500,000,000 $46,000 * Determined solely for the purpose of calculating the registration fee. Note: Fees of $100,000 were previously paid in connection with Registration Statement No. 333-65460. Of the First Mortgage Bonds registered under Registration Statement No. 333-65460, $100,000,000 principal amount is being carried forward, for which the associated registration fee was $25,000. The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine. Pursuant to Rule 429, the prospectus included in this registration statement includes $100,000,000 principal amount First Mortgage Bonds previously registered under Registration Statement No. 333-65460. The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted. SUBJECT TO COMPLETION DATED November ___, 2002. PROSPECTUS $600,000,000 SOUTH CAROLINA ELECTRIC & GAS COMPANY 1426 Main Street Columbia, South Carolina 29201 (803) 217-9000 First Mortgage Bonds Investing in our First Mortgage Bonds, which we refer to herein as the New Bonds, involves risks. See "Risk Factors" beginning on page to read about certain factors you should consider before buying the New Bonds. Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense. The date of this prospectus is ___________ ___, 2002. Table of Contents Page About this Prospectus.................................................... Risk Factors............................................................. Where You Can Find More Information...................................... South Carolina Electric & Gas Company.................................... Ratio of Earnings to Fixed Charges....................................... Use of Proceeds.......................................................... Description of the New Bonds............................................. Book-Entry System........................................................ Plan of Distribution..................................................... Experts.................................................................. Legal Opinions........................................................... About This Prospectus This prospectus is part of a registration statement that we filed with the Securities and Exchange Commission (the "SEC") utilizing a "shelf" registration process. Under this shelf process, we may sell any or all of the New Bonds described in this prospectus in one or more offerings up to a total offering amount of $600,000,000. This prospectus provides you with a general description of the New Bonds. Each time we sell New Bonds, we will provide a prospectus supplement that will contain specific information about the terms of that offering. The prospectus supplement may also add, update or change information contained in this prospectus. You should read both this prospectus and the relevant prospectus supplement, together with the additional information described under the heading "Where You Can Find More Information." We believe we have included all information material to investors but certain details that may be important to you have not been included. To see more detail, you should read the exhibits filed with the registration statement. All references in this prospectus to "SCE&G," "we," "us" and "our" are to South Carolina Electric & Gas Company and its subsidiary unless otherwise indicated. Risk Factors Commodity price changes may affect the operating costs and competitive positions of our businesses, thereby adversely impacting our results of operations. Our energy businesses are sensitive to changes in coal, gas, oil and other commodity prices. Any changes could affect the prices these businesses charge, their operating costs and the competitive position of their products and services. We are able to recover the cost of fuel through retail customers' bills, but increases in fuel costs affect electric prices and, therefore, the competitive position of our electric business against other energy sources. In the case of our natural gas operations, costs for purchased gas are recovered through customers' bills, but increases in gas cost affect total retail prices and, therefore, the competitive position of our gas business relative to electricity, other forms of energy and other gas suppliers. We are subject to complex government rate regulation, and any inability to obtain timely rate increases could adversely affect our revenues and results of operations. We are subject to extensive regulation which could adversely affect our operations. In particular, our electric and gas operations are regulated by the South Carolina Public Service Commission. Although we believe we have a constructive relationship with our regulators, our ability to obtain rate increases that will allow us to maintain an acceptable rate of return is dependent upon regulatory discretion, and there can be no assurance that we will be able to implement requested rate increases on the schedule desired. We are vulnerable to interest rate increases and we may not have access to capital at favorable rates, if at all, which could increase our borrowing costs. Changes in interest rates can affect the cost of borrowing on variable rate debt outstanding, on refinancing of debt maturities and on incremental borrowing to fund new investments. Our business plan reflects the expectation that we will have access to capital markets on satisfactory terms to fund our commitments. Moreover, our ability to maintain short-term liquidity by utilizing our commercial paper program is dependent upon our maintaining an investment grade rating. Our liquidity would be adversely affected by changes in the commercial paper market or if our bank credit facilities become unavailable. Our operating results may be adversely affected by abnormal weather. We have historically sold less power, delivered less gas and received lower prices for natural gas, and consequently earned less income, when weather conditions are milder than normal. Mild weather in the future could diminish our revenues and results of operations and harm our financial condition. In addition severe weather can be destructive, causing outages and property damage, adversely affecting operating expenses and revenues. Potential competitive changes may adversely affect our electric and gas business due to the loss of customers or reductions in revenues. The utility industry has been undergoing dramatic structural change for several years, resulting in increasing competitive pressures on electric and natural gas utility companies. Competition in wholesale power sales has been introduced on a national level. Some states have also mandated or encouraged competition at the retail level. Increased competition may create greater risks to the stability of utility earnings generally and may in the future reduce our earnings from retail electric and natural gas sales. In a deregulated environment, formerly regulated utility companies that are not responsive to a competitive energy marketplace may suffer erosion in market share, revenues and profits as competitors gain access to their customers. We are subject to risks associated with recent events affecting capital markets and changes in business climate which could limit our access to capital, thereby increasing our costs and adversely affecting our results of operations. The September 11, 2001 attack on the United States and the ongoing war against terrorism by the United States have resulted in greater uncertainty in the financial markets. Additionally, the availability and cost of capital for our business and those of our competitors could be adversely affected by the bankruptcy of Enron Corporation and disclosures by Enron and other energy companies of their trading practices involving electricity and natural gas. These events have constrained and are expected to continue to constrain the capital available to our industry and could limit our access to funding for our operations. Other factors that generally could affect our ability to access capital include: (1) general economic conditions; (2) market prices for electricity and gas; and (3) our capital structure. Much of our business is capital intensive, and achievement of our long-term growth targets is dependent, at least in part, upon our ability to access capital at rates and on terms we determine to be attractive. If our ability to access capital becomes significantly constrained, our interest costs will likely increase and our financial condition and future results of operations could be significantly harmed. A downgrade in our credit rating could negatively affect our borrowing costs and our ability to access capital and to operate our businesses. In July 2002, Standard & Poor's lowered its long-term credit rating for our securities by one notch, and Moody's affirmed its ratings. Our senior secured debt is rated at A- and A1 by Standard and Poor's and Moody's, respectively, with a stable outlook. However, if Standard & Poor's or Moody's were to further downgrade our long-term rating, particularly below investment grade, our borrowing costs would increase, which would diminish our financial results, and our potential pool of investors and funding sources could decrease. Further, if our short-term ratings were to fall below A-1 or P-1, the current ratings assigned by Standard & Poor's and Moody's, respectively, it could significantly limit our access to the commercial paper market and our liquidity. In addition, Standard & Poor's rating philosophy links the rating of the utility subsidiary to the credit rating of the parent corporation. As a result, if Standard & Poor's were to downgrade SCANA Corporation's (SCANA) long-term credit rating, our long-term credit rating would also likely be downgraded. Changes in the environmental laws and regulations to which we are subject could increase our costs or curtail our activities. Compliance with extensive federal, state and local environmental laws and regulations requires us to commit significant capital toward environmental monitoring, installation of pollution control equipment, emission fees and permits at our facilities. These expenditures have been significant in the past and we expect that they will increase in the future. Changes in compliance requirements or a more burdensome interpretation by governmental authorities of existing requirements may impose additional costs on us or require us to curtail some of our activities. Costs of compliance with environmental regulations could harm our industry, our business and our results of operations and financial position, especially if emission or discharge limits are tightened, more extensive permitting requirements are imposed or additional substances become regulated. Changing transmission regulatory and energy marketing structures could affect our ability to compete in our electric markets, thereby adversely impacting our results of operations, cash flows and financial condition. The Federal Energy Regulatory Commission ("FERC") has issued a Notice of Proposed Rulemaking ("NOPR") on Standard Market Design which proposes sweeping changes to the country's existing regulatory framework governing transmission, open access and energy markets and will attempt, in large measure, to standardize the national energy market. While it is anticipated that significant change to the NOPR may occur and that implementation, presently scheduled for September 2004, may not occur for some time, any rules standardizing the markets may have significant impact on our access to or cost of power for our native load customers and on our marketing of power outside our service territory. At this time, management is unable to predict the final rules or timing of implementation and the impact on our results of operations and cash flows. Repeal of PUHCA could adversely impact our business by increasing our costs or otherwise changing or restricting the nature of activities in which we may engage. Any such changes could thereby impact our results of operations. We are a subsidiary of a registered holding company under the Public Utility Holding Company Act of 1935, as amended ("PUHCA"). Repeal of PUHCA has been proposed, but it is unclear whether or when such a repeal would occur. It is also unclear to what extent repeal of PUHCA would result in additional or new regulatory oversight or action at the federal and state levels, or what the impact of those developments might be on our business. Problems with operations could cause us to incur substantial costs, thereby adversely impacting our results of operations and financial condition. As the operator of power generation facilities, we could incur problems such as the breakdown or failure of power generation equipment, transmission lines, other equipment or processes which would result in performance below assumed levels of output or efficiency. The failure of a power generation facility may result in our purchasing replacement power at market rates. These purchases are subject to state regulatory approval for recovery through rates. A significant portion of our 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 and financial condition. The V.C. Summer nuclear plant, which we operate, provided approximately 4.5 million MWh, or 21% of our generation capacity, in 2001. Our license to operate this plant currently expires in 2022. We have filed an application with the federal Nuclear Regulatory Commission ("NRC") to extend the license for an additional 20 years, but there can be no assurance that the extension will be granted. We are also subject to other risks of nuclear generation, which include the following: o 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; o 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; o Uncertainties with respect to contingencies and assessment amounts if insurance coverage is inadequate; and o Uncertainties with respect to the technological and financial aspects of decommissioning nuclear plants at the end of their licensed lives. The NRC has broad authority under federal law to impose licensing and safety-related requirements for the operation of nuclear generation facilities. In the event of non-compliance, the NRC has the authority to impose fines or shut down a unit, or both, depending upon its assessment of the severity of the situation, until compliance is achieved. Revised safety requirements promulgated by the NRC could necessitate capital expenditures at nuclear plants such as ours. In addition, although we have no reason to anticipate a serious nuclear incident, if a major incident should occur at a domestic nuclear facility, it could harm our results of operations or financial condition. A major incident at a nuclear facility anywhere in the world could cause the NRC to limit or prohibit the operation or licensing of any domestic nuclear unit. Finally, in today's environment, there is a heightened risk of terrorist attack on the nation's nuclear facilities, which has resulted in increased security costs at our nuclear plant. Where You Can Find More Information We file annual, quarterly and special reports, proxy statements and other information with the SEC. Our SEC filings are available to the public over the Internet at the SEC's web site at http://www.sec.gov. You may also read and copy any document we file with the SEC at, and obtain copies of these documents by mail (at prescribed rates) from, the Public Reference section of the SEC, 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the operation of the public reference rooms. Because we have preferred stock which is listed on The New York Stock Exchange, you may also read our filings at the Stock Exchange's offices at 20 Broad Street, New York, New York 10005. This prospectus does not repeat important information that you can find in the registration statement and in the reports and other documents which we file with the SEC under the Securities Exchange Act of 1934 (the "Exchange Act"). The SEC allows us to "incorporate by reference" the information we file with it, which means that we can disclose important information to you by referring you to those documents. The information incorporated by reference is an important part of this prospectus, and information that we file later with the SEC will automatically update and supersede some of this information. We incorporate by reference our Annual Report on Form 10-K for the year ended December 31, 2001, our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2002, June 30, 2002 and September 30, 2002, our Current Report on Form 8-K filed October 29, 2002 and any future filing made with the SEC under Sections 13(a), 13(c), 14, or 15(d) of the Exchange Act until we sell all of the New Bonds. In addition, we are also incorporating by reference any additional documents that we file with the SEC pursuant to these sections of the Exchange Act after the date of the filing of the registration statement containing this prospectus and prior to the date of effectiveness of the registration statement. We are not required to, and do not, provide annual reports to holders of our debt securities unless specifically requested by a holder. You may request a copy of our SEC filings at no cost by writing or telephoning us at the following address or phone number, as the case may be: H. John Winn, III Manager - Investor Relations and Shareholder Services South Carolina Electric & Gas Company Columbia, South Carolina 29218 (803) 217-9240 You may obtain more information by contacting SCANA's Internet website at http://www.scana.com (which is not intended to be an active hyperlink). The information on SCANA's Internet website is not incorporated by reference in this prospectus, and you should not consider it part of this prospectus. You should rely on the information we incorporate by reference or provide in this prospectus or any prospectus supplement. We have not authorized anyone else to provide you with different information. We are not making an offer of these securities in any state where the offer is not permitted. You should not assume that the information in this prospectus or any prospectus supplement is accurate as of any date other than the date on the front of those documents, because our business, financial condition, results of operations and prospects may have changed since that date. South Carolina Electric & Gas Company We are a wholly-owned subsidiary of SCANA Corporation and a regulated public utility engaged in the generation, transmission, distribution and sale of electricity and the purchase and sale, primarily at retail, of natural gas in South Carolina. Our electric service area extends into 24 counties covering more than 15,000 square miles of the central, southern and southwestern portions of South Carolina. Our service area for natural gas encompasses all or part of 33 of South Carolina's 46 counties, and covers more than 22,000 square miles. The total population of the counties representing our combined service area in South Carolina is approximately 2.6 million. We maintain a generally constructive relationship with the Public Service Commission of South Carolina. We are allowed, subject to state commission approval during annual fuel and purchased gas cost hearings, full pass-through to retail customers of our electric fuel and natural gas costs. Such approval has historically been granted. There is also a weather normalization clause in effect for natural gas, which mitigates our commodity price risk and allows us to focus our efforts on serving our customers. We have significantly increased our marketing of services to commercial and industrial customers, and have executed long-term power supply contracts with a significant portion of our industrial customers. We provide all of our electric generation capacity through our own facilities and maintain a balanced supply and demand position as it relates to electric generation. We have executed a contract with a third party for the portion of the generating capacity of the Jasper plant that we do not expect to be able to utilize immediately when that plant begins operations, which is scheduled for 2004. We are subject to the jurisdiction of the Public Service Commission of South Carolina, and in August 2002 we submitted a request for an electric rate increase, which if approved would go into effect in February 2003. The rate increase relates primarily to our expenditures for a recently completed generating station and for the Jasper County, South Carolina generating station. We also operate and have a two-thirds interest in the V.C. Summer nuclear station in South Carolina. This station furnished approximately 21% of our electric generation capacity in 2001. In September 2002 we filed an application with the NRC to extend our license on the plant for an additional twenty years, until 2042. In 1999 FERC mandated that we reinforce our Lake Murray dam in order to maintain the lake in case of an extreme earthquake. Construction for the project and related activities, which began in the third quarter of 2001, is expected to cost approximately $250 million and be completed in 2005. Business Strategy Our business plan is based on traditional utility operations. We have a straight-forward strategic plan that is focused on retail service to customers in the South Carolina. We believe we can implement this strategy by: o Maintaining excellent customer service. We have received several prominent customer satisfaction awards, including an award for the highest marks for overall residential customer satisfaction among investor-owned utilities in the 12-state southern region in a study released by J. D. Power and Associates in July 2002 and a number one ranking in five of seven categories in a national survey of large electric customers released by TQS Research in August 2002. o Continuing our ability to provide cost-effective electric generation with the completion of our Jasper plant and obtaining a license extension for the V. C. Summer nuclear station. o Maintaining a strong credit rating and capital structure. o Developing our personnel by continued training. We conduct ongoing code of conduct and compliance training for all of our employees annually. Ratio of Earnings to Fixed Charges Our historical ratios of earnings to fixed charges are as follows: Twelve Months Ended Year Ended December 31, ------------------------------------------ September 30, 2002 2001 2000 1999 1998 1997 - ---------------------- ---- ---- ---- ---- ---- 3.55 3.78 4.24 3.71 4.40 3.85 For purposes of this ratio, earnings represent net income plus income taxes and fixed charges. Fixed charges represent interest charges and the estimated interest portion of annual rentals. Use of Proceeds We will use the proceeds from the sale of the New Bonds to finance our construction program, to reduce short-term indebtedness incurred for such purpose, and for other general corporate purposes. Description of the New Bonds General We will issue the New Bonds in one or more series under an Indenture, dated as of April 1, 1993, between us and The Bank of New York, successor to NationsBank of Georgia, National Association, as trustee (the "Trustee"), as supplemented (the "Mortgage"). The New Bonds and all other debt securities issued and outstanding under the Mortgage are referred to in this prospectus as the "Bonds." Capitalized terms used under this heading (other than under the caption "The Class A Mortgage") which are not otherwise defined in this prospectus have the meanings given those terms in the Mortgage. We have summarized selected provisions of the Mortgage below. The Mortgage is filed as an exhibit to the registration statement, and you should read the Mortgage for provisions that may be important to you. In the summary below, we have included references to section numbers of the Mortgage so that you can easily locate these provisions. Provisions of a Particular Series The New Bonds of a series need not be issued at the same time, bear interest at the same rate or mature on the same date. Unless otherwise provided in the terms of a series, a series may be reopened, without notice to or consent of any holder of outstanding Bonds, for issuances of additional New Bonds of that series. Each prospectus supplement which accompanies this prospectus will set forth the following information to describe the series of New Bonds related to that prospectus supplement, unless the information is the same as the information included in this section: o the title of the series of New Bonds; o the aggregate principal amount and any limit upon the aggregate principal amount of the series of New Bonds; o the portion of the principal payable upon acceleration of maturity, if other than the entire principal; o the date or dates on which the principal of the series of New Bonds will be payable, and any right that we have to change the date on which principal is payable amount; o the rate or rates at which the series of New Bonds will bear interest, if any (or the method of calculating the rate); the date or dates from which the interest will accrue; the dates on which the interest will be payable ("Interest Payment Dates"); the record dates for the interest payable on the Interest Payment Dates; o any payments due if the maturity of the New Bonds is accelerated; o any option on our part to redeem the series of New Bonds and redemption terms and conditions; o any obligation on our part to redeem or purchase the series of New Bonds in accordance with any sinking fund or analogous provisions or at the option of the holder and the relevant terms and conditions for that redemption or purchase; o the denominations of the series of New Bonds; o whether the series of New Bonds is subject to a book-entry system of transfers and payments; and o any other particular terms of the series of New Bonds and of its offering. Payment of New Bonds; Transfers; Exchanges We will pay any interest which is due on each New Bond to the person in whose name that New Bond is registered as of the close of business on the record date relating to the Interest Payment Date. (Section 207) However, we will pay interest which is payable when the New Bonds mature (whether the New Bonds mature on their stated date of maturity, the date the New Bonds are redeemed or otherwise) to the person to whom the relevant principal payment on the New Bonds is to be paid. We will pay principal of, and any premium and interest on, the New Bonds at our office or agency in Atlanta, Georgia (currently, the Trustee). The applicable prospectus supplement for any series of New Bonds will specify any other place of payment and any other paying agent. We may change the place at which the New Bonds will be payable, may appoint one or more additional paying agents (including us) and may remove any paying agent, all at our discretion. (Section 702) You may transfer or exchange the New Bonds for other New Bonds of the same series, authorized denominations (which are, unless otherwise stated in the prospectus supplement, denominations of $1,000 and any integral multiple thereof) and of like tenor and aggregate principal amount, at our office or agency in Atlanta, Georgia (currently, the Trustee). At our discretion, we may change the place for registration and transfer of the New Bonds, and we may appoint one or more additional security registrars (including us) and remove any security registrar. The prospectus supplement will identify any additional place for registration of transfer and any additional security registrar. You are not responsible for paying a service charge for any transfer or exchange of the New Bonds, but you may have to pay a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any registration of transfer or exchange of the New Bonds. (Sections 202 and 205) For additional information with respect to the rights of the owners of beneficial interests in New Bonds subject to a book-entry system of transfers and payments, see "Book-Entry System." Redemption The New Bonds are subject to redemption, as set forth in the relevant prospectus supplement, only upon notice by mail (unless waived) not less than 30 days prior to the redemption date. If less than all the New Bonds of a series are to be redeemed, the particular New Bonds to be redeemed will be selected by the method as shall be provided for any particular series, or in the absence of any such provision, by any method as the security registrar deems fair and appropriate. (Sections 409, 903 and 904) We may, in any notice of redemption, make any redemption conditional upon receipt by the Trustee, on or prior to the date fixed for redemption, of money sufficient to pay the redemption price. If the Trustee has not received that money, we will not be required to redeem those New Bonds and we will then give notice to that effect. (Section 904) Security General. The New Bonds will be equally and ratably secured with all other Bonds issued under the Mortgage. The Bonds are secured by: o a like principal amount of non-interest bearing first and refunding mortgage bonds (the "Class A Bonds" as more particularly described below), and o the lien of the Mortgage on substantially all of our properties used in the generation, purchase, transmission, distribution and sale of electricity and any other property which we may elect to subject to the lien of the Mortgage on the Mortgaged Property. The lien of the Mortgage is junior to the lien of our Indenture, dated as of January 1, 1945 (the "Class A Mortgage") to JPMorgan Chase Bank, successor to Central Hanover Bank and Trust Company, as trustee (the "Class A Trustee"). If we merge or are consolidated with another corporation and certain conditions set forth in the Mortgage are satisfied, then we may deliver to the Trustee bonds issued under an existing mortgage on the properties of such other corporation in lieu of or in addition to Class A Bonds. In that event, the Bonds will be secured, additionally, by such bonds (which would become Class A Bonds) and by the lien of the mortgage on the properties of such other corporation, subject to such existing mortgage, which lien would be junior to the liens of such existing mortgage (which would become a Class A Mortgage) and the Class A Mortgage. (Section 1206) When no Class A Bonds are outstanding under a Class A Mortgage except for Class A Bonds held by the Trustee, then, subject to the satisfaction of certain conditions, the Trustee will surrender those Class A Bonds for cancellation and the related Class A Mortgage will be satisfied and discharged. In that event, the lien of such Class A Mortgage on our property will cease to exist and the Mortgage will constitute, subject to certain exceptions, a first mortgage lien on the property mortgaged thereby. (Section 1207) Class A Bonds. The Class A Bonds are issued under the Class A Mortgage, and delivered to the Trustee under the Mortgage. The Class A Bonds will be registered in the name of the Trustee and will be owned and held, subject to the provisions of the Mortgage, for the benefit of the holders of all of the Bonds outstanding from time to time. We will have no interest in the Class A Bonds designated as the basis for authentication and delivery of Bonds. (Section 1201) The Trustee may not transfer any Class A Bonds which have been designated as the basis for the authentication and delivery of Bonds, except to a successor trustee. At the time any Bonds which have been authenticated and delivered upon the basis of Class A Bonds are no longer outstanding, we may request the Trustee to surrender for cancellation an equal principal amount of such Class A Bonds. (Sections 1203 and 1204) Lien of the Mortgage. The properties subject to the lien of the Mortgage are also subject to the prior first mortgage lien of the Class A Mortgage. As discussed under the caption "Description of the New Bonds--The Class A Mortgage--Security" in this prospectus, the lien of the Class A Mortgage is a first mortgage lien, subject to certain exceptions, against the properties subject thereto. Until the Class A Mortgage is discharged, the Bonds have the benefit of the lien of the Class A Mortgage on the property mortgaged thereby, to the extent of the aggregate principal amount of Class A Bonds designated as the basis for the authentication and delivery of Bonds held by the Trustee. (Granting Clauses and Article Twelve) The lien of the Mortgage is also subject to liens on after-acquired property existing at the time of acquisition and to various liens, including: o tax liens, mechanics', materialmen's and similar liens and certain employees' liens, in each case, which are not delinquent and which are being contested, o certain judgment liens, easements, reservations and rights of others (including governmental entities) in, and defects of title to, the property subject to the lien of the Mortgage which do not materially impair its use by us, o certain leases, and o certain other liens and encumbrances. (Granting Clauses and Section 101) The following, among other things, are excepted from the lien of the Mortgage: o cash and securities not held under the Mortgage, o contracts, leases and other agreements, bills, notes and other instruments, receivables, claims, certain intellectual property rights and other general intangibles, o automotive and similar vehicles, movable equipment, and railroad, marine and flight equipment, o all goods, stock in trade, wares and merchandise held for sale in the ordinary course of business, o fuel (including nuclear fuel assemblies), materials, supplies and other personal property consumable in the operation of our business, o portable equipment, o furniture and furnishings, and computers, machinery and equipment used exclusively for corporate administrative or clerical purposes, o electric energy, gas and other products generated, produced or purchased, o substances mined, extracted or otherwise separated from the land and all rights thereto, leasehold interests, and, o with certain exceptions, all property which is located outside of the State of South Carolina or Columbia County, Georgia. (Granting Clauses) The Mortgage contains provisions subjecting (with certain exceptions and limitations and subject to the prior lien of the Class A Mortgage) after-acquired electric utility property to the lien of the Mortgage. (Granting Clauses) The Mortgage provides that the Trustee has a lien upon the property subject to the lien of the Mortgage, for the payment of its compensation and expenses. This Trustee's lien is prior to the lien on behalf of the holders of the Bonds. (Section 1607) Issuance of Bonds The maximum principal amount of Bonds which we may issue under the Mortgage is unlimited. (Section 201) We may issue Bonds of any series from time to time on the basis of, and in an aggregate principal amount not exceeding the sum of: o the aggregate principal amount of Class A Bonds issued and delivered to the Trustee and designated by us as the basis for such issuance, o 70% of the amount of Unfunded Net Property Additions (generally defined as Property Additions (net of retirements) which have not been made or deemed to have been made the basis of the authentication and delivery of Bonds or used for other purposes under the Mortgage), o the aggregate principal amount of retired Bonds, and o cash deposited with the Trustee. (Sections 101, 104 and 302 and Articles Four, Five and Six) Property Additions are generally defined to include any Property subject to the lien of the Mortgage (the "Mortgaged Property") which we may elect to designate as such, except (with certain exceptions) goodwill, going concern value rights, intangible property or any property the cost of acquisition or construction of which is properly chargeable to an operating expense account. (Section 104) Because the Mortgaged Property is subject to the lien of the Class A Mortgage, the New Bonds are issued on the basis of Class A Bonds. The amount of Bonds we may issue on that basis will be limited by the amount of Class A Bonds which may be issued under the Class A Mortgage. See "The Class A Mortgage - Issuance of Additional Bonds." With certain exceptions in the case of Bonds issued on the basis of Class A Bonds and retired Bonds as described above, we can issue Bonds only if our Adjusted Net Earnings for 12 consecutive months within the preceding 18 months is at least twice the Annual Interest Requirements on: o all Bonds at the time outstanding, o the Bonds then applied for, and o all outstanding Class A Bonds other than Class A Bonds held by the Trustee under the Mortgage. (Sections 103, 301, 302 and 501) Release of Property We may obtain the release of property from the lien of the Mortgage either upon the basis of an equal amount of Unfunded Net Property Additions or upon the basis of the deposit of cash or a credit for retired Bonds. We may also obtain the release of property upon the basis of the release of the property from the lien of the Class A Mortgage. (Article Ten) Withdrawal of Cash We may withdraw cash deposited as the basis for the issuance of Bonds and cash representing payments in respect of Class A Bonds designated as the basis for the issuance of Bonds upon the basis of (1) Unfunded Net Property Additions in an amount equal to ten-sevenths of such cash, (2) an equal amount of retired Bonds or (3) an equal amount of Class A Bonds not then designated as the basis for the issuance of Bonds or the withdrawal of cash. (Sections 601 and 1202) In addition, we may withdraw cash upon the basis of (a) an equal amount of Unfunded Net Property Additions, or (b) ten-sevenths of the amount of retired Bonds, or may apply such cash to (y) the purchase of Bonds (at prices not exceeding ten-sevenths of the principal amount thereof) or (z) the redemption or payment at stated maturity of Bonds. (Sections 601 and 1005) Modification of Mortgage Except for modifications which will not have a material adverse effect upon the interests of the Holders of the Bonds, the holders of a majority in aggregate principal amount of the Outstanding Bonds (or if only certain series would be affected, the Outstanding Bonds of that series) must consent to amend the Mortgage. (Section 1701) However, no amendment may, without the consent of the holder of each outstanding Bond directly affected by the amendment, among other things (1) change the Stated Maturity of the principal of, or any installment of principal of or interest on that Bond, or reduce the principal amount, or the rate of interest on that Bond, or change the method of calculating the interest rate, or reduce any premium payable on that Bond, or impair any right to enforce payment on that Bond, or (2) permit the creation of a lien prior to the lien of the Mortgage on substantially all of the Mortgaged Property or otherwise deprive those holders of the security of the lien of the Mortgage or (3) reduce the percentage in principal amount of Bonds, the consent of whose Holders is required for any supplemental indenture or any waiver. (Section 1702) Events of Default Each of the following events is an Event of Default under the Mortgage: o We fail to make payments of principal or premium within three business days, or interest within 60 days, after the due date, o We fail to perform or breach any other covenant or warranty for a period of 90 days after notice, o We file for bankruptcy or certain other events involving insolvency, receivership or bankruptcy occur, or o We default under any Class A Mortgage. (Section 1101) If an Event of Default occurs and is continuing, either the Trustee or the Holders of 25% in principal amount of the Outstanding Bonds may declare the principal amount of all of the Outstanding Bonds to be immediately due and payable. After the declaration of acceleration has been made, but before the sale of any of the Mortgaged Property and before the Trustee has obtained a judgment or decree for payment of money, the Event of Default giving rise to such declaration of acceleration will be deemed to be waived, and such declaration and its consequences will be rescinded and annulled, if we (a) pay to the Trustee all overdue interest, principal and any premium on any Outstanding Bonds and (b) cure any other such Event of Default. (Sections 1102 and 1117) The Holders of a majority in principal amount of the Outstanding Bonds may direct the time, method and place of conducting any proceeding for the enforcement of the Mortgage available to the Trustee or exercising any trust or power conferred on the Trustee. No Holder of any Bond has the right to institute any proceeding with respect to the Mortgage, or for the appointment of a receiver or for any other remedy thereunder, unless: o that Holder previously gave written notice of a continuing Event of Default to the Trustee, o the Holders of a majority in principal amount of Outstanding Bonds have offered to the Trustee reasonable indemnity against costs and liabilities and requested that the Trustee take action, o the Trustee declined to take action for 60 days, and o the Holders of a majority in principal amount of Outstanding Bonds have given no inconsistent direction during such 60-day period; provided, however, that each Holder of a Bond has the right to enforce payment of that Bond when due. (Sections 1111, 1112 and 1116) In addition to the rights and remedies provided in the Mortgage, the Trustee may exercise any right or remedy available to the Trustee in its capacity as the owner and holder of Class A Bonds which arises as a result of a default under the Class A Mortgage. (Section 1119) Evidence of Compliance The Trust Indenture Act requires that we give the Trustee, at least annually, a brief statement as to our compliance with the conditions and covenants under the Mortgage. (Article Eight) The Class A Mortgage General. Capitalized terms used under this caption which are not otherwise defined in this prospectus have the meanings ascribed to those terms in the Class A Mortgage. The summaries under this caption are not detailed. Whenever particular provisions of the Class A Mortgage or terms defined in the Class A Mortgage are referred to in this caption, those provisions or definitions are qualified by reference to the Class A Mortgage. References to article and section numbers in this caption, unless otherwise indicated, are references to article and section numbers of the Class A Mortgage. A copy of the Class A Mortgage is included as an exhibit to the registration statement of which this prospectus is a part. Security. The Class A Bonds are secured, equally and ratably with all other bonds issued and outstanding under the Class A Mortgage, by a direct lien on substantially all of our fixed property and franchises used or useful in our public utility businesses (except cash, securities, contracts and accounts receivable, materials and supplies, natural gas, oil, certain minerals and mineral rights and certain other assets) now owned by us. The lien of the Class A Mortgage is a first lien except that it is subject to (1) certain excepted encumbrances and (2) the fact that titles to certain properties are subject to reservations and encumbrances such as are customarily encountered in the public utility business and which do not materially interfere with their use. The Class A Mortgage contains provisions that allow us to subject (with certain exceptions and limitations) after-acquired property to the lien thereof. (Granting Clauses) The Class A Mortgage prohibits us from acquiring property subject to prior liens if, following the acquisition, prior lien bonds would exceed 15% of the aggregate of outstanding bonds unless the principal amount of indebtedness secured by such prior liens does not exceed 70% of the cost of such property to us and unless, in certain cases, the net earnings of such property meet certain tests. (Section 7.05 and Fifty-third Supplemental Section 2.02) The Class A Trustee has a lien upon the property subject to the lien of the Class A Mortgage for payment of its reasonable compensation and expenses and for indemnification against certain liabilities. This lien is prior to the lien on behalf of the holders of bonds. (Section 16.10) Issuance of Additional Bonds. The principal amount of bonds which may be secured by the Class A Mortgage is currently limited to $5,000,000,000 and may be increased by a supplemental indenture or indentures without the consent of bondholders or stockholders. (Section 2.01 and Fifty-third Supplemental Section 1.04) Additional bonds may from time to time be issued on the basis of: o 70% of unfunded net property additions, o the deposit of cash, or o the retirement of bonds. (Articles Four, Five and Six, Fifty-third Supplemental Section 2.02) With certain exceptions in the case of bonds issued on the basis of the retirement of bonds, we can issue bonds only if net earnings for 12 consecutive months out of the preceding 18 months are at least twice the annual interest requirements on all bonds to be outstanding and all prior lien bonds. (Section 103 and Articles Four, Five and Six, Fifty-third Supplemental Section 2.02) We may withdraw, or apply to the purchase or redemption of bonds, cash deposited with the Class A Trustee as the basis for the issuance of bonds in an amount equal to the principal amount of bonds which we are then entitled to have authenticated and delivered. (Section 1.03 and Articles Four, Five and Six) At September 30, 2002 unfunded net property additions were approximately $1,941 million, sufficient to permit the issuance of approximately $1,359 million principal amount of bonds under the Class A Mortgage. Retirement credits in the amount of $148.3 million were available at September 30, 2002. Sinking Fund. The Class A Mortgage requires us to deposit, on or before June 1 in each year, with the Class A Trustee as a "sinking fund requirement" an amount equal to 1% of the aggregate principal amount of bonds (other than bonds authenticated on the basis of retirements of other bonds and certain retired bonds). We may pay the sinking fund requirement in cash or bonds. In addition, we may satisfy a portion of the sinking fund requirement by certifying to the Class A Trustee unfunded net property additions in an amount equal to ten-sevenths of the portion of the sinking fund requirement being satisfied. Any cash deposited may be applied to the purchase or redemption of bonds of any series or may be withdrawn by us against deposit of bonds. (Section 2.12, Second Supplemental Section 2, Third through Fifth, Seventh through Eleventh, Thirteenth through Fifty-third Supplementals Section 1.03 and Sixth and Twelfth Supplementals Section 2.03) Events of Default; Concerning the Trustee. The following are defaults under the Class A Mortgage: o We fail to make payments of principal or interest when due, o We fail to make any sinking fund or purchase fund payment when due, o We file for bankruptcy or certain other events involving insolvency, receivership or bankruptcy occur, and o We fail to perform certain covenants or agreements. Certain of these events become defaults only after the lapse of prescribed periods of time and/or notice from the Class A Trustee. (Section 11.01) The Trust Indenture Act, with which we have covenanted to abide, requires us to furnish the Class A Trustee with periodic evidence as to the absence of defaults and as to compliance with the terms of the Class A Mortgage. (Section 18.03) Upon the occurrence of a default under the Class A Mortgage, either the Class A Trustee or the holders of not less than 20% in principal amount of outstanding bonds may declare the principal of all outstanding bonds immediately due and payable. However, if the default is cured, the holders of a majority in principal amount of outstanding bonds may rescind that declaration and waive the default and its consequences. (Section 11.05) The holders of a majority in principal amount of outstanding bonds may direct the time, method and place of conducting any proceeding for the enforcement of the Class A Mortgage. (Section 11.12) No holder of any bond has the right to institute any proceeding with respect to the Class A Mortgage unless: o the holder previously gave written notice of a default to the Class A Trustee, o the holders of not less than 20% in principal amount of outstanding bonds have offered to the Class A Trustee reasonable indemnity against costs and liabilities and requested the Class A Trustee to take action, o the Class A Trustee declined to take action for 60 days, and o the holders of a majority in principal amount of outstanding bonds have given no inconsistent direction; provided, however, that each holder of a bond shall have the right to enforce payment of that bond when due. (Section 11.14) Miscellaneous. Subject to certain exceptions and limitations contained in the Class A Mortgage, property subject to the lien of that mortgage may be released only upon the substitution of cash, divisional bonds, bonds authenticated under the Class A Mortgage or certain other property. (Article Ten) Amendments of the Class A Mortgage require the consent of the holders of 66 2/3% in principal amount of outstanding bonds; provided, the bondholders shall have no power: o to extend the fixed maturity, or reduce the rate or extend the time of payment of interest on any bonds, or reduce the principal amount of any bonds, or change provisions relating to the sinking fund or the redemption provisions of any series of bonds outstanding under the Class A Mortgage, without the express consent of the holder of each bond which would be affected, o to reduce the percentages of holders whose consent is required to enter into any supplemental indenture, without the consent of the holders of all bonds outstanding, o to permit the creation by us of any mortgage or pledge or lien in the nature thereof, ranking prior to or equal with the lien of the Class A Mortgage on any of the mortgaged property, or o to deprive the holder of any bond outstanding under the Class A Mortgage of the lien of the Class A Mortgage on any of the mortgaged property. (Fifty-third Supplemental Section 2.01) Amendment of the Class A Mortgage by Vote of Trustee The Mortgage provides that, if we request the holders of the Class A Bonds to eliminate the sinking fund provisions of the Mortgage, the Trustee, as such a holder, will vote to amend the Class A Mortgage to eliminate the sinking fund provisions accordingly. The Company intends to request the Trustee to do so at such time as the Trustee is the sole holder of the Class A Bonds. (Section 1205, Fifty-third Supplemental) With respect to any other amendments to the Class A Mortgage, the Trustee will vote proportionately with what it reasonably believes will be the vote of the holders of all other Class A Bonds. However, if the proposed amendment of the Mortgage is an amendment or modification described under the caption "Modification of Mortgage" that requires the prior consent of a majority in aggregate principal amount of the Outstanding Bonds (or if only certain series would be affected, the Outstanding Bonds of such series), then the Trustee will not vote in favor of that amendment unless the consent requirement has already been met. (Section 1205) Book-Entry System If provided in the prospectus supplement, except under the circumstances described below, we will issue the New Bonds in the form of one or more global Bonds (each a "Global Bond"), each of which will represent beneficial interests in the New Bonds. Each such beneficial interest in a Global Bond is called a "Book-Entry Bond" in this prospectus. We will deposit those Global Bonds with, or on behalf of, The Depository Trust Company, New York, New York ("DTC"), or another depository as we may subsequently designate (the "Depository") relating to the New Bonds, and register them in the name of a nominee of the Depository. So long as the Depository, or its nominee, is the registered owner of a Global Bond, the Depository or its nominee, as the case may be, will be considered the owner of that Global Bond for all purposes under the Mortgage. We will make payments of principal of, any premium and interest on the Global Bond to the Depository or its nominee, as the case may be, as the registered owner of that Global Bond. Except as set forth below, owners of a beneficial interest in a Global Bond will not be entitled to have any individual New Bonds registered in their names, will not receive or be entitled to receive physical delivery of any New Bonds and will not be considered the owners of New Bonds under the Mortgage. Accordingly, to exercise any of the rights of the registered owners of the New Bonds, each person holding a beneficial interest in a Global Bond must rely on the procedures of the Depository. If that person is not a Direct Participant (hereinafter defined), then that person must also rely on procedures of the Direct Participant through which that person holds its interest. DTC The following information concerning DTC and DTC's book-entry system has been obtained from sources that we believe to be reliable, but neither we nor any underwriter, dealer or agent take any responsibility for the accuracy of that information. DTC will act as the initial securities depository for the Global Bonds. The Global Bonds will be issued only as fully-registered securities registered in the name of Cede & Co., DTC's partnership nominee, or such other name as may be requested by an authorized representative of DTC. One fully-registered New Bond certificate will be issued for each issue of the New Bonds, each in the aggregate principal amount of such issue, and will be deposited with DTC. If, however, the aggregate principal amount of any issue exceeds $500 million, one certificate will be issued with respect to each $500 million of principal amount and an additional certificate will be issued with respect to any remaining principal amount of such issue. DTC, the world's largest depository, is a limited-purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the Exchange Act. DTC holds and provides asset servicing for over two million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments from over 85 countries that DTC's participants ("Direct Participants") deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants' accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation ("DTCC"). DTCC, in turn, is owned by a number of Direct Participants of DTC and members of the National Securities Clearing Corporation, Government Securities Clearing Corporation, MBS Clearing Corporation, and Emerging Markets Clearing Corporation (NSCC, GSCC, MBSCC, and EMCC, also subsidiaries of DTCC), as well as by the New York Stock Exchange, Inc., the American Stock Exchange LLC, and the National Association of Securities Dealers, Inc. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants"). DTC has Standard & Poor's highest rating: AAA. The DTC Rules applicable to its Participants are on file with the SEC. More information about DTC can be found at www.dtcc.com. Purchases of the New Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the New Bonds on DTC's records. The ownership interest of each actual purchaser of each New Bond ("Beneficial Owner") is in turn to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation from DTC of their purchase, but Beneficial Owners are expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the New Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in the New Bonds, except in the event that use of the book-entry system for the New Bonds is discontinued. To facilitate subsequent transfers, all New Bonds deposited by Direct Participants with DTC are registered in the name of DTC's partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of New Bonds with DTC and their registration in the name of Cede & Co. or such other nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the New Bonds; DTC's records reflect only the identity of the Direct Participants to whose accounts such New Bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners may wish to take certain steps to augment transmission to them of notices of significant events with respect to the New Bonds, such as redemptions, tenders, defaults and proposed amendments to the New Bond documents. Beneficial Owners may wish to ascertain that the nominee holding the New Bonds for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of the notices be provided directly to them. Redemption notices shall be sent to DTC. If less than all of the New Bonds within an issue are being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed. Neither DTC nor Cede & Co., nor any other DTC nominee, will consent or vote with respect to the New Bonds, unless authorized by a Direct Participant in accordance with DTC's procedures. Under its usual procedures, DTC mails an Omnibus Proxy to us as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whose accounts the New Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy). Principal and interest payments on the New Bonds will be made to Cede & Co. or such other nominee as may be requested by an authorized representative of DTC. DTC's practice is to credit Direct Participants' accounts, upon DTC's receipt of funds and corresponding detail information from us or the Trustee, on the relevant payment date in accordance with their respective holdings shown on DTC's records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such Participant and not of DTC (nor its nominee), the Trustee or us, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal and interest to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC, is our responsibility or that of the Trustee. Disbursement of such payments to Direct Participants is the responsibility of DTC, and disbursement of such payments to the Beneficial Owners shall be the responsibility of Direct and Indirect Participants. A Beneficial Owner shall give notice to elect to have its New Bonds purchased or tendered by us, through its Participant, to the Trustee and shall effect delivery of such Book-Entry Bonds by causing the Direct Participant to transfer the Participant's interest in the New Bonds representing such New Bonds, on DTC's records, to the Trustee. The requirement for physical delivery of New Bonds in connection with a demand for repayment will be deemed satisfied when the ownership rights in the Global Bond or Bonds representing such New Bonds are transferred by Direct Participants on DTC's records and followed by a credit of tendered New Bonds to the Trustee's DTC account. DTC may discontinue providing its services as securities depository with respect to the New Bonds at any time by giving reasonable notice to us or the Trustee. Under such circumstances, in the event that a successor securities depository is not obtained, New Bonds in certificated form are required to be printed and delivered. In addition, we may decide to discontinue use of the system of book-entry transfers through DTC or a successor securities depository. In that event, New Bonds in certificated form will be printed and delivered. Neither we nor the Trustee will have any responsibility or obligation to the Depository, any Participant in the book-entry system or any Beneficial Owner with respect to (1) the accuracy of any records maintained by DTC or any Participant; (2) the payment by DTC or by any Participant of any amount due to any Participant or Beneficial Owner, respectively, in respect of the principal amount or purchase price or redemption price of, or interest on, any New Bonds; (3) the delivery of any notice by DTC or any participant; (4) the selection of the Beneficial Owners to receive payment in the event of any partial redemption of the New Bonds; or (5) any other action taken by DTC or any Participant. Plan of Distribution We may offer the New Bonds in any of three ways: o through underwriters or dealers, o directly to a limited number of purchasers or to a single purchaser, or o through agents. Each prospectus supplement will set forth: o the terms of the offering of the New Bonds, o the proceeds to us, o any underwriting discounts and other items constituting underwriters' compensation, and o any initial public offering price and any discounts or concessions allowed or reallowed or paid to dealers. From time to time, we may change any initial public offering price and any discounts or concessions allowed or reallowed or paid to dealers. By Underwriters If underwriters are used in the sale, the New Bonds being sold will be acquired by them for their own account and they may resell the New Bonds from time to time in one or more transactions, including negotiated transactions, at a fixed public offering price or at varying prices determined at the time of sale. Underwriters may offer the New Bonds to the public either through underwriting syndicates represented by one or more managing underwriters or directly by one or more firms acting as underwriters. The applicable prospectus supplement will name any underwriter involved in a sale of New Bonds and the cover page will state the name of the managing underwriter. Any underwriting agreement will provide that the obligations of the underwriters are subject to certain conditions precedent, and that the underwriters will be obligated to purchase all of the New Bonds to which that underwriting agreement relates if any are purchased. Any initial public offering price and any discounts or concessions allowed or re-allowed or paid to underwriters or dealers may be changed from time to time. We have agreed to indemnify the underwriters against some liabilities, including liabilities under the Securities Act of 1933, or to contribute to payments the underwriters may be required to make because of any of those liabilities. Specifically, the underwriting agreement will provide that we will indemnify the underwriters for losses, claims, liabilities, expenses or damages arising out of or based on untrue statements of a material fact contained in this prospectus or the registration statement of which the prospectus is a part (or any amendment hereto or thereto) or in any document filed under the Exchange Act and deemed to be incorporated by reference herein, or omissions to state material facts required to be stated herein or therein in order to make the statements contained herein or therein not misleading, with certain exceptions. Direct Sales We may also sell the New Bonds directly. In this case, no underwriters or agents would be involved. By Agents We may sell the New Bonds directly or through agents designated by us from time to time. In the applicable prospectus supplement, we will state the name of any agent involved in the offer or sale of the New Bonds as well as any commissions payable by us to such agent. Unless otherwise indicated in the prospectus supplement, any such agent will be acting on a best efforts basis for the period of its appointment. Experts The consolidated financial statements and related financial statement schedule incorporated in this prospectus by reference from our Annual Report on Form 10-K for the year ended December 31, 2001 have been audited by Deloitte & Touche LLP, independent auditors, as stated in their report which is incorporated herein by reference (which report expresses an unqualified opinion and includes an explanatory paragraph referring to a change in our method of accounting for operating revenues), and has been so incorporated in reliance upon the report of such firm given upon their authority as experts in accounting and auditing. Legal Opinions McNair Law Firm, P.A., of Columbia, South Carolina, and H. Thomas Arthur, Esq., our Senior Vice President and General Counsel, or Sarena D. Burch, our Deputy General Counsel, will pass upon the validity of the New Bonds for us. Troutman Sanders LLP, of Richmond, Virginia, will serve as counsel to any underwriters. Troutman Sanders LLP will rely as to all matters of South Carolina law upon the opinion of H. Thomas Arthur, Esq. or Sarena D. Burch, Esq. At September 30, 2002, H. Thomas Arthur, Esq., and Sarena D. Burch, Esq., owned beneficially 15,089 and 4,192, respectively (and options to purchase 70,930 and 29,876, respectively), shares of SCANA's Common Stock, including shares acquired by the trustee under its Stock Purchase-Savings Program by use of contributions made by Mr. Arthur and Ms. Burch and earnings thereon and including shares purchased by the trustee by use of SCANA contributions and earnings thereon. PART II INFORMATION NOT REQUIRED IN PROSPECTUS Item 14. Other Expenses of Issuance and Distribution Securities and Exchange Commission filing fee....... $71,000 Printing Expense.................................... 15,000* Blue Sky and Legal fees............................. 125,000* Rating Agency fees.................................. 100,000* Trustee fees........................................ 25,000* Accounting services................................. 30,000* Miscellaneous....................................... 10,000* -------- Total.............................................. $376,000* *Estimated Item 15. Indemnification of Directors and Officers The South Carolina Business Corporation Act of 1988 permits indemnification of the Registrant's directors and officers in a variety of circumstances, which may include indemnification for liabilities under the Securities Act. Under Sections 33-8-510, 33-8-550 and 33-8-560 of the South Carolina Business Corporation Act of 1988, a South Carolina corporation is authorized generally to indemnify its directors and officers in civil or criminal actions if they acted in good faith and reasonably believed their conduct to be in the best interests of the corporation and, in the case of criminal actions, had no reasonable cause to believe that the conduct was unlawful. In addition, the Registrant carries insurance on behalf of directors, officers, employees or agents that may cover liabilities under the Securities Act. Item 16. Exhibits Exhibits required to be filed with this registration statement are listed in the following Exhibit Index. Certain of such exhibits which have heretofore been filed with the SEC and which are designated by reference to their exhibit numbers in prior filings are hereby incorporated herein by reference and made a part hereof. Item 17. Undertakings The undersigned Registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: (i) to include any prospectus required by section 10(a)(3) of the Securities Act of 1933; (ii) to reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; and (iii) to include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement; Provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed with or furnished to the Commission by the Registrant pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement. (2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. The undersigned Registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the Registrant's annual report pursuant to section 13(a) or section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan's annual report pursuant to section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3, except for the assignment of a security rating pursuant to transaction requirement B-2 of Form S-3, which requirement the Registrant reasonably believes will be met by the time of sale, and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Columbia, State of South Carolina, on November 25, 2002. (REGISTRANT) South Carolina Electric & Gas Company By: s/N. O. Lorick (Name & Title): N. O. Lorick, President and Chief Operating Officer Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated. (i) Principal executive officer: By: s/W. B. Timmerman (Name & Title): W. B. Timmerman, Chairman of the Board, Chief Executive Officer and Director Date: November 25, 2002 (ii) Principal financial officer: By: s/K. B. Marsh (Name & Title): K. B. Marsh, Senior Vice President-Finance and Chief Financial Officer Date: November 25, 2002 (iii) Principal accounting officer: By: s/J. E. Swan, IV (Name & Title) J. E. Swan, IV, Controller Date: November 25, 2002 (iv) Other Directors: *B. L. Amick; J. A. Bennett; W. B. Bookhart, Jr.; W. C. Burkhardt; E. T. Freeman; D. M. Hagood; W. H. Hipp; L. M. Miller; M. K. Sloan; H. C. Stowe and G. S. York * Signed on behalf of each of these persons by Kevin B. Marsh, Attorney-in-Fact Date: November 25, 2002 EXHIBIT INDEX Exhibit No. Description 1.01 Underwriting Agreement Form of Underwriting Agreement relating to the New Bonds (Filed herewith) 3.01 Restated Articles of Incorporation, as adopted on May 3, 2001 (Filed as Exhibit 3.01 to Registration Statement No. 333-65460) 3.02 Articles of Amendment dated May 22, 2001 (Filed as Exhibit 3.02 to Registration Statement No. 333-65460) 3.03 Articles of Correction dated June 1, 2001 (Filed as Exhibit 3.03 to Registration Statement No. 333-65460) 3.04 Articles of Amendment dated June 14, 2001 (Filed as Exhibit 3.04 to Registration Statement No. 333-65460) 3.05 Articles of Amendment dated August 30, 2001 (Filed herewith) 3.06 Articles of Amendment dated March 13, 2002 (Filed herewith) 3.07 Articles of Amendment dated May 9, 2002 (Filed herewith) 3.08 Articles of Amendment dated June 4, 2002 (Filed herewith) 3.09 Articles of Amendment dated August 12, 2002 (Filed herewith) 3.10 By-Laws as revised and amended on February 22, 2001 (Filed as Exhibit 3.05 to Registration Statement No. 333-65460) 4.01 Indenture dated as of January 1, 1945, from the South Carolina Power Company (the "Power Company") to 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) 4.02 Fourth Supplemental Indenture dated as of April 1, 1950, to Indenture referred to in Exhibit 4.01, pursuant to which SCE&G assumed said Indenture (Filed as Exhibit 2-C to Registration Statement No. 2-26459) 4.03 Fifth through Fifty-second Supplemental Indentures to Indenture referred to in Exhibit 4.01 dated as of the dates indicated below and filed as exhibits to the Registration Statements whose file numbers are set forth below: December 1, 1950 Exhibit 2-D to Registration No. 2-26459 July 1, 1951 Exhibit 2-E to Registration No. 2-26459 Exhibit No. Description 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. 2-26489 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. 2-26459 September 1, 1968 Exhibit 4-O to Registration No. 2-29693 June 1, 1969 Exhibit 4-C to Registration No. 2-31569 December 1, 1969 Exhibit 4-O to Registration No. 33-38580 June 1, 1970 Exhibit 4-R to Registration No. 2-35388 March 1, 1971 Exhibit 2-B-17 to Registration No. 2-37363 January 1, 1972 Exhibit 2-B to Registration No. 2-40324 July 1, 1974 Exhibit 2-A-19 to Registration No. 33-38580 May 1, 1975 Exhibit 4-C to Registration No. 2-51291 July 1, 1975 Exhibit 2-B-21 to Registration No. 33-38580 February 1, 1976 Exhibit 2-B-22 to Registration No. 2-53908 December 1, 1976 Exhibit 2-B-23 to Registration No. 2-55304 March 1, 1977 Exhibit 2-B-24 to Registration No. 2-57936 May 1, 1977 Exhibit 4-C to Registration No. 2-58662 February 1, 1978 Exhibit 4-C to Registration No. 33-38580 June 1, 1978 Exhibit 2-A-3 to Registration No. 2-61653 April 1, 1979 Exhibit 4-C to Registration No. 33-38580 June 1, 1979 Exhibit 2-A-3 to Registration No. 33-38580 April 1, 1980 Exhibit 4-C to Registration No. 33-38580 June 1, 1980 Exhibit 4-C to Registration No. 33-38580 December 1, 1980 Exhibit 4-C to Registration No. 33-38580 April 1, 1981 Exhibit 4-D to Registration No. 33-49421 June 1, 1981 Exhibit 4-D to Registration No. 2-73321 March 1, 1982 Exhibit 4-D to Registration No. 33-49421 April 15, 1982 Exhibit 4-D to Registration No. 33-49421 May 1, 1982 Exhibit 4-D to Registration No. 33-49421 December 1, 1984 Exhibit 4-D to Registration No. 33-49421 December 1, 1985 Exhibit 4-D to Registration No. 33-49421 June 1, 1986 Exhibit 4-D to Registration No. 33-49421 February 1, 1987 Exhibit 4-D to Registration No. 33-49421 September 1, 1987 Exhibit 4-D to Registration No. 33-49421 January 1, 1989 Exhibit 4-D to Registration No. 33-49421 January 1, 1991 Exhibit 4-D to Registration No. 33-49421 February 1, 1991 Exhibit 4-D to Registration No. 33-49421 July 15, 1991 Exhibit 4-D to Registration No. 33-49421 August 15, 1991 Exhibit 4-D to Registration No. 33-49421 April 1, 1993 Exhibit 4-E to Registration No. 33-49421 July 1, 1993 Exhibit 4-D to Registration No. 33-57955 Exhibit No. Description 4.04 Fifty-Third Supplemental Indenture, dated as of May 1, 1999, to Indenture referred to in Exhibit 4.01 (Filed as Exhibit 4.04 to Registration Statement No. 333-86387) 4.05 Indenture dated as of April 1, 1993 from SCE&G to NationsBank of Georgia, National Association (Filed as Exhibit 4-F to Registration Statement No. 33-49421) 4.06 First Supplemental Indenture to Indenture referred to in Exhibit 4.05 dated as of June 1, 1993 (Filed as Exhibit 4-G to Registration Statement No. 33-49421) 4.07 Second Supplemental Indenture to Indenture referred to in Exhibit 4.05 dated as of June 15, 1993 (Filed as Exhibit 4-G to Registration Statement No. 33-57955) 5.01 Opinion Re Legality Opinion of H. Thomas Arthur, Esq. (Filed herewith) 8.01 Opinion Re Tax Matters (Not Applicable) 10.01 Service Agreement between SCE&G and SCANA Services, Inc., effective April 1, 2002 (Filed herewith) 12.01 Statements Re Computation of Ratios (Filed herewith) 15.01 Letter re Unaudited Interim Financial Information (Not applicable) 23.01 Consents of Experts and Counsel A. Consent of Deloitte & Touche LLP (Filed herewith) B. Consent of H. Thomas Arthur, Esq. (Included in opinion filed as Exhibit 5.01). 24.01 Power of Attorney (Filed herewith) 25.01 Statement of Eligibility of Trustee Statement of Eligibility of The Bank of New York, as Trustee (Form T-1) (Filed herewith) 26.01 Invitations for Competitive Bids (Not applicable) EX-3 3 under02agr.txt UNDERWRITERS AGREEMENT Exhibit 1.01 SOUTH CAROLINA ELECTRIC & GAS COMPANY First Mortgage Bonds, % Series due UNDERWRITING AGREEMENT Ladies and Gentlemen: The undersigned South Carolina Electric & Gas Company, a South Carolina corporation (the "Company"), addresses you as the representatives (the "Representatives") of each of the persons, firms and corporations listed in Schedule A hereto (the "Underwriters"). The term "Representatives" as used herein shall be deemed to mean the firms and/or corporations addressed hereby. If there is only one firm or corporation to which this Agreement (the "Agreement") is addressed, such term shall be deemed to mean such firm or corporation. If there are any Underwriters in addition to yourselves, you represent that you have been authorized by each of the Underwriters to enter into this Agreement on their behalf and to act for them in the manner herein provided in all matters relating to carrying out the provisions of this Agreement. If there are no Underwriters other than yourselves, the term "Underwriters" shall be deemed to mean the Representatives. All obligations of the Underwriters hereunder are several and not joint. The Company hereby confirms its agreement with the several Underwriters as follows: 1. Description of the Bonds. The Company has authorized the issuance and sale of $ principal amount of its First Mortgage Bonds, % Series due (the "Bonds"), to be issued under and secured by (i) the Indenture, dated as of April 1, 1993 (the "Indenture"), made by the Company to The Bank of New York, successor to NationsBank of Georgia, National Association, as trustee (the "Trustee"), and (ii) a Supplemental Indenture from the Company to the Trustee (hereinafter called the "Supplemental Indenture"), dated as of June 15, 1993 (the Indenture as so supplemented being hereinafter collectively referred to as the "Indenture as Supplemented"). The Bonds are also entitled to the benefit of a like principal amount of the Company's First and Refunding Mortgage Bonds (the "Class A Bonds"), issued or to be issued under the Company's Indenture dated as of January 1, 1945, as supplemented (the "Class A Mortgage"), to J P Morgan Chase Bank, successor to Central Hanover Bank and Trust Company, as trustee, delivered to and held by the Trustee under the Indenture as Supplemented. The Class A Mortgage constitutes, subject to certain exceptions, a first mortgage lien on substantially all of the public utility properties of the Company. The Bonds shall be dated, shall mature, shall bear interest, shall be payable and shall otherwise conform to the description thereof to be contained in the Prospectus relating to the Bonds referred to in Section 2(a) hereof and to the provisions of the Indenture as Supplemented. No amendment to the Indenture as Supplemented is to be made prior to the Closing Date hereinafter referred to unless said amendment is first approved by you. 2. Representations and Warranties of the Company. The Company represents and warrants to, and agrees with, each Underwriter that: (a) Registration statements (File Nos. and 333-65460) on Form S-3 with respect to the Bonds, including a prospectus, have been prepared by the Company in conformity with the requirements of the Securities Act of 1933, as amended (the "Act"), the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"), and the rules and regulations of the Securities and Exchange Commission (the "Commission") under such Acts, and have been filed with and declared effective by the Commission. Copies of such registration statements and any amendments thereto heretofore filed (including all exhibits except those incorporated therein by reference) have heretofore been delivered to you. The Company will file with or mail for filing to the Commission a prospectus supplement relating to the Bonds pursuant to Rule 424 under the Act. The registration statements when they became effective and as they may be amended as of the date of this Agreement are hereafter collectively referred to as the "Registration Statement" and the prospectus as supplemented including all documents incorporated therein by reference is hereafter referred to as the "Prospectus." If the Company files any documents pursuant to Sections 13 or 14 of the Securities Exchange Act of 1934, as amended (the "Exchange Act") after the time the Registration Statement became effective and prior to the termination of the offering of the Bonds by the Underwriters, which documents are deemed to be incorporated by reference in the Prospectus, the term "Prospectus," unless the context otherwise indicates or requires, shall refer to said Prospectus as supplemented by the documents so filed from and after the time said documents are filed with the Commission. (b) The documents incorporated by reference in the Prospectus, when they became effective or were filed with the Commission, as the case may be, conformed in all material respects to the requirements of the Exchange Act and the rules and regulations of the Commission thereunder, and none of such documents contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading; and any further documents so filed and incorporated by reference, when they become effective or are filed with the Commission, as the case may be, will conform in all material respects to the requirements of the Exchange Act and the rules and regulations of the Commission thereunder, and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading. (c) When the Registration Statement became effective and at all times subsequent thereto up to and at the Closing Date (hereinafter defined), (i) the Registration Statement and Prospectus and any post-effective amendments or supplements thereto contained and will contain all statements and information which are required to be stated therein by the Act, the Trust Indenture Act and the rules and regulations of the Commission under such Acts, and in all material respects, conformed and will conform to the requirements thereof, and (ii) neither the Registration Statement nor the Prospectus nor any post-effective amendment or supplement thereto included or will include any untrue statement of a material fact or omitted or will omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading; provided, however, that the foregoing representations and warranties shall not apply to information contained in or omitted from the Registration Statement or Prospectus or any such amendment or supplement thereto in reliance upon, and in conformity with, written information furnished to the Company by you, or by any Underwriter through you, specifically for use in the preparation thereof, or to any information relating to the book-entry system of payments and transfers of the Bonds or the depository therefor set forth under the caption "Book-Entry System" provided by The Depository Trust Company or to any statements in or omissions from the Statement of Eligibility (Form T-1) of the Trustee. (d) The financial statements of the Company incorporated by reference in the Prospectus fairly present the financial condition of the Company as of the dates indicated and the results of operations and changes in financial position for the periods therein specified; and said financial statements have been prepared in accordance with generally accepted accounting principles, applied on a consistent basis throughout the periods involved. Deloitte & Touche LLP, who have audited certain of such financial statements, as set forth in their report with respect to such financial statements, are independent public accountants with respect to the Company as required by the Act and the rules and regulations of the Commission thereunder. (e) The Company has been duly organized and is validly existing as a corporation under the laws of the State of South Carolina; the Company has the corporate power and authority to own and operate the properties now owned by it and to carry on its business as now being carried on by it, as described in the Prospectus; and neither the character of properties owned or leased by the Company nor the nature of the business transacted by it make the licensing or qualification of the Company as a foreign corporation necessary in any other state or jurisdiction. (f) The Company is a "public utility company" and a "subsidiary company" of a "registered holding company" as such terms are defined in the Public Utility Holding Company Act of 1935, as amended (the "1935 Act"). The Company has no subsidiaries other than SCE&G Trust I, a Delaware business trust. (g) The Bonds have been duly authorized and, when duly executed, authenticated and issued as provided in the Indenture as Supplemented and delivered pursuant to this Agreement, will constitute valid and legally binding obligations of the Company entitled to the security and benefits of the Indenture as Supplemented, will be secured equally and ratably with all other Bonds to be issued under the Indenture as Supplemented, and will conform to the description thereof contained in the Prospectus. The Indenture as Supplemented has been duly authorized, executed and delivered by the Company and is a valid and legally binding instrument in accordance with its terms. The Indenture as Supplemented has been qualified under the Trust Indenture Act. (h) The Indenture as Supplemented constitutes a legally valid and directly enforceable mortgage lien (except to the extent that enforcement of such lien may be limited by the effect of certain laws and judicial decisions upon the remedies provided in the Indenture as Supplemented, which, however, do not make the remedies afforded inadequate for the practical realization of the security and benefits provided by the Indenture as Supplemented, and except as enforceability of such lien may be limited by bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting creditors' rights and by general equity principles) upon the respective properties subject thereto (which properties constitute substantially all of the electric utility properties of the Company) subject only to Permitted Liens (as defined in the Indenture), the prior lien of the Class A Mortgage and to minor defects and irregularities customarily found in properties of like size and character which do not materially impair the use of the property affected thereby in the operations of the business of the Company, and the Indenture as Supplemented conforms to the description thereof contained in the Prospectus. (i) Except as contemplated in the Prospectus, subsequent to the respective dates as of which information is given in the Registration Statement and the Prospectus, the Company has not incurred any liabilities or obligations, direct or contingent, or entered into any transactions, not in the ordinary course of business, which are material to the Company, and there has not been any material change in the capital stock or long-term debt of the Company, or any material adverse change, or any development which the Company has reasonable cause to believe will involve a prospective material adverse change, in the condition (financial or other), business, net worth or results of operations of the Company. (j) Except as set forth in the Prospectus, there is not pending or, to the knowledge of the Company, threatened, any action, suit or proceeding, to which the Company is a party, before or by any court or governmental agency or body, which might result in any material adverse change in the condition (financial or other), business, net worth or results of operations of the Company or might materially and adversely affect the properties or assets thereof; and there are no contracts or documents of the Company which are required to be filed as exhibits to the Registration Statement by the Act or by the rules and regulations of the Commission thereunder which have not been so filed. (k) The Company holds good and marketable title in fee simple, except as otherwise stated in the Prospectus, to all of the real property referred to therein as being owned by it, free and clear of all liens and encumbrances, except liens and encumbrances referred to in the Prospectus (or reflected in the financial statements included therein) and liens and encumbrances which are not material in the aggregate and do not materially interfere with the conduct of the business of the Company and the properties referred to in the Prospectus as held under lease by the Company are held by it under valid and enforceable leases with such exceptions as do not materially interfere with the conduct of the business of the Company. (l) The Class A Bonds which heretofore or on the date hereof have been issued or on the closing date shall have been issued to the Trustee under the Indenture as Supplemented as the basis for the issuance of the Bonds have been duly authorized, executed, authenticated and delivered to the Trustee under the Indenture as Supplemented, constitute valid and legally binding obligations of the Company, entitled to the security and benefits of the Class A Mortgage, and are equally and ratably issued with all other bonds issued under the Class A Mortgage. (m) The Class A Mortgage constitutes a legally valid and directly enforceable first mortgage lien (except to the extent that enforcement of such lien may be limited by the effect of certain laws and judicial decisions upon the remedies provided in the Class A Mortgage, which, however, do not make the remedies afforded inadequate for the practical realization of the security and benefits provided by the Class A Mortgage, and except as enforceability of such lien may be limited by bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting creditors' rights and by general equity principles) upon the respective properties subject thereto (which properties constitute substantially all of the utility properties of the Company) subject only to excepted encumbrances (as defined therein) and to minor defects and irregularities customarily found in properties of like size and character, which do not materially impair the use of the property affected thereby in the operation of the business of the Company, and the Class A Mortgage conforms to the description thereof contained in the Prospectus. (n) The performance of this Agreement and the consummation of the transactions herein contemplated will not result in a breach or violation of any of the terms and provisions of, or constitute a default under, any statute, indenture, mortgage, deed of trust, note agreement or other agreement or instrument to which the Company is a party or by which it is bound or to which any of the property of the Company is subject, the Company's Restated Articles of Incorporation, as amended, or by-laws, or any order, rule or regulation of any court or governmental agency or body having jurisdiction over the Company or any of its properties; no consent, approval, authorization or order of any court or governmental agency or body is required for the consummation of the transactions contemplated by this Agreement in connection with the issuance or sale of the Bonds by the Company hereunder, except such as may be required under the Act, the Trust Indenture Act or state securities laws and except for the approval of The Public Service Commission of South Carolina which has been obtained or will be obtained prior to the Closing Date and is or will be in full force and effect; and the Company has full power and authority to authorize, issue and sell the Bonds on the terms and conditions herein set forth. 3. Purchase, Sale and Delivery of the Bonds. On the basis of representations, warranties and agreements herein contained, but subject to the terms and conditions herein set forth, the Company agrees to issue and sell to the several Underwriters named in Schedule A hereto, and each such Underwriter agrees, severally and not jointly, to purchase from the Company at the purchase price set forth in such Schedule A the principal amount of Bonds set forth opposite the name of such Underwriter in such Schedule A. The Bonds will be delivered by the Company to you for the accounts of the several Underwriters against payment of the purchase price therefor by wire transfer in federal (same day) funds at the office of McNair Law Firm, P. A., 1301 Gervais Street, 17th Floor, Columbia, South Carolina 29201, or such other office as may be mutually agreeable, at 10:00 A.M., New York City Time, on (or, if the New York and American Stock Exchanges and commercial banks in The City of New York are not open on such day, the next day on which such exchanges and banks are open), or at such other time not later than eight full business days thereafter as you and the Company determine, such time being herein referred to as the "Closing Date." It is understood that you, individually and not as Representatives of the Underwriters, may (but shall not be obligated to) make payment to the Company, on behalf of any Underwriter or Underwriters, for the Bonds to be purchased by such Underwriter or Underwriters. Any such payment by you shall not relieve any such Underwriter or Underwriters of any of its or their obligations hereunder. 4. Covenants. The Company covenants and agrees with each Underwriter that: (a) The Company will file no amendment to the Registration Statement, and prior to the completion of the offering of the Bonds make no supplement to the Prospectus, including the initial supplement to the Prospectus which is filed pursuant to Rule 424 under the Act referred to in Section 2(a) hereof, of which you have not been advised and furnished with a copy or to which you have promptly and reasonably objected; it will notify you, promptly after it shall receive notice thereof, of the time when any post-effective amendment to the Registration Statement has become effective or any supplement to the Prospectus has been filed; it will notify you promptly of any request by the Commission for the amending or supplementing of the Registration Statement or Prospectus or for additional information; it will prepare and file with the Commission, promptly upon your request, any amendments or supplements to the Registration Statement or Prospectus which, in your opinion, may be necessary or advisable in connection with the distribution of the Bonds by the Underwriters; it will file promptly all reports and any definitive proxy or information statements required to be filed by the Company with the Commission pursuant to the Exchange Act subsequent to the date of the Prospectus and for so long as the delivery of a prospectus is required in connection with the offering or sale of the Bonds; and it will furnish to you at or prior to the filing thereof a copy of any document which upon filing is deemed to be incorporated by reference in the Prospectus. (b) The Company will advise you, promptly after it shall receive notice or obtain knowledge thereof, of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or of any proceeding for that purpose having been instituted or threatened by the Commission; and it will promptly use its best efforts to prevent the issuance of any stop order or to obtain its withdrawal if such a stop order should be issued. (c) Within the time during which a prospectus relating to the Bonds is required to be delivered under the Act, the Company will comply as far as it is able with all requirements imposed upon it by the Act, as now and hereafter amended, and by the rules and regulations of the Commission thereunder, as from time to time in force, so far as necessary to permit the continuance of sales of or dealings in the Bonds as contemplated by the provisions hereof and the Prospectus. If during such period any event occurs as a result of which the Prospectus as then amended or supplemented would include an untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances then existing, not misleading, or if during such period it is necessary to amend or supplement the Prospectus to comply with the Act or to file under the Exchange Act any document incorporated by reference in the Prospectus in order to comply with the Act or the Exchange Act, the Company will promptly notify you and, if such event occurs within nine months after the date hereof, the Company will at its own cost and expense amend or supplement the Prospectus in order to correct such statement or omission and in order that the Prospectus as so amended or supplemented will comply with the requirements of Section 10(a)(1) of the Act or file such document to effect such compliance. In case any Underwriter is required to deliver a Prospectus relating to the Bonds at any time nine months or more after the date hereof, the Company will, at the expense of the Underwriter requesting the same, prepare promptly such prospectus or prospectuses and thereafter amend or supplement the same as may be necessary to permit compliance with the requirements of Section 10(a)(3) of the Act. (d) The Company will use its best efforts to qualify the Bonds for sale under the securities laws of such jurisdictions as you reasonably designate and to continue such qualifications in effect so long as required for the distribution of the Bonds, except that the Company shall not be required in connection therewith to qualify as a foreign corporation or to execute a general consent to service of process in any state. The Company will also arrange for the determination of the Bonds' eligibility for investment under the laws of such jurisdictions as you reasonably request. (e) The Company has furnished or will furnish to the Underwriters, as soon as available, copies of the Registration Statement (two of which will be signed and will include all exhibits except those incorporated by reference), the Prospectus (including all documents incorporated by reference therein but excluding exhibits to such documents), and all amendments and supplements to such documents, including any prospectus prepared to permit compliance with Section 10(a)(3) of the Act, all in such quantities as you may from time to time reasonably request. (f) The Company will make generally available to its security holders as soon as practicable, but in any event not later than 15 months after the end of the Company's current fiscal quarter, an earnings statement (which need not be audited) covering a 12-month period beginning after the effective date of the Registration Statement which shall satisfy the provisions of Section 11(a) of the Act. (g) So long as any of the Bonds are outstanding, the Company agrees to furnish to you, and, upon request, to each of the other Underwriters, (i) as soon as they are available, copies of all the reports (financial or other) and any definitive proxy statements mailed to security holders or filed with the Commission and (ii) from time to time such other information concerning the business and financial condition of the Company as you may reasonably request. (h) The Company, whether or not the transactions contemplated hereunder are consummated or this Agreement is prevented from becoming effective or is terminated under the provisions of Section 9 hereof, will pay all costs and expenses incident to the performance of the obligations of the Company hereunder, including, without limitation, the fees and expenses of the Company's accountants and counsel for the Company, all costs incident to the preparation, printing and filing under the Act of the Registration Statement, the Prospectus and all amendments and supplements thereto, any fees charged by any investment rating agencies for rating the Bonds, all fees and disbursements incurred by the Company and by the Underwriters in connection with the qualification of the Bonds under the laws of various jurisdictions as provided in Section 4(d) hereof and the determination of their eligibility for investment under the laws of various jurisdictions (including the cost of furnishing to the Underwriters memoranda relating thereto and the reasonable fees and disbursements of counsel for the Underwriters in connection therewith), the cost of furnishing to the Underwriters copies of the Registration Statement, the Prospectus and each amendment and supplement thereto, in such numbers as you may reasonably request, the cost of printing this Agreement, the costs and charges of the Trustee and of any depository in connection with a book-entry system of payments and transfers, and the cost of preparing the Bonds. If the sale of the Bonds provided for herein is not consummated by reason of any failure, refusal or inability on the part of the Company to perform any agreement on its part to be performed, or because any other condition of the Underwriters' obligation hereunder required to be fulfilled by the Company is not fulfilled, the Company will reimburse the several Underwriters for all reasonable out-of-pocket disbursements (including fees and disbursements of counsel) incurred by the Underwriters in connection with their investigation, preparing to market and marketing the Bonds or in contemplation of performing their obligations hereunder. The Company shall not in any event be liable to any of the Underwriters for loss of anticipated profits from the transactions covered by this Agreement. (i) The Company will apply the net proceeds from the sale of the Bonds to be sold by it hereunder for the purposes set forth under "Use of Proceeds" in the Prospectus. (j) The Company will not for a period of 30 days after the commencement of the public offering of the Bonds, without the prior written consent of the Representatives, sell, contract to sell or otherwise dispose of any other of its First Mortgage Bonds. (k) The Company will file with the Commission a Certificate of Notification on Form U-6B-2 under the 1935 Act within ten days of the Closing Date. 5. Conditions of Underwriters' Obligations. The obligations of the several Underwriters to purchase and pay for the Bonds, as provided herein, shall be subject to the accuracy, as of the date hereof and the Closing Date (as if made on the Closing Date), of the representations and warranties of the Company herein, to the performance by the Company of its obligations hereunder, and to the following additional conditions: (a) No stop order suspending the effectiveness of the Registration Statement shall have been issued and no proceeding for that purpose shall have been instituted or, to the knowledge of the Company or any Underwriter, threatened by the Commission; and any request of the Commission for additional information (to be included in the Registration Statement or the Prospectus or otherwise) shall have been complied with to your satisfaction. (b) No Underwriter shall have advised the Company that the Registration Statement or Prospectus, or any amendment or supplement thereto, contains an untrue statement of fact which in your opinion is material or omits to state a fact which in your opinion is material and is required to be stated therein or is necessary to make the statements therein not misleading. (c) Except as contemplated in the Prospectus, subsequent to the respective dates as of which information is given in the Registration Statement and the Prospectus, there shall not have been any change in the capital stock or long-term debt of the Company or any adverse change, or any development involving a prospective adverse change, in the condition (financial or other), business, net worth or results of operations of the Company which, in your judgment, makes it impractical or inadvisable to offer or deliver the Bonds on the terms and in the manner contemplated in the Prospectus. (d) On the Closing Date, you shall have received the opinion of McNair Law Firm, P.A., counsel for the Company, dated the Closing Date, to the effect that: (i) The Company is validly existing as a corporation under the laws of the State of South Carolina and is empowered by its Restated Articles of Incorporation, as amended, to own and operate the properties now owned and proposed to be owned by it and to carry on its business as now carried on and proposed to be carried on as described in the Prospectus. (ii) Each of the Indenture as Supplemented and the Class A Mortgage has been duly authorized, executed and delivered by the Company and constitutes a valid and legally binding instrument enforceable against the Company in accordance with its terms and the Indenture as Supplemented has been qualified under the Trust Indenture Act. (iii) The Class A Bonds which heretofore or on the date hereof have been issued to the Trustee under the Indenture as Supplemented as the basis for the issuance of the Bonds have been duly authorized by all necessary corporate action, have been duly executed, authenticated, issued and delivered and constitute valid and legally binding obligations of the Company enforceable against the Company in accordance with their terms and the terms of the Class A Mortgage, are entitled to the security and benefits of the Class A Mortgage and are secured equally and ratably with all other bonds issued under the Class A Mortgage. (iv) The Bonds have been duly authorized by all necessary corporate action, have been duly executed, authenticated, issued and delivered and constitute valid and legally binding obligations of the Company enforceable against the Company in accordance with their terms and the terms of the Indenture as Supplemented, are entitled to the security and benefits of the Indenture as Supplemented and are secured equally and ratably with all other bonds issued under the Indenture as Supplemented. (v) This Agreement has been duly authorized, executed and delivered by the Company. (vi) The Indenture as Supplemented, the Bonds and the Class A Mortgage conform in all material respects to the statements concerning them in the Prospectus. (vii) The documents incorporated by reference in the Prospectus (other than the financial statements and other financial or statistical data contained therein, as to which such counsel need express no opinion), when they were filed with the Commission complied as to form in all material respects with the requirements of the Exchange Act and the rules and regulations of the Commission thereunder; and, based upon such counsel's participation in conferences with representatives of the Company and its accountants and participation in certain prior financings of the Company, they have no reason to believe that any of such documents, when they were so filed, contained an untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made when such documents were so filed, not misleading. (viii) The Registration Statement has become effective under the Act, and, to the best of the knowledge of such counsel, no stop order suspending the effectiveness of the Registration Statement has been issued and no proceedings for that purpose have been instituted or are pending or contemplated under the Act, and, based upon such counsel's participation in conferences with representatives of the Company and its accountants and participation in certain prior financings of the Company, they do not believe that on the date hereof or the Closing Date either the Registration Statement or the Prospectus (or the Registration Statement or Prospectus as amended or supplemented by any amendment or further supplement thereto made by the Company prior to the Closing Date) contained or contains any untrue statement of a material fact or omitted or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading, and, in their opinion, the Registration Statement and the Prospectus, as of the date hereof (or the Registration Statement or Prospectus as amended or supplemented by any amendment or further supplement thereto made by the Company prior to the Closing Date), appear on their face to be appropriately responsive in all material respects to the requirements of the Act, the Trust Indenture Act and the rules and regulations of the Commission under such acts (except that no opinion need be expressed as to financial statements and other financial or statistical data contained or incorporated by reference in the Registration Statement or to any information relating to the book-entry system of payments and transfers of the Bonds or the depository therefor set forth under the caption "Book-Entry System" provided by The Depository Trust Company or as to the Trustee's Statement of Eligibility on Form T-1). In rendering said opinion, (i) counsel may rely upon the opinion of H. Thomas Arthur, Esquire, delivered pursuant to paragraph (e), with respect to matters of title, property descriptions, recording fees and taxes and the filing, recordation and liens of the Indenture as Supplemented and the Class A Mortgage; (ii) counsel may state that the enforceability of the Class A Mortgage, the Class A Bonds, the Indenture as Supplemented and the Bonds is subject to applicable bankruptcy, insolvency, reorganization, moratorium and other laws affecting the rights of creditors generally and general principles of equity; and (iii) counsel may state that although certain provisions of the Class A Mortgage and the Indenture as Supplemented may not be enforceable in whole or in part, the inclusion of such provisions does not affect the validity of the Class A Mortgage or Indenture as Supplemented, which contain adequate provisions for the practical realization of the benefits and security provided therefor. (e) On the Closing Date, you shall have received the opinion of H. Thomas Arthur, Esquire, Senior Vice President and General Counsel of the Company, or Sarena D. Burch, Deputy General Counsel of the Company, dated the Closing Date, covering the matters set forth in clauses (i) to (viii), inclusive, of paragraph (d) of this Section and such other matters incident to the transactions contemplated hereby as you may reasonably request, and also to the effect that (subject to such exceptions specified in such opinion with respect to the matters referred to in clauses (i), (ii), (iii), (iv) and (v) of this paragraph (e) as such counsel may deem appropriate, which exceptions in the opinion of the counsel rendering such opinion do not materially interfere with the maintenance and operation by the Company of the properties now owned by it or with the conduct by the Company of the business now carried on by it), and in rendering the opinion set forth in clause (i) of paragraph (d) counsel shall also state that neither the character of property owned or leased by the Company nor the nature of the business transacted by it make the licensing or qualifications of the Company as a foreign corporation necessary in any other state or jurisdiction: (i) The Company has fee title to all the real property (except (i) rights-of-way, water rights and flowage rights, (ii) that electric transmission and electric and gas distribution lines are constructed principally on rights-of-way which are maintained under or held by easement and (iii) that the fee ownership of the lands upon which the Company's Stevens Creek dam is situated may extend only to the abutment sites on each side of the Savannah River) and has good and valid title to all of the personal property described or referred to in each of the Class A Mortgage and the Indenture as Supplemented as owned by it (except property heretofore released from or conveyed subject to the liens thereof or retired in accordance with the provisions thereof), subject to no liens or encumbrances other than (a) excepted encumbrances and Permitted Liens, (b) the lien of the Class A Mortgage, (c) the lien of the Indenture as Supplemented and (d) the fact that titles to certain properties are subject to reservations and encumbrances such as are customarily encountered in the public utility business and which do not materially interfere with their use, and the descriptions of and references to such real and personal property contained in each of the Class A Mortgage and the Indenture as Supplemented are adequate for the purposes thereof. No notice has been given to the Company by any governmental authority of any proceeding to condemn, purchase or otherwise acquire any of the properties of the Company and, so far as such counsel knows, no such proceeding is contemplated. (ii) The Indenture as Supplemented has been duly filed for recording and recorded, and constitutes a legally valid and direct enforceable mortgage lien upon the respective properties presently subject thereto subject only to Permitted Liens and the prior lien of the Class A Mortgage. (iii) The Class A Mortgage has been duly filed for recording and recorded and constitutes a valid direct first mortgage lien on the respective properties presently subject thereto subject only to excepted encumbrances. (iv) Except as set forth in "Security - Lien of the Mortgage" and "The Class A Mortgage - Security" under "Description of the New Bonds" in the Prospectus, substantially all fixed electric utility properties used or useful in its electric utility business (other than those of the character not subject to the lien of the Indenture as Supplemented as aforesaid and properties heretofore released from or conveyed subject to the lien thereof or retired in accordance with the provisions thereof) acquired by the Company after the date of the Indenture, and substantially all fixed properties and franchises used or useful in its public utility businesses (other than those of the character not subject to the lien of the Class A Mortgage as aforesaid and properties heretofore released from or conveyed subject to the lien thereof or retired in accordance with the provisions thereof) acquired by the Company after the date of the Class A Mortgage have become subject to the respective liens thereof, subject, however, to excepted encumbrances or Permitted Liens, as the case may be, the lien of the Class A Mortgage in the case of the Indenture as Supplemented, and to liens, if any, existing or placed thereon at the time of the acquisition thereof by the Company. (v) Except as otherwise set forth in the Prospectus, the Company has such valid franchises, certificates of convenience and necessity, operating rights, licenses, permits, consents, approvals, authorizations and/or orders of governmental bodies, political subdivisions or regulatory authorities, free from burdensome restrictions, as are necessary for the acquisition, construction, ownership, maintenance and operation of the properties now owned by it and the conduct of the business now carried on by it as described in the Registration Statement and Prospectus, and the Company is not in default or violation of any thereof and is carrying on its business in accordance therewith and, to the best of his knowledge, with all applicable federal, state and other laws and regulations. (vi) The descriptions in the Registration Statement and Prospectus of statutes, legal and governmental proceedings, contracts and other documents are, to the best of his knowledge, accurate and fairly present the information required to be shown therein, and such counsel does not know of any legal or governmental proceedings required to be described in the Prospectus which are not described as required, nor of any contracts or documents of a character required to be described in the Registration Statement or Prospectus or required to be incorporated by reference into the Prospectus or to be filed as exhibits to the Registration Statement which are not described or incorporated by reference or filed as required. (vii) An order has been or orders have been entered by The Public Service Commission of South Carolina permitting the issuance and sale of the Bonds as contemplated hereby, and no further authorization or consent of any public body or board is required for the issuance and sale by the Company of the Bonds as contemplated hereby, except as may be required under state securities or Blue Sky laws. (viii) The statements in the Prospectus which are stated therein to have been made on the authority of such counsel have been reviewed by such counsel and, as to matters of law and legal conclusions, are correct in all material respects. (ix) The consummation of the transactions contemplated herein and the fulfillment of the terms hereof and compliance by the Company with all terms and provisions of the Indenture as Supplemented and the Class A Mortgage will not result in a breach of any of the terms or provisions of, or constitute a default under, any statute, indenture, mortgage, deed of trust, note agreement or other agreement or instrument known to such counsel to which the Company is a party or by which it is bound or to which any of the property of the Company is subject, or the Restated Articles of Incorporation, as amended, or by-laws of the Company, or to the best of his knowledge, any order, rule or regulation applicable to the Company of any court or of any federal or state regulatory body or administrative agency or other governmental body having jurisdiction over the Company or its property. (x) All recording fees and taxes applicable to or in connection with the recording of the Class A Mortgage and the Indenture as Supplemented and all applicable taxes on or in connection with the issuance of the Bonds have been paid. In giving the opinion contemplated by clauses (ii) and (iii), counsel shall state what, if any, re-recording or re-filing of the Class A Mortgage and the Indenture as Supplemented is required and what, if any, further supplemental indentures or other instruments are required to be executed, filed and/or recorded or notices given, in order to extend the liens of the Class A Mortgage and Indenture as Supplemented to after-acquired property, or to maintain such liens with respect to future advances. Furthermore, in rendering said opinion, (i) counsel may state that the enforceability of the Class A Mortgage, the Class A Bonds, the Indenture as Supplemented and the Bonds, and the enforceability of the respective lien of the Class A Mortgage and the Indenture as Supplemented, are subject to applicable bankruptcy, insolvency, reorganization, moratorium and other laws affecting the rights of creditors generally and general principles of equity and (ii) counsel may state that although certain provisions of the Class A Mortgage and the Indenture as Supplemented may not be enforceable in whole or in part, the inclusion of such provisions does not affect the validity of the Class A Mortgage or the Indenture as Supplemented, which contain adequate provisions for the practical realization of the benefits and security provided therefor. (f) On the Closing Date, you shall have received from Troutman Sanders LLP, counsel for the several Underwriters, such opinion or opinions with respect to the incorporation of the Company, the validity of the Bonds, the Registration Statement, the Prospectus and other related matters as you may reasonably request, and such counsel shall have received such papers and information as they may reasonably request to enable them to pass upon such matters. In rendering their opinion, such counsel may rely upon the opinion of H. Thomas Arthur, Esquire, or Sarena D. Burch, Esquire, referred to above as to all matters governed by South Carolina law. (g) On the Closing Date, you shall have received a letter from Deloitte & Touche LLP, dated the date of delivery thereof, in the form heretofore delivered to the Representatives. (h) On the Closing Date, you shall have received from the Company a certificate, signed by its Chairman, President or a Vice President and by its principal financial or accounting officer, dated the Closing Date, to the effect that, to the best of their knowledge based on reasonable investigation: (i) The representations and warranties of the Company in this Agreement are true and correct in all material respects, as if made on and as of the Closing Date, and the Company has complied with all the agreements and satisfied all the conditions on its part to be performed or satisfied on or prior to the Closing Date; (ii) No stop order suspending the effectiveness of the Registration Statement has been issued, and no proceedings for that purpose have been instituted or are pending or threatened, under the Act; and (iii) The Registration Statement and the Prospectus, and any amendments or supplements thereto, contain all statements and information required to be included therein, and neither the Registration Statement nor the Prospectus, nor any amendment or supplement thereto, includes any untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading and, since the date hereof there has occurred no event required to be set forth in an amended or supplemented prospectus which has not been so set forth and there has been no document required to be filed under the Exchange Act and the rules and regulations of the Commission thereunder and which upon such filing would be deemed to be incorporated by reference in the Prospectus, which has not been so filed. (i) The Company shall have furnished to you such further certificates and documents as you shall have reasonably requested. (j) There shall not have been any further announcement by any "nationally recognized statistical rating organization," as defined for purposes of Rule 430(g)(2) under the Act, that (i) it is downgrading its rating assigned to any debt securities of the Company, or (ii) it is reviewing its rating assigned to any debt securities of the Company with a view to possible downgrading, or with negative implications, or with direction not determined. All such opinions, certificates, letters and other documents will be in compliance with the provisions hereof only if they are satisfactory in form and substance to you. The Company will furnish you with such conformed copies of such opinions, certificates, letters and other documents as you shall reasonably request. In giving the opinions contemplated by paragraphs (d), (e) and (f) of this Section, counsel need not express any opinion either as to matters of Georgia law, including the enforceability of the Indenture as Supplemented thereunder, and may rely upon certificates of state officials as to the Company's good standing and upon certificates of officers of the Company as to matters of fact relevant to such opinions and may assume (i) that the Bonds have been executed on behalf of the Company by the manual or facsimile signatures of the President or a Vice President and the Secretary or an Assistant Secretary of the Company and have been duly authenticated by the Trustee and (ii) that the signatures on all documents examined by them are genuine. 6. Indemnification. (a) The Company will indemnify and hold harmless each Underwriter against any losses, claims, damages or liabilities, joint or several, to which such Underwriter may become subject, under the Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in the Registration Statement, the Prospectus, or any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading; and will reimburse each Underwriter for any legal or other expenses reasonably incurred by it in connection with investigating or defending against such loss, claim, damage, liability or action; provided, however, that the Company shall not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in the Registration Statement, the Prospectus, or any such amendment or supplement, in reliance upon and in conformity with written information furnished to the Company by you, or by any Underwriter through you, specifically for use in the preparation thereof. (b) Each Underwriter will indemnify and hold harmless the Company against any losses, claims, damages or liabilities to which the Company may become subject, under the Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in the Registration Statement, the Prospectus, or any amendment or supplement thereto, or arise out of or are based upon the omission or the alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in the Registration Statement, the Prospectus, or any such amendment or supplement, in reliance upon and in conformity with written information furnished to the Company by you, or by such Underwriter through you, specifically for use in the preparation thereof; and will reimburse the Company for any legal or other expenses reasonably incurred by the Company in connection with investigating or defending against any such loss, claim, damage, liability or action. (c) Promptly after receipt by an indemnified party under subsection (a) or (b) above of notice of the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party under such subsection, notify the indemnifying party in writing of the commencement thereof; but the omission so to notify the indemnifying party shall not relieve it from any liability which it may have to any indemnified party otherwise than under such subsection. In case any such action shall be brought against any indemnified party, and it shall notify the indemnifying party of the commencement thereof, the indemnifying party shall be entitled to participate in and, to the extent that it shall wish, jointly with any other indemnifying party, similarly notified, to assume the defense thereof, with counsel satisfactory to such indemnified party, and, after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party shall not be liable to such indemnified party under such subsection for any legal or other expenses subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation. The indemnified party will have the right to employ its own counsel in any such action, but the fees, expenses and other charges of such counsel will be at the expense of such indemnified party unless (1) the employment of counsel by the indemnified party has been authorized in writing by the indemnifying party, (2) the indemnified party has reasonably concluded (based on advice of counsel) that there may be legal defenses available to it or other indemnified parties that are different from or in addition to those available to the indemnifying party, (3) a conflict or potential conflict exists (based on advice of counsel to the indemnified party) between the indemnified party and the indemnifying party (in which case the indemnifying party will not have the right to direct the defense of such action on behalf of the indemnified party) or (4) the indemnifying party has not in fact employed counsel to assume the defense of such action within a reasonable time after receiving notice of the commencement of the action, in each of which cases the reasonable fees, disbursements and other charges of counsel will be at the expense of the indemnifying party or parties. It is understood that the indemnifying party or parties shall not, in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the reasonable fees, disbursements and other charges of more than one separate firm admitted to practice in such jurisdiction at any one time for all such indemnified party or parties. All such fees, disbursements and other charges will be reimbursed by the indemnifying party promptly as they are incurred. An indemnifying party will not be liable for any settlement of any action or claim effected without its written consent (which consent will not be unreasonably withheld). No indemnifying party shall, without the prior written consent of each indemnified party, settle or compromise or consent to the entry of any judgment in any pending or threatened claim, action or proceeding relating to the matters contemplated by this Section 6 (whether or not any indemnified party is a party thereto), unless such settlement, compromise or consent includes an unconditional release of each indemnified party from all liability arising or that may arise out of such claim, action or proceeding. (d) If the indemnification provided for in this Section 6 is unavailable under subsection (a) or (b) above to a party that would have been an indemnified party under subsection (a) or (b) above ("Indemnified Party") in respect of any losses, claims, damages or liabilities (or actions in respect thereof) referred to therein, then each party that would have been an indemnifying party thereunder ("Indemnifying Party") shall, in lieu of indemnifying such Indemnified Party, contribute to the amount paid or payable by such Indemnified Party as a result of such losses, claims, damages or liabilities (or actions in respect thereof) in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and the Underwriters on the other from the offering of the Bonds. If, however, the allocation provided by the immediately preceding sentence is not permitted by applicable law or if the Indemnified Party failed to give the notice required under subsection (c) above, then each Indemnifying Party shall contribute to such amount paid or payable by such Indemnified Party in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of the Company on the one hand and the Underwriters on the other in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities (or actions in respect thereof), as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and the Underwriters on the other shall be deemed to be in the same proportion as the total net proceeds from the offering (before deducting expenses) received by the Company bear to the total underwriting discounts and commissions received by the Underwriters, in each case as set forth in the table on the cover page of the initial supplement to the Prospectus which is filed pursuant to Rule 424 under the Act referred to in Section 2(a) hereof. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or alleged omission to state a material fact relates to information supplied by the Company or the Underwriters and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company and the Underwriters agree that it would not be just and equitable if contribution pursuant to this subsection (d) were determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to above in this subsection (d). The amount paid or payable by an Indemnified Party as a result of the losses, claims, damages or liabilities (or actions in respect thereof) referred to above in this subsection (d) shall be deemed to include any legal or other expenses reasonably incurred by such Indemnified Party in connection with investigating or defending any such action or claim (which shall be limited as provided in subsection (c) above if the Indemnifying Party has assumed the defense of any such action in accordance with the provisions thereof). Notwithstanding the provisions of this subsection (d), no Underwriter shall be required to contribute any amount in excess of the underwriting discounts received by it. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Underwriters' obligations in this subsection (d) to contribute are several in proportion to their respective underwriting obligations and not joint. (e) The obligations of the Company under this Section 6 shall be in addition to any liability which the Company may otherwise have and shall extend, upon the same terms and conditions, to each person, if any, who controls any Underwriter within the meaning of the Act; and the obligations of the Underwriters under this Section 6 shall be in addition to any liability which the respective Underwriters may otherwise have and shall extend, upon the same terms and conditions, to each director of the Company, to each officer of the Company who has signed the Registration Statement and to each person, if any, who controls the Company within the meaning of the Act. 7. Representations and Agreements to Survive Delivery. All representations, warranties and agreements of the Company herein or in certificates delivered pursuant hereto, and the indemnity and contribution agreements of the several Underwriters contained in Section 6 hereto, shall remain operative and in full force and effect regardless of any investigation made by or on behalf of any Underwriter or any controlling persons, or the Company or any of its officers, directors or any controlling persons and shall survive delivery of the Bonds to the Underwriters hereunder. 8. Substitution of Underwriters. (a) If any Underwriter or Underwriters shall fail to take up and pay for the principal amount of Bonds agreed by such Underwriter or Underwriters to be purchased hereunder, upon tender of such Bonds in accordance with the terms hereof, and the principal amount of Bonds not purchased does not aggregate more than 10% of the aggregate principal amount of the Bonds, the remaining Underwriters shall be obligated to take up and pay for (in proportion to their respective commitments hereunder except as may otherwise be determined by you) the Bonds which any withdrawing or defaulting Underwriters agreed but failed to purchase; however, if such Bonds not purchased aggregate more than 10% of the aggregate principal amount of the Bonds, the remaining Underwriters shall have the right, but shall not be obligated, to take up and pay for (in such proportions as shall be determined by you) the Bonds which the defaulting Underwriter or Underwriters agreed but failed to purchase. If such remaining Underwriters do not, at the Closing Date, take up and pay for the Bonds which the defaulting Underwriter or Underwriters agreed but failed to purchase, the time for delivery of the Bonds shall be extended to the next business day to allow the several Underwriters the privilege of substituting within 24 hours (including non-business hours) another underwriter or underwriters satisfactory to the Company. If no such underwriter or underwriters shall have been substituted, as aforesaid, the time for delivery of the Bonds may, at the option of the Company, be again extended to the next following business day, if necessary, to allow the Company the privilege of finding within 24 hours (including non-business hours) another underwriter or underwriters, satisfactory to you, to purchase the Bonds which the defaulting Underwriter or Underwriters agreed but failed to purchase. If the remaining Underwriters shall not take up and pay for all such Bonds agreed to be purchased by the defaulting Underwriters, or substitute another underwriter or underwriters as aforesaid, and the Company shall not find or shall not elect to seek another underwriter or underwriters for such Bonds as aforesaid, then this Agreement shall terminate. In the event of any such termination the Company shall not be under any liability to any Underwriter (except to the extent provided in Section 4(h) and in Section 6 hereof), nor shall any Underwriter (other than an Underwriter who shall have failed, otherwise than for some reason permitted under this Agreement, to purchase the principal amount of Bonds agreed by such Underwriter to be purchased hereunder) be under any liability to the Company (except to the extent provided in Section 6 hereof). (b) If the remaining Underwriters or substituted underwriters take up the Bonds of the defaulting Underwriter or Underwriters as provided in this Section, (i) the Company shall have the right to postpone the time of delivery for a period of not more than seven full business days, in order to effect any changes which may be made necessary thereby in the Registration Statement or the Prospectus, or in any other documents or arrangements, and the Company agrees promptly to file any amendments to the Registration Statement or supplements to the Prospectus which may be made necessary thereby, and (ii) the respective principal amounts of Bonds to be purchased by the remaining Underwriters or substituted underwriters shall be taken as the basis of their respective underwriting obligations for all purposes of this Agreement. A substituted underwriter hereunder shall become an Underwriter for all purposes of this Agreement. (c) Nothing herein shall relieve a defaulting Underwriter from liability for its default. 9. Effective Date of this Agreement and Termination. (a) This Agreement shall become effective upon your accepting it in the manner indicated below. (b) You, as Representative of the several Underwriters, shall have the right to terminate this Agreement by giving notice as hereinafter specified at any time at or prior to the Closing Date if (i) the Company shall have failed, refused or been unable, at or prior to the Closing Date, to perform any material agreement on its part to be performed hereunder, (ii) any other condition of the Underwriters' obligations hereunder required to be fulfilled by the Company is not fulfilled, (iii) trading on the New York Stock Exchange or the American Stock Exchange shall have been wholly suspended, (iv) minimum or maximum prices for trading shall have been fixed, or maximum ranges for prices for securities shall have been required, on the New York Stock Exchange or the American Stock Exchange, by the New York Stock Exchange or the American Stock Exchange or by order of the Commission or any other governmental authority having jurisdiction, (v) a banking moratorium shall have been declared by Federal or New York authorities, or (vi) an outbreak of major hostilities in which the United States is involved, a declaration of war by Congress, any other substantial national or international calamity, a default in payment when due of interest on or principal of any debt obligations of, or the institution of proceedings under the Federal bankruptcy laws by or against, any State of the United States or any other event or occurrence of a similar character shall have occurred since the execution of this Agreement which, in your judgment, makes it impractical or inadvisable to proceed with the completion of the sale of and payment for the Bonds. Any such termination shall be without liability of any party to any other party except that the provisions of Section 4(h) and Section 6 hereof shall at all times be effective. (c) If you elect to prevent this Agreement from becoming effective or to terminate this Agreement as provided in this Section, the Company shall be notified promptly by you by telephone or telegram, confirmed by letter. If the Company elects to prevent this Agreement from becoming effective, you shall be notified promptly by the Company by telephone or telegram, confirmed by letter. 10. Notices. All notices or communications hereunder, except as herein otherwise specifically provided, shall be in writing and, if sent to you, shall be mailed, delivered or telegraphed and confirmed to you at , Attention: , or if sent to the Company, shall be mailed, delivered or telegraphed and confirmed to the Company at 1426 Main Street, Columbia, South Carolina 29201, Attention: Secretary. Notice to any Underwriter pursuant to Section 6 shall be mailed, delivered or telegraphed and confirmed to such Underwriter in care of the Representatives at the address set forth above. Any party to this Agreement may change such address for notices by sending to the parties to this agreement written notice of a new address for such purpose. 11. Parties. This Agreement shall inure to the benefit of and be binding upon the several Underwriters, the Company and their respective successors and assigns. Nothing expressed or mentioned in this Agreement is intended or shall be construed to give any person or corporation, other than the parties hereto and their respective successors and assigns and the controlling persons, officers and directors referred to in Section 6, any legal or equitable right, remedy or claim under or in respect of this Agreement or any provision herein contained, this Agreement and all conditions and provisions hereof being intended to be and being for the sole and exclusive benefit of the parties hereto and their respective successors and assigns and said controlling persons and said officers and directors and for the benefit of no other person or corporation. No purchaser of any of the Bonds from any Underwriter shall be construed a successor or assign merely by reason of such purchase. In all dealings with the Company under this Agreement, you shall act on behalf of each of the several Underwriters, and any action under this Agreement taken by you will be binding upon all Underwriters. 12. Applicable Law. The Agreement shall be governed by, and construed in accordance with, the laws of the State of New York. If the foregoing correctly sets forth the understanding between the Company and the several Underwriters, please so indicate in the space provided below for that purpose, whereupon this letter shall constitute a binding agreement between the Company and the several Underwriters. Very truly yours, SOUTH CAROLINA ELECTRIC & GAS COMPANY By: -------------------------------------- Its: ------------------------------------- ACCEPTED at , as of the date first above written. By: ------------------------------------------------- Its: ------------------------------------------------ By: ------------------------------------------------- Its: ------------------------------------------------ SCHEDULE A UNDERWRITERS % Series due ---------------------- Name of Underwriters Principal Amount of Bonds To be Purchased $---------- - ---------------------------------------------------- $---------- - -------------------------------------- Total _________ Purchase Price equal to $ , plus accrued -------------------------- interest from ______________ -------------- EX-3 4 exh305.txt ARTICLES OF AMENDMENT Exhibit 3.05 STATE OF SOUTH CAROLINA SECRETARY OF STATE ARTICLES OF AMENDMENT Pursuant to Section 33-10-106 of the 1976 South Carolina Code, as amended, the undersigned corporation adopts the following Articles of Amendment to its Articles of Incorporation: 1. The name of the corporation is SOUTH CAROLINA ELECTRIC & GAS COMPANY. 2. On , the corporation adopted the following Amendment(s) of its Articles of Incorporation: NOT APPLICABLE 3. The manner, if not set forth in the amendment, in which any exchange, reclassification, or cancellation of issued shares provided for in the Amendment shall be effected, is as follows: (a) The number of redeemable shares of the corporation reacquired by redemption or purchase is 3,203 itemized as follows: Class Series No. of Shares Cumulative Preferred Stock ($50 par value) 4.50% 1,203 Cumulative Preferred Stock ($50 par value) 4.60% Series A 2,000 (b) The aggregate number of issued shares of the corporation after giving effect to such cancellation is 41,630,840, itemized as follows: Class Series No. of Shares Cumulative Preferred Stock ($50 par value) 5% 125,209 " " " " 4.60% 0 " " " " 4.50% 8,397 " " " " 4.60% (Series A) 14,052 " " " " 5.125% 66,000 " " " " 4.60% (Series B) 54,400 " " " " 6% 66,635 " " " " 9.40% 0 " " " ($100 par value) 8.12% 0 " " " " 7.70% 0 " " " " 8.40% 0 " " " ($50 par value) 8.72% 0 " " " ($100 par value) 6.52% 1,000,000 Common Stock ($4.50 par value) ------ 40,296,147 ---------- 41,630,840 (c) The amount of the stated capital of the corporation after giving effect to such cancellation is $298,067,311.50. Page 2 (d) The number of shares which the corporation has authority to issue after giving effect to such cancellation is 56,424,693, itemized as follows: Class Series No. of Shares Cumulative Preferred Stock ($50 par value) 5% 125,209 " " " " 4.60% 0 " " " " 4.50% 8,397 " " " " 4.60% (Series A) 14,052 " " " " 5.125% 66,000 " " " " 4.60% (Series B) 54,400 " " " " 6% 66,635 " " " " 9.40% 0 " " " ($100 par value) 8.12% 0 " " " " 7.70% 0 " " " " 8.40% 0 " " " ($50 par value) 8.72% 0 " " " ($100 par value) 6.52% 1,000,000 Serial Preferred Stock ($50 par value) (1 vote) ---- 640,000 Serial Preferred Stock ($100 par value) (1 vote) ---- 1,750,000 Serial Preferred Stock ($25 par value) (1/4 vote) ---- 2,000,000 Serial Preferred Stock ($50 par value) (1/2 vote) ---- 700,000 Common Stock ($4.50 par value) ---- 50,000,000 ---------- 56,424,693 -- 4. (a) |__| Amendment(s) adopted by shareholder action. At the date of adoption of the amendment, the number of outstanding shares of each voting group entitled to vote separately on the Amendment, and the vote of such shares was: Number of Number of Number of Votes Number of Undisputed Voting Outstanding Votes Entitled Represented at Shares Voted Group Shares to be Cast the meeting For Against ----- ------------- ---------------- -------------------------------------- --- (b) |XX| The Amendment(s) was duly adopted by the incorporators or board of directors without shareholder approval pursuant to Sections 33-6-102(d), 33-10-102 and 33-10-105 of the 1976 South Carolina Code, as amended, and shareholder action was not required. 5. Unless a delayed date is specified, the effective date of these Articles of Amendment shall be the date of the acceptance for filing by the Secretary of State (See Section 33-1-230(b)): SOUTH CAROLINA ELECTRIC & GAS COMPANY Date: August 30, 2001 By: s/Lynn M. Williams ------------------ Secretary EX-3 5 exh306.txt ARTICLES OF AMENDMENT Exhibit 3.06 STATE OF SOUTH CAROLINA SECRETARY OF STATE ARTICLES OF AMENDMENT Pursuant to Section 33-10-106 of the 1976 South Carolina Code, as amended, the undersigned corporation adopts the following Articles of Amendment to its Articles of Incorporation: 1. The name of the corporation is SOUTH CAROLINA ELECTRIC & GAS COMPANY. 2. On , the corporation adopted the following Amendment(s) of its Articles of Incorporation: NOT APPLICABLE 3. The manner, if not set forth in the amendment, in which any exchange, reclassification, or cancellation of issued shares provided for in the Amendment shall be effected, is as follows: (a) The number of redeemable shares of the corporation reacquired by redemption or purchase is 1,511 itemized as follows: Class Series No. of Shares Cumulative Preferred Stock ($50 par value) 6.00% 1,511 (b) The aggregate number of issued shares of the corporation after giving effect to such cancellation is 41,629,329, itemized as follows: Class Series No. of Shares Cumulative Preferred Stock ($50 par value) 5% 125,209 " " " " 4.60% 0 " " " " 4.50% 8,397 " " " " 4.60% (Series A) 14,052 " " " " 5.125% 66,000 " " " " 4.60% (Series B) 54,400 " " " " 6% 65,124 " " " " 9.40% 0 " " " ($100 par value) 8.12% 0 " " " " 7.70% 0 " " " " 8.40% 0 " " " ($50 par value) 8.72% 0 " " ($100 par value) 6.52% 1,000,000 Common Stock ($4.50 par value) ------ 40,296,147 ---------- 41,629,329 (c) The amount of the stated capital of the corporation after giving effect to such cancellation is $297,991,761.50. Page 2 (d) The number of shares which the corporation has authority to issue after giving effect to such cancellation is 56,423,182, itemized as follows: Class Series No. of Shares Cumulative Preferred Stock ($50 par value) 5% 125,209 " " " " 4.60% 0 " " " " 4.50% 8,397 " " " " 4.60% (Series A) 14,052 " " " " 5.125% 66,000 " " " " 4.60% (Series B) 54,400 " " " " 6% 65,124 " " " " 9.40% 0 " " " ($100 par value) 8.12% 0 " " " " 7.70% 0 " " " " 8.40% 0 " " " ($50 par value) 8.72% 0 " " " ($100 par value) 6.52% 1,000,000 Serial Preferred Stock ($50 par value) (1 vote) ---- 640,000 Serial Preferred Stock ($100 par value) (1 vote) ---- 1,750,000 Serial Preferred Stock ($25 par value) (1/4 vote) ---- 2,000,000 Serial Preferred Stock ($50 par value) (1/2 vote) ---- 700,000 Common Stock ($4.50 par value) ---- 50,000,000 ---------- 56,423,182 -- 4. (a) |__| Amendment(s) adopted by shareholder action. At the date of adoption of the amendment, the number of outstanding shares of each voting group entitled to vote separately on the Amendment, and the vote of such shares was: Number of Number of Number of Votes Number of Undisputed Voting Outstanding Votes Entitled Represented at Shares Voted Group Shares to be Cast the meeting For Against ----- ------------- --------------- ---------------- -------------------- --- (b) |XX| The Amendment(s) was duly adopted by the incorporators or board of directors without shareholder approval pursuant to Sections 33-6-102(d), 33-10-102 and 33-10-105 of the 1976 South Carolina Code, as amended, and shareholder action was not required. 5. Unless a delayed date is specified, the effective date of these Articles of Amendment shall be the date of the acceptance for filing by the Secretary of State (See Section 33-1-230(b)): SOUTH CAROLINA ELECTRIC & GAS COMPANY Date: March 13, 2002 By: s/ Lynn M. Williams --------------------- Secretary EX-3 6 exh307.txt ARTICLES OF AMENDMENT Exhibit 3.07 STATE OF SOUTH CAROLINA SECRETARY OF STATE ARTICLES OF AMENDMENT Pursuant to Section 33-10-106 of the 1976 South Carolina Code, as amended, the undersigned corporation adopts the following Articles of Amendment to its Articles of Incorporation: 1. The name of the corporation is SOUTH CAROLINA ELECTRIC & GAS COMPANY. 2. On , the corporation adopted the following Amendment(s) of its Articles of Incorporation: NOT APPLICABLE 3. The manner, if not set forth in the amendment, in which any exchange, reclassification, or cancellation of issued shares provided for in the Amendment shall be effected, is as follows: (a) The number of redeemable shares of the corporation reacquired by redemption or purchase is 3,400 itemized as follows: Class Series No. of Shares Cumulative Preferred Stock ($50 par value) 4.60% Series B 3,400 (b) The aggregate number of issued shares of the corporation after giving effect to such cancellation is 41,625,929, itemized as follows: Class Series No. of Shares Cumulative Preferred Stock ($50 par value) 5% 125,209 " " " " 4.60% 0 " " " " 4.50% 8,397 " " " " 4.60% (Series A) 14,052 " " " " 5.125% 66,000 " " " " 4.60% (Series B) 51,000 " " " " 6% 65,124 " " " " 9.40% 0 " " " ($100 par value) 8.12% 0 " " " " 7.70% 0 " " " " 8.40% 0 " " " ($50 par value) 8.72% 0 " " ($100 par value) 6.52% 1,000,000 Common Stock ($4.50 par value) ------ 40,296,147 ---------- 41,625,929 (c) The amount of the stated capital of the corporation after giving effect to such cancellation is $297,821,761.50. Page 2 (d) The number of shares which the corporation has authority to issue after giving effect to such cancellation is 56,419,782, itemized as follows: Class Series No. of Shares Cumulative Preferred Stock ($50 par value) 5% 125,209 " " " " 4.60% 0 " " " " 4.50% 8,397 " " " " 4.60% (Series A) 14,052 " " " " 5.125% 66,000 " " " " 4.60% (Series B) 51,000 " " " " 6% 65,124 " " " " 9.40% 0 " " " ($100 par value) 8.12% 0 " " " " 7.70% 0 " " " " 8.40% 0 " " " ($50 par value) 8.72% 0 " " " ($100 par value) 6.52% 1,000,000 Serial Preferred Stock ($50 par value) (1 vote) ---- 640,000 Serial Preferred Stock ($100 par value) (1 vote) ---- 1,750,000 Serial Preferred Stock ($25 par value) (1/4 vote) ---- 2,000,000 Serial Preferred Stock ($50 par value) (1/2 vote) ---- 700,000 Common Stock ($4.50 par value) ---- 50,000,000 ---------- 56,419,782 -- 4. (a) |__| Amendment(s) adopted by shareholder action. At the date of adoption of the amendment, the number of outstanding shares of each voting group entitled to vote separately on the Amendment, and the vote of such shares was: Number of Number of Number of Votes Number of Undisputed Voting Outstanding Votes Entitled Represented at Shares Voted Group Shares to be Cast the meeting For Against ----- ------------- ---------------- ----------------- --------------------- --- (b) |XX| The Amendment(s) was duly adopted by the incorporators or board of directors without shareholder approval pursuant to Sections 33-6-102(d), 33-10-102 and 33-10-105 of the 1976 South Carolina Code, as amended, and shareholder action was not required. 5. Unless a delayed date is specified, the effective date of these Articles of Amendment shall be the date of the acceptance for filing by the Secretary of State (See Section 33-1-230(b)): SOUTH CAROLINA ELECTRIC & GAS COMPANY Date: May 9, 2002 By: s/Lynn M. Williams --------------------------------------- Secretary EX-4 7 exh308.txt ARTICLES OF AMENDMENT Exhibit 3.08 STATE OF SOUTH CAROLINA SECRETARY OF STATE ARTICLES OF AMENDMENT Pursuant to Section 33-10-106 of the 1976 South Carolina Code, as amended, the undersigned corporation adopts the following Articles of Amendment to its Articles of Incorporation: 1. The name of the corporation is SOUTH CAROLINA ELECTRIC & GAS COMPANY. 2. On , the corporation adopted the following Amendment(s) of its Articles of Incorporation: NOT APPLICABLE 3. The manner, if not set forth in the amendment, in which any exchange, reclassification, or cancellation of issued shares provided for in the Amendment shall be effected, is as follows: (a) The number of redeemable shares of the corporation reacquired by redemption or purchase is 1,000 itemized as follows: Class Series No. of Shares Cumulative Preferred Stock ($50 par value) 5.125% 1,000 (b) The aggregate number of issued shares of the corporation after giving effect to such cancellation is 41,624,929, itemized as follows: Class Series No. of Shares Cumulative Preferred Stock ($50 par value) 5% 125,209 " " " " 4.60% 0 " " " " 4.50% 8,397 " " " " 4.60% (Series A) 14,052 " " " " 5.125% 65,000 " " " " 4.60% (Series B) 51,000 " " " " 6% 65,124 " " " " 9.40% 0 " " " ($100 par value) 8.12% 0 " " " " 7.70% 0 " " " " 8.40% 0 " " " ($50 par value) 8.72% 0 " " ($100 par value) 6.52% 1,000,000 Common Stock ($4.50 par value) ------ 40,296,147 ---------- 41,624,929 (c) The amount of the stated capital of the corporation after giving effect to such cancellation is $297,771,761.50. Page 2 (d) The number of shares which the corporation has authority to issue after giving effect to such cancellation is 56,418,782, itemized as follows: Class Series No. of Shares Cumulative Preferred Stock ($50 par value) 5% 125,209 " " " " 4.60% 0 " " " " 4.50% 8,397 " " " " 4.60% (Series A) 14,052 " " " " 5.125% 65,000 " " " " 4.60% (Series B) 51,000 " " " " 6% 65,124 " " " " 9.40% 0 " " " ($100 par value) 8.12% 0 " " " " 7.70% 0 " " " " 8.40% 0 " " " ($50 par value) 8.72% 0 " " " ($100 par value) 6.52% 1,000,000 Serial Preferred Stock ($50 par value) (1 vote) ---- 640,000 Serial Preferred Stock ($100 par value) (1 vote) ---- 1,750,000 Serial Preferred Stock ($25 par value) (1/4 vote) ---- 2,000,000 Serial Preferred Stock ($50 par value) (1/2 vote) ---- 700,000 Common Stock ($4.50 par value) ---- 50,000,000 ---------- 56,418,782 -- 4. (a) |__| Amendment(s) adopted by shareholder action. At the date of adoption of the amendment, the number of outstanding shares of each voting group entitled to vote separately on the Amendment, and the vote of such shares was: Number of Number of Number of Votes Number of Undisputed Voting Outstanding Votes Entitled Represented at Shares Voted Group Shares to be Cast the meeting For Against - ----- ------------- ---------------- ---------------- ----------------------- --- (b) |XX| The Amendment(s) was duly adopted by the incorporators or board of directors without shareholder approval pursuant to Sections 33-6-102(d), 33-10-102 and 33-10-105 of the 1976 South Carolina Code, as amended, and shareholder action was not required. 5. Unless a delayed date is specified, the effective date of these Articles of Amendment shall be the date of the acceptance for filing by the Secretary of State (See Section 33-1-230(b)): SOUTH CAROLINA ELECTRIC & GAS COMPANY Date: June 4, 2002 By: s/Lynn M. Williams ------------------ Secretary EX-3 8 exh309.txt ARTICLES OF AMENDMETN STATE OF SOUTH CAROLINA SECRETARY OF STATE ARTICLES OF AMENDMENT Pursuant to Section 33-10-106 of the 1976 South Carolina Code, as amended, the undersigned corporation adopts the following Articles of Amendment to its Articles of Incorporation: 1. The name of the corporation is SOUTH CAROLINA ELECTRIC & GAS COMPANY. 2. On , the corporation adopted the following Amendment(s) of its Articles of Incorporation: NOT APPLICABLE 3. The manner, if not set forth in the amendment, in which any exchange, reclassification, or cancellation of issued shares provided for in the Amendment shall be effected, is as follows: (a) The number of redeemable shares of the corporation reacquired by redemption or purchase is 3,600 itemized as follows: Class Series No. of Shares Cumulative Preferred Stock ($50 par value) 4.60% (Series A) 2,000 Cumulative Preferred Stock ($50 par value) 4.50% 1,600 (b) The aggregate number of issued shares of the corporation after giving effect to such cancellation is 41,621,329, itemized as follows: Class Series No. of Shares Cumulative Preferred Stock ($50 par value) 5% 125,209 " " " " 4.60% 0 " " " " 4.50% 6,797 " " " " 4.60% (Series A) 12,052 " " " " 5.125% 65,000 " " " " 4.60% (Series B) 51,000 " " " " 6% 65,124 " " " " 9.40% 0 " " " ($100 par value) 8.12% 0 " " " " 7.70% 0 " " " " 8.40% 0 " " " ($50 par value) 8.72% 0 " " " ($100 par value) 6.52% 1,000,000 Common Stock ($4.50 par value) ------ 40,296,147 ---------- 41,621,329 (c) The amount of the stated capital of the corporation after giving effect to such cancellation is $297,591,761.50. Page 2 (d) The number of shares which the corporation has authority to issue after giving effect to such cancellation is 56,415,182, itemized as follows: Class Series No. of Shares Cumulative Preferred Stock ($50 par value) 5% 125,209 " " " " 4.60% 0 " " " " 4.50% 6,797 " " " " 4.60% (Series A) 12,052 " " " " 5.125% 65,000 " " " " 4.60% (Series B) 51,000 " " " " 6% 65,124 " " " " 9.40% 0 " " " ($100 par value) 8.12% 0 " " " " 7.70% 0 " " " " 8.40% 0 " " " ($50 par value) 8.72% 0 " " " ($100 par value) 6.52% 1,000,000 Serial Preferred Stock ($50 par value) (1 vote) ---- 640,000 Serial Preferred Stock ($100 par value) (1 vote) ---- 1,750,000 Serial Preferred Stock ($25 par value) (1/4 vote) ---- 2,000,000 Serial Preferred Stock ($50 par value) (1/2 vote) ---- 700,000 Common Stock ($4.50 par value) ---- 50,000,000 --------- 56,415,182 -- 4. (a) |__| Amendment(s) adopted by shareholder action. At the date of adoption of the amendment, the number of outstanding shares of each voting group entitled to vote separately on the Amendment, and the vote of such shares was: Number of Number of Number of Votes Number of Undisputed Voting Outstanding Votes Entitled Represented at Shares Voted Group Shares to be Cast the meeting For Against ----- ----------------------------- ------------------ ---------------- --- (b) |XX| The Amendment(s) was duly adopted by the incorporators or board of directors without shareholder approval pursuant to Sections 33-6-102(d), 33-10-102 and 33-10-105 of the 1976 South Carolina Code, as amended, and shareholder action was not required. 5. Unless a delayed date is specified, the effective date of these Articles of Amendment shall be the date of the acceptance for filing by the Secretary of State (See Section 33-1-230(b)): SOUTH CAROLINA ELECTRIC & GAS COMPANY Date: August 12, 2002 By: s/Lynn M. Williams ------------------ Secretary EX-5 9 exh501.txt OPINION OF COUNSEL Exhibit 5.01 SOUTH CAROLINA ELECTRIC & GAS COMPANY 1426 Main Street Columbia, South Carolina 29201 November 25, 2002 Securities and Exchange Commission 450 Fifth Street, NW Washington, DC 20549 Ladies and Gentlemen: I refer to the proposed issue and sale from time to time in one or more series of up to $500,000,000 principal amount of First Mortgage Bonds (the "Bonds") by South Carolina Electric & Gas Company (the "Company"), with respect to which the Company proposes to file a Registration Statement on Form S-3 with the Securities and Exchange Commission under the Securities Act of 1933, as amended, and Rule 415 thereof. In connection therewith, I have examined (a) the Registration Statement, proposed to be filed as of the date hereof (the "Registration Statement"), to which this opinion is attached as an exhibit; (b) the Indenture of Mortgage, dated as of January 1, 1945, made by South Carolina Power Company to Central Hanover Bank and Trust Company (now JPMorgan Chase Bank), as trustee, as supplemented by three supplemental indentures thereto executed by South Carolina Power Company and by fifty supplemental indentures thereto executed by the Company (the "Class A Mortgage"); (c) the Indenture dated as of April 1, 1993 between the Company and NationsBank of Georgia, National Association (now The Bank of New York), as trustee, as supplemented by two supplemental indentures thereto executed by the Company (the "Mortgage"); and (d) such other corporate documents, proceedings and matters of law as I have considered necessary. Based on the foregoing, I am of the opinion that, with respect to the Bonds of each series, when (a) the Registration Statement, and any amendments thereto, have become effective under the Securities Act of 1933, as amended, (b) the Mortgage has been qualified under the Trust Indenture Act of 1939, as amended, (c) an appropriate order relating to such Bonds has been obtained from The Public Service Commission of South Carolina, (d) the Board of Directors of the Company has authorized the issuance and sale of the Bonds of such series, (e) a prospectus supplement relating to such series has been filed with the Securities and Exchange Commission and (f) the Bonds of such series have been duly executed, authenticated, issued and delivered in accordance with the Mortgage and the corporate and governmental authorizations aforesaid, the Bonds of such series will be duly authorized and will constitute legal, valid and binding obligations of the Company and will be entitled to the benefits and security of the Mortgage. I hereby consent to the filing of this opinion with the Registration Statement and to the reference to me under the caption "Legal Opinions" included therein. Sincerely, s/H. Thomas Arthur H. Thomas Arthur Senior Vice President and General Counsel EX-10 10 serviceagr2002.txt SERVICE AGREEMENT Exhibit 10.01 Service Agreement This Service Agreement (this "Agreement") is entered into as of the 1st day of April, 2002, by and between South Carolina Electric & Gas Company, a South Carolina corporation (the "Company") and SCANA Services, Inc., a South Carolina corporation ("SCANA Services"). WHEREAS, SCANA Services is a direct or indirect wholly owned subsidiary of SCANA Corporation; WHEREAS, SCANA Services has been formed for the purpose of providing administrative, management and other services to subsidiaries of SCANA Corporation; and WHEREAS, the Company believes that it is in the interest of the Company to provide for an arrangement whereby the Company may, from time to time and at the option of the Company, agree to purchase such administrative, management and other services from SCANA Services; NOW, THEREFORE, in consideration of the mutual covenants contained herein and other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows: I. SERVICES. SCANA Services supplies, or will supply, certain administrative, management or other services to Company similar to those supplied to other subsidiaries of SCANA Corporation. Such services are and will be provided to the Company only at the request of the Company. Exhibit I hereto lists and describes all of the services that are available from SCANA Services. II. PERSONNEL. SCANA Services provides and will provide such services by utilizing the services of their executives, accountants, financial advisers, technical advisers, attorneys and other persons with the necessary qualifications. If necessary, SCANA Services, after consultation with the Company, may also arrange for the services of nonaffiliated experts, consultants and attorneys in connection with the performance of any of the services supplied under this Agreement. III. COMPENSATION AND ALLOCATION. As and to the extent required by law, SCANA Services provides and will provide such services at cost. Exhibit I hereof contains rules for determining and allocating such costs. IV. TERMINATION AND MODIFICATION. The Company may terminate this Agreement by providing 60 days written notice of such termination to SCANA Services. SCANA Services may terminate this Agreement by providing 60 days written notice of such termination to the Company. This Agreement is subject to termination or modification at any time to the extent its performance may conflict with the provisions of the Public Utility Holding Company Act of 1935, as amended, or with any rule, regulation or order of the Securities and Exchange Commission adopted before or after the making of this Agreement. This Agreement shall be subject to the approval of any state commission or other state regulatory body whose approval is, by the laws of said state, a legal prerequisite to the execution and delivery or the performance of this Agreement. V. SERVICE REQUESTS. The Company and SCANA Services will prepare a Service Request on or before April 1, 2002 listing services to be provided to the Company by SCANA Services and any special arrangements related to the provision of such services for the period April 1, 2002 through December 31, 2003. On or before November 1, 2003 and on or before November 1, of each year thereafter, SCANA Services will prepare a revised Service Request listing services to be provided to the Company by SCANA Services and any special arrangements related to the provision of such services for the following calendar year, based on services provided during the past calendar year. The Company and SCANA Services may supplement any Service Request during the year to reflect any additional or special services that the Company wishes to obtain from SCANA Services, and the arrangements relating thereto. VI. BILLING AND PAYMENT. Unless otherwise set forth in a Service Request, payment for services provided by SCANA Services shall be by making remittance of the amount billed or by making appropriate accounting entries on the books of the Company and SCANA Services. Billing will be made on a monthly basis, with the bill to be rendered by the 25th of the month, and remittance or accounting entries completed within 30 days of billing. VII. NOTICE. Where written notice is required by this Agreement, all notices, consents, certificates, or other communications hereunder shall be in writing and shall be deemed given when mailed by United States registered or certified mail, postage prepaid, return receipt requested, addressed as follows: 1. To the Company: Neville O. Lorick President South Carolina Electric & Gas Company 1426 Main Street Columbia, SC 29201 2. To SCANA Services: H. Thomas Arthur General Counsel SCANA Corporation 1426 Main Street Columbia, SC 29201 VIII. GOVERNING LAW. This Agreement shall be governed by and construed in accordance with the laws of the State of South Carolina, without regard to their conflict of laws provisions. IX. MODIFICATION. No amendment, change or modification of this Agreement shall be valid, unless made in writing and signed by all parties hereto. X. ENTIRE AGREEMENT. This Agreement, together with its exhibits, constitutes the entire understanding and agreement of the parties with respect to its subject matter, and effective upon the execution of this Agreement by the respective parties hereof and thereto, any and all prior agreements, understandings or representations with respect to this subject matter are hereby terminated and canceled in their entirety and are of no further force or effect. XI. WAIVER. No waiver by any party hereto of a breach of any provision of this Agreement shall constitute a waiver of any preceding or succeeding breach of the same or any other provision hereof. XII. ASSIGNMENT. This Agreement shall inure to the benefit and shall be binding upon the parties and their respective successors and assigns. No assignment of this Agreement or any party's rights, interests or obligations hereunder may be made without the other party's consent, which shall not be unreasonably withheld, delayed or conditioned. XIII. SEVERABILITY. If any provision or provisions of this Agreement shall be held by a court of competent jurisdiction to be invalid, illegal, or unenforceable, the validity, legality, and enforceability of the remaining provisions shall in no way be affected or impaired thereby. IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed as of this 3rd day of October 2002. SCANA SERVICES, INC. By: s/Sarena D.Burch Name: Sarena D. Burch Title: Deputy General Counsel SOUTH CAROLINA ELECTRIC & GAS COMPANY By: s/Neville O. Lorick Name: Neville O. Lorick Title: President EXHIBIT I Description of Services, Cost Accumulation, Assignment and Allocation Methodologies for SCANA Services, Inc. This document sets forth the methodologies used to accumulate the costs of services performed by SCANA Services, Inc. ("SCANA Services") and to assign or allocate such costs to other subsidiaries and business units within SCANA Corporation ("Client Entities"). Cost of Services Performed SCANA Services maintains an accounting system that enables costs to be identified by Cost Center, Account Number or Project, Activity, Resource, and Event ("Account Codes"). The primary inputs to the accounting system are time records of hours worked by SCANA Services employees, accounts payable transactions and journal entries. Charges for labor are made at the employees' effective hourly rate, including the cost of pensions, other employee benefits and payroll taxes. To the extent practicable, costs of services are directly assigned to the applicable Account Codes. The full cost of providing services also includes certain indirect costs, e.g., departmental overheads, administrative and general costs, and taxes. Indirect costs are associated with the services performed in proportion to the directly assigned costs of the services or other relevant cost allocators. Cost Assignment and Allocation SCANA Services costs will be directly assigned, distributed or allocated to Client Entities in the manner prescribed below. 1. Costs accumulated in Account Codes for services specifically performed for a single Client Entity will be directly assigned or charged to such Client Entity. 2. Costs accumulated in Account Codes for services specifically performed for two or more Client Entities will be distributed among and charged to such Client Entities using methods determined on a case-by-case basis consistent with the nature of the work performed and based on one of the allocation methods described below. 3. Costs accumulated in Account Codes for services of a general nature which are applicable to all Client Entities or to a class or classes of Client Entities will be allocated among and charged to such Client Entities by application of one or more of the allocation methods described below. Page 9 of 9 Allocation Methods The following methods will be applied, as indicated in the Description of Services section that follows, to allocate costs for services of a general nature. 1. Information Systems Charge-back Rates - Rates for services, including but not limited to Software, Consulting, Mainframe, Midtier and Network Connectivity Services, are based on the costs of labor, materials and Information Services overheads related to the provision of each service. Such rates are applied based on the specific equipment employed and the measured usage of services by Client Entities. These rates will be determined annually based on actual experience and may be adjusted for any known and reasonably quantifiable events, or at such time as may be required due to significant changes. 2. Margin Revenue Ratio - "Margin" is equal to the excess of sales revenues over the applicable cost of sales, i.e., cost of fuel for generation and gas for resale. The numerator is equal to margin revenues for a specific Client Entity and the denominator is equal to the combined margin revenues of all the applicable Client Entities. This ratio will be evaluated annually based on actual results of operations for the previous calendar year and may be adjusted for any known and reasonably quantifiable events, or at such time, based on results of operations for a subsequent twelve-month period, as may be required due to significant changes. 3. Number of Customers Ratio - A ratio based on the number of retail electric, gas and/or other customers. This ratio will be determined annually based on the actual number of customers at the end of the previous calendar year and may be adjusted for any known and reasonably quantifiable events, or at such time as may be required due to significant changes. 4. Number of Employees Ratio - A ratio based on the number of employees benefiting from the performance of a service. This ratio will be determined annually based on actual counts of applicable employees at the end of the previous calendar year and may be adjusted for any known and reasonably quantifiable events, or at such time as may be required due to significant changes. 5. Three-Factor Formula - This formula will be determined annually based on the average of gross property (original cost of plant in service, excluding depreciation), payroll charges (salaries and wages, including overtime, shift premium and holiday pay, but not including pension, benefit and company-paid payroll taxes) and gross revenues during the previous calendar year and may be adjusted for any known and reasonably quantifiable events, or at such time as may be required due to significant changes. 6. Modified Three-Factor Method - a ratio for the allocation of non-directly assigned corporate governance costs. The Modified Three-Factor Method provides for an allocation of cost to the parent company; the Three-Factor Method does not. The formula will be determined annually based on the average of gross property (original cost of plant in service, excluding depreciation), payroll charges (salaries and wages, including overtime, shift premium and holiday pay, but not including pension, benefit and company paid payroll taxes) and gross revenues during the previous calendar year. For the purpose of the Modified Three-Factor Method, the dividends resulting from operations of the subsidiaries are used as a proxy for revenues for the parent company. 7. Telecommunications Charge-back Rates - Rates for use of telecommunications services other than those encompassed by Information Systems Charge-back Rates are based on the costs of labor, materials, outside services and Telecommunications overheads. Such rates are applied based on the specific equipment employment and the measured usage of services by Client Entities. These rates will be determined annually based on actual experience and may be adjusted for any known and reasonably quantifiable events, or at such time as may be required due to significant changes. 8. Gas Sales Ratio - A ratio based on the actual number of dekatherms of natural gas sold by the applicable gas distribution or marketing operations. This ratio will be determined annually based on actual results of operations for the previous calendar year and may be adjusted for any known and reasonably quantifiable events, or at such time, based on results of operations for a subsequent twelve-month period, as may be required due to significant changes. Description of Services A description of each of the services performed by SCANA Services, which may be modified from time to time, is presented below. As discussed above, where identifiable, costs will be directly assigned or distributed to Client Entities. For costs accumulated in Account Codes which are for services of a general nature that cannot be directly assigned or distributed, the method or methods of allocation are also set forth. Substitution or changes may be made in the methods of allocation hereinafter specified, as may be appropriate, and will be provided to state regulatory agencies and to each affected Client Entity and appropriate notice (through 60-day letter or otherwise) will be given to the SEC. 1. Information Systems Services - Provides electronic data processing services. Costs of a general nature are allocated using the Information Systems Charge-back Rates. 2. Customer Services - Provides billing, mailing, remittance processing, call center and customer communication services for electric and gas customers. Costs of a general nature are allocated using the Margin Revenue Ratio. 3. Marketing and Sales - Establishing strategies, provides oversight for marketing, sales and branding of utility and related services and conducts marketing and sales programs. Costs of a general nature are allocated using the Number of Customers Ratio. 4. Employee Services - Includes Human Resources which establishes and administers policies and oversees compliance with regulations in the areas of employment, compensation and benefits, processes payroll and administers corporate training. Also includes employee communications, facilities management and mail services. Costs of a general nature are allocated using the Number of Employees Ratio or the Modified Three-Factor Method as appropriate. 5. Corporate Compliance - Oversees compliance with all laws, regulations and policies applicable to all of SCANA Corporation's businesses and directs compliance training. Costs of general nature are allocated using the Modified Three-Factor Method. 6. Purchasing - Provides procurement services. Costs of a general nature are allocated using the Three-Factor Formula. 7. Financial Services - Provides treasury, accounting, tax, financial planning, rate and auditing services. Costs of a general nature are allocated using the Three-Factor Formula or the Modified Three-Factor Method as appropriate. 8. Risk Management - Provides services related to the identification and mitigation of risk, and the development and implementation of risk management strategy. Encompasses credit and collections, risk analyses, insurance, claims, security, environmental and safety services. Costs of a general nature are allocated using the Three-Factor Method or the Modified Three-Factor Method as appropriate. 9. Public Affairs - Maintains relationships with government policy makers, conducts lobbying activities and provides community relations functions. Costs of a general nature are allocated using the Three-Factor Formula or the Modified Three-Factor Method as appropriate. 10. Legal Services - Provides various legal services and general legal oversight; handles claims. Costs of a general nature are allocated using the Modified Three-Factor Formula. 11. Investor Relations - Maintains relationships with the financial community and provides shareholder services. Costs of a general nature are allocated using the Modified Three-Factor Formula. 12. Telecommunications - Provides telecommunications services, primarily the use of telephone equipment. Costs are allocated using the Telecommunications Charge-back Rates. 13. Gas Supply and Capacity Management - Provides gas supply and capacity management services. Costs of a general nature are allocated using the Gas Sales Ratio. 14. Strategic Planning - Develops corporate strategies and business plans. Costs of a general nature are allocated using the Modified Three-Factor Formula. 15. Executive - Provides executive and general administrative services. Costs of a general nature are allocated using the Modified Three-Factor Formula. EXHIBIT II FORM OF INITIAL SERVICE REQUEST The undersigned requests all of the services listed in Exhibit I from SCANA Services Company. The services requested hereunder shall commence on April 1, 2002 and be provided through December 31, 2003. SOUTH CAROLINA ELECTRIC & GAS COMPANY By: s/Neville O. Lorick ----------------------------------- Name: Neville O. Lorick Title: President EX-12 11 exh1201.txt COMPUTATION OF RATIOS
Exhibit 12.01 SOUTH CAROLINA ELECTRIC & GAS COMPANY COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES For the Twelve Months Ended September 30, 2002 and Each of the Five Years Ended December 31 (Millions of Dollars) 12 Months Ended September 30, Year Ended December 31, ------------- ------------------------------------------------------------------------ 2002 2001 2000 1999 1998 1997 ---- ---- ---- ---- ---- ---- Fixed Charges as defined: Interest expense $123.1 $115.8 $106.4 $103.0 $98.8 $98.9 Amortization of debt premium, discount and expense (net) 2.9 2.8 2.6 2.5 2.3 2.3 Interest component on rentals 2.7 1.8 1.1 0.8 0.9 1.8 Preferred security dividend requirements 3.8 3.8 3.8 3.8 3.8 0.7 --- --- --- --- --- --- Total Fixed Charges (A) $132.5 $124.2 $113.9 $110.1 $105.8 $103.7 ====== ====== ====== ====== ====== ====== Earnings, as defined: Pre-tax income from continuing operations $341.1 $349.0 $372.7 $302.7 $363.1 $295.9 Total fixed charges above 132.5 124.2 113.9 110.1 $105.8 103.7 Preferred security dividend requirements from above (3.8) (3.8) (3.8) (3.8) (3.8) (0.7) ----- ----- ----- ----- ----- ----- Total Earnings (B) $469.8 $469.4 $482.8 $409.0 $465.1 $398.9 ====== ====== ====== ====== ====== ====== Ratio of Earnings to Fixed Charges (B/A) 3.55 3.78 4.24 3.71 4.40 3.85 ==== ==== ==== ==== ====
EX-23 12 exh2301.txt AUDITOR'S CONSENT Exhibit 23.01 INDEPENDENT AUDITORS' CONSENT We consent to the incorporation by reference in this Registration Statement of South Carolina Electric & Gas Company on Form S-3 of our report dated February 8, 2002 (which expresses an unqualified opinion and includes an explanatory paragraph relating to the Company's change in method of accounting for operating revenues) appearing in the Annual Report on Form 10-K of South Carolina Electric & Gas Company for the year ended December 31, 2001 and to the reference to us under the heading "Experts" in the Prospectus, which is part of this Registration Statement. s/DELOITTE & TOUCHE, LLP DELOITTE & TOUCHE LLP Columbia, South Carolina November 25, 2002 EX-24 13 exh2401.txt POWER OF ATTORNEY Exhibit 24.01 POWER OF ATTORNEY Each of the undersigned directors of South Carolina Electric & Gas Company (the "Company") hereby appoint W. B. Timmerman and K. B. Marsh, and each of them severally, his or her true and lawful attorney or attorneys, with the power to act with or without the other, and with full power of substitution and re-substitution, to execute in his or her name, place and stead in his or her capacity as director of the Company and to file with the Securities and Exchange Commission under the Securities Act of 1933, as amended, a registration statement on Form S-3 and any and all amendments thereto with respect to the issuance and sale of up to $500,000,000 of such Company's mortgage bonds. Dated: June 7, 2002 Columbia, South Carolina s/B. L. Amick s/W. H. Hipp B. L. Amick W. H. Hipp Director Director s/J. A. Bennett s/L. M. Miller J. A. Bennett L. M. Miller Director Director s/W. B. Bookhart, Jr. s/M. K. Sloan W. B. Bookhart, Jr. M. K. Sloan Director Director s/W. C. Burkhardt s/H. C. Stowe W. C. Burkhardt H. C. Stowe Director Director s/E. T. Freeman s/W. B. Timmerman E. T. Freeman W. B. Timmerman Director Director s/D. M. Hagood s/G. S. York D. M. Hagood G. S. York Director Director EX-25 14 exh2501.txt T-1 Exhibit 25.01 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ------------------ FORM T-1 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE ------------------ CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) |___| ------------------ THE BANK OF NEW YORK (Exact name of trustee as specified in its charter) New York (Jurisdiction of incorporation or organization if not a U.S. national bank) 13-5160382 (I.R.S. Employer Identification No.) 48 Wall Street, New York, New York (Address of principal executive offices) 10286 (Zip Code) ------------------- The Bank of New York 100 Ashford Center North Suite 520 Atlanta, Georgia 30338 Attn: Ms. Elizabeth Talley (770) 698-5188 (Name, address and telephone number of agent for service) -------------------- South Carolina Electric & Gas Company (Exact name of obligor as specified in its charter) South Carolina 57-0248695 State or other jurisdiction of (IRS Employer incorporation or organization Identification no.) South Carolina Electric & Gas Company 1426 Main Street Columbia, South Carolina (Address of principal executive offices) 29201 (Zip Code) -------------------- First Mortgage Bonds (Title of the indenture securities) 1. General Information. Furnish the following information as to the trustee-- Name and address of each examining or supervising authority to which it is subject. Superintendent of Banks of the State of New York 2 Rector Street New York, N.Y. 10006, and Albany, N.Y. 12203 Federal Reserve Bank of New York 33 Liberty Plaza New York, N.Y. 10045 Federal Deposit Insurance Corporation Washington, D.C. 20429 New York Clearing House Association New York, N.Y. 10005 Whether it is authorized to exercise corporate trust powers. Yes. 2. Affiliations with Obligor. If the obligor is an affiliate of the trustee, describe each such affiliation. None. 3-15 Not Applicable 16. List of Exhibits. Exhibits identified in parentheses below, on file with the Commission, are incorporated herein by reference as an exhibit hereto, pursuant to Rule 7a-29 under the Trust Indenture Act of 1939 (the "Act") and Rule 24 of the Commission's Rules of Practice. (1) A copy of the Organization Certificate of The Bank of New York (formerly Irving Trust Company) as now in effect, which contains the authority to commence business and a grant of powers to exercise corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1 filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with Registration Statement No. 33-21672 and Exhibit 1 to Form T-1 filed with Registration Statement No. 33-29637.) (4) A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1 filed with Registration Statement No. 33-31019.) (6) The consent of the Trustee required by Section 321(b) of the Act. (Exhibit 6 to Form T-1 filed with Registration Statement No. 33-44051.) (7) A copy of the latest report of condition of the Trustee published pursuant to law or to the requirements of its supervising or examining authority. SIGNATURE Pursuant to the requirements of the Act, the Trustee, The Bank of New York, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of Atlanta and the State of Georgia, on the 16th day of July, 2001. THE BANK OF NEW YORK By: /S/ Elizabeth T. Talley Elizabeth T. Talley, Agent EXHIBIT 6 TO FORM T-1 CONSENT OF TRUSTEE Pursuant to the requirements of Section 321(b) of the Trust Indenture Act of 1939, in connection with the proposed issuance of South Carolina Electric & Gas Company First Mortgage Bonds, The Bank of New York hereby consents that reports of examinations by Federal, State, Territorial or District Authorities may be furnished by such authorities to the Securities and Exchange Commission upon request therefor. THE BANK OF NEW YORK By: /S/ Elizabeth T. Talley Elizabeth T. Talley, Agent EXHIBIT 7 TO FORM T-1 Consolidated Report of Condition of THE BANK OF NEW YORK of 48 Wall Street, New York, N.Y. 10286 And Foreign and Domestic Subsidiaries, a member of the Federal Reserve System, at the close of business December 31, 2000, published in accordance with a call made by the Federal Reserve Bank of this District pursuant to the provisions of the Federal Reserve Act. Dollar Amounts in Thousands ASSETS Cash and balances due from depository institutions: Noninterest-bearing balances and currency and coin................................... $ 3,083,720 Interest-bearing balances................................. 4,949,333 Securities: Held-to-maturity securities................................ 740,315 Available-for-sale securities............................. 5,328,981 Federal funds sold and securities purchased under agreements to resell........................ 5,695,708 Loans and lease financing receivables: Loans and leases, net of unearned income. . . . . 36,590,456 LESS: Allowance for loan and lease losses. . . . . . . . . . 598,536 LESS: Allocated transfer risk reserve. . . . . . . . . . 12,575 Loans and leases, net of unearned income and allowance and reserve...................... 35,979,345 Trading Assets .................................................. 11,912,448 Premises and fixed assets (including capitalized leases)......................................... 763,241 Other real estate owned.............................................. 2,925 Investments in unconsolidated subsidiaries and associated companies................................................... 183,836 Customers' liability to this bank on acceptances outstanding................................... 424,303 Intangible assets.................................................... 1,378,477 Other assets......................................................... 3,823,797 ----------- Total assets........................................................$74,266,429 =========== LIABILITIES Deposits: In domestic offices....................................... $28,328,548 Noninterest-bearing . . . . . . . 12,637,384 Interest-bearing. . . . . . . . . 15,691,164 In foreign offices, Edge and Agreement subsidiaries, and IBFs..........................27,920,690 Noninterest-bearing . . . . . . . 470,130 Interest-bearing. . . . . . . . . 27,450,560 Federal funds purchased and securities sold under agreements to repurchase . . . . . . . .. 1,437,916 Demand notes issued to the U.S. Treasury............................................. 100,000 Trading liabilities................................................ 2,049,818 Other borrowed money: With remaining maturity of one year or less................................................. 1,279,125 With remaining maturity of more than one year through three years....................... 0 With remaining maturity of more than three years........................................ 31,080 Bank's liability on acceptances executed and outstanding................................ 427,110 Subordinated notes and debentures.................................. 1,646,000 Other liabilities.................................................. 4,604,478 ---------- Total liabilities.................................................. 67,824,765 ========== EQUITY CAPITAL Common stock........................................................ 1,135,285 Surplus............................................................. 1,008,775 Undivided profits and capital reserves................................................... 4,308,492 Net unrealized holding gains (losses) on available-for-sale securities........................... 27,768 Cumulative foreign currency translation adjustments.................................... . 0 Total equity capital................................................ 6,441,664 ----------- Total liabilities and equity capital................................$74,266,429 =========== .........I, Thomas J. Masiro, Senior Vice President and Comptroller of the above-named bank do hereby declare that this Report of Condition has been prepared in conformance with the instructions issued by the Board of Governors of the Federal Reserve System and is true to the best of my knowledge and belief. ................... Thomas J. Masiro ..........We, the undersigned directors, attest to the correctness of this Report of Condition and declare that it has been examined by us and to the best of our knowledge and belief has been prepared in conformance with the instructions issued by the Board of Governors of the Federal Reserve System and is true and correct. ..........Thomas A. Renyi ) ..........Gerald L. Hassell ) Directors ..........Allen R. Griffith ) -----END PRIVACY-ENHANCED MESSAGE-----