10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

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

For the quarterly period ended March 31, 2011

OR

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

For the Transition Period from            to           

Commission	Registrant, State of Incorporation,	I.R.S. Employer
File Number	Address and Telephone Number	Identification No.
1-8809	SCANA Corporation	57-0784499
	(a South Carolina corporation)
	100 SCANA Parkway, Cayce, South Carolina 29033
	(803) 217-9000
1-3375	South Carolina Electric & Gas Company	57-0248695
	(a South Carolina corporation)
	100 SCANA Parkway, Cayce, South Carolina 29033
	(803) 217-9000

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

SCANA Corporation Yes x No o  South Carolina Electric & Gas Company Yes x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

SCANA Corporation Yes x No oSouth Carolina Electric & Gas Company Yes o No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

SCANA Corporation	Large accelerated filer  x	Accelerated filer  o	Non-accelerated filer  o
	Smaller reporting company  o
South Carolina Electric & Gas Company	Large accelerated filer  o	Accelerated filer  o	Non-accelerated filer  x
	Smaller reporting company  o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

SCANA Corporation Yes o No x  South Carolina Electric & Gas Company Yes o No x

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

	Description of	Shares Outstanding
Registrant	Common Stock	at April 27, 2011
SCANA Corporation	Without Par Value	128,428,337
South Carolina Electric & Gas Company	Without Par Value	40,296,147	(a)

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

This combined Form 10-Q is separately filed by SCANA Corporation and South Carolina Electric & Gas Company.  Information contained herein relating to any individual company is filed by such company on its own behalf.  Each company makes no representation as to information relating to the other company.

South Carolina Electric & Gas Company meets the conditions set forth in General Instruction H(1)(a) and (b) of Form 10-Q and therefore is filing this Form with the reduced disclosure format allowed under General Instruction H(2).

TABLE OF CONTENTS

MARCH 31, 2011

			Page
Cautionary Statement Regarding Forward-Looking Information			3
Definitions			4
PART I. FINANCIAL INFORMATION
SCANA Corporation Financial Section			5
	Item 1.	Financial Statements	6
		Condensed Consolidated Balance Sheets	6
		Condensed Consolidated Statements of Income	8
		Condensed Consolidated Statements of Cash Flows	9
		Condensed Consolidated Statements of Comprehensive Income	10
		Notes to Condensed Consolidated Financial Statements	11
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	30
	Item 4.	Controls and Procedures	31
South Carolina Electric & Gas Company Financial Section			32
	Item 1.	Financial Statements	33
		Condensed Consolidated Balance Sheets	33
		Condensed Consolidated Statements of Income	35
		Condensed Consolidated Statements of Cash Flows	36
		Condensed Consolidated Statements of Comprehensive Income	37
		Notes to Condensed Consolidated Financial Statements	38
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	49
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	54
	Item 4.	Controls and Procedures	55
PART II. OTHER INFORMATION			56
	Item 6.	Exhibits	56
Signatures			57
Exhibit Index			58

2

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

Statements included in this Quarterly Report on Form 10-Q which are not statements of historical fact are intended to be, and are hereby identified as, “forward-looking statements” for purposes of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.  Forward-looking statements include, but are not limited to, statements concerning key earnings drivers, customer growth, environmental regulations and expenditures, leverage ratio, projections for pension fund contributions, financing activities, access to sources of capital, impacts of the adoption of new accounting rules and estimated construction and other expenditures.  In some cases, forward-looking statements can be identified by terminology such as “may,” “will,” “could,” “should,” “expects,” “forecasts,” “plans,” “anticipates,” “believes,” “estimates,” “projects,” “predicts,” “potential” or “continue” or the negative of these terms or other similar terminology.  Readers are cautioned that any such forward-looking statements are not guarantees of future performance and involve a number of risks and uncertainties, and that actual results could differ materially from those indicated by such forward-looking statements.  Important factors that could cause actual results to differ materially from those indicated by such forward-looking statements include, but are not limited to, the following:

(1)	the information is of a preliminary nature and may be subject to further and/or continuing review and adjustment;
(2)	regulatory actions, particularly changes in rate regulation, regulations governing electric grid reliability, and environmental regulations, and actions affecting the construction of new nuclear units;
(3)	current and future litigation;
(4)	changes in the economy, especially in areas served by subsidiaries of SCANA;
(5)	the impact of competition from other energy suppliers, including competition from alternate fuels in industrial interruptible markets;
(6)	growth opportunities for SCANA’s regulated and diversified subsidiaries;
(7)	the results of short- and long-term financing efforts, including future prospects for obtaining access to capital markets and other sources of liquidity;
(8)	changes in SCANA’s or its subsidiaries’ accounting rules and accounting policies;
(9)	the effects of weather, including drought, especially in areas where the generation and transmission facilities of SCANA and its subsidiaries (the Company) are located and in areas served by SCANA’s subsidiaries;
(10)	payment by counterparties as and when due;
(11)	the results of efforts to license, site, construct and finance facilities for baseload electric generation and transmission;
(12)	the results of efforts to attract and retain joint venture partners for SCE&G’s new nuclear generation project;
(13)	the ability of suppliers, both domestic and international, to timely provide the components, parts, tools, equipment and other supplies needed for our construction program, operations and maintenance;
(14)	the availability of fuels such as coal, natural gas and enriched uranium used to produce electricity; the availability of purchased power and natural gas for distribution; the level and volatility of future market prices for such fuels and purchased power; and the ability to recover the costs for such fuels and purchased power;
(15)	the availability of skilled and experienced human resources to properly manage, operate, and grow the Company’s businesses;
(16)	labor disputes;
(17)	performance of SCANA’s pension plan assets;
(18)	changes in taxes;
(19)	inflation or deflation;
(20)	compliance with regulations; and
(21)	the other risks and uncertainties described from time to time in the periodic reports filed by SCANA or SCE&G with the SEC.

SCANA and SCE&G disclaim any obligation to update any forward-looking statements.

3

DEFINITIONS

The following abbreviations used in the text have the meanings set forth below unless the context requires otherwise:

TERM	MEANING
AFC	Allowance for Funds Used During Construction
ARO	Asset Retirement Obligation
BLRA	Base Load Review Act
CAIR	Clean Air Interstate Rule
CAMR	Clean Air Mercury Rule
CEO	Chief Executive Officer
CFO	Chief Financial Officer
CGT	Carolina Gas Transmission Corporation
COL	Combined Construction and Operating License
Company	SCANA, together with its consolidated subsidiaries
Consolidated SCE&G	SCE&G and its consolidated affiliates
CUT	Customer Usage Tracker
DHEC	South Carolina Department of Health and Environmental Control
DSM Programs	Demand reduction and energy efficiency programs
DT	Dekatherms
Energy Marketing	The divisions of SEMI, excluding SCANA Energy
EPA	United States Environmental Protection Agency
eWNA	Pilot Electric WNA
FEIS	Final Environmental Impact Statement
FERC	United States Federal Energy Regulatory Commission
Fuel Company	South Carolina Fuel Company, Inc.
GENCO	South Carolina Generating Company, Inc.
LOC	Lines of credit
MGP	Manufactured Gas Plant
MW or MWh	Megawatt or megawatt-hour
NASDAQ	The NASDAQ Stock Market, Inc.
NCUC	North Carolina Utilities Commission
New Units	Nuclear Units 2 and 3 to be constructed at Summer Station
NMST	Negotiated Market Sales Tariff
NRC	United States Nuclear Regulatory Commission
NYMEX	New York Mercantile Exchange
OATT	Open Access Transmission Tariff
OCI	Other Comprehensive Income
ORS	South Carolina Office of Regulatory Staff
OUC	Orlando Utilities Commission
PGA	Purchased Gas Adjustment
PRP	Potentially Responsible Party
PSNC Energy	Public Service Company of North Carolina, Incorporated
Retail Gas Marketing	SCANA Energy
RSA	Natural Gas Rate Stabilization Act
Santee Cooper	South Carolina Public Service Authority
SCANA	SCANA Corporation, the parent company
SCANA Energy	A division of SEMI which markets natural gas in Georgia
SCE&G	South Carolina Electric & Gas Company
SCEUC	South Carolina Energy Users
SCPSC	Public Service Commission of South Carolina
SCR	Selective Catalytic Reactor
SEC	United States Securities and Exchange Commission
SEMI	SCANA Energy Marketing, Inc.
Summer Station	V. C. Summer Nuclear Station
USACE	United States Army Corps of Engineers
VIE	Variable Interest Entity
Westinghouse	Westinghouse Electric Company LLC
WNA	Weather Normalization Adjustment

4

SCANA CORPORATION

FINANCIAL SECTION

5

PART I.  FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

SCANA CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

	March 31,			December 31,
Millions of dollars	2011			2010
Assets
Utility Plant In Service	$	11,783		$	11,714
Accumulated Depreciation and Amortization	(3,541		)	(3,495		)
Construction Work in Progress	1,197			1,081
Nuclear Fuel, Net of Accumulated Amortization	128			132
Goodwill, net of accumulated amortization and writedown of $276	230			230
Utility Plant, Net	9,797			9,662
Nonutility Property and Investments:
Nonutility property, net of accumulated depreciation of $122 and $118	296			299
Assets held in trust, net-nuclear decommissioning	78			76
Other investments	84			78
Nonutility Property and Investments, Net	458			453
Current Assets:
Cash and cash equivalents	122			55
Receivables, net of allowance for uncollectible accounts of $11 and $9	645			837
Inventories (at average cost):
Fuel and gas supply	288			316
Materials and supplies	126			125
Emission allowances	5			6
Prepayments and other	188			271
Deferred income taxes	21			21
Total Current Assets	1,395			1,631
Deferred Debits and Other Assets:
Regulatory assets	1,066			1,061
Other	157			161
Total Deferred Debits and Other Assets	1,223			1,222
Total	$	12,873		$	12,968

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	March 31,		December 31,
Millions of dollars	2011		2010
Capitalization and Liabilities
Common Equity	$	3,800	$	3,702
Long-Term Debt, net	3,989		4,152
Total Capitalization	7,789		7,854
Current Liabilities:
Short-term borrowings	512		420
Current portion of long-term debt	587		337
Accounts payable	294		526
Customer deposits and customer prepayments	100		100
Taxes accrued	47		146
Interest accrued	72		72
Dividends declared	62		61
Derivative financial instruments	36		65
Other	115		140
Total Current Liabilities	1,825		1,867
Deferred Credits and Other Liabilities:
Deferred income taxes, net	1,406		1,391
Deferred investment tax credits	50		56
Asset retirement obligations	503		497
Pension and other postretirement benefits	204		202
Regulatory liabilities	923		913
Other	173		188
Total Deferred Credits and Other Liabilities	3,259		3,247
Commitments and Contingencies (Note 9)	-		-
Total	$	12,873	$	12,968

See Notes to Condensed Consolidated Financial Statements.

7

SCANA CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

	Three Months Ended March 31,
Millions of dollars, except per share amounts	2011			2010
Operating Revenues:
Electric	$	558		$	540
Gas - regulated	362			430
Gas - nonregulated	361			458
Total Operating Revenues	1,281			1,428
Operating Expenses:
Fuel used in electric generation	211			235
Purchased power	2			2
Gas purchased for resale	512			658
Other operation and maintenance	170			172
Depreciation and amortization	86			83
Other taxes	52			48
Total Operating Expenses	1,033			1,198
Operating Income	248			230
Other Income (Expense):
Other income	13			14
Other expenses	(9		)	(10		)
Interest charges, net of allowance for borrowed funds used during construction of $2 and $2	(70		)	(65		)
Allowance for equity funds used during construction	3			3
Total Other Expense	(63		)	(58		)
Income Before Income Tax Expense	185			172
Income Tax Expense	57			45
Income Available to Common Shareholders of SCANA	$	128		$	127
Per Common Share Data
Basic Earnings Per Share of Common Stock	$	1.00		$	1.02
Diluted Earnings Per Share of Common Stock	$	1.00		$	1.02
Weighted Average Common Shares Outstanding (millions)
Basic	127.9			123.8
Diluted	129.0			123.9
Dividends Declared Per Share of Common Stock	$	.485		$	.475

See Notes to Condensed Consolidated Financial Statements.

8

SCANA CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Three Months Ended
	March 31,
Millions of dollars	2011			2010
Cash Flows From Operating Activities:
Net income	$	128		$	127
Adjustments to reconcile net income to net cash provided from operating activities:
Earnings from equity method investments, net of distributions	1			-
Deferred income taxes, net	11			8
Depreciation and amortization	88			88
Amortization of nuclear fuel	9			9
Allowance for equity funds used during construction	(3		)	(3		)
Carrying cost recovery	-			(1		)
Cash provided (used) by changes in certain assets and liabilities:
Receivables	192			(3		)
Inventories	17			56
Prepayments and other	83			26
Regulatory liabilities	(2		)	1
Accounts payable	(146		)	(33		)
Taxes accrued	(99		)	(73		)
Interest accrued	-			1
Regulatory assets	14			(31		)
Changes in other assets	-			(15		)
Changes in other liabilities	(52		)	16
Net Cash Provided From Operating Activities	241			173
Cash Flows From Investing Activities:
Utility property additions and construction expenditures	(293		)	(223		)
Proceeds from investments and sale of assets	1			8
Nonutility property additions	(2		)	(7		)
Purchase of investments	(6		)	(2		)
Net Cash Used For Investing Activities	(300		)	(224		)
Cash Flows From Financing Activities:
Proceeds from issuance of common stock	25			26
Proceeds from issuance of long-term debt	379			202
Repayment of long-term debt	(309		)	(9		)
Dividends	(61		)	(58		)
Short-term borrowings, net	92			(115		)
Net Cash Provided From Financing Activities	126			46
Net Increase (Decrease) In Cash and Cash Equivalents	67			(5		)
Cash and Cash Equivalents, January 1	55			162
Cash and Cash Equivalents, March 31	$	122		$	157
Supplemental Cash Flow Information:
Cash paid for - Interest (net of capitalized interest of $2 and $2)	$	67		$	63
- Income taxes	-			-
Noncash Investing and Financing Activities:
Accrued construction expenditures	93			101

See Notes to Condensed Consolidated Financial Statements.

9

SCANA CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

	Three Months Ended
	March 31,
Millions of dollars	2011		2010
Net Income	$	128	$	127
Other Comprehensive Income (Loss), net of tax:
Unrealized holding gains (losses) arising during period, net	2		(11		)
Reclassified to net income:
Losses on cash flow hedging activities	5		5
Amortization of deferred employee benefit plan costs, net of taxes	-		1
Comprehensive income attributable to SCANA Corporation (1)	$	135	$	122

(1)  Accumulated other comprehensive loss totaled $40.0 million as of March 31, 2011 and $46.6 million as of December 31, 2010.

See Notes to Condensed Consolidated Financial Statements.

10

SCANA CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2011

(Unaudited)

The following notes should be read in conjunction with the Notes to Consolidated Financial Statements appearing in SCANA’s Annual Report on Form 10-K for the year ended December 31, 2010. These are interim financial statements and, due to the seasonality of the Company’s business and matters that may occur during the rest of the year, the amounts reported in the Condensed Consolidated Statements of Income are not necessarily indicative of amounts expected for the full year.  In the opinion of management, the information furnished herein reflects all adjustments, all of a normal recurring nature, which are necessary for a fair statement of the results for the interim periods reported.

1.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Earnings Per Share

The Company computes basic earnings per share by dividing income available to common shareholders by the weighted average number of common shares outstanding for the period.  The Company computes diluted earnings per share using this same formula after giving effect to securities considered to be dilutive potential common stock utilizing the treasury stock method.  The Company has issued no securities that would have an antidilutive effect on earnings per share.

A reconciliation of the weighted average number of common shares for year to date March 31 for basic and dilutive purposes is as follows:

In Millions	2011	2010
Weighted Average Shares Outstanding - Basic	127.9	123.8
Net effect of dilutive stock-based compensation plans and equity forward contracts	1.1	0.1
Weighted Average Shares - Diluted	129.0	123.9

Asset Management and Supply Service Agreements

PSNC Energy utilizes asset management and supply service agreements with counterparties for certain natural gas storage facilities.  At March 31, 2011, such counterparties held 40% of PSNC Energy’s natural gas inventory, with a carrying value of $8.3 million, through either capacity release or agency relationships.  Under the terms of the asset management agreements, PSNC Energy receives storage asset management fees.  No fees are received under supply service agreements.  The agreements expire at various times through March 31, 2013.

2.RATE AND OTHER REGULATORY MATTERS

Rate Matters

Electric

SCE&G’s electric rates are established using a cost of fuel component approved by the SCPSC which may be adjusted periodically to reflect changes in the price of fuel purchased by SCE&G.  Effective with the first billing cycle of May 2010, the SCPSC approved a settlement agreement authorizing SCE&G to decrease the fuel cost portion of its electric rates.  The settlement agreement incorporated SCE&G’s proposal to accelerate the recognition of $17.4 million of previously deferred state income tax credits and record an offsetting reduction to the recovery of fuel costs.  In addition, SCE&G agreed to defer recovery of its actual undercollected base fuel costs as of April 30, 2010 until May 2011.  SCE&G is allowed to charge and recover carrying costs monthly on the actual base fuel costs undercollected balance as of the end of each month during this deferral period.  In February 2011, SCE&G filed for an increase to the cost of fuel component of its rates to be effective with the first billing cycle of May 2011.  The annual fuel hearing was conducted on March 24, 2011, and a

11

settlement agreement was reached among ORS, the SCEUC, and SCE&G which will allow SCE&G to recover the actual base fuel under-collected balance as of April 30, 2011, over a two year period and charge carrying cost on the deferred balance.  The settlement was approved by the SCPSC on April 20, 2011 and is effective with the first billing cycle of May 2011.

On July 15, 2010, the SCPSC issued an order approving a 4.88% overall increase in SCE&G’s retail electric base rates and authorized an allowed return on common equity of 10.7%. The SCPSC’s order adopted various stipulations among SCE&G, the ORS and other intervening parties. Among other things, the SCPSC’s order (1) included implementation of an eWNA for SCE&G’s electric customers, which began in August 2010, (2) provided for a $25 million credit, over one year, to SCE&G’s customers to be offset by amortization of weather-related revenues which were deferred in the first quarter of 2010 pursuant to a stipulation between SCE&G and the ORS, (3) provided for a $48.7 million credit to SCE&G’s customers over two years to be offset by accelerated recognition of previously deferred state income tax credits and (4) provided for the recovery of certain federally-mandated capital expenditures that had been included in utility plant but were not being depreciated.

On July 15, 2010, the SCPSC issued an order approving the implementation by SCE&G of certain DSM Programs, including the establishment of an annual rider to allow recovery of the costs and lost net margin revenue associated with DSM Programs, along with an incentive for investing in such programs. The SCPSC’s order approved various settlement agreements among SCE&G, the ORS and other intervening parties. On July 27, 2010, SCE&G filed the DSM rate rider tariff sheet with the SCPSC. The tariff rider was applied to bills rendered on or after October 30, 2010. The order requires that SCE&G submit annual filings to the SCPSC regarding the DSM Programs, net lost revenues, program costs, incentive and net program benefits.  In January 2011, SCE&G submitted to the SCPSC its annual update on DSM Programs.  Included in the filing was a petition to update the rate rider to provide for the recovery of costs, lost net margin revenue, and the approved shared savings incentive for investing in such DSM Programs.

In December 2009, SCE&G submitted to the FERC revised tariff sheets to change the network and point to point transmission rates under SCE&G’s OATT. This initial request, if approved, would result in an annual revenue increase of approximately $5.6 million. In compliance with the OATT, on March 1, 2010 pursuant to an order issued by the FERC, SCE&G implemented, subject to refund, the proposed tariff sheets. On May 17, 2010, SCE&G submitted to the FERC as an informational filing its recalculated Annual Transmission Revenue Requirement or “Annual Update” for the period June 1, 2010 through May 31, 2011. The FERC accepted the tariff sheets in the “Annual Update” and made them effective, subject to refund, as of June 1, 2010.

Electric – BLRA

In January 2010, the SCPSC approved SCE&G’s request for an order pursuant to the BLRA to approve an updated construction and capital cost schedule for the construction of two new nuclear generating units at Summer Station.  The updated schedule provides details of the construction and capital cost schedule beyond what was proposed and included in the original BLRA filing described below.  The revised schedule does not change the previously announced completion date for the New Units or the originally announced cost.

In February 2009, the SCPSC approved SCE&G’s combined application pursuant to the BLRA seeking a certificate of environmental compatibility and public convenience and necessity and for a base load review order relating to the proposed construction and operation by SCE&G and Santee Cooper of the New Units at Summer Station.  Under the BLRA, the SCPSC conducted a full pre-construction prudency review of the proposed units and the engineering, procurement, and construction contract under which they are being built.  The SCPSC prudency finding is binding on all future related rate proceedings so long as the construction proceeds in accordance with schedules, estimates and projections, including contingencies, as approved by the SCPSC.

In May 2009, two intervenors filed separate appeals of the order with the South Carolina Supreme Court. With regard to the first appeal, which challenged the SCPSC’s prudency finding, the South Carolina Supreme Court issued an opinion on April 26, 2010, affirming the decision of the SCPSC. As for the second appeal, the South Carolina Supreme Court reversed the SCPSC’s decision to allow SCE&G to include a pre-approved cost contingency fund and associated inflation (contingency reserve) as part of its anticipated capital costs allowed under the BLRA. SCE&G’s share of the project, as originally approved by the SCPSC, is $4.5 billion in 2007 dollars. Approximately $438 million represented contingency costs associated with the project. Without the pre-approved contingency reserve, SCE&G must seek SCPSC approval for the recovery of any additional capital costs. The Court’s ruling, however, does not affect the project schedule or disturb the SCPSC’s issuance of a certificate of environmental compatibility and public convenience and necessity, which is required to

12

construct the new units. On November 15, 2010, SCE&G filed a petition to the SCPSC seeking an order approving an updated capital cost schedule that reflects the removal of the contingency reserve and incorporates presently identifiable capital costs of $173.9 million, and on March 28, 2011, SCE&G and the ORS entered into a settlement agreement which stated, among other things, that this updated capital cost schedule should be approved by the SCPSC.  A hearing on this petition was held on April 4, 2011, and the SCPSC is expected to rule on the request in May 2011.

Under the BLRA, SCE&G is allowed to file revised rates with the SCPSC each year to incorporate the financing cost of any incremental construction work in progress incurred for new nuclear generation. Requested rate adjustments are based on SCE&G’s updated cost of debt and capital structure and on an allowed return on common equity of 11%. In September 2009, the SCPSC approved SCE&G’s annual revised rate request under the BLRA which constituted a $22.5 million or 1.1% increase to retail electric rates. In October 2010, the SCPSC approved an increase of $47.3 million or 2.3%, under the BLRA for the annual revised rates adjustment filing. The new retail electric rates were effective for bills rendered on and after October 30, 2010.

Gas

SCE&G

The RSA is designed to reduce the volatility of costs charged to customers by allowing for more timely recovery of the costs that regulated utilities incur related to natural gas infrastructure.  On October 15, 2010, pursuant to the annual RSA filing, the SCPSC approved a decrease in retail natural gas rates of $10.4 million or approximately 2.1%.  The rate adjustment was effective with the first billing cycle of November 2010.

SCE&G’s natural gas tariffs include a PGA that provides for the recovery of actual gas costs incurred including costs related to hedging natural gas purchasing activities. SCE&G’s gas rates are calculated using a methodology which adjusts the cost of gas monthly based on a 12-month rolling average. The annual PGA hearing to review SCE&G’s gas purchasing policies and procedures was conducted in November 2010, before the SCPSC. The SCPSC issued an order in December 2010 finding that SCE&G’s gas purchasing policies and practices during the review period of August 1, 2009, through July 31, 2010, were reasonable and prudent.

In February 2011, the ORS submitted a request to the SCPSC to suspend SCE&G’s natural gas hedging program.  SCE&G responded in March 2011 indicating no objection to the ORS’s request.  The request is subject to approval by the SCPSC.  The SCPSC issued an order directing staff to schedule an Oral Argument Information Briefing regarding this matter, which was held on April 21, 2011.

PSNC Energy

PSNC Energy is subject to a Rider D rate mechanism which allows it to recover from customers all prudently incurred gas costs and certain uncollectible expenses related to gas cost.  The Rider D rate mechanism also allows PSNC Energy to recover, in any manner authorized by the NCUC, losses on negotiated gas and transportation sales.

PSNC Energy’s rates are established using a benchmark cost of gas approved by the NCUC, which may be modified periodically to reflect changes in the market price of natural gas. PSNC Energy revises its tariffs with the NCUC as necessary to track these changes and defers any over- or under-collections of the delivered cost of gas for subsequent rate consideration. The NCUC reviews PSNC Energy’s gas purchasing practices annually. In addition, PSNC Energy utilizes a CUT which allows it to adjust its base rates semi-annually for residential and commercial customers based on average per customer consumption.

In October 2010, in connection with PSNC Energy’s 2010 Annual Prudence Review, the NCUC determined that PSNC Energy’s gas costs, including all hedging transactions, were reasonable and prudently incurred during the 12 months ended March 31, 2010.

13

Regulatory Assets and Regulatory Liabilities

The Company’s cost-based, rate-regulated utilities recognize in their financial statements certain revenues and expenses in different time periods than do enterprises that are not rate-regulated. As a result, the Company has recorded regulatory assets and liabilities which are summarized in the following tables. Substantially all of our regulatory assets are either explicitly excluded from rate base or are effectively excluded from rate base due to their being offset by related liabilities.

	March 31,		December 31,
Millions of dollars	2011		2010
Regulatory Assets:
Accumulated deferred income taxes	$	210	$	210
Under-collections - electric fuel adjustment clause	36		25
Environmental remediation costs	31		32
AROs and related funding	304		298
Franchise agreements	44		45
Deferred employee benefit plan costs	323		326
Planned major maintenance	3		6
Deferred losses on interest rate derivatives	76		83
Other	39		36
Total Regulatory Assets	$	1,066	$	1,061

Regulatory Liabilities:
Accumulated deferred income taxes	$	25	$	26
Other asset removal costs	792		780
Storm damage reserve	38		38
Monetization of bankruptcy claim	37		37
Deferred gains on interest rate derivatives	26		26
Other	5		6
Total Regulatory Liabilities	$	923	$	913

Accumulated deferred income tax liabilities arising from utility operations that have not been included in customer rates are recorded as a regulatory asset.  Substantially all of these regulatory assets are expected to be recovered over the remaining lives of the related property which may range up to approximately 70 years.  Similarly, accumulated deferred income tax assets arising from deferred investment tax credits are recorded as a regulatory liability.

Under-collections - electric fuel adjustment clause represent amounts due from customers pursuant to the fuel adjustment clause as approved by the SCPSC during annual hearings which are expected to be recovered in retail electric rates in future periods.  These amounts are expected to be recovered in retail electric rates during the period May 2012 through April 2013.  SCE&G is allowed to recover interest on the base fuel deferred balances through the recovery period.

Environmental remediation costs represent costs associated with the assessment and clean-up of MGP sites currently or formerly owned by the Company.  These regulatory assets are expected to be recovered over periods of up to approximately 19 years.

ARO and related funding represents the regulatory asset associated with the legal obligation to decommission and dismantle Summer Station and conditional AROs.  These regulatory assets are expected to be recovered over the related property lives and periods of decommissioning which may range up to approximately 95 years.

Franchise agreements represent costs associated with electric and gas franchise agreements with the cities of Charleston and Columbia, South Carolina.  Based on an SCPSC order, SCE&G began amortizing these amounts through cost of service rates in February 2003 over approximately 20 years.

Employee benefit plan costs of the regulated utilities have historically been recovered as they have been recorded under generally accepted accounting principles. Deferred employee benefit plan costs represent amounts of pension and other postretirement benefit costs which were accrued as liabilities and treated as regulatory assets pursuant to FERC guidance, and costs deferred pursuant to specific SCPSC regulatory orders.  A significant majority of these deferred costs are expected to be recovered through utility rates over average service periods of participating employees, or up to approximately 14 years, although recovery periods could become longer at the direction of the SCPSC.

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Planned major maintenance related to certain fossil hydro turbine/generation equipment and nuclear refueling outages is accrued in periods other than when incurred, as approved pursuant to specific SCPSC orders.  SCE&G collected $8.5 million annually through July 15, 2010, through electric rates, to offset turbine maintenance expenditures.  After July 15, 2010, SCE&G began collecting $18.4 million annually for this purpose.  Nuclear refueling charges are accrued during each 18-month refueling outage cycle as a component of cost of service.

Deferred losses or gains on interest rate derivatives represent the effective portions of changes in fair value and payments made or received upon termination of certain interest rate swaps, treasury rate locks and forward starting swap agreements designated as cash flow hedges.  These amounts are expected to be amortized to interest expense over the lives of the underlying debt, up to approximately 30 years.

Various other regulatory assets are expected to be recovered in rates over periods of up to approximately 30 years.

Other asset removal costs represent estimated net collections through depreciation rates of amounts to be incurred for the removal of assets in the future.

The storm damage reserve represents an SCPSC-approved collection through SCE&G electric rates, capped at $100 million, which can be applied to offset incremental storm damage costs in excess of $2.5 million in a calendar year, certain transmission and distribution insurance premiums and certain tree trimming and vegetation management expenditures in excess of amounts included in base rates.  During the first quarter of 2011 and 2010, SCE&G applied costs of $0.7 million to the reserve.  Pursuant to the SCPSC’s July 2010 retail electric rate order approving an electric rate increase, SCE&G suspended collection of storm damage reserve funds indefinitely, pending future SCPSC action.

The monetization of bankruptcy claim represents proceeds from the sale of a bankruptcy claim which are expected to be amortized into operating revenue through the year 2024.

The SCPSC or the NCUC (collectively, state public service commissions) or the FERC have reviewed and approved through specific orders most of the items shown as regulatory assets.  Other regulatory assets include certain costs which have not been approved for recovery by a state public service commission or by the FERC.  In recording these costs as regulatory assets, management believes the costs will be allowable under existing rate-making concepts that are embodied in rate orders received by the Company.  In the future, as a result of deregulation or other changes in the regulatory environment or changes in accounting requirements, the Company could be required to write off its regulatory assets and liabilities.  Such an event could have a material adverse effect on the Company’s results of operations, liquidity or financial position in the period the write-off would be recorded.

3.COMMON EQUITY

SCANA issued common stock valued at $25.4 million (at time of issue) during the three months ended March 31, 2011 through various compensation and dividend reinvestment plans (including the Stock Purchase Savings Plan), including the exercise of approximately 19,600 stock options during the period.  In addition, in May 2010 SCANA entered into forward sale contracts for approximately 6.6 million common shares to be settled no later than February 29, 2012.  There have been no shares issued under the forward sales contracts.

4.LONG-TERM DEBT AND LIQUIDITY

Long-term Debt

In February 2011, PSNC Energy issued $150 million of 4.59% unsecured senior notes due February 14, 2021. Proceeds from these notes were used to retire $150 million of medium term notes due February 15, 2011.

In January 2011, SCE&G issued $250 million of 5.45% first mortgage bonds maturing on February 1, 2041. Proceeds from the sale were used to retire $150 million of First Mortgage Bonds due February 1, 2011, to repay short-term debt and for general corporate purposes.

Substantially all of SCE&G’s and GENCO’s electric utility plant is pledged as collateral in connection with long-term debt. The Company is in compliance with all debt covenants.

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Liquidity

SCANA, SCE&G (including Fuel Company) and PSNC Energy had available the following committed LOC, and had outstanding the following LOC advances, commercial paper, and LOC-supported letter of credit obligations:

	SCANA						SCE&G						PSNC Energy
	March 31,			December 31,			March 31,			December 31,			March 31,		December 31,
Millions of dollars	2011			2010			2011			2010			2011		2010
Lines of credit:
Committed long-term (a)
Total	$	300		$	300		$	1,100		$	1,100		$	100	$	100
LOC advances	-			-			-			-			-		-
Weighted average interest rate	-			-			-			-			-		-
Outstanding commercial paper (270 or fewer days)	$	26		$	39		$	486		$	381		-		-
Weighted average interest rate	.37		%	.35		%	.38		%	.42		%	-		-
Letters of credit supported by LOC	$	3		$	3		$	.3		$	.3		-		-
Available	$	271		$	258		$	614		$	719		$	100	$	100

(a)The Company’s committed long-term facilities serve to back-up the issuance of commercial paper or to provide liquidity support.  Commercial paper can be issued in the amounts of up to $300 million by SCANA, $700 million by SCE&G, $400 million by Fuel Company and $100 million by PSNC Energy.

SCANA, SCE&G (including Fuel Company) and PSNC Energy are parties to five-year credit agreements in the amounts of $300 million, $1.1 billion, of which $400 million relates to Fuel Company, and $100 million, respectively, which expire October 23, 2015.  These credit agreements are used for general corporate purposes, including liquidity support for each company’s commercial paper program and working capital needs and, in the case of Fuel Company, to finance or refinance the purchase of nuclear fuel, fossil fuel, and emission and other environmental allowances.  These committed long-term facilities are revolving lines of credit under credit agreements with a syndicate of banks. Wells Fargo Bank, National Association, Bank of America, N. A. and Morgan Stanley Bank, N.A. each provide 10% of the aggregate $1.5 billion credit facilities, Branch Banking and Trust Company, Credit Suisse AG, Cayman Islands Branch, JPMorgan Chase Bank, N.A., Mizuho Corporate Bank, Ltd., TD Bank N.A. and UBS Loan Finance LLC each provide 8%, and Deutsche Bank AG New York Branch, Union Bank, N.A. and U.S. Bank National Association each provide 5.3%.  Three other banks provide the remaining 6%. These bank credit facilities support the issuance of commercial paper by SCANA, SCE&G (including Fuel Company) and PSNC Energy. When the commercial paper markets are dislocated (due to either price or availability constraints), the credit facilities are available to support the borrowing needs of SCANA, SCE&G (including Fuel Company) and PSNC Energy.

The Company is obligated with respect to an aggregate of $71.4 million of industrial revenue bonds which are secured by letters of credit issued by Branch Banking and Trust Company.  These letters of credit expire, subject to renewal, in the fourth quarter of 2011.

5.INCOME TAXES

In the first quarter of 2010, in connection with a fuel cost recovery settlement (see Note 2), SCE&G accelerated the recognition of certain previously deferred state income tax credits.  In the first quarter of 2011, pursuant to an SCPSC order, SCE&G continued the accelerated recognition of additional previously deferred state income tax credits (see Note 2).  No other material changes in the status of the Company’s tax positions have occurred through March 31, 2011.

In connection with the change in method of accounting for certain repair costs in 2010, the Company identified approximately $36 million of unrecognized tax benefit.  Because this method change is primarily a temporary difference, this additional benefit, if recognized, would not have a significant effect on the effective tax rate.  Within the next 12 months, it is reasonably possible that this unrecognized tax benefit could increase by as much as $12 million or decrease by as much as $36 million.  The events that could cause these changes are direct settlements with taxing authorities, legal or administrative guidance by relevant taxing authorities, or the lapse of an applicable statute of limitation.

The Company recognizes interest accrued related to unrecognized tax benefits within interest expense and recognizes tax penalties within other expenses.  The Company has not accrued any significant amount of interest expense related to unrecognized tax benefits or tax penalties.

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6.DERIVATIVE FINANCIAL INSTRUMENTS

The Company recognizes all derivative instruments as either assets or liabilities in the statement of financial position and measures those instruments at fair value.  The Company recognizes changes in the fair value of derivative instruments either in earnings, as a component of other comprehensive income (loss) or, for regulated subsidiaries, within regulatory assets or regulatory liabilities, depending upon the intended use of the derivative and the resulting designation.  The fair value of derivative instruments is determined by reference to quoted market prices of listed contracts, published quotations or, for interest rate swaps, discounted cash flow models with independently sourced data.

Policies and procedures and risk limits are established to control the level of market, credit, liquidity and operational and administrative risks assumed by the Company.  SCANA’s Board of Directors has delegated to a Risk Management Committee the authority to set risk limits, establish policies and procedures for risk management and measurement, and oversee and review the risk management process and infrastructure for SCANA and each of its subsidiaries.  The Risk Management Committee, which is comprised of certain officers, including the Company’s Risk Management Officer and senior officers, apprises the Board of Directors with regard to the management of risk and brings to the Board’s attention any areas of concern. Written policies define the physical and financial transactions that are approved, as well as the authorization requirements and limits for transactions.

Commodity Derivatives

The Company uses derivative instruments to hedge forward purchases and sales of natural gas, which create market risks of different types.  Instruments designated as cash flow hedges are used to hedge risks associated with fixed price obligations in a volatile market and risks associated with price differentials at different delivery locations. Instruments designated as fair value hedges are used to mitigate exposure to fluctuating market prices created by fixed prices of stored natural gas.  The basic types of financial instruments utilized are exchange-traded instruments, such as NYMEX futures contracts or options, and over-the-counter instruments such as options and swaps, which are typically offered by energy and financial institutions.

The Company’s regulated gas operations (SCE&G and PSNC Energy) hedge natural gas purchasing activities using over-the-counter options and swaps and NYMEX futures and options.  SCE&G’s tariffs include a PGA that provides for the recovery of actual gas costs incurred.  The SCPSC has ruled that the results of SCE&G’s hedging activities are to be included in the PGA.  As such, the cost of derivatives and gains and losses on such derivatives utilized to hedge gas purchasing activities are recoverable through the weighted average cost of gas calculation.  The offset to the change in fair value of these derivatives is recorded as a regulatory asset or liability.  PSNC Energy’s tariffs also include a provision for the recovery of actual gas costs incurred.  PSNC Energy records premiums, transaction fees, margin requirements and any realized gains or losses from its hedging program in deferred accounts as a regulatory asset or liability for the over- or under-recovery of gas costs.  These derivative financial instruments are not designated as hedges for accounting purposes.

The unrealized gains and losses on qualifying cash flow hedges of nonregulated operations are deferred in other comprehensive income.  When the hedged transactions affect earnings, the previously recorded gains and losses are reclassified from other comprehensive income to cost of gas.  The effects of gains or losses resulting from these hedging activities are either offset by the recording of the related hedged transactions or are included in gas sales pricing decisions made by the business unit.

As an accommodation to certain customers, SEMI, as part of its energy management services, offers fixed price supply contracts which are accounted for as derivatives.  These sales contracts are offset by the purchase of supply futures and swaps which are also accounted for as derivatives.

Interest Rate Swaps

The Company uses interest rate swaps to manage interest rate risk on certain debt issuances.  These swaps are designated as either fair value hedges or cash flow hedges.

The Company uses swaps to synthetically convert fixed rate debt to variable rate debt.  These swaps are designated as fair value hedges.  Gains on certain swaps which were terminated prior to maturity of the underlying debt instruments are being amortized over the life of the debt they hedged.

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The Company also uses swaps to synthetically convert variable rate debt to fixed rate debt.  In addition, in anticipation of the issuance of debt, the Company may use treasury rate lock or forward starting swap agreements which are designated as cash flow hedges.  The effective portions of changes in fair value and payments made or received upon termination of such agreements for regulated subsidiaries are recorded in regulatory assets or regulatory liabilities, and for the holding company or nonregulated subsidiaries, are recorded in other comprehensive income.  Ineffective portions of changes in fair value are recognized in income.

The effective portion of settlement payments made or received upon termination are amortized to interest expense over the term of the underlying debt and are classified as a financing activity in the condensed consolidated statements of cash flows.

Quantitative Disclosures Related to Derivatives

The Company was party to natural gas derivative contracts outstanding in the following quantities:

	Commodity and Other Energy Management Contracts (in DT)
Hedge designation	Gas Distribution	Retail Gas Marketing	Energy Marketing	Total
As of March 31, 2011
Cash flow	-	3,640,000	17,236,375	20,876,375
Not designated (a)	8,470,000	-	22,857,305	31,327,305
Total (a)	8,470,000	3,640,000	40,093,680	52,203,680
As of December 31, 2010
Cash flow	-	5,715,000	17,190,351	22,905,351
Not designated (b)	10,677,000	-	20,588,581	31,265,581
Total (b)	10,677,000	5,715,000	37,778,932	54,170,932

(a)  Includes an aggregate 8,950,000 DT related to basis swap contracts in Energy Marketing.

(b)  Includes an aggregate 6,485,536 DT related to basis swap contracts in Energy Marketing.

At each of March 31, 2011 and December 31, 2010, the Company was party to interest rate swaps designated as fair value hedges with an aggregate notional amount of $556.4 million, and was party to interest rate swaps designated as cash flow hedges with an aggregate notional amount of $977.0 million and $1.1 billion, respectively.

The fair value of energy-related derivatives and interest rate derivatives was reflected in the balance sheet as follows:

	Fair Values of Derivative Instruments
	Asset Derivatives			Liability Derivatives
	Balance Sheet	Fair		Balance Sheet	Fair
Millions of dollars	Location (c)	Value		Location (c)	Value
As of March 31, 2011
Derivatives designated as hedging instruments
Interest rate contracts	Prepayments and other	$	2	Other current liabilities	$	31
	Other deferred debits	4		Other deferred credits	20
Commodity contracts	Other current liabilities	1		Other current liabilities	3
				Other deferred credits	2
Total		$	7		$	56
Derivatives not designated as hedging instruments
Commodity contracts	Prepayments and other	$	3
Energy management contracts	Prepayments and other	5		Prepayments and other	$	1
	Other deferred debits	2		Other deferred debits	1
	Other deferred credits	1		Other current liabilities	4
				Other deferred credits	2
Total		$	11		$	8

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As of December 31, 2010
Derivatives designated as hedging instruments
Interest rate contracts	Other current assets	$	1	Other current liabilities	$	57
	Other deferred debits	7		Other deferred credits	25
Commodity contracts	Other current liabilities	1		Other current liabilities	5
				Other deferred credits	2
Total		$	9		$	89
Derivatives not designated as hedging instruments
Commodity contracts	Prepayments and other	$	3
Energy management contracts	Prepayments and other	7		Prepayments and other	$	1
	Other deferred debits	2		Other current liabilities	6
				Other deferred credits	2
Total		$	12		$	9

(c)Asset derivatives represent unrealized gains to the Company, and liability derivatives represent unrealized losses.  In the Company’s condensed consolidated balance sheets, unrealized gain and loss positions on commodity contracts with the same counterparty are reported as either a net asset or liability.

The effect of derivative instruments on the statements of income is as follows:

Derivatives in Fair Value Hedging Relationships

With regard to the Company’s interest rate swaps designated as fair value hedges, the gains on those swaps and the losses on the hedged fixed rate debt are recognized in current earnings and included in interest expense.  These gains and losses, combined with the amortization of deferred gains on previously terminated swaps as discussed above, resulted in reductions to interest expense of $2.5 million and $3.0 million for the three months ended March 31, 2011 and 2010, respectively.

Derivatives in Cash Flow Hedging Relationships

	Gain (Loss) Deferred			Gain (Loss) Reclassified from
Derivatives in Cash Flow	in Regulatory Accounts			Deferred Accounts into Income
Hedging Relationships	(Effective Portion)			(Effective Portion)
Millions of dollars				Location	Amount
Three Months Ended March 31, 2011
Interest rate contracts	$	6		Interest expense	$	(1	)
Three Months Ended March 31, 2010
Interest rate contracts	$	3		Interest expense	$	(1	)
	Gain (Loss)			Gain (Loss) Reclassified from
Derivatives in Cash Flow	Recognized in OCI,			Accumulated OCI into Income,
Hedging Relationships	net of tax			net of tax (Effective Portion)
Millions of dollars	(Effective Portion)			Location	Amount
Three Months Ended March 31, 2011
Interest rate contracts	$	3		Interest expense	$	(1	)
Commodity contracts	(1		)	Gas purchased for resale	(4		)
Total	$	2			$	(5	)
Three Months Ended March 31, 2010
Interest rate contracts	$	(2	)	Interest expense	$	(1	)
Commodity contracts	(9		)	Gas purchased for resale	(4		)
Total	$	(11	)		$	(5	)

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As of March 31, 2011, the Company expects that during the next 12 months reclassifications from accumulated other comprehensive loss to earnings arising from cash flow hedges will include approximately $0.9 million as an increase to gas cost and approximately $2.1 million as an increase to interest expense, assuming natural gas and financial markets remain at their current levels.  As of March 31, 2011, all of the Company’s commodity cash flow hedges settle by their terms before the end of 2013.

	Gain (Loss) Recognized in Income
Derivatives not designated as
Hedging Instruments
Millions of dollars	Location	2011		2010
First Quarter
Commodity contracts	Gas purchased for resale	$	(1)	$	(1	)

Hedge Ineffectiveness

Other gains (losses) recognized in income representing ineffectiveness on interest rate hedges designated as cash flow hedges were insignificant in each of the three months ended March 31, 2011 and 2010.

Credit Risk Considerations

Certain of the Company’s derivative instruments contain contingent provisions that require the Company to provide collateral upon the occurrence of specific events, primarily credit downgrades.  As of March 31, 2011 and December 31, 2010, the Company has posted $19.7 million and $20.0 million, respectively, of collateral related to derivatives with contingent provisions that are in a net liability position.  If all of the contingent features underlying these instruments were fully triggered as of March 31, 2011 and December 31, 2010, the Company would be required to post an additional $38.5 million and $74.0 million, respectively, of collateral to its counterparties.  The aggregate fair value of all derivative instruments with contingent provisions that are in a net liability position as of March 31, 2011 and December 31, 2010 are $58.2 million and $94.0 million, respectively.

7.FAIR VALUE MEASUREMENTS, INCLUDING DERIVATIVES

The Company values available for sale securities using quoted prices from a national stock exchange, such as the NASDAQ, where the securities are actively traded.  For commodity derivative assets and liabilities, the Company uses unadjusted NYMEX prices to determine fair value, and considers such measures of fair value to be Level 1 for exchange traded instruments and Level 2 for over-the-counter instruments.  The Company’s interest rate swap agreements are valued using discounted cash flow models with independently sourced data.  Fair value measurements, and the level within the fair value hierarchy in which the measurements fall, were as follows:

		Fair Value Measurements Using
		Quoted Prices in Active		Significant Other
		Markets for Identical Assets		Observable Inputs
Millions of dollars		(Level 1)		(Level 2)
As of March 31, 2011
Assets -	Available for sale securities	$	3	$	-
	Interest rate contracts	-		6
	Commodity contracts	3		1
	Energy management contracts	-		8
Liabilities -	Interest rate contracts	-		51
	Commodity contracts	-		5
	Energy management contracts	-		8
As of December 31, 2010
Assets -	Available for sale securities	$	3	$	-
	Interest rate contracts	-		8
	Commodity contracts	2		2
	Energy management contracts	-		9
Liabilities -	Interest rate contracts	-		82
	Commodity contracts	1		6
	Energy management contracts	-		11

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There were no fair value measurements based on significant unobservable inputs (Level 3) for either period presented.  In addition, there were no transfers of fair value amounts into or out of Levels 1 and 2 during any period presented.

Financial instruments for which the carrying amount may not equal estimated fair value at March 31, 2011 and December 31, 2010 were as follows:

	March 31, 2011				December 31, 2010
Millions of dollars	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Long-term debt	$	4,575.8	$	4,865.8	$	4,488.3	$	4,840.5

Fair values of long-term debt are based on quoted market prices of the instruments or similar instruments.  For debt instruments for which no quoted market prices are available, fair values are based on net present value calculations.  Carrying values reflect the fair values of interest rate swaps based on discounted cash flow models with independently sourced data.  Early settlement of long-term debt may not be possible or may not be considered prudent.  Potential taxes and other expenses that would be incurred in an actual sale or settlement have not been considered.

8.EMPLOYEE BENEFIT PLANS

Pension and Other Postretirement Benefit Plans

Components of net periodic benefit cost recorded by the Company were as follows:

	Pension Benefits						Other Postretirement Benefits
Millions of dollars	2011			2010			2011		2010
Three months ended March 31,
Service cost	$	4.6		$	4.7		$	1.1	$	1.1
Interest cost	11.1			11.8			3.0		3.0
Expected return on assets	(16.2		)	(16.4		)	-		-
Prior service cost amortization	1.8			1.9			0.3		0.3
Transition obligation amortization	-			-			0.2		0.2
Amortization of actuarial loss	3.0			4.3			0.1		0.1
Net periodic benefit cost	$	4.3		$	6.3		$	4.7	$	4.7

Prior to July 15, 2010, the SCPSC allowed SCE&G to defer as a regulatory asset the amount of pension cost exceeding amounts included in current rates for SCE&G’s retail electric and gas distribution regulated operations.  In connection with the SCPSC’s July 2010 retail electric rate order and November 2010 natural gas RSA order, SCE&G began deferring all pension expense or income related to retail electric and gas operations as a regulatory asset or liability, as applicable.  Costs totaling $2.3 million and $ 5.3 million were deferred for the three months ended March 31, 2011 and 2010, respectively.

9.COMMITMENTS AND CONTINGENCIES

Nuclear Insurance

The Price-Anderson Indemnification Act deals with public liability for a nuclear incident and establishes the liability limit for third-party claims associated with any nuclear incident at $12.6 billion.  Each reactor licensee is currently liable for up to $117.5 million per reactor owned for each nuclear incident occurring at any reactor in the United States, provided that not more than $17.5 million of the liability per reactor would be assessed per year.  SCE&G’s maximum assessment, based on its two-thirds ownership of Summer Station, would be $78.3 million per incident, but not more than $11.7 million per year.

SCE&G currently maintains policies (for itself and on behalf of Santee Cooper, a one-third owner of Summer Station) with Nuclear Electric Insurance Limited.  The policies, covering the nuclear facility for property damage, excess property damage and outage costs, permit retrospective assessments under certain conditions to cover insurer’s losses.  Based on the current annual premium, SCE&G’s portion of the retrospective premium assessment would not exceed $14.2 million.

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To the extent that insurable claims for property damage, decontamination, repair and replacement and other costs and expenses arising from a nuclear incident at Summer Station exceed the policy limits of insurance, or to the extent such insurance becomes unavailable in the future, and to the extent that SCE&G rates would not recover the cost of any purchased replacement power, SCE&G will retain the risk of loss as a self-insurer.  SCE&G has no reason to anticipate a serious nuclear incident.  However, if such an incident were to occur, it likely would have a material adverse impact on the Company’s results of operations, cash flows and financial position.

Environmental

SCE&G

In 2005, the EPA issued the CAIR, which requires the District of Columbia and 28 states, including South Carolina, to reduce nitrogen oxide and sulfur dioxide emissions in order to attain mandated state levels.  CAIR set emission limits to be met in two phases beginning in 2009 and 2015, respectively, for nitrogen oxide and beginning in 2010 and 2015, respectively, for sulfur dioxide.  SCE&G and GENCO determined that additional air quality controls would be needed to meet the CAIR requirements.  SCE&G has completed the installation of SCR technology at Cope Station for nitrogen oxide reduction, and GENCO has completed installation of a wet limestone scrubber at Williams Station for sulfur dioxide reduction.   SCE&G also installed a wet limestone scrubber at Wateree Station.  In July 2010, the EPA proposed a revised rule known as the Clean Air Transport Rule which will replace CAIR once promulgated.  The proposed rule is currently being evaluated by the Company.  Any costs incurred to comply with this rule or other rules issued by the EPA in the future are expected to be recoverable through rates.

In 2005, the EPA issued the CAMR which established a mercury emissions cap and trade program for coal-fired power plants. Numerous parties challenged the rule and, on February 8, 2008, the United States Circuit Court for the District of Columbia vacated the rule for electric utility steam generating units.  In March 2011, the EPA proposed new standards for mercury and other specified air pollutants.  The proposed rule provides up to four years for facilities to meet the standards once promulgated.  The EPA is expected to finalize the rule in November 2011.  The proposed rule is currently being evaluated by the Company. Any costs incurred to comply with this rule or other rules issued by the EPA in the future are expected to be recoverable through rates.

SCE&G maintains an environmental assessment program to identify and evaluate its current and former operations sites that could require environmental clean-up.  As site assessments are initiated, estimates are made of the amount of expenditures, if any, deemed necessary to investigate and remediate each site.  These estimates are refined as additional information becomes available; therefore, actual expenditures could differ significantly from the original estimates.  Amounts estimated and accrued to date for site assessments and clean-up relate solely to regulated operations.  SCE&G defers site assessment and cleanup costs and expects to recover them through rates.

SCE&G is responsible for four decommissioned MGP sites in South Carolina which contain residues of by-product chemicals.  These sites are in various stages of investigation, remediation and monitoring under work plans approved by DHEC.  SCE&G anticipates that major remediation activities at these sites will continue until 2012 and will cost an additional $8.8 million.  In addition, the National Park Service of the Department of the Interior has made an initial demand to SCE&G for payment of $9.1 million for certain costs and damages relating to the MGP site in Charleston, South Carolina.  SCE&G expects to recover any cost arising from the remediation of these four sites through rates.  At March 31, 2011, deferred amounts, net of amounts previously recovered through rates and insurance settlements, totaled $25.9 million and are included in regulatory assets.

PSNC Energy

PSNC Energy is responsible for environmental clean-up at five sites in North Carolina on which MGP residuals are present or suspected.  PSNC Energy’s actual remediation costs for these sites will depend on a number of factors, such as actual site conditions, third-party claims and recoveries from other PRPs.  PSNC Energy has recorded a liability and associated regulatory asset of $3.6 million, which reflects its estimated remaining liability at March 31, 2011. PSNC Energy expects to recover through rates any costs allocable to PSNC Energy arising from the remediation of these sites.

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Nuclear Generation

SCE&G, on behalf of itself and as agent for Santee Cooper has entered into a contractual agreement for the design and construction of two 1,117-MW nuclear generation units at the site of Summer Station.  The contract provides that SCE&G and Santee Cooper will be joint owners and share operating costs and generation output of the New Units, with SCE&G responsible for 55 percent of the cost and receiving 55 percent of the output, and Santee Cooper responsible for and receiving the remaining 45 percent. Assuming timely receipt of federal approvals and construction proceeding as scheduled, the first unit is expected to be completed and in service in 2016, and the second in 2019.  SCE&G will be the operator of the New Units.  SCE&G’s share of the estimated cash outlays (future value, excluding AFC) totals $5.5 billion for plant costs and related transmission infrastructure costs, which costs are projected based on historical one-year and five-year escalation rates as required by the SCPSC.

SCE&G’s latest Integrated Resource Plan filed with the SCPSC in February 2011 continues to support SCE&G’s need for 55 percent of the output of the two units.  As previously reported, SCE&G has been advised by Santee Cooper that it is reviewing certain aspects of its capital improvement program and long-term power supply plan, including the level of its participation in the New Units. Santee Cooper has more recently indicated that it will seek to reduce its 45 percent ownership in the New Units.  Santee Cooper has disclosed that, in March 2011, it entered into a non-binding letter of intent with OUC that may result in the execution of a power purchase agreement with an option for OUC to acquire a portion of Santee Cooper’s ownership interest in the New Units.  SCE&G is unable to predict whether any change in Santee Cooper’s ownership interest or the addition of new joint owners will increase project costs or delay the commercial operation dates of the New Units.  Any such project cost increase or delay could be material.

10.SEGMENT OF BUSINESS INFORMATION

The Company’s reportable segments are listed in the following table.  The Company uses operating income to measure profitability for its regulated operations; therefore, income available to common shareholders is not allocated to the Electric Operations and Gas Distribution segments.  The Company uses income available to common shareholders to measure profitability for its Retail Gas Marketing and Energy Marketing segments.  Gas Distribution is comprised of the local distribution operations of SCE&G and PSNC Energy which meet the criteria for aggregation.  All Other includes equity method investments and other nonreportable segments.  One of these nonreportable segments operates a FERC-regulated interstate pipeline company and the others conduct nonregulated operations in energy-related and telecommunications industries.

	External			Intersegment			Operating		Income Available to		Segment
Millions of dollars	Revenue			Revenue			Income		Common Shareholders		Assets
Three Months Ended March 31, 2011
Electric Operations	$	558		$	2		$	122	n/a		$	8,002
Gas Distribution	360			-			84		n/a		2,177
Retail Gas Marketing	202			-			n/a		$	22	201
Energy Marketing	158			45			n/a		1		95
All Other	10			102			5		1		1,262
Adjustments/Eliminations	(7		)	(149		)	37		104		1,136
Consolidated Total	$	1,281		$	-		$	248	$	128	$	12,873
Three Months Ended March 31, 2010
Electric Operations	$	540		$	2		$	86	n/a		$	7,423
Gas Distribution	428			-			90		n/a		2,093
Retail Gas Marketing	262			-			n/a		$	30	219
Energy Marketing	196			47			n/a		-		99
All Other	8			97			5		-		1,262
Adjustments/Eliminations	(6		)	(146		)	49		97		1,046
Consolidated Total	$	1,428		$	-		$	230	$	127	$	12,142

23

ITEM 2.   MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

SCANA CORPORATION

The following discussion should be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations appearing in SCANA’s Annual Report on Form 10-K for the year ended December 31, 2010.

RESULTS OF OPERATIONS

FOR THE THREE MONTHS ENDED MARCH 31, 2011

AS COMPARED TO THE CORRESPONDING PERIODS IN 2010

Earnings Per Share

Earnings per share was as follows:

Millions of dollars	2011		2010
Basic and diluted earnings per share	$	1.00	$	1.02

Basic earnings per share decreased by $.10 due to lower gas margin, $.02 due to higher property taxes, $.02 due to higher depreciation expense, $.02 due to higher interest expense and by dilution from additional shares outstanding of $.03.  These decreases were partially offset by $.16 due to higher electric margin and by $.01 due to lower operating expenses which are explained below.

Dividends Declared

SCANA’s Board of Directors has declared the following dividends on common stock during 2011:

Declaration Date	Dividend Per Share	Record Date	Payment Date
February 11, 2011	$.485	March 10, 2011	April 1, 2011
April 21, 2011	$.485	June 10, 2011	July 1, 2011

Electric Operations

Electric Operations is comprised of the electric operations of SCE&G, GENCO and Fuel Company.  Electric operations sales margin (including transactions with affiliates) was as follows:

Millions of dollars	2011		% Change		2010
Operating revenues	$	560.3	3.5	%	$	541.6
Less:  Fuel used in generation	212.6		(10.0	)%	236.1
Purchased power	2.3		(4.2	)%	2.4
Margin	$	345.4	14.0	%	$	303.1

Margin increased by $15.6 million due to higher SCPSC—approved retail electric base rates in July 2010, by $11.9 million due to an increase in base rates approved by the SCPSC under the BLRA in October 2010, and by $17.4 million as the result of a March 2010 settlement agreement approved by the SCPSC.  (See also discussion at “Income Taxes”.)  These increases were partially offset by $5.1 million due to lower residential and customer usage.

Sales volumes (in MWh) related to the electric margin above, by class, were as follows:

Classification (in thousands)	2011	% Change		2010
Residential	2,058	(10.5	)%	2,299
Commercial	1,650	(5.4	)%	1,744
Industrial	1,416	4.7	%	1,353
Sale for resale (excluding interchange)	477	11.7	%	427
Other	127	(1.6	)%	129
Total territorial	5,728	(3.8	)%	5,952
Negotiated Market Sales Tariff (NMST)	4	(33.3	)%	6
Total	5,732	(3.8	)%	5,958

24

Territorial sales volume decreased by approximately 360 MWh due to the effects of weather.

Gas Distribution

Gas Distribution is comprised of the local distribution operations of SCE&G and PSNC Energy.  Gas distribution sales margin (including transactions with affiliates) was as follows:

Millions of dollars	2011		% Change		2010
Operating revenues	$	359.8	(16.0	)%	$	428.3
Less:  Gas purchased for resale	215.5		(22.8	)%	279.3
Margin	$	144.3	(3.2	)%	$	149.0

Sales volumes (in DT) by class, including transportation, were as follows:

Classification (in thousands)	2011	% Change		2010
Residential	20,309	(17.2	)%	24,519
Commercial	10,350	(11.9	)%	11,743
Industrial	5,326	7.7	%	4,945
Transportation	9,574	4.0	%	9,202
Total	45,559	(9.6	)%	50,409

Margin at SCE&G decreased $4.5 million due to the SCPSC-approved decrease in retail gas base rates under the RSA which became effective with the first billing cycle of November 2010.  Total sales volumes decreased primarily due to decreased firm customer usage resulting from milder weather.

Retail Gas Marketing

Retail Gas Marketing is comprised of SCANA Energy, which operates in Georgia’s natural gas market.  Retail Gas Marketing revenues and income available to common shareholders were as follows:

Millions		2011	% Change			2010
Operating revenues	$	202.4	(22.8	)%	$	262.1
Income available to common shareholders		21.6	(27.3	)%		29.7

Operating revenues decreased as a result of milder weather in 2011.  Income available to common shareholders decreased primarily as a result of lower margin, partially offset by lower bad debt expense.

Energy Marketing

Energy Marketing is comprised of the Company’s non-regulated marketing operations, excluding SCANA Energy.  Energy Marketing operating revenues and income available to common shareholders were as follows:

Millions		2011	% Change			2010
Operating revenues	$	203.6	(16.4	)%	$	243.4
Income available to common shareholders		1.2	*			0.5

*Greater than 100%

Operating revenues decreased primarily due to lower market prices.  Income available to common shareholders increased primarily due to higher margins on sales.

25

Other Operating Expenses

Other operating expenses were as follows:

Millions of dollars		2011	% Change			2010
Other operation and maintenance	$	169.7	(1.3)	%	$	172.0
Depreciation and amortization		85.8	3.6	%		82.8
Other taxes		51.8	8.6	%		47.7

Other operation and maintenance expenses decreased by $1.2 million due to lower generation, transmission and distribution expenses and by $4.6 million due to lower customer service expenses and general expenses, including bad debt expense.  This decrease was partially offset by $4.0 million due to higher compensation and other benefits.  Depreciation and amortization expense increased in 2011 primarily due to net property additions.  Other taxes increased primarily due to higher property taxes.

Other Income (Expense)

Other income (expense) includes the results of certain incidental (non-utility) activities and the activities of certain non-regulated subsidiaries.

Pension Cost

Pension cost was recorded on the Company’s income statements and balance sheets as follows:

Millions of dollars		2011		2010
Income Statement Impact:
Employee benefit costs	$	0.7	$	(0.1	)
Other income		0.1		(0.9	)
Balance Sheet Impact:
Capital expenditures		0.9		1.6
Component of amount due from Summer Station co-owner		0.3		0.4
Regulatory asset		2.3		5.3
Total Pension Cost	$	4.3	$	6.3

No contribution to the pension trust will be necessary in or for 2011, nor will limitations on benefit payments apply.  Prior to July 15, 2010, the SCPSC allowed SCE&G to defer as a regulatory asset the amount of pension cost exceeding amounts included in rates for its retail electric and gas distribution regulated operations.  In connection with the SCPSC’s July 2010 electric rate order and November 2010 natural gas RSA order, SCE&G began deferring all pension expense and income related to retail electric and gas operations as a regulatory asset or regulatory liability, as applicable.  These costs will be deferred until such time as future rate recovery is provided for by the SCPSC.

AFC

AFC is a utility accounting practice whereby a portion of the cost of both equity and borrowed funds used to finance construction (which is shown on the balance sheet as construction work in progress) is capitalized.  The Company includes an equity portion of AFC in nonoperating income and a debt portion of AFC in interest charges (credits) as noncash items, both of which have the effect of increasing reported net income.  AFC related to the construction of two nuclear electric generation units at the site of Summer Station was offset by the decrease in AFC related to the completion of certain pollution abatement projects at coal fired plants.

Interest Expense

Interest charges increased primarily due to increased borrowings.

Income Taxes

Income taxes (and the effective tax rate) for the three months ended March 31, 2011 were higher than the same period in 2010 primarily due to higher income before taxes, which excludes the allowance for equity funds used during construction, a nontaxable item, as well as by the recognition of certain previously deferred state income tax credits pursuant to the settlement of a fuel cost recovery proceeding in the first quarter of 2010 (see also the discussion at “Electric Operations”).

26

LIQUIDITY AND CAPITAL RESOURCES

The Company anticipates that its contractual cash obligations, including its $587 million current portion of long-term debt as of March 31, 2011, will be met through internally generated funds, the incurrence of additional short- and long-term indebtedness and sales of equity securities.  The Company expects that, barring further impairment of the capital markets, it has or can obtain adequate sources of financing to meet its projected cash requirements for the foreseeable future, including the cash requirements for nuclear construction and refinancing maturing long-term debt.  The Company’s ratio of earnings to fixed charges for the three and 12 months ended March 31, 2011 was 3.57 and 2.95, respectively.

SCANA, SCE&G (including Fuel Company) and PSNC Energy had available the following committed LOC, and had outstanding the following LOC advances, commercial paper, and LOC-supported letter of credit obligations:

	SCANA						SCE&G						PSNC Energy
	March 31,			December 31,			March 31,			December 31,			March 31,		December 31,
Millions of dollars	2011			2010			2011			2010			2011		2010
Lines of credit:
Committed long-term (a)
Total	$	300		$	300		$	1,100		$	1,100		$	100	$	100
LOC advances	-			-			-			-			-		-
Weighted average interest rate	-			-			-			-			-		-
Outstanding commercial paper (270 or fewer days)	$	26		$	39		$	486		$	381		-		-
Weighted average interest rate	.37		%	.35		%	.38		%	.42		%	-		-
Letters of credit supported by LOC	$	3		$	3		$	.3		$	.3		-		-
Available	$	271		$	258		$	614		$	719		$	100	$	100

(a)The Company’s committed long-term facilities serve to back-up the issuance of commercial paper or to provide liquidity support.  Commercial paper can be issued in amounts of up to $300 million by SCANA, $700 million by SCE&G, $400 million by Fuel Company and $100 million by PSNC Energy.

SCANA, SCE&G (including Fuel Company) and PSNC Energy are parties to five-year credit agreements in the amounts of $300 million, $1.1 billion, of which $400 million relates to Fuel Company, and $100 million, respectively, which expire October 23, 2015.  These credit agreements are used for general corporate purposes, including liquidity support for each company’s commercial paper program and working capital needs and, in the case of Fuel Company, to finance or refinance the purchase of nuclear fuel, fossil fuel, and emission and other environmental allowances.  These committed long-term facilities are revolving lines of credit under credit agreements with a syndicate of banks. Wells Fargo Bank, National Association, Bank of America, N. A. and Morgan Stanley Bank, N.A. each provide 10% of the aggregate $1.5 billion credit facilities, Branch Banking and Trust Company, Credit Suisse AG, Cayman Islands Branch, JPMorgan Chase Bank, N.A., Mizuho Corporate Bank, Ltd., TD Bank N.A. and UBS Loan Finance LLC each provide 8%, and Deutsche Bank AG New York Branch, Union Bank, N.A. and U.S. Bank National Association each provide 5.3%.  Three other banks provide the remaining 6%. These bank credit facilities support the issuance of commercial paper by SCANA, SCE&G (including Fuel Company) and PSNC Energy. When the commercial paper markets are dislocated (due to either price or availability constraints), the credit facilities are available to support the borrowing needs of SCANA, SCE&G (including Fuel Company) and PSNC Energy.

The Company is obligated with respect to an aggregate of $71.4 million of industrial revenue bonds which are secured by letters of credit issued by Branch Banking and Trust Company.  These letters of credit expire, subject to renewal, in the fourth quarter of 2011.

At March 31, 2011, the Company had net available liquidity of approximately $1.1 billion.  The Company regularly monitors the commercial paper and short-term credit markets to optimize the timing of repayment of any outstanding balance on its draws, while maintaining appropriate levels of liquidity.  The Company’s long-term debt portfolio has a weighted average maturity of approximately 16 years and bears an average cost of 6.3%.  A significant majority of long-term debt, other than credit facility draws, bears fixed interest rates or is swapped to fixed.  To further preserve liquidity, the Company rigorously reviews its projected capital expenditures and operating costs and adjusts them where possible without impacting safety, reliability, and core customer service.

SCANA issued stock valued at $25.4 million during the three months ended March 31, 2011 through various compensation and dividend reinvestment plans.  In addition, the Company expects to issue approximately 6.6 million common shares under forward sales contracts to be settled no later than February 29, 2012, resulting in net proceeds of approximately $200 million.

27

The Company’s liquidity will be favorably impacted due to the recent issuance of final rules by the IRS related to bonus depreciation.  In addition the Company recognizes a cash benefit from the method being used to account for capital maintenance, which results in certain maintenance costs being treated as current expense for income tax purposes.  The Company expects these strategies to generate approximately $60 million in cash flow for 2011.

In February 2011, PSNC Energy issued $150 million of 4.59% unsecured senior notes due February 14, 2021. Proceeds from these notes were used to retire $150 million of medium term notes due February 15, 2011.

In January 2011, SCE&G issued $250 million of 5.45% first mortgage bonds maturing on February 1, 2041. Proceeds from the sale were used to retire $150 million of First Mortgage Bonds due February 1, 2011, to repay short-term debt and for general corporate purposes.

OTHER MATTERS

Nuclear Generation

SCE&G, on behalf of itself and as agent for Santee Cooper, has entered into a contractual agreement for the design and construction of two 1,117-MW nuclear generation units at the site of Summer Station.  The contract provides that SCE&G and Santee Cooper will be joint owners and share operating costs and generation output of the New Units, with SCE&G responsible for 55 percent of the cost and receiving 55 percent of the output, and Santee Cooper responsible for and receiving the remaining 45 percent.  Assuming timely receipt of federal approvals and construction proceeding as scheduled, the first unit is expected to be completed and in service in 2016, and the second in 2019.  SCE&G will be the operator of the New Units.  SCE&G’s share of the estimated cash outlays (future value, excluding AFC) totals $5.5 billion for plant costs and related transmission infrastructure costs, which costs are projected based on historical one-year and five-year escalation rates as required by the SCPSC.

SCE&G’s latest Integrated Resource Plan filed with the SCPSC in February 2011 continues to support SCE&G’s need for 55 percent of the output of the two units.  As previously reported, SCE&G has been advised by Santee Cooper that it is reviewing certain aspects of its capital improvement program and long-term power supply plan, including the level of its participation in the New Units.  Santee Cooper has more recently indicated that it will seek to reduce its 45 percent ownership in the New Units.  Santee Cooper has disclosed that, in March 2011, it entered into a non-binding letter of intent with OUC that may result in the execution of a power purchase agreement with an option for OUC to acquire a portion of Santee Cooper’s ownership interest in the New Units.  SCE&G is unable to predict whether any change in Santee Cooper’s ownership interest or the addition of new joint owners will increase project costs or delay the commercial operation dates of the New Units.  Any such project cost increase or delay could be material.

In March 2011 a tsunami resulting from a massive earthquake severely damaged several nuclear generating units and their back-up cooling systems in Japan.  The impact of the disaster is being evaluated world-wide, and numerous political and regulatory bodies, including those in the United States, are seeking to determine if additional safety measures should be required at other existing nuclear facilities, as well as those planned for construction.  SCE&G cannot predict what regulatory or other outcomes may be implemented in the United States, nor how such initiatives would impact SCE&G’s existing Summer Station or the licensing, construction or operations of the New Units.

In April 2011, the NRC and the USACE completed the FEIS for the New Units, concluding that there were no environmental impacts that would preclude issuing the COL for the New Units.  The NRC continues to compile its final safety evaluation report, which is expected to be completed in the summer of 2011.

Fuel Contract

On January 27, 2011, SCE&G, for itself and as agent for Santee Cooper, and Westinghouse entered into a fuel alliance agreement and contracts for fuel fabrication and related services. Under these contracts, Westinghouse will supply enriched nuclear fuel assemblies for Summer Station Unit 1 and the New Units. Westinghouse will be SCE&G’s exclusive provider of such fuel assemblies on a cost-plus basis. The fuel assemblies to be delivered under the contracts are expected to supply the nuclear fuel requirements of Summer Station Unit 1 and the New Units through 2033. SCE&G is dependent upon Westinghouse for providing fuel assemblies for the new AP1000 passive reactors in the New Units in the current and anticipated future absence of other commercially viable sources. Westinghouse currently provides maintenance and engineering support to Summer Station Unit 1 under a services alliance arrangement, and SCE&G has also contracted for Westinghouse to provide similar support services to the New Units upon their completion and commencement of commercial operation in 2016 and 2019, respectively.

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Air Quality

SCE&G

In 2005, the EPA issued the CAIR, which requires the District of Columbia and 28 states, including South Carolina, to reduce nitrogen oxide and sulfur dioxide emissions in order to attain mandated state levels.  CAIR set emission limits to be met in two phases beginning in 2009 and 2015, respectively, for nitrogen oxide and beginning in 2010 and 2015, respectively, for sulfur dioxide.  SCE&G and GENCO determined that additional air quality controls would be needed to meet the CAIR requirements.  SCE&G has completed the installation of SCR technology at Cope Station for nitrogen oxide reduction, and GENCO has completed installation of a wet limestone scrubber at Williams Station for sulfur dioxide reduction.   SCE&G also installed a wet limestone scrubber at Wateree Station.  In July 2010, the EPA proposed a revised rule known as the Clean Air Transport Rule which will replace CAIR once promulgated.  The proposed rule is currently being evaluated by the Company.  Any costs incurred to comply with this rule or other rules issued by the EPA in the future are expected to be recoverable through rates.

In 2005, the EPA issued the CAMR which established a mercury emissions cap and trade program for coal-fired power plants. Numerous parties challenged the rule and, on February 8, 2008, the United States Circuit Court for the District of Columbia vacated the rule for electric utility steam generating units.  In March 2011, EPA proposed new standards for mercury and other specified air pollutants.  The proposed rule provides up to four years for facilities to meet the standards once promulgated.  The EPA is expected to finalize the rule in November 2011.  The proposed rule is currently being evaluated by the Company. Any costs incurred to comply with this rule or other rules issued by the EPA in the future are expected to be recoverable through rates.

SCE&G maintains an environmental assessment program to identify and evaluate its current and former operations sites that could require environmental clean-up.  As site assessments are initiated, estimates are made of the amount of expenditures, if any, deemed necessary to investigate and remediate each site.  These estimates are refined as additional information becomes available; therefore, actual expenditures could differ significantly from the original estimates.  Amounts estimated and accrued to date for site assessments and clean-up relate solely to regulated operations.  SCE&G defers site assessment and cleanup costs and expects to recover them through rates.

SCE&G is responsible for four decommissioned MGP sites in South Carolina which contain residues of by-product chemicals.  These sites are in various stages of investigation, remediation and monitoring under work plans approved by DHEC.  SCE&G anticipates that major remediation activities at these sites will continue until 2012 and will cost an additional $8.8 million.  In addition, the National Park Service of the Department of the Interior has made an initial demand to SCE&G for payment of $9.1 million for certain costs and damages relating to the MGP site in Charleston, South Carolina.  SCE&G expects to recover any cost arising from the remediation of these four sites through rates.  At March 31, 2011, deferred amounts, net of amounts previously recovered through rates and insurance settlements, totaled $25.9 million and are included in regulatory assets.

PSNC Energy

PSNC Energy is responsible for environmental clean-up at five sites in North Carolina on which MGP residuals are present or suspected.  PSNC Energy’s actual remediation costs for these sites will depend on a number of factors, such as actual site conditions, third-party claims and recoveries from other PRPs.  PSNC Energy has recorded a liability and associated regulatory asset of $3.6 million, which reflects its estimated remaining liability at March 31, 2011. PSNC Energy expects to recover through rates any costs allocable to PSNC Energy arising from the remediation of these sites.

For additional information related to environmental matters and claims and litigation, see Note 9 to the condensed consolidated financial statements.

29

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate Risk-The Company’s market risk exposures relative to interest rate risk have not changed materially compared with the Company’s Annual Report on Form 10-K for the year ended December 31, 2010.  Interest rates on a significant portion of the Company’s outstanding long-term debt, other than credit facility draws, are fixed either through the issuance of fixed rate debt or through the use of interest rate derivatives.  The Company is not aware of any facts or circumstances that would significantly affect exposures on existing indebtedness in the near future.

For further discussion of changes in long-term debt and interest rate derivatives, see ITEM 2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS – LIQUIDITY AND CAPITAL RESOURCES and also Notes 4 and 6 of the condensed consolidated financial statements.

Commodity price risk - The Company uses derivative instruments to hedge forward purchases and sales of natural gas, which create market risks of different types.  See Note 6 of the condensed consolidated financial statements.  The following tables provide information about the Company’s financial instruments that are sensitive to changes in natural gas prices.  Weighted average settlement prices are per 10,000 DT.  Fair value represents quoted market prices for these or similar instruments.

Expected Maturity:
Futures Contracts		Options
			Purchased Call
2011	Long	2011	(Long)
Settlement Price (a)	4.59	Strike Price (a)	5.15
Contract Amount (b)	17.1	Contract Amount (b)	31.5
Fair Value (b)	16.9	Fair Value (b)	1.8
2012		2012
Settlement Price (a)	5.05	Strike Price (a)	5.26
Contract Amount (b)	3.8	Contract Amount (b)	12.4
Fair Value (b)	3.8	Fair Value (b)	1.1
(a)  Weighted average, in dollars
(b)  Millions of dollars

Swaps	2011	2012	2013	2014	2015
Commodity Swaps:
Pay fixed/receive variable (b)	36.1	27.6	15.8	5.2	5.2
Average pay rate (a)	5.2285	5.6706	5.8365	5.4031	5.4031
Average received rate (a)	4.6303	5.0610	5.4063	5.7336	6.0807
Fair value (b)	32.0	24.7	14.6	5.5	5.8
Pay variable/receive fixed (b)	27.9	18.8	11.9	5.5	5.8
Average pay rate (a)	4.5920	5.0504	5.4048	5.7336	6.0807
Average received rate (a)	5.0895	5.5855	5.4331	5.4150	5.4150
Fair value (b)	31.0	20.8	12.0	5.2	5.2
Basis Swaps:
Pay variable/receive variable (b)	21.0	18.2	4.6
Average pay rate (a)	4.6214	5.0823	5.5072
Average received rate (a)	4.6098	5.0644	5.4550
Fair value (b)	20.9	18.1	4.5
(a) Weighted average, in dollars
(b) Millions of dollars

30

ITEM 4. CONTROLS AND PROCEDURES

As of March 31, 2011, SCANA conducted an evaluation under the supervision and with the participation of its management, including its CEO and CFO, of (a) the effectiveness of the design and operation of its disclosure controls and procedures and (b) any change in its internal control over financial reporting.  Based on this evaluation, the CEO and CFO concluded that, as of March 31, 2011, SCANA’s disclosure controls and procedures were effective.  There has been no change in SCANA’s internal control over financial reporting during the quarter ended March 31, 2011 that has materially affected or is reasonably likely to materially affect SCANA’s internal control over financial reporting.

31

SOUTH CAROLINA ELECTRIC & GAS COMPANY

FINANCIAL SECTION

32

ITEM 1. FINANCIAL STATEMENTS

SOUTH CAROLINA ELECTRIC & GAS COMPANY

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

	March 31,			December 31,
Millions of dollars	2011			2010
Assets
Utility Plant In Service	$	10,148		$	10,112
Accumulated Depreciation and Amortization	(3,137		)	(3,098		)
Construction Work in Progress	1,181			1,051
Nuclear Fuel, Net of Accumulated Amortization	128			133
Utility Plant, Net ($627 and $634 related to VIEs)	8,320			8,198
Nonutility Property and Investments:
Nonutility property, net of accumulated depreciation	46			46
Assets held in trust, net - nuclear decommissioning	78			76
Other investments	5			4
Nonutility Property and Investments, Net	129			126
Current Assets:
Cash and cash equivalents	24			31
Receivables, net of allowance for uncollectible accounts of $2 and $3	400			507
Inventories (at average cost):
Fuel and gas supply	219			216
Materials and supplies	117			117
Emission allowances	5			6
Prepayments and other	108			168
Deferred income taxes	15			15
Total Current Assets ($223 and $221 related to VIEs)	888			1,060
Deferred Debits and Other Assets:
Pension asset	58			57
Regulatory assets	1,002			996
Other	138			137
Total Deferred Debits and Other Assets ($44 and $43 related to VIEs)	1,198			1,190
Total	$	10,535		$	10,574

33

	March 31,		December 31,
Millions of dollars	2011		2010
Capitalization and Liabilities
Common equity	$	3,479	$	3,436
Noncontrolling interest	105		105
Long-Term Debt, net	3,128		3,037
Total Capitalization	6,712		6,578
Current Liabilities:
Short-term borrowings	486		381
Current portion of long-term debt	22		22
Accounts Payable	174		341
Affiliated Payables	154		140
Customer deposits and customer prepayments	60		60
Taxes accrued	41		137
Interest accrued	48		50
Dividends declared	51		54
Derivative financial instruments	7		34
Other	66		80
Total Current Liabilities	1,109		1,299
Deferred Credits and Other Liabilities:
Deferred income taxes, net	1,248		1,240
Deferred investment tax credits	49		56
Asset retirement obligations	484		478
Pension and other  postretirement benefits	163		163
Regulatory liabilities	669		662
Other	101		98
Total Deferred Credits and Other Liabilities	2,714		2,697
Commitments and Contingencies (Note 9)	-		-
Total	$	10,535	$	10,574

See Notes to Condensed Consolidated Financial Statements.

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SOUTH CAROLINA ELECTRIC & GAS COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

	Three Months Ended
	March 31,
Millions of dollars	2011			2010
Operating Revenues:
Electric	$	560		$	542
Gas	144			180
Total Operating Revenues	704			722
Operating Expenses:
Fuel used in electric generation	213			236
Purchased power	2			2
Gas purchased for resale	88			119
Other operation and maintenance	132			132
Depreciation and amortization	71			66
Other taxes	47			44
Total Operating Expenses	553			599
Operating Income	151			123
Other Income (Expense):
Other income	1			4
Other expenses	(4		)	(3		)
Interest charges, net of allowance for borrowed funds used during construction of $2 and $2	(50		)	(47		)
Allowance for equity funds used during construction	3			3
Total Other Expense	(50		)	(43		)
Income Before Income Tax Expense	101			80
Income Tax Expense	31			16
Net Income	70			64
Less Net Income Attributable to Noncontrolling Interest	2			2
Earnings Available to Common Shareholder	$	68		$	62
Dividends Declared on Common Stock	$	51		$	47

See Notes to Condensed Consolidated Financial Statements.

35

SOUTH CAROLINA ELECTRIC & GAS COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Three Months Ended
	March 31,
Millions of dollars	2011			2010
Cash Flows From Operating Activities:
Net income	$	70		$	64
Adjustments to reconcile net income to net cash provided from operating activities:
Deferred income taxes, net	8			10
Depreciation and amortization	74			70
Amortization of nuclear fuel	9			9
Allowance for equity funds used during construction	(3		)	(3		)
Carrying cost recovery	-			(1		)
Cash provided (used) by changes in certain assets and liabilities:
Receivables	107			13
Inventories	(13		)	7
Prepayments and other	59			7
Regulatory assets	13			(31		)
Regulatory liabilities	(1		)	3
Accounts payable	(67		)	(15		)
Taxes accrued	(96		)	(73		)
Interest accrued	(2		)	(3		)
Changes in other assets	(4		)	(9		)
Changes in other liabilities	(36		)	29
Net Cash Provided From Operating Activities	118			77
Cash Flows From Investing Activities:
Utility property additions and construction expenditures	(269		)	(197		)
Proceeds from investments and sale of assets	1			4
Nonutility property additions	-			(1		)
Investment in affiliate	-			41
Purchase of investments	(2		)	(1		)
Net Cash Used For Investing Activities	(270		)	(154		)
Cash Flows From Financing Activities:
Proceeds from issuance of long-term debt	229			50
Repayment of long-term debt	(157		)	(9		)
Dividends	(54		)	(50		)
Contributions from parent	24			25
Short-term borrowings –affiliate, net	(2		)	19
Short-term borrowings, net	105			(38		)
Net Cash Provided From (Used For) Financing Activities	145			(3		)
Net Decrease In Cash and Cash Equivalents	(7		)	(80		)
Cash and Cash Equivalents, January 1	31			134
Cash and Cash Equivalents, March 31	$	24		$	54
Supplemental Cash Flow Information:
Cash paid for - Interest (net of capitalized interest of $2 and $2)	$	47		$	47
- Income taxes	-			-
Noncash Investing and Financing Activities:
Accrued construction expenditures	84			95

See Notes to Condensed Consolidated Financial Statements.

36

SOUTH CAROLINA ELECTRIC & GAS COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

	Three Months Ended
	March 31,
Millions of dollars	2011			2010
Net Income	$	70		$	64
Other Comprehensive Income, net of tax:
Reclassification to net income - amortization of deferred employee benefit plan costs, net of taxes	-			1
Total Comprehensive Income	70			65
Less comprehensive income attributable to noncontrolling interest	(2		)	(2		)
Comprehensive income available to common shareholder (1)	$	68		$	63

(1)  Accumulated other comprehensive loss totaled $2.6 million as of March 31, 2011 and $2.7 million as of December 31, 2010.

See Notes to Condensed Consolidated Financial Statements.

37

SOUTH CAROLINA ELECTRIC & GAS COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2011

(Unaudited)

The following notes should be read in conjunction with the Notes to Consolidated Financial Statements appearing in SCE&G’s Annual Report on Form 10-K for the year ended December 31, 2010.  These are interim financial statements and, due to the seasonality of Consolidated SCE&G’s business and matters that may occur during the rest of the year, the amounts reported in the Condensed Consolidated Statements of Income are not necessarily indicative of amounts expected for the full year.  In the opinion of management, the information furnished herein reflects all adjustments, all of a normal recurring nature, which are necessary for a fair statement of the results for the interim periods reported.

1.             SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Variable Interest Entity

SCE&G has determined that it has a controlling financial interest in GENCO and Fuel Company (which are considered to be VIEs), and accordingly, the accompanying condensed consolidated financial statements include the accounts of SCE&G, GENCO and Fuel Company. The equity interests in GENCO and Fuel Company are held solely by SCANA, SCE&G’s parent. Accordingly, GENCO’s and Fuel Company’s equity and results of operations are reflected as noncontrolling interest in Consolidated SCE&G’s condensed consolidated financial statements.

GENCO owns a coal-fired electric generating station with a 605 MW net generating capacity (summer rating). GENCO’s electricity is sold solely to SCE&G under the terms of a power purchase agreement and related operating agreement. The effects of these transactions are eliminated in consolidation. Substantially all of GENCO’s property (carrying value of approximately $499 million) serves as collateral for its long-term borrowings. Fuel Company acquires, owns and provides financing for SCE&G’s nuclear fuel, fossil fuel and emission allowances. See also Note 4.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.

2.             RATE AND OTHER REGULATORY MATTERS

Rate Matters

Electric

SCE&G’s electric rates are established using a cost of fuel component approved by the SCPSC which may be adjusted periodically to reflect changes in the price of fuel purchased by SCE&G.  Effective with the first billing cycle of May 2010, the SCPSC approved a settlement agreement authorizing SCE&G to decrease the fuel cost portion of its electric rates.  The settlement agreement incorporated SCE&G’s proposal to accelerate the recognition of $17.4 million of previously deferred state income tax credits and record an offsetting reduction to the recovery of fuel costs.  In addition, SCE&G agreed to defer recovery of its actual undercollected base fuel costs as of April 30, 2010 until May 2011.  SCE&G is allowed to charge and recover carrying costs monthly on the actual base fuel costs undercollected balance as of the end of each month during this deferral period.  In February 2011, SCE&G filed for an increase to the cost of fuel component of its rates to be effective with the first billing cycle of May 2011.  The annual fuel hearing was conducted on March 24, 2011, and a settlement agreement was reached among ORS, the SCEUC, and SCE&G which will allow SCE&G to recover the actual base fuel under-collected balance as of April 30, 2011, over a two year period and charge carrying cost on the deferred balance.  The settlement was approved by the SCPSC on April 20, 2011 and is effective with the first billing cycle of May 2011.

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On July 15, 2010, the SCPSC issued an order approving a 4.88% overall increase in SCE&G’s retail electric base rates and authorized an allowed return on common equity of 10.7%. The SCPSC’s order adopted various stipulations among SCE&G, the ORS and other intervening parties. Among other things, the SCPSC’s order (1) included implementation of an eWNA for SCE&G’s electric customers, which began in August 2010, (2) provided for a $25 million credit, over one year, to SCE&G’s customers to be offset by amortization of weather-related revenues which were deferred in the first quarter of 2010 pursuant to a stipulation between SCE&G and the ORS, (3) provided for a $48.7 million credit to SCE&G’s customers over two years to be offset by accelerated recognition of previously deferred state income tax credits and (4) provided for the recovery of certain federally-mandated capital expenditures that had been included in utility plant but were not being depreciated.

On July 15, 2010, the SCPSC issued an order approving the implementation by SCE&G of certain DSM Programs, including the establishment of an annual rider to allow recovery of the costs and lost net margin revenue associated with DSM Programs, along with an incentive for investing in such programs. The SCPSC’s order approved various settlement agreements among SCE&G, the ORS and other intervening parties. On July 27, 2010, SCE&G filed the DSM rate rider tariff sheet with the SCPSC. The tariff rider was applied to bills rendered on or after October 30, 2010. The order requires that SCE&G submit annual filings to the SCPSC regarding the DSM Programs, net lost revenues, program costs, incentive and net program benefits.  In January 2011, SCE&G submitted to the SCPSC its annual update on DSM Programs.  Included in the filing was a petition to update the rate rider to provide for the recovery of costs, lost net margin revenue, and the approved shared savings incentive for investing in such DSM Programs.

In December 2009, SCE&G submitted to the FERC revised tariff sheets to change the network and point to point transmission rates under SCE&G’s OATT.  This initial request, if approved, would result in an annual revenue increase of approximately $5.6 million.  In compliance with the OATT, on March 1, 2010 pursuant to an order issued by the FERC, SCE&G implemented, subject to refund, the proposed tariff sheets.  On May 17, 2010, SCE&G submitted to the FERC as an informational filing its recalculated Annual Transmission Revenue Requirement or “Annual Update” for the period June 1, 2010 through May 31, 2011.  The FERC accepted the tariff sheets in the “Annual Update” and made them effective subject to refund as of June 1, 2010.

Electric – BLRA

In January 2010, the SCPSC approved SCE&G’s request for an order pursuant to the BLRA to approve an updated construction and capital cost schedule for the construction of two new nuclear generating units at Summer Station.  The updated schedule provides details of the construction and capital cost schedule beyond what was proposed and included in the original BLRA filing described below.  The revised schedule does not change the previously announced completion date for the New Units or the originally announced cost.

In February 2009, the SCPSC approved SCE&G’s combined application pursuant to the BLRA seeking a certificate of environmental compatibility and public convenience and necessity and for a base load review order relating to the proposed construction and operation by SCE&G and Santee Cooper of the New Units at Summer Station.  Under the BLRA, the SCPSC conducted a full pre-construction prudency review of the proposed units and the engineering, procurement, and construction contract under which they are being built.  The SCPSC prudency finding is binding on all future related rate proceedings so long as the construction proceeds in accordance with schedules, estimates and projections, including contingencies, as approved by the SCPSC.

In May 2009, two intervenors filed separate appeals of the order with the South Carolina Supreme Court. With regard to the first appeal, which challenged the SCPSC’s prudency finding, the South Carolina Supreme Court issued an opinion on April 26, 2010, affirming the decision of the SCPSC. As for the second appeal, the South Carolina Supreme Court reversed the SCPSC’s decision to allow SCE&G to include a pre-approved cost contingency fund and associated inflation (contingency reserve) as part of its anticipated capital costs allowed under the BLRA. SCE&G’s share of the project, as originally approved by the SCPSC, is $4.5 billion in 2007 dollars. Approximately $438 million represented contingency costs associated with the project. Without the pre-approved contingency reserve, SCE&G must seek SCPSC approval for the recovery of any additional capital costs. The Court’s ruling, however, does not affect the project schedule or disturb the SCPSC’s issuance of a certificate of environmental compatibility and public convenience and necessity, which is required to construct the new units. On November 15, 2010, SCE&G filed a petition to the SCPSC seeking an order approving an updated capital cost schedule that reflects the removal of the contingency reserve and incorporates presently identifiable capital costs of $173.9 million and, on March 28, 2011, SCE&G and the ORS entered into a settlement agreement which stated, among other things, that this updated capital cost schedule should be approved by the SCPSC.  A hearing on this petition was held on April 4, 2011, and the SCPSC is expected to rule on the request in May 2011.

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Under the BLRA, SCE&G is allowed to file revised rates with the SCPSC each year to incorporate the financing cost of any incremental construction work in progress incurred for new nuclear generation. Requested rate adjustments are based on SCE&G’s updated cost of debt and capital structure and on an allowed return on common equity of 11%. In September 2009, the SCPSC approved SCE&G’s annual revised rate request under the BLRA which constituted a $22.5 million or 1.1% increase to retail electric rates. In October 2010, the SCPSC approved an increase of $47.3 million or 2.3%, under the BLRA for the annual revised rates adjustment filing. The new retail electric rates were effective for bills rendered on and after October 30, 2010.

Gas

The RSA is designed to reduce the volatility of costs charged to customers by allowing for more timely recovery of the costs that regulated utilities incur related to natural gas infrastructure.  On October 15, 2010, pursuant to the annual RSA filing, the SCPSC approved a decrease in retail natural gas rates of $10.4 million or approximately 2.1%.  The rate adjustment was effective with the first billing cycle of November 2010.

SCE&G’s natural gas tariffs include a PGA that provides for the recovery of actual gas costs incurred including costs related to hedging natural gas purchasing activities. SCE&G’s gas rates are calculated using a methodology which adjusts the cost of gas monthly based on a 12-month rolling average. The annual PGA hearing to review SCE&G’s gas purchasing policies and procedures was conducted in November 2010, before the SCPSC. The SCPSC issued an order in December 2010 finding that SCE&G’s gas purchasing policies and practices during the review period of August 1, 2009, through July 31, 2010, were reasonable and prudent.

In February 2011, the ORS submitted a request to the SCPSC to suspend SCE&G’s natural gas hedging program.  SCE&G responded in March 2011 indicating no objection to the ORS’s request.  The request is subject to approval by the SCPSC.  The SCPSC issued an order directing staff to schedule an Oral Argument Information Briefing regarding this matter, which was held on April 21, 2011.

Regulatory Assets and Regulatory Liabilities

Consolidated SCE&G has significant cost-based, rate-regulated operations and recognizes in its financial statements certain revenues and expenses in different time periods than do enterprises that are not rate-regulated.  As a result, Consolidated SCE&G has recorded regulatory assets and regulatory liabilities, which are summarized in the following tables.  Substantially all of our regulatory assets are either explicitly excluded from rate base or are effectively excluded from rate base due to their being offset by related liabilities.

	March 31,		December 31,
Millions of dollars	2011		2010
Regulatory Assets:
Accumulated deferred income taxes	$	205	$	205
Under collections – electric fuel adjustment clause	36		25
Environmental remediation costs	26		27
AROs and related funding	289		284
Franchise agreements	44		45
Deferred employee benefit plan costs	287		288
Planned major maintenance	3		6
Deferred losses on interest rate derivatives	76		83
Other	36		33
Total Regulatory Assets	$	1,002	$	996
Regulatory Liabilities:
Accumulated deferred income taxes	$	25	$	26
Other asset removal costs	577		568
Storm damage reserve	38		38
Deferred gains on interest rate derivatives	26		26
Other	3		4
Total Regulatory Liabilities	$	669	$	662

Accumulated deferred income tax liabilities arising from utility operations that have not been included in customer rates are recorded as a regulatory asset.  Substantially all of these regulatory assets are expected to be recovered over the remaining lives of the related property which may range up to approximately 70 years.  Similarly, accumulated deferred income tax assets arising from deferred investment tax credits are recorded as a regulatory liability.

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Under-collections - electric fuel adjustment clause represent amounts due from customers pursuant to the fuel adjustment clause as approved by the SCPSC during annual hearings which are expected to be recovered in retail electric rates in future periods.  These amounts are expected to be recovered in retail electric rates during the period May 2012 through April 2013.  SCE&G is allowed to recover interest on the base fuel deferred balances through the recovery period.

Environmental remediation costs represent costs associated with the assessment and clean-up of MGP sites currently or formerly owned by SCE&G.  These regulatory assets are expected to be recovered over approximately 19 years.

ARO and related funding represents the regulatory asset associated with the legal obligation to decommission and dismantle Summer Station and conditional AROs.  These regulatory assets are expected to be recovered over the related property lives and periods of decommissioning which may range up to approximately 95 years.

Franchise agreements represent costs associated with electric and gas franchise agreements with the cities of Charleston and Columbia, South Carolina.  Based on an SCPSC order, SCE&G began amortizing these amounts through cost of service rates in February 2003 over approximately 20 years.

Employee benefit plan costs of the regulated utilities have historically been recovered as they have been recorded under generally accepted accounting principles. Deferred employee benefit plan costs represent amounts of pension and other postretirement benefit costs which were accrued as liabilities and treated as regulatory assets pursuant to FERC guidance, and costs deferred pursuant to specific SCPSC regulatory orders.  A significant majority of these deferred costs are expected to be recovered through utility rates over average service periods of participating employees, or up to approximately 14 years, although recovery periods could become longer at the direction of the SCPSC.

Planned major maintenance related to certain fossil hydro turbine/generation equipment and nuclear refueling outages is accrued in periods other than when incurred, as approved pursuant to specific SCPSC orders.  SCE&G collected $8.5 million annually through July 15, 2010, through electric rates, to offset turbine maintenance expenditures.  After July 15, 2010, SCE&G began collecting $18.4 million annually for this purpose.  Nuclear refueling charges are accrued during each 18-month refueling outage cycle as a component of cost of service.

Deferred losses or gains on interest rate derivatives represent the effective portions of changes in fair value and payments made or received upon termination of certain interest rate swaps, treasury rate locks and forward starting swap agreements designated as cash flow hedges.  These amounts are expected to be amortized to interest expense over the lives of the underlying debt, up to approximately 30 years.

Various other regulatory assets are expected to be recovered in rates over periods of up to approximately 30 years.

Other asset removal costs represent estimated net collections through depreciation rates of amounts to be incurred for the removal of assets in the future.

The storm damage reserve represents an SCPSC-approved collection through SCE&G electric rates, capped at $100 million, which can be applied to offset incremental storm damage costs in excess of $2.5 million in a calendar year, certain transmission and distribution insurance premiums and certain tree trimming and vegetation management expenditures in excess of amounts included in base rates.  During the first quarter of 2011 and 2010, SCE&G applied costs of $0.7 million to the reserve.  Pursuant to the SCPSC’s July 2010 retail electric rate order approving an electric rate increase, SCE&G suspended collection of the storm damage reserve indefinitely, pending future SCPSC action.

The SCPSC or the FERC have reviewed and approved through specific orders most of the items shown as regulatory assets.  Other regulatory assets include certain costs which have not been approved for recovery by the SCPSC or by FERC.  In recording these costs as regulatory assets, management believes the costs will be allowable under existing rate-making concepts that are embodied in rate orders received by SCE&G.  In the future, as a result of deregulation or other changes in the regulatory environment or changes in accounting requirements, Consolidated SCE&G could be required to write off its regulatory assets and liabilities.  Such an event could have a material adverse effect on Consolidated SCE&G’s results of operations, liquidity or financial position in the period the write-off would be recorded.

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3.COMMON EQUITY

Changes in common equity during the three months ended March 31, 2011 and 2010 were as follows:

Millions of dollars	Common Equity			Noncontrolling Interest			Total Equity
Balance at January 1, 2011	$	3,436		$	105		$	3,541
Capital contribution from parent	24			-			24
Dividends declared	(49		)	(2		)	(51		)
Net income	68			2			70
Balance as of March 31, 2011	$	3,479		$	105		$	3,584
Balance at January 1, 2010	$	3,162		$	97		$	3,259
Capital contribution from parent	25			-			25
Dividends declared	(45		)	(2		)	(47		)
Net income	62			2			64
Balance as of March 31, 2010	$	3,204		$	97		$	3,301

4.             LONG-TERM DEBT AND LIQUIDITY

Long-term Debt

In January 2011, SCE&G issued $250 million of 5.45% first mortgage bonds maturing on February 1, 2041. Proceeds from the sale were used to retire $150 million of First Mortgage Bonds due February 1, 2011 and for general corporate purposes.

Substantially all of Consolidated SCE&G’s electric utility plant is pledged as collateral in connection with long-term debt. Consolidated SCE&G is in compliance with all debt covenants.

Liquidity

SCE&G (including Fuel Company) had available the following committed LOC, and had outstanding the following LOC advances, commercial paper, and LOC-supported letter of credit obligations:

	Consolidated SCE&G
	March 31,			December 31,
Millions of dollars	2011			2010
Lines of credit:
Committed long-term (a)
Total	$	1,100		$	1,100
LOC advances	-			-
Weighted average interest rate	-			-
Outstanding commercial paper (270 or fewer days)	$	486		$	381
Weighted average interest rate	.38		%	.42		%
Letters of credit supported by LOC	$	.3		$	.3
Available	$	614		$	719

(a)Consolidated SCE&G’s committed long-term facilities serve to back-up the issuance of commercial paper or to provide liquidity support.  SCE&G and Fuel Company have commercial paper programs in the amounts of up to $700 million and $400 million, respectively.  SCE&G has guaranteed the short-term borrowings of Fuel Company.

SCE&G (including Fuel Company) are parties to five-year credit agreements in the amount of $1.1 billion, of which $400 million relates to Fuel Company, which expire October 23, 2015.  These credit agreements are used for general corporate purposes, including liquidity support for each company’s commercial paper program and working capital needs and, in the case of Fuel Company, to finance or refinance the purchase of nuclear fuel, fossil fuel, and emission and other environmental allowances.  These committed long-term facilities are revolving lines of credit under credit agreements with a syndicate of banks. Wells Fargo Bank, National Association, Bank of America, N. A. and Morgan Stanley Bank, N.A. each provide 10% of the aggregate $1.1 billion credit facilities, Branch Banking and Trust Company, Credit Suisse AG, Cayman Islands Branch, JPMorgan Chase Bank, N.A., Mizuho Corporate Bank, Ltd., TD Bank N.A. and UBS Loan Finance LLC each provide 8%, and Deutsche Bank AG New York Branch, Union Bank, N.A. and U.S. Bank National Association each provide 5.3%.  Three other banks provide the remaining 6%. These bank credit facilities support the issuance of commercial

42

paper by SCE&G (including Fuel Company). When the commercial paper markets are dislocated (due to either price or availability constraints), the credit facilities are available to support the borrowing needs of SCE&G (including Fuel Company).

Consolidated SCE&G is obligated with respect to an aggregate of $71.4 million of industrial revenue bonds which are secured by letters of credit issued by Branch Banking and Trust Company.  These letters of credit expire, subject to renewal, in the fourth quarter of 2011.

5.INCOME TAXES

In the first quarter of 2010, in connection with a fuel cost recovery settlement (see Note 2), SCE&G accelerated the recognition of certain previously deferred state income tax credits.  In the first quarter of 2011, pursuant to an SCPSC order, SCE&G continued the accelerated recognition of additional previously deferred state income tax credits (see Note 2).  No other material changes in the status of Consolidated SCE&G’s tax positions have occurred through March 31, 2011.

In connection with the change in method of accounting for certain repair costs in 2010, SCE&G identified approximately $36 million of unrecognized tax benefit.  Because this method change is primarily a temporary difference, this additional benefit, if recognized, would not have a significant effect on the effective tax rate.  Within the next 12 months, it is reasonably possible that this unrecognized tax benefit could increase by as much as $12 million or decrease by as much as $36 million.  The events that could cause these changes are direct settlements with taxing authorities, legal or administrative guidance by relevant taxing authorities, or the lapse of an applicable statute of limitation.

Consolidated SCE&G recognizes interest accrued related to unrecognized tax benefits within interest expense and recognizes tax penalties within other expenses.  Consolidated SCE&G has not accrued any significant amount of interest expense related to unrecognized tax benefits or tax penalties.

6.DERIVATIVE FINANCIAL INSTRUMENTS

Consolidated SCE&G recognizes all derivative instruments as either assets or liabilities in the statement of financial position and measures those instruments at fair value.  Consolidated SCE&G recognizes changes in the fair value of derivative instruments either in earnings or within regulatory assets or regulatory liabilities, depending upon the intended use of the derivative and the resulting designation.  The fair value of derivative instruments is determined by reference to quoted market prices of listed contracts, published quotations or, for interest rate swaps, discounted cash flow models with independently sourced data.

Policies and procedures and risk limits are established to control the level of market, credit, liquidity and operational and administrative risks assumed by Consolidated SCE&G.  SCANA’s Board of Directors has delegated to a Risk Management Committee the authority to set risk limits, establish policies and procedures for risk management and measurement, and oversee and review the risk management process and infrastructure for SCANA and each of its subsidiaries, including Consolidated SCE&G.  The Risk Management Committee, which is comprised of certain officers, including the Consolidated SCE&G’s Risk Management Officer and senior officers, apprises the Board of Directors with regard to the management of risk and brings to the Board’s attention any areas of concern.  Written policies define the physical and financial transactions that are approved, as well as the authorization requirements and limits for transactions.

Commodity Derivatives

SCE&G uses derivative instruments to hedge forward purchases and sales of natural gas, which create market risks of different types.  Instruments designated as cash flow hedges are used to hedge risks associated with fixed price obligations in a volatile market and risks associated with price differentials at different delivery locations.  The basic types of financial instruments utilized are exchange-traded instruments, such as NYMEX futures contracts or options, and over-the-counter instruments such as options and swaps, which are typically offered by energy and financial institutions.

SCE&G’s tariffs include a PGA that provides for the recovery of actual gas costs incurred.  The SCPSC has ruled that the results of these hedging activities are to be included in the PGA.  As such, the cost of derivatives and gains and losses on such derivatives utilized to hedge gas purchasing activities are recoverable through the weighted average cost of gas calculation.  The offset to the change in fair value of these derivatives is recorded as a regulatory asset or liability.  These derivative financial instruments are not designated as hedges for accounting purposes.

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Interest Rate Swaps

Consolidated SCE&G uses interest rate swaps to manage interest rate risk on certain debt issuances and to synthetically convert variable rate debt to fixed rate debt.  In addition, in anticipation of the issuance of debt, Consolidated SCE&G may use treasury rate lock or forward starting swap agreements which are designated as cash flow hedges.  The effective portions of changes in fair value and payments made or received upon termination of such agreements for regulated subsidiaries are recorded in regulatory assets or regulatory liabilities.  Ineffective portions of changes in fair value are recognized in income.

The effective portions of settlement payments made or received upon termination are amortized to interest expense over the term of the underlying debt and are classified as a financing activity in the condensed consolidated statements of cash flows.

Quantitative Disclosures Related to Derivatives

SCE&G was party to natural gas derivative contracts for 1,960,000 DT at March 31, 2011 and 2,460,000 DT at December 31, 2010.  Consolidated SCE&G was a party to interest rate swaps designated as cash flow hedges with an aggregate notional amount of $321.4 million at March 31, 2011 and $421.4 million at December 31, 2010.

The fair value of energy-related derivatives and interest rate derivatives was reflected in the balance sheet as follows:

	Fair Values of Derivative Instruments
	Asset Derivatives			Liability Derivatives
	Balance Sheet	Fair		Balance Sheet	Fair
Millions of dollars	Location (a)	Value		Location (a)	Value
As of March 31, 2011
Derivatives designated as hedging instruments
Interest rate contracts	Other deferred debits	$	4	Other current liabilities	$	6
				Other deferred credits	4
Total		$	4		$	10
Derivatives not designated as hedging instruments
Commodity contracts	Prepayments and other	$	1
As of December 31, 2010
Derivatives designated as hedging instruments
Interest rate contracts	Other deferred debits	$	4	Other current liabilities	$	34
				Other deferred credits	1
Total		$	4		$	35
Derivatives not designated as hedging instruments
Commodity contracts	Prepayments and other	$	1

(a)Asset derivatives represent unrealized gains to Consolidated SCE&G, and liability derivatives represent unrealized losses.  In Consolidated SCE&G’s condensed consolidated balance sheet, unrealized gain and loss positions with the same counterparty are reported as either a net asset or liability.

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The effect of derivative instruments on the statement of income is as follows:

			Gain (Loss) Reclassified from
Derivatives in Cash Flow	Gain (Loss) Deferred		Deferred Accounts into Income
Hedging Relationships	in Regulatory Accounts		(Effective Portion)
Millions of dollars	(Effective Portion)		Location	Amount
Three Months Ended March 31, 2011
Interest rate contracts	$	6	Interest expense	$	(1	)
Three Months Ended March 31, 2010
Interest rate contracts	$	3	Interest expense	$	(1	)
	Gain (Loss) Recognized in Income
Derivatives Not Designated as
Hedging Instruments
Millions of dollars	Location			Amount
Three Months Ended March 31, 2011
Commodity contracts	Gas purchased for resale			$	(1	)
Three Months Ended March 31, 2010
Commodity contracts	Gas purchased for resale			$	(1	)

Hedge Ineffectiveness

Other gains (losses) recognized in income representing interest rate hedge ineffectiveness were insignificant for the three months ended March 31, 2011 and 2010.

Credit Risk Considerations

Certain of Consolidated SCE&G’s derivative instruments contain contingent provisions that require collateral to be provided upon the occurrence of specific events, primarily credit downgrades.  As of March 31, 2011 and December 31, 2010, Consolidated SCE&G has posted no collateral, respectively, related to derivatives with contingent provisions that are in a net liability position.  If all of the contingent features underlying these instruments were fully triggered as of March 31, 2011 and December 31, 2010, Consolidated SCE&G would be required to post $10.4 million and $34.9 million, respectively, of collateral to its counterparties.  The aggregate fair value of all derivative instruments with contingent provisions that are in a net liability position as of March 31, 2011 and December 31, 2010 is $10.4 million and $34.9 million, respectively.

7.FAIR VALUE MEASUREMENTS, INCLUDING DERIVATIVES

SCE&G values commodity derivative assets and liabilities using unadjusted NYMEX prices to determine fair value, and considers such measure of fair value to be Level 1 for exchange traded instruments and Level 2 for over-the-counter instruments.  Consolidated SCE&G’s interest rate swap agreements are valued using discounted cashflow models with independently sourced data.  Fair value measurements, and the level within the fair value hierarchy in which the measurements fall, were as follows:

		Fair Value Measurements Using
		Quoted Prices in Active		Significant Other
		Markets for Identical Assets		Observable Inputs
Millions of dollars		(Level 1)		(Level 2)
As of March 31, 2011
Assets -	Interest rate contracts	$	-	$	4
	Commodity contracts	1		-
Liabilities-	Interest rate contracts	-		10
As of December 31, 2010
Assets -	Interest rate contracts	$	-	$	4
	Commodity contracts	1		-
Liabilities -	Interest rate contracts	-		35

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There were no fair value measurements based on significant unobservable inputs (Level 3) for either period presented.  In addition, there were no transfers of fair value amounts into or out of Levels 1 and 2 during any period presented.

Financial instruments for which the carrying amount may not equal estimated fair value at March 31, 2011 and December 31, 2010 were as follows:

	March 31, 2011				December 31, 2010
Millions of dollars	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Long-term debt	$	3,150.1	$	3,365.9	$	3,059.7	$	3,321.8

Fair values of long-term debt are based on quoted market prices of the instruments or similar instruments.  For debt instruments for which no quoted market prices are available, fair values are based on net present value calculations.  Carrying values reflect the fair values of interest rate swaps based on discounted cash flow models with independently sourced data.  Early settlement of long-term debt may not be possible or may not be considered prudent.

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

8.EMPLOYEE BENEFIT PLANS

Pension and Other Postretirement Benefit Plans

Consolidated SCE&G participates in SCANA’s noncontributory defined benefit pension plan, which covers substantially all regular, full-time employees, and also participates in SCANA’s unfunded postretirement health care and life insurance programs, which provide benefits to active and retired employees.   Components of net periodic benefit cost recorded by Consolidated SCE&G were as follows:

	Pension Benefits						Other Postretirement Benefits
Millions of dollars	2011			2010			2011		2010
Three months ended March 31,
Service cost	$	3.7		$	3.5		$	0.9	$	0.8
Interest cost	9.4			10.2			2.4		2.4
Expected return on assets	(13.8		)	(14.5		)	-		-
Prior service cost amortization	1.5			1.6			0.2		0.2
Transition obligation amortization	-			-			-		-
Amortization of actuarial loss	2.6			4.2			-		0.1
Net periodic benefit cost	$	3.4		$	5.0		$	3.5	$	3.5

Prior to July 15, 2010, the SCPSC allowed SCE&G to defer as a regulatory asset the amount of pension cost exceeding amounts included in current rates for SCE&G’s retail electric and gas distribution regulated operations.  In connection with the SCPSC’s July 2010 retail electric rate order and November 2010 natural gas RSA order, SCE&G began deferring all pension expense or income related to retail electric and gas operations as a regulatory asset or liability, as applicable.  Costs totaling $2.3 million  and $5.3 million were deferred for the three months ended March 31, 2011 and 2010, respectively.

9.COMMITMENTS AND CONTINGENCIES

Nuclear Insurance

The Price-Anderson Indemnification Act deals with public liability for a nuclear incident and establishes the liability limit for third-party claims associated with any nuclear incident at $12.6 billion.  Each reactor licensee is currently liable for up to $117.5 million per reactor owned for each nuclear incident occurring at any reactor in the United States, provided that not more than $17.5 million of the liability per reactor would be assessed per year.  SCE&G’s maximum assessment, based on its two-thirds ownership of Summer Station, would be $78.3 million per incident, but not more than $11.7 million per year.

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SCE&G currently maintains policies (for itself and on behalf of Santee Cooper, a one-third owner of Summer Station) with Nuclear Electric Insurance Limited.  The policies, covering the nuclear facility for property damage, excess property damage and outage costs, permit retrospective assessments under certain conditions to cover insurer’s losses.  Based on the current annual premium, SCE&G’s portion of the retrospective premium assessment would not exceed $14.2 million.

To the extent that insurable claims for property damage, decontamination, repair and replacement and other costs and expenses arising from a nuclear incident at Summer Station exceed the policy limits of insurance, or to the extent such insurance becomes unavailable in the future, and to the extent that SCE&G rates would not recover the cost of any purchased replacement power, SCE&G will retain the risk of loss as a self-insurer.  SCE&G has no reason to anticipate a serious nuclear incident. However, if such an incident were to occur, it likely would have a material adverse impact on the Company’s results of operations, cash flows and financial position.

Environmental

In 2005, the EPA issued the CAIR, which requires the District of Columbia and 28 states, including South Carolina, to reduce nitrogen oxide and sulfur dioxide emissions in order to attain mandated state levels.  CAIR set emission limits to be met in two phases beginning in 2009 and 2015, respectively, for nitrogen oxide and beginning in 2010 and 2015, respectively, for sulfur dioxide.  SCE&G and GENCO determined that additional air quality controls would be needed to meet the CAIR requirements.  SCE&G has completed the installation of SCR technology at Cope Station for nitrogen oxide reduction, and GENCO has completed installation of a wet limestone scrubber at Williams Station for sulfur dioxide reduction.   SCE&G also installed a wet limestone scrubber at Wateree Station.  In July 2010, the EPA proposed a revised rule known as the Clean Air Transport Rule which will replace CAIR once promulgated.  The proposed rule is currently being evaluated by the Company.  Any costs incurred to comply with this rule or other rules issued by the EPA in the future are expected to be recoverable through rates.

In 2005, the EPA issued the CAMR which established a mercury emissions cap and trade program for coal-fired power plants. Numerous parties challenged the rule and, on February 8, 2008, the United States Circuit Court for the District of Columbia vacated the rule for electric utility steam generating units.  In March 2011, the EPA proposed new standards for mercury and other specified air pollutants.  The proposed rule provides up to four years for facilities to meet the standards once promulgated.  The EPA is expected to finalize the rule in November 2011.  The proposed rule is currently being evaluated by the Company. Any costs incurred to comply with this rule or other rules issued by the EPA in the future are expected to be recoverable through rates.

SCE&G maintains an environmental assessment program to identify and evaluate its current and former operations sites that could require environmental clean-up.  As site assessments are initiated, estimates are made of the amount of expenditures, if any, deemed necessary to investigate and remediate each site.  These estimates are refined as additional information becomes available; therefore, actual expenditures could differ significantly from the original estimates.  Amounts estimated and accrued to date for site assessments and clean-up relate solely to regulated operations.  SCE&G defers site assessment and cleanup costs and expects to recover them through rates.

SCE&G is responsible for four decommissioned MGP sites in South Carolina which contain residues of by-product chemicals.  These sites are in various stages of investigation, remediation and monitoring under work plans approved by DHEC. SCE&G anticipates that major remediation activities at these sites will continue until 2012 and will cost an additional $8.8 million.  In addition, the National Park Service of the Department of the Interior has made an initial demand to SCE&G for payment of $9.1 million for certain costs and damages relating to the MGP site in Charleston, South Carolina.  SCE&G expects to recover any cost arising from the remediation of these four sites through rates.  At March 31, 2011, deferred amounts, net of amounts previously recovered through rates and insurance settlements, totaled $25.9 million and are included in regulatory assets.

Nuclear Generation

SCE&G, on behalf of itself and as agent for Santee Cooper has entered into a contractual agreement for the design and construction of two 1,117-MW nuclear  generation units at the site of Summer Station.  The contract provides that SCE&G and Santee Cooper will be joint owners and share operating costs and generation output of the New Units, with SCE&G responsible for 55 percent of the cost and receiving 55 percent of the output, and Santee Cooper responsible for and receiving the remaining 45 percent. Assuming timely receipt of federal approvals and construction proceeding as scheduled, the first unit is expected to be completed and in service in 2016, and the second in 2019.  SCE&G will be the operator of the New Units.  SCE&G’s share of the estimated cash outlays (future value, excluding AFC) totals $5.5 billion for plant costs and for related transmission infrastructure costs, which costs are projected based on historical one-year and five year escalation rates as required by the SCPSC.

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SCE&G’s latest Integrated Resource Plan filed with the SCPSC in February 2011 continues to support SCE&G’s need for 55 percent of the output of the two units.  As previously reported, SCE&G has been advised by Santee Cooper that it is reviewing certain aspects of its capital improvement program and long-term power supply plan, including the level of its participation in the New Units.   Santee Cooper has more recently indicated that it will seek to reduce its 45 percent  ownership in the New Units.  Santee Cooper has disclosed that, in March 2011, it entered into a non-binding letter of intent with OUC that may result in the execution of a power purchase agreement with an option for OUC to acquire a portion of Santee Cooper’s ownership interest in the New Units.  SCE&G is unable to predict whether any change in Santee Cooper’s ownership interest or the addition of new joint owners will increase project costs or delay the commercial operation dates of the New Units.  Any such project cost increase or delay could be material.

10.AFFILIATED TRANSACTIONS

CGT transports natural gas to SCE&G to supply certain electric generation requirements and to serve SCE&G’s retail gas customers.  SCE&G had approximately $2.7 million and $2.1 million payable to CGT for transportation services at March 31, 2011 and December 31, 2010, respectively.

SCE&G purchases natural gas and related pipeline capacity from SEMI to supply its Jasper County Electric Generating Station, Urquhart Electric Generation Station and to serve its retail gas customers.  Such purchases totaled approximately $45.4 million and $47.3 million for the three months ended March 31, 2011 and 2010, respectively.  SCE&G’s payables to SEMI for such purposes were $15.5 million and $16.1 million as of March 31, 2011 and December 31, 2010, respectively.

SCE&G owns 40% of Canadys Refined Coal, LLC and 10% of Cope Refined Coal, LLC, both involved in the manufacturing and selling of refined coal to reduce emissions.  SCE&G accounts for these investments using the equity method.  SCE&G’s receivables from these affiliates were $5.0 million at March 31, 2011 and insignificant at December 31, 2010.  SCE&G’s payables to these affiliates were $5.1 million at March 31, 2011 and insignificant at December 31, 2010.  SCE&G’s total purchases were $13.0 million and $12.5 million for the three months ended March 31, 2011 and 2010, respectively.  SCE&G’s total sales were $12.9 million and $12.4 million for the three months ended March 31, 2011 and 2010, respectively.

Consolidated SCE&G participates in a utility money pool.  Money pool borrowings and investments bear interest at short-term market rates.  Consolidated SCE&G’s interest income and expense from money pool transactions was not significant for the three months ended March 31, 2011 or 2010.  At March 31, 2011 and December 31, 2010, Consolidated SCE&G owed an affiliate $69.0 million and $71.0 million, respectively.

11.SEGMENT OF BUSINESS INFORMATION

Consolidated SCE&G’s reportable segments are listed in the following table.  Consolidated SCE&G uses operating income to measure profitability for its regulated operations.  Therefore, earnings available to common shareholder are not allocated to the Electric Operations and Gas Distribution segments.  Intersegment revenues were not significant.

			Operating			Earnings Available
	External		Income			to Common		Segment
Millions of Dollars	Revenue		(Loss)			Shareholder		Assets
Three Months Ended March 31, 2011
Electric Operations	$	560	$	122		n/a		$	8,002
Gas Distribution	144		30			n/a		587
Adjustments/Eliminations	-		(1		)	$	68	1,946
Consolidated Total	$	704	$	151		$	68	$	10,535
Three Months Ended March 31, 2010
Electric Operations	$	542	$	86		n/a		$	7,423
Gas Distribution	180		37			n/a		564
Adjustments/Eliminations	-		-			$	62	1,800
Consolidated Total	$	722	$	123		$	62	$	9,787

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

SOUTH CAROLINA ELECTRIC & GAS COMPANY

The following discussion should be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations appearing in SCE&G’s Annual Report on Form 10-K for the year ended December 31, 2010.

RESULTS OF OPERATIONS

FOR THE THREE MONTHS ENDED MARCH 31, 2011

AS COMPARED TO THE CORRESPONDING PERIOD IN 2010

Net Income

Net income for Consolidated SCE&G was as follows:

Millions of dollars	2011		% Change		2010
Net income	$	67.8	9.2	%	$	62.1

Net income increased by $15.3 million due to higher electric margin.  These increases were partially offset by lower gas margin of $3.4 million, higher depreciation expense of $2.1 million, higher property taxes of $2.3 million and higher interest expense of $1.6 million.

Dividends Declared

Consolidated SCE&G’s Boards of Directors declared the following dividends on common stock (all of which was held by SCANA) during 2011:

Declaration Date	Amount	Quarter Ended	Payment Date
February 11, 2011	$50.6 million	March 31, 2011	April 1, 2011
April 21, 2011	49.0 million	June 30, 2011	July 1, 2011

Electric Operations

Electric Operations is comprised of the electric operations of SCE&G, GENCO and Fuel Company.  Electric operations sales margin (including transactions with affiliates) was as follows:

Millions of dollars	2011		% Change		2010
Operating revenues	$	560.3	3.5	%	$	541.6
Less: Fuel used in electric generation	212.6		(10.0	)%	236.1
Purchased power	2.3		(4.2	)%	2.4
Margin	$	345.4	14.0	%	$	303.1

Margin increased by $15.6 million due to higher SCPSC–approved retail electric base rates in July 2010, by $11.9 million due to an increase in base rates approved by the SCPSC under the BLRA in October 2010, and by $17.4 million as the result of a March 2010 settlement agreement approved by the SCPSC.  (See also discussion at “Income Taxes”.)  These increases were partially offset by $5.1 million due to lower residential and customer usage.

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Sales volumes (in MWh) related to the electric margin above, by class, were as follows:

Classification (in thousands)	2011	% Change		2010
Residential	2,058	(10.5	)%	2,299
Commercial	1,650	(5.4	)%	1,744
Industrial	1,416	4.7	%	1,353
Sale for resale (excluding interchange)	477	11.7	%	427
Other	127	(1.6	)%	129
Total territorial	5,728	(3.8	)%	5,952
Negotiated Market Sales Tariff (NMST)	4	(33.3	)%	6
Total	5,732	(3.8	)%	5,958

Territorial sales volume decreased by approximately 360 MWh due to the effects of weather.

Gas Distribution

Gas Distribution is comprised of the local distribution operations of SCE&G.  Gas distribution sales margin (including transactions with affiliates) was as follows:

Millions of dollars	2011		% Change		2010
Operating revenues	$	144.1	(20.2	)%	$	180.6
Less: Gas purchased for resale	87.8		(26.1	)%	118.8
Margin	$	56.3	(8.9	)%	$	61.8

Sales volumes (in DT) by class, including transportation, were as follows:

Classification (in thousands)	2011	% Change		2010
Residential	6,532	(21.4	)%	8,309
Commercial	4,277	(10.8	)%	4,797
Industrial	4,467	11.4	%	4,010
Transportation	1,192	16.3	%	1,025
Total	16,468	(9.2	)%	18,141

Margin decreased $4.5 million due to the SCPSC-approved decrease in retail gas base rates under the RSA which became effective with the first billing cycle of November 2010.  Total sales volumes decreased primarily due to decreased firm customer usage resulting from milder weather.

Other Operating Expenses

Other operating expenses were as follows:

Millions of dollars	2011		% Change		2010
Other operation and maintenance	$	132.0	-		$	132.0
Depreciation and amortization	70.9		6.8	%	66.4
Other taxes	47.4		8.7	%	43.6

Other operation and maintenance expenses were unchanged.  Other operation and maintenance expenses increased by $4.5 million due to higher compensation and other benefits.  These increases were offset by $1.3 million due to lower generation, transmission and distribution expenses and by $0.7 million due to lower customer service expenses and general expenses, including bad debt expense.  Depreciation and amortization expense increased in 2011 primarily due to net property additions.  Other taxes increased primarily due to higher property taxes.

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Other Income (Expense)

Other income (expense) includes the results of certain incidental (non-utility) activities.   Other income (expense) decreased in 2011 compared to 2010 primarily due to the July 2010 SCPSC order allowing the recovery of certain federally mandated capital expenditures and the related cessation of recording of carrying cost recovery.

Pension Cost

Pension cost was recorded on Consolidated SCE&G’s income statements and balance sheets as follows:

Millions of dollars	2011		2010
Income Statement Impact:
Employee benefit costs	$	-	$	(1.1	)
Other income	-		(1.0		)
Balance Sheet Impact:
Capital expenditures	0.8		1.4
Component of amount due from Summer Station co-owner	0.3		0.4
Regulatory asset	2.3		5.3
Total Pension Cost	$	3.4	$	5.0

No contribution to the pension trust will be necessary in or for 2011, nor will limitations on benefit payments apply.  Prior to July 15, 2010, the SCPSC allowed SCE&G to defer as a regulatory asset the amount of pension cost exceeding amounts included in rates for its retail electric and gas distribution regulated operations.  In connection with the SCPSC’s July 2010 electric rate order and November 2010 natural gas RSA order, SCE&G began deferring all pension expense and income related to retail electric and gas operations as a regulatory asset or regulatory liability, as applicable.  These costs will be deferred until such time as future rate recovery is provided for by the SCPSC.

AFC

AFC is a utility accounting practice whereby a portion of the cost of both equity and borrowed funds used to finance construction (which is shown on the balance sheet as construction work in progress) is capitalized.  Consolidated SCE&G includes an equity portion of AFC in nonoperating income and a debt portion of AFC in interest charges (credits) as noncash items, both of which have the effect of increasing reported net income.  AFC related to the construction of two nuclear electric generation units at the site of Summer Station was offset by the decrease in AFC related to the completion of certain pollution abatement projects at coal fired plants.

Interest Expense

Interest charges increased primarily due to increased borrowings.

Income Taxes

Income taxes (and the effective tax rate) for the three months ended March 31, 2011 were higher than the same period in 2010 primarily due to higher income before taxes, which excludes the allowance for equity funds used during construction, a nontaxable item, as well as by the recognition of certain previously deferred state income tax credits pursuant to the settlement of a fuel cost recovery proceeding in the first quarter of 2010 (see also the discussion at “Electric Operations”).

LIQUIDITY AND CAPITAL RESOURCES

Consolidated SCE&G anticipates that its contractual cash obligations will be met through internally generated funds and the incurrence of additional short- and long-term indebtedness.  Consolidated SCE&G expects that, barring further impairment of the capital markets, it has or can obtain adequate sources of financing to meet its projected cash requirements for the foreseeable future, including the cash requirements for nuclear construction and refinancing maturing long-term debt.  Consolidated SCE&G’s ratio of earnings to fixed charges for the three and 12 months ended March 31, 2011 was 2.95 and 3.27, respectively.

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SCE&G (including Fuel Company) had available the following committed LOC, and had outstanding the following LOC advances, commercial paper, and LOC-supported letter of credit obligations:

	Consolidated SCE&G
		March 31,			December 31,
Millions of dollars		2011			2010
Lines of credit:
Committed long-term (a)
Total	$	1,100		$	1,100
LOC advances		-			-
Weighted average interest rate		-			-
Outstanding commercial paper   (270 or fewer days)	$	486		$	381
Weighted average interest rate		.38	%		.42	%
Letters of credit supported by LOC	$	.3		$	.3
Available	$	614		$	719

(a)Consolidated SCE&G’s committed long-term facilities serve to back-up the issuance of commercial paper or to provide liquidity support.  SCE&G and Fuel Company have commercial paper programs in the amounts of up to $700 million and $400 million, respectively.  Nuclear and fossil fuel inventories and emission allowances are financed through the issuance by Fuel Company of short-term commercial paper or LOC advances.

SCE&G (including Fuel Company) are parties to five-year credit agreements in the amount of $1.1 billion, of which $400 million relates to Fuel Company, which expire October 23, 2015.  These credit agreements are used for general corporate purposes, including liquidity support for each company’s commercial paper program and working capital needs and, in the case of Fuel Company, to finance or refinance the purchase of nuclear fuel, fossil fuel, and emission and other environmental allowances.  These committed long-term facilities are revolving lines of credit under credit agreements with a syndicate of banks. Wells Fargo Bank, National Association, Bank of America, N. A. and Morgan Stanley Bank, N.A. each provide 10% of the aggregate $1.1 billion credit facilities, Branch Banking and Trust Company, Credit Suisse AG, Cayman Islands Branch, JPMorgan Chase Bank, N.A., Mizuho Corporate Bank, Ltd., TD Bank N.A. and UBS Loan Finance LLC each provide 8%, and Deutsche Bank AG New York Branch, Union Bank, N.A. and U.S. Bank National Association each provide 5.3%.  Three other banks provide the remaining 6%. These bank credit facilities support the issuance of commercial paper by SCE&G (including Fuel Company). When the commercial paper markets are dislocated (due to either price or availability constraints), the credit facilities are available to support the borrowing needs of SCE&G (including Fuel Company).

Consolidated SCE&G is obligated with respect to an aggregate of $71.4 million of industrial revenue bonds which are secured by letters of credit issued by Branch Banking and Trust Company.  These letters of credit expire, subject to renewal, in the fourth quarter of 2011.

At March 31, 2011, Consolidated SCE&G had net available liquidity of approximately $638 million.  Consolidated SCE&G regularly monitors the commercial paper and short-term credit markets to optimize the timing for repayment of any outstanding balance on its draws, while maintaining appropriate levels of liquidity.  Consolidated SCE&G’s long term debt portfolio has a weighted average maturity of approximately 19 years and bears an average cost of 6.2%.  A significant portion of long-term debt, other than credit facility draws, bears fixed interest rates or is swapped to fixed.  To further preserve liquidity, Consolidated SCE&G rigorously reviews its projected capital expenditures and operating costs and adjusts them where possible without impacting safety, reliability, and core customer service.

Consolidated SCE&G’s liquidity will be favorably impacted due to the recent issuance of final rules by the IRS related to bonus depreciation.  In addition Consolidated SCE&G recognizes a cash benefit from the method being used to account for capital maintenance, which results in certain maintenance costs being treated as current expense for income tax purposes.  Consolidated SCE&G expects these strategies to generate approximately $60 million in cash flow for 2011.  In addition, in 2011 SCE&G has received capital contributions from SCANA of approximately $24 million and expects to receive an additional $70 million related to SCANA’s issuance of stock through various compensation and dividend reinvestment plans.

In January 2011, SCE&G issued $250 million of 5.45% first mortgage bonds maturing on February 1, 2041. Proceeds from the sale were used to retire $150 million of First Mortgage Bonds due February 1, 2011, to repay short-term debt  and for general corporate purposes.

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OTHER MATTERS

Nuclear Generation

SCE&G, on behalf of itself and as agent for Santee Cooper, has entered into a contractual agreement for the design and construction of two 1,117-MW nuclear generation units at the site of Summer Station.  The contract provides that SCE&G and Santee Cooper will be joint owners and share operating costs and generation output of the New Units, with SCE&G responsible for 55 percent of the cost and receiving 55 percent of the output, and Santee Cooper responsible for and receiving the remaining 45 percent.  Assuming timely receipt of federal approvals and construction proceeding as scheduled, the first unit is expected to be completed and in service in 2016, and the second in 2019.  SCE&G will be the operator of the New Units.  SCE&G’s share of the estimated cash outlays (future value, excluding AFC) totals $5.5 billion for plant costs and related transmission infrastructure costs, which costs are projected based on historical one-year and five-year escalation rates as required by the SCPSC.

SCE&G’s latest Integrated Resource Plan filed with the SCPSC in February 2011 continues to support SCE&G’s need for 55 percent of the output of the two units.  As previously reported, SCE&G has been advised by Santee Cooper that it is reviewing certain aspects of its capital improvement program and long-term power supply plan, including the level of its participation in the New Units.  Santee Cooper has more recently indicated that it will seek to reduce its 45 percent ownership in the New Units.  Santee Cooper has disclosed that, in March 2011, it entered into a non-binding letter of intent with OUC that may result in the execution of a power purchase agreement with an option for OUC to acquire a portion of Santee Cooper’s ownership interest in the New Units.  SCE&G is unable to predict whether any change in Santee Cooper’s ownership interest or the addition of new joint owners will increase project costs or delay the commercial operation dates of the New Units.  Any such project cost increase or delay could be material.

In March 2011 a tsunami resulting from a massive earthquake severely damaged several nuclear generating units and their back-up cooling systems in Japan.  The impact of the disaster is being evaluated world-wide, and numerous political and regulatory bodies, including those in the United States, are seeking to determine if additional safety measures should be required at other existing nuclear facilities, as well as those planned for construction.  SCE&G cannot predict what regulatory or other outcomes may be implemented in the United States, nor how such initiatives would impact SCE&G’s existing Summer Station or the licensing, construction or operations of the New Units.

In April 2011, the NRC and the USACE completed the FEIS for the New Units, concluding that there were no environmental impacts that would preclude issuing the COL for the New Units.  The NRC continues to compile its final safety evaluation report, which is expected to be completed in the summer of 2011.

Fuel Contract

On January 27, 2011, SCE&G, for itself and as agent for Santee Cooper, and Westinghouse entered into a fuel alliance agreement and contracts for fuel fabrication and related services. Under these contracts, Westinghouse will supply enriched nuclear fuel assemblies for Summer Station Unit 1 and the New Units. Westinghouse will be SCE&G’s exclusive provider of such fuel assemblies on a cost-plus basis. The fuel assemblies to be delivered under the contracts are expected to supply the nuclear fuel requirements of Summer Station Unit 1 and the New Units through 2033. SCE&G is dependent upon Westinghouse for providing fuel assemblies for the new AP1000 passive reactors in the New Units in the current and anticipated future absence of other commercially viable sources. Westinghouse currently provides maintenance and engineering support to Summer Station Unit 1 under a services alliance arrangement, and SCE&G has also contracted for Westinghouse to provide similar support services to the New Units upon their completion and commencement of commercial operation in 2016 and 2019, respectively.

Air Quality

In 2005, the EPA issued the CAIR, which requires the District of Columbia and 28 states, including South Carolina, to reduce nitrogen oxide and sulfur dioxide emissions in order to attain mandated state levels.  CAIR set emission limits to be met in two phases beginning in 2009 and 2015, respectively, for nitrogen oxide and beginning in 2010 and 2015, respectively, for sulfur dioxide.  SCE&G and GENCO determined that additional air quality controls would be needed to meet the CAIR requirements.  SCE&G has completed the installation of SCR technology at Cope Station for nitrogen oxide reduction, and GENCO has completed installation of a wet limestone scrubber at Williams Station for sulfur dioxide reduction.   SCE&G also installed a wet limestone scrubber at Wateree Station.  In July 2010, EPA proposed a revised rule known as the Clean Air Transport Rule which will replace CAIR once promulgated.  The proposed rule is currently being evaluated by the Company.  Any costs incurred to comply with this rule or other rules issued by the EPA in the future are expected to be recoverable through rates.

53

In 2005, the EPA issued the CAMR which established a mercury emissions cap and trade program for coal-fired power plants. Numerous parties challenged the rule and, on February 8, 2008, the United States Circuit Court for the District of Columbia vacated the rule for electric utility steam generating units.  In March 2011, EPA proposed new standards for mercury and other specified air pollutants.  The proposed rule provides up to four years for facilities to meet the standards once promulgated.  The EPA is expected to finalize the rule in November 2011.  The proposed rule is currently being evaluated by Consolidated SCE&G. Any costs incurred to comply with this rule or other rules issued by the EPA in the future are expected to be recoverable through rates.

SCE&G maintains an environmental assessment program to identify and evaluate its current and former operations sites that could require environmental clean-up.  As site assessments are initiated, estimates are made of the amount of expenditures, if any, deemed necessary to investigate and remediate each site.  These estimates are refined as additional information becomes available; therefore, actual expenditures could differ significantly from the original estimates.  Amounts estimated and accrued to date for site assessments and clean-up relate solely to regulated operations.  SCE&G defers site assessment and cleanup costs and expects to recover them through rates.

SCE&G is responsible for four decommissioned MGP sites in South Carolina which contain residues of by-product chemicals.  These sites are in various stages of investigation, remediation and monitoring under work plans approved by DHEC.  SCE&G anticipates that major remediation activities at these sites will continue until 2012 and will cost an additional $8.8 million.  In addition, the National Park Service of the Department of the Interior has made an initial demand to SCE&G for payment of $9.1 million for certain costs and damages relating to the MGP site in Charleston, South Carolina.  SCE&G expects to recover any cost arising from the remediation of these four sites through rates.  At March 31, 2011, deferred amounts, net of amounts previously recovered through rates and insurance settlements, totaled $25.9 million and are included in regulatory assets.

For additional information related to environmental matters and claims and litigation, see Note 9 to the condensed consolidated financial statements.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate Risk-Consolidated SCE&G’s market risk exposures relative to interest rate risk have not changed materially compared with SCE&G’s Annual Report on Form 10-K for the year ended December 31, 2010.  Interest rates on a significant portion of Consolidated SCE&G’s outstanding long-term debt, other than credit facility draws, are fixed either through the issuance of fixed  rate debt or through the use of interest rate derivatives.  Consolidated SCE&G is not aware of any facts or circumstances that would significantly affect exposures on existing indebtedness in the near future.

For further discussion of changes in long-term debt and interest rate derivatives, see ITEM 2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - LIQUIDITY AND CAPITAL RESOURCES and also Notes 4 and 6 of the condensed consolidated financial statements.

Commodity price risk - SCE&G uses derivative instruments to hedge forward purchases and sales of natural gas, which create market risks of different types.  See Note 6 of the condensed consolidated financial statements.  The following table provides information about SCE&G’s financial instruments that are sensitive to changes in natural gas prices.  Weighted average settlement prices are per 10,000 DT.  Fair value represents quoted market prices for these or similar instruments.

Expected Maturity:
Options
	Purchased Call
2011	(Long)
Strike Price (a)	4.77
Contract Amount (b)	7.5
Fair Value (b)	0.5
2012
Strike Price (a)	5.13
Contract Amount (b)	2.0
Fair Value (b)	0.2

(a)Weighted average, in dollars

(b)Millions of dollars

54

ITEM 4.  CONTROLS AND PROCEDURES

As of March 31, 2011, SCE&G conducted an evaluation under the supervision and with the participation of its management, including its CEO and CFO, of (a) the effectiveness of the design and operation of its disclosure controls and procedures and (b) any change in its internal control over financial reporting.  Based on this evaluation, the CEO and CFO concluded that, as of March 31, 2011, SCE&G’s disclosure controls and procedures were effective.  There has been no change in SCE&G’s internal control over financial reporting during the quarter ended March 31, 2011 that has materially affected or is reasonably likely to materially affect SCE&G’s internal control over financial reporting.

55

PART II.  OTHER INFORMATION

ITEM 6.  EXHIBITS

SCANA and SCE&G:

Exhibits filed or furnished with this Quarterly Report on Form 10-Q are listed in the following Exhibit Index.

As permitted under Item 601(b) (4) (iii) of Regulation S-K, instruments defining the rights of holders of long-term debt of less than 10 percent of the total consolidated assets of SCANA, for itself and its subsidiaries, and of SCE&G, for itself and its consolidated affiliates, have been omitted and SCANA and SCE&G agree to furnish a copy of such instruments to the SEC upon request.

56

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, each of the registrants has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.  The signature of each registrant shall be deemed to relate only to matters having reference to such registrant and any subsidiaries thereof.

	SCANA CORPORATION
	SOUTH CAROLINA ELECTRIC & GAS COMPANY
	(Registrants)
	By:	/s/James E. Swan, IV
May 3, 2011		James E. Swan, IV
		Controller
		(Principal accounting officer)

57

EXHIBIT INDEX

	Applicable to Form 10-Q of
Exhibit No.	SCANA	SCE&G	Description
3.01	X		Restated Articles of Incorporation of SCANA, as adopted on April 26, 1989 (Filed as Exhibit 3-A to Registration Statement No. 33-49145 and incorporated by reference herein)
3.02	X		Articles of Amendment dated April 27, 1995 (Filed as Exhibit 4-B to Registration Statement No. 33-62421 and incorporated by reference herein)
3.03	X		Articles of Amendment effective April 25, 2011 (Filed as Exhibit 99.1 to Form 8-K filed April 26, 2011 and incorporated by reference herein)
3.04		X	Restated Articles of Incorporation of SCE&G, as adopted on December 30, 2009 (Filed as Exhibit 1 to Form 8-A (File Number 000-53860) and incorporated by reference herein)
3.05	X		By-Laws of SCANA as amended and restated as of February 19, 2009 (Filed as Exhibit 3.01to Form 8-K filed February 23, 2009 and incorporated by reference herein)
3.06		X	By-Laws of SCE&G as revised and amended on February 22, 2001 (Filed as Exhibit 3.05 to Registration Statement No. 333-65460 and incorporated by reference herein)
10.01	X	X	Contract for AP1000 Fuel Fabrication and Related Services between Westinghouse Electric Company LLC and South Carolina Electric & Gas Company for V. C. Summer AP1000 Nuclear Plant Units 2 & 3, dated January 27, 2011 (portions of the exhibit have been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended) (Filed herewith)
10.02*	X	X	Independent Contractor Agreement between SCANA Corporation and William B. Timmerman dated January 7, 2011 (Filed herewith)
31.01	X		Certification of Principal Executive Officer Required by Rule 13a-14 (Filed herewith)
31.02	X		Certification of Principal Financial Officer Required by Rule 13a-14 (Filed herewith)
31.03		X	Certification of Principal Executive Officer Required by Rule 13a-14 (Filed herewith)
31.04		X	Certification of Principal Financial Officer Required by Rule 13a-14 (Filed herewith)
32.01	X		Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350 (Furnished herewith)
32.02	X		Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350 (Furnished herewith)
32.03		X	Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350 (Furnished herewith)
32.04		X	Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350 (Furnished herewith)
101. INS**	X		XBRL Instance Document
101. SCH**	X		XBRL Taxonomy Extension Schema
101. CAL**	X		XBRL Taxonomy Extension Calculation Linkbase

58

	Applicable to Form 10-Q of
Exhibit No.	SCANA	SCE&G	Description
101. DEF**	X		XBRL Taxonomy Extension Definition Linkbase
101. LAB**	X		XBRL Taxonomy Extension Label Linkbase
101. PRE**	X		XBRL Taxonomy Extension Presentation Linkbase

*Management Contract or Compensatory Plan or Arrangement

**   Pursuant to Rule 406T of Regulation S-T, this interactive data file is deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, and otherwise is not subject to liability under these sections.

59

EX-10.01

Exhibit 10.01

Westinghouse Proprietary Class 2

CONTRACT FOR

AP1000 FUEL FABRICATION

AND RELATED SERVICES

BETWEEN

WESTINGHOUSE ELECTRIC COMPANY LLC

AND

SOUTH CAROLINA ELECTRIC & GAS COMPANY

FOR

V. C. SUMMER AP1000 NUCLEAR PLANT UNITS 2 & 3

Disclosure of this document, in whole or in part, is subject to the proprietary information restrictions set forth in ARTICLE 10, PROPRIETARY INFORMATION of the General Terms and Conditions.

©2011 Westinghouse Electric Company LLC

All Rights Reserved

“[**]” in this Exhibit 10.01 indicates material that has been omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission.

Westinghouse Proprietary Class 2

ARTICLETITLE		PAGE
RECITALS		1
ARTICLE 1AGREEMENT DOCUMENTS; DEFINITIONS		2
A.	Agreement Documents	2
B.	Definitions	2
ARTICLE 2WESTINGHOUSE SCOPE OF SUPPLY		3
A.	Westinghouse Fuel Assembly Fabrication Services	3
B.	Cost Bases for Reload Region Fuel Fabrication Services	4
C.	Handling of Owner-Supplied EUP	5
D.	Initial Core and Reload Core Design and Related Licensing Engineering Services	5
ARTICLE 3OWNER’S SCOPE OF SUPPLY		8
ARTICLE 4PRICE AND PAYMENT SCHEDULE		9
A.	Initial Core Fuel Assembly Fabrication Price	9
B.	Reload Fuel Assembly Fabrication and Related Services Prices	9
C.	Core Components Prices	9
ARTICLE 5INVOICING AND PAYMENT		10
A.	Invoicing	10
B.	Terms of Payment	10
C.	[**]	11
D.	[**]	13
ARTICLE 6SCHEDULES		16
A.	Fuel Assembly Delivery Schedules	16
B.	Energy Requirements Schedule	17
C.	Material Delivery Schedule	18
ARTICLE 7[**]		19
A.	[**]	19
B.	[**]	19
C.	[**]	19
D.	[**]	20
E.	[**]	22
F.	[**]	23
G.	[**]	25
H.	[**]	26
I.	[**]	26
J.	[**]	27
K.	[**]	28
ARTICLE 8EXTENSION OR SUSPENSION		29
A.	Extension or Suspension	29
B.	Resumption and Adjustment	29
ARTICLE 9[**]		31
A.	[**]	31
B.	[**]	32
C.	[**]	32
D.	Termination for Change of Control	33
E.	Termination for Cause	33
F.	General Obligations at Termination	34

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Westinghouse Proprietary Class 2

ARTICLETITLE		PAGE
ARTICLE 10LIMITATION OF LIABILITY		37
ARTICLE 11THIRD PARTY FUEL SUPPLY		38
A.	Fuel Assemblies Purchased from Others	38
B.	Lead Use Fuel Assembly (LUA)	38
C.	Maintenance of Mechanical Integrity Warranty	39
ARTICLE 12CHANGES TO GENERAL WORK SCOPE		40
APPENDIX 1[**]		42
APPENDIX 2[**]		43
A.	[**]	43
B.	[**]	43
APPENDIX 3[**]		44
APPENDIX 4[**]		45
APPENDIX 5OWNER’S EUP		46
A.	General	46
B.	EUP Delivery by Physical Delivery	48
C.	EUP Delivery by Book Transfer	48
D.	Standard Enricher Formulae for Calculating SWU and Feed	49
E.	EUP Dispute Procedure	50
F.	EUP Accounting/Reconciliation Procedure	51
APPENDIX 6CYCLE DESIGN REPORT CONTENTS		57
APPENDIX 7INTENTIONALLY LEFT BLANK		58
APPENDIX 8[**]		59
A.	[**]	59
B.	[**]	59
C.	[**]	59
D.	[**]	59
E.	[**]	60
F.	[**]	60
APPENDIX 9PROPRIETARY INFORMATION AGREEMENT (SAMPLE)		61
APPENDIX 10COMPATIBILITY DATA		65
A.	Pre-Award Information	65
B.	Post-Award Information	67
APPENDIX 11INTENTIONALLY LEFT BLANK		70
APPENDIX 12[**]		71
A.	[**]	71
B.	[**]	71
C.	[**]	71
D.	[**]	71
E.	[**]	71
F.	[**]	73
G.	[**]	73

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Westinghouse Proprietary Class 2

RECITALS

THIS CONTRACT for FUEL FABRICATION AND RELATED SERVICES, dated this 27th day of January, 2011, is by and between South Carolina Electric & Gas Company, and Westinghouse Electric Company LLC, a limited liability company duly organized and existing under and by virtue of the laws of the State of Delaware, with an office at 1000 Westinghouse Drive, Cranberry Township, Pennsylvania 16066 (“Westinghouse”) and provides for the fabrication of nuclear fuel and associated services as hereinafter described.

WHEREAS, Owners desire to develop, license, procure and have constructed a nuclear-fueled electricity generating facility to be located at the V. C. Summer Plant Site (the “Facility”) in the state of South Carolina and,

WHEREAS, Owner requires a supplier of nuclear fuel and related services necessary to operate its Facility; and,

WHEREAS, Westinghouse is engaged in the business of designing, developing and supplying commercial nuclear power facilities and has developed a pressurized water nuclear power reactor known as the AP1000 (the “AP1000 Nuclear Power Plant”) for which the U.S. Nuclear Regulatory Commission has issued a Standard Design Certification in the form of a rule set forth in Appendix D to 10 CFR Part 52; and,

WHEREAS, the AP1000 Standard Design Certification set forth in Appendix D to 10 CFR Part 52 specifies the Westinghouse AP1000 nuclear fuel design as an integral part of the licensed AP1000 plant design; and,

WHEREAS, Westinghouse desires to provide the nuclear fuel fabrication and related support technology and services necessary to operate the Owner’s new AP1000 nuclear electricity generation facility; and

WITNESSETH:

NOW, THEREFORE, in consideration of the mutual covenants herein and other good and valuable consideration, the sufficiency of which the Parties acknowledge, the Parties, intending to be legally bound, stipulate and agree as follows:

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Westinghouse Proprietary Class 2

ARTICLE 1AGREEMENT DOCUMENTS; DEFINITIONS

A.Agreement Documents

The Agreement Documents (“Agreement” or “Agreement Documents”) between the parties shall consist of this Contract for AP1000 Fuel Fabrication and Related Services Agreement (“the Contract”), its Appendices and all documents incorporated by reference therein including, without limitation, the Fuel Alliance Agreement, the General Terms and Conditions, the Fuel Technology License Agreement and any amendments thereto.

B.Definitions

Defined terms which are common for all Agreement Documents shall be located in Attachment E, DEFINED TERMS.  In the event a term requires a definition that is different from the definition set forth in the Attachment E, for the purposes of this Contract it shall be defined as specifically set forth in this Contract.

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ARTICLE 2WESTINGHOUSE SCOPE OF SUPPLY

A.Westinghouse Fuel Assembly Fabrication Services

Westinghouse will provide the following Work as specified herein:

1.Fuel Assembly fabrication services of the Reference Design using the Owner-supplied EUP for [**] Fuel Assemblies contained in the Initial Core of each Unit and that comply with the Fuel Assembly design and fabrication specifications provided by Westinghouse.

2.Integral and insert burnable absorbers including holddown devices required by the Initial Core design of each Unit as described in Appendix 2, INITIAL CORE DESIGN SUMMARY.

3.Core Components of the Reference Design and the quantities described in Appendix 3, REFERENCE CORE COMPONENTS REQUIREMENTS AND DESIGN for the Initial Core of each Unit.

4.Fuel Assembly fabrication of the Reference Design for Reload Regions using the Owner-supplied EUP for each Unit of approximately [**] Fuel Assemblies per Reload Region. This Contract is for the Initial Cores and [**] Reload Regions for Unit 2 and [**] Reload Regions for Unit 3.  The number of Fuel Assemblies per Reload Region may not vary by more than [**] Fuel Assemblies due to the use of Lead Use Assemblies.

5.Wet Annular Burnable Absorbers (WABAs) and their associated holddown devices for any Reload Region.

6.One (1) full-size replica fuel assembly per Unit.  The replica fuel assembly shall be suitable to demonstrate compatibility with Plant and handling tool interfaces. The replica fuel assembly will be fabricated from production Fuel Assembly components using production manufacturing processes with the exception that the fuel rods will be filled with non-uranium pellets instead of UO2 pellets.  The replica fuel assembly envelope and top and bottom nozzles will meet production Fuel Assembly design requirements.  The resulting total mass shall be within +/- 10 lbs of a fuel-bearing assembly and will be documented. The center of gravity will be matched as closely to that of a fuel-bearing assembly as practicable.

7.One (1) model fuel assembly.  The model fuel assembly will be fabricated from production Fuel Assembly components and will contain at least one of each type of spacer grid used in the Fuel Assemblies.  The height of the model assembly will be approximately 4.0 feet to facilitate display and a stand will be provided to minimize safety tipping concerns.  The model fuel assembly will be loaded with simulated fuel rods in approximately 75% of the fuel lattice locations with one of the four faces open to allow viewing of the internal layout of the spacer grids and guide thimbles.

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Westinghouse Proprietary Class 2

8.[**] reusable Fuel Assembly shipping containers for shipment of non-irradiated Fuel Assemblies to the Site.

9.Delivery of Fuel Assemblies, Core Components, replica fuel assemblies, model fuel assemblies and Designated Computer System, as defined in Article 2.E, in accordance with the provisions of Article 2, DELIVERY, TITLE, AND RISK OF LOSS of the General Terms and Conditions.

10.Return transportation of Fuel Assembly shipping containers from the Owner’s Site.

11.New Fuel Assembly unloading and handling instructions, procedures and training.  Westinghouse will provide Fuel Assembly unloading and handling training upon request at a place and time mutually agreed by the Parties. ([**])

12.Information to allow Owner to arrange for supply of non-Westinghouse reload fuel in accordance with the provisions of Article 10, THIRD PARTY FUEL SUPPLY in the form of Lead Use Assemblies during the term of the Contract and subsequent reload fuel after the term of the Contract.

B.[**] Reload Region Fuel Fabrication Services

1.The final Reload Region provided by Westinghouse under this Contract shall constitute one-hundred percent (100%) of the Fuel Assembly requirements for that Cycle.

2.Fabrication requirements are projected in Appendix 4, REPRESENTATIVE RELOAD FUEL ASSEMBLY REQUIREMENTS AND SCHEDULE.

3.The use of LUAs will not reduce the minimum Fuel Assembly requirement.  Allowances for limited numbers of LUAs are defined in Article 10, THIRD PARTY FUEL SUPPLY.

4.[**] includes burnable absorbers requirements of integral absorbers in the form of rods [**] on a region average basis

5.[**] includes up to [**] burnable absorber patterns per Reload Region from the then-current Westinghouse standard patterns per reload.  Any additional burnable absorber pattern requirements above this allocation or any asymmetric burnable absorber patterns shall be subject to the terms of Article 4, CHANGES of the General Terms and Conditions.

6.[**].  Changes to these conditions shall be subject to the terms of Article 4, CHANGES of the General Terms and Conditions. Reload Regions are assumed to contain IFBA rods only. If WABA

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Westinghouse Proprietary Class 2

assemblies are required in addition to the IFBA, they will be subject to the terms of Article 4, CHANGES of the General Terms and Conditions.  [**]

C.Handling of Owner-Supplied EUP

The terms and conditions for the activities associated with the Owner-supplied EUP are set forth in Appendix 5, OWNER’S EUP.

D.Initial Core and Reload Core Design and Related Licensing Engineering Services

1.For each Initial Core, Westinghouse will:

a.Establish Fuel Assembly and Core Components design bases, including a review of the Core Operating Limits Report (COLR), Core Reference Report and Technical Specifications;

b.Provide initial Cycle-specific input to the BEACON-DMMTM Core monitoring software;

c.Provide initial Cycle-specific operating margin evaluation for Unit operation with the BEACON-DMM Core monitoring software in service;

d.Provide initial Cycle-specific COLR including parameters necessary to operate the Unit with BEACON-DMM out of service, as allowed by the Unit Technical Specifications;

e.Recommend control rod shuffling, control rod programming, GRCA exchange sequence and timing;

f.Establish the initial value of the following set points and safety-related parameters to reflect the as-built condition of the Plant and Initial Core reactor as they are related to and affected by the Core and/or Fuel Assembly design:

1.Reactor protection system set points;

2.Reactor power control system set points;

3.Rod control system set points;

4.Rapid power reduction system set points; and,

5.Review safety-related parameters in the combined operating License to confirm applicability to the Initial Core.

Any required modifications or revisions identified during these reviews that are solely due to Owner requested changes will be subject to the terms of Article 4, CHANGES of the General Terms and Conditions, and/or Article 8, LICENSES, PERMITS, AUTHORIZATIONS, AND LICENSING SUPPORT of the General Terms and Conditions, as appropriate.

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Westinghouse Proprietary Class 2

g.Perform transient and safeguards related analyses, as required by the NRC, in support of the licensing effort of the Owner under the conditions set forth in Article 8 LICENSES, PERMITS, AUTHORIZATIONS, AND LICENSING SUPPORT of the General Terms and Conditions;

h.Provide individual as-built Fuel Assembly design and as-built manufacturing information required by TracWorks®;

i.Provide a Cycle Design Report describing the nuclear, thermal/hydraulic and mechanical design for each Fuel Cycle at each Unit for licensing and Core operation purposes.  The contents of the Cycle Design Report are presented in Appendix 6, CYCLE DESIGN REPORT CONTENTS.

j.Provide the analytic constants and review of startup testing results required to support the low-power physics testing upon initial Cycle startup using Dynamic Rod Worth Measurement for Cycle 1.

k.Provide an Initial Core Safety Evaluation Report which summarizes the results of the Westinghouse effort described in this Article 2.D.1.

2.For each Reload Region, Westinghouse or Owner will provide the following Services for each forthcoming Cycle based on the Owner-specified energy requirements furnished in accordance with Article 6, SCHEDULES:

a.Establish number of Fuel Assemblies, enrichments, a loading pattern and a burnable absorber pattern, as required, consistent with NRC licensing requirements;

b.Review design bases, including a review of the Technical Specifications and COLR(s) of the Owner’s operating license and previous designs, if applicable;

c.Provide Cycle-specific operating margin evaluation for Unit operation with the BEACON-DMM Core monitoring software in service.

d.Provide Cycle-specific Core Operating Limit Report (COLR) updates including parameters necessary to operate the Unit with BEACON-DMM out of service, as allowed by the Unit Technical Specifications.

e.Provide recommendations on control rod shuffling, control rod programming, GRCA exchange sequence and timing.

f.Perform a review and evaluation of the following (as they are related to and affected by the Core design) provided that Owner makes available to Westinghouse all of the Plant information required by Westinghouse to perform its obligation:

1.Reactor protection system set points;

2.Applicable safety-related parameters versus those used in support of the current licensing basis described in Owner’s most recently amended Final Safety Analysis Report (FSAR).

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Any required modifications or revisions identified during these reviews could be subject to the terms of Article 4, CHANGES of the General Terms and Conditions, and/or Article 8, LICENSES, PERMITS, AUTHORIZATIONS, AND LICENSING SUPPORT of the General Terms and Conditions, as appropriate.

g.Perform additional transient and safeguards related analyses, as required by the NRC, in support of the licensing effort of the Owner under the conditions set forth in Article 8, LICENSES, PERMITS, AUTHORIZATIONS, AND LICENSING SUPPORT of the General Terms and Conditions;

h.Provide individual as-built Fuel Assembly design and as-built manufacturing information;

i.Provide a Cycle Design Report describing the nuclear, thermal/hydraulic and mechanical design for each Cycle at each Unit for licensing and Core operation purposes.  The contents of the Cycle Design Report are presented in Appendix 6, CYCLE DESIGN REPORT CONTENTS.

j.Provide the analytic constants and review of startup testing results required to support the low-power physics testing upon initial Cycle startup using Subcritical Rod Worth Measurement.

k.Provide a Reload Region Evaluation Report which summarizes the results of the Westinghouse effort described in this Article 2.D.2.

3.Fuel Management Support

For the initial Cycle, the fuel management will be as determined by the Core Reference Report.  For subsequent Cycles the fuel management support will be as defined herein or as otherwise directed by Owner at its expense. Should the Owner perform the fuel management services, the Owner will be required to use Westinghouse core design codes and methods and must provide a verified copy of the models to Westinghouse.

4.Operational Support

Westinghouse will provide evaluations of coolant chemistry data provided by Owner.  Upon request, Westinghouse will provide evaluation of Core follow data such as Fq, FH and axial offset, and maintain the operating model for each Cycle.

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Westinghouse Proprietary Class 2

ARTICLE 3OWNER’S SCOPE OF SUPPLY

A.In Support of the nuclear fuel fabrication and related services to be provided hereunder, Owner shall:

1.Supply, in accordance with APPENDIX 5,OWNER’S EUP, one hundred percent (100%) of the EUP as natural or enriched uranium hexafluoride required to meet the final design uranium loading for each Reload Region to be fabricated in the enrichments and at the times specified in accordance with Article 6, SCHEDULES.  In the event that the EUP supplied by Owner does not conform to the quality standards specified for EUP, an equitable adjustment will be made to all pertinent provisions of the Contract, including but not limited to, scope of work, price, schedules, and warranties.

2.Pay for all transportation charges not explicitly provided by Westinghouse pursuant to Article 2.A, Westinghouse Fuel Assembly Fabrication Services.

3.For physical deliveries, pay for all withdrawal, packaging, and associated charges levied by the Enrichment Facility and similar charges levied by the Conversion Facility for EUP supplied by Owner to Westinghouse under this Contract.

4.Unload and store the Fuel Assemblies at the Site.

5.Use its reasonable efforts to make the Westinghouse Fuel Assembly shipping containers ready for return shipment to Westinghouse within [**] days of their arrival at the Site but in any case [**].

6.Make payments in accordance with Article 5, INVOICING AND PAYMENT.

7.Provide reasonable access to the Plant and the required support services to enable Westinghouse to fulfill its warranty and other obligations and requirements as specified elsewhere in the Contract.

8.Provide data, reviews, notifications, schedules, and requirements as specified elsewhere in the Contract and any other information reasonably required by Westinghouse to enable it to perform its design, licensing and manufacturing obligations under the Contract.  Safety-related parameters made available by Owner shall be provided in accordance with Owner’s quality assurance program.

9.Apply for and pursue in good faith the Combined Operating License for the Plant prior to Delivery of the Initial Core and maintain said license during the term of this Contract.

January 2011 AP1000 Fuel Fabrication Contract Page 8

“[**]” in this Exhibit 10.01 indicates material that has been omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission.

Westinghouse Proprietary Class 2

ARTICLE 4PRICE AND PAYMENT SCHEDULE

A.Initial Core Fuel Assembly Fabrication Price

1.Westinghouse shall charge for and be compensated for by Owner for fabrication of Fuel Assemblies and the engineering support for each Initial Core of each Unit as provided in the Fuel Alliance Agreement.

2.The prices are subject to escalation as defined in Article 5, INVOICING AND PAYMENT of this Contract.

B.Reload Fuel Assembly Fabrication and Related Services Prices

1.The prices for Reload Fuel Assembly fabrication services are provided in the Fuel Alliance Agreement.

2.The prices are subject to escalation as defined in Article 5, INVOICING AND PAYMENT, of this Contract.

C.Core Components Prices

1.Westinghouse shall charge for and be compensated for by Owner for the fabrication of Core Components and spares for each Initial Core of each Unit as provided in the Fuel Alliance Agreement.

2.The prices are subject to escalation as defined in Article 5, INVOICING AND PAYMENT, of this Contract.

3.In addition to escalation of the fabrication prices, the price of the NG-RCCAs are subject to adjustment based upon the price of silver and indium as of the time of fabrication.  The price of the primary source is subject to adjustment based upon the price of californium as of the time of fabrication.

4.The final design and licensing of the GRCA has not been completed as of the date of this offer.  Westinghouse will provide the final price for the GRCA upon design completion and USNRC licensing approval of WCAP-16943-P, “Enhanced GRCA (Gray Rod Cluster Assembly) Rodlet Design”.  To the extent that the final design contains precious metals, the cost of the precious metals will be indexed to industry indices and the actual cost determined at the time of delivery in a manner similar to that used for NG-RCCAs.  The price of the non-precious metals portion of the GRCA will be subject to escalation as defined in the Fuel Alliance Agreement.

January 2011 AP1000 Fuel Fabrication Contract Page 9

“[**]” in this Exhibit 10.01 indicates material that has been omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission.

Westinghouse Proprietary Class 2

ARTICLE 5INVOICING AND PAYMENT

A.Invoicing

1.Invoicing will be as defined in the Fuel Alliance Agreement.

2.Each invoice will be transmitted electronically to Owner as indicated in Article 14.H, Notices of the General Terms and Conditions and shall reference the applicable Work.

B.Terms of Payment

1.Subject to Article 5.B.3 below, payment by the Owner of all amounts reflected on Westinghouse invoice(s) shall be made in US dollars (unless otherwise agreed by the Parties) on a net [**] calendar day basis from the date an invoice is electronically transferred to the Owner.

2.The Owner shall pay Westinghouse, or Westinghouse will refund to the Owner, the amounts reflected on submitted invoice(s) via electronic funds transfer to account(s) that will be specified on such invoices.

3.Amounts incorrectly or inappropriately invoiced to the Owner, whether discovered prior to or subsequent to payment by the Owner, shall be adjusted or reimbursed to the Owner by Westinghouse within [**] calendar days of notification by the Owner to Westinghouse of the error in the invoice.  In the case of an invoice dispute, the undisputed portion(s) of the invoice(s) (or if applicable refund statement(s)) shall be paid on the same net [**] calendar day basis.  The disputed portion will be paid, or refunded, net [**] days after the dispute is resolved.

4.The Parties shall use all reasonable efforts to resolve any invoice dispute within [**] calendar days.  Thereafter, any disputed invoice amounts shall be resolved in accordance with the provisions of Article 13, DISPUTES of the General Terms and Conditions.

5.All payments of undisputed invoice amounts received by Westinghouse or adjustments or reimbursements due to Owner more than [**] calendar days from the invoice date shall be subject to late payment charges using the prime interest rate as published by “The Wall Street Journal” on the invoice date plus [**].

6.Any price adjustment made in recognition of changes in the reference EUP Hold Time as provided in Article 5.D, Price Adjustment – Variation of EUP Delivery Time, shall not be subject to the [**].

January 2011 AP1000 Fuel Fabrication Contract Page 10

“[**]” in this Exhibit 10.01 indicates material that has been omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission.

Westinghouse Proprietary Class 2

C.Price Adjustment

1.[**]

[**]

[**]

[**]

[**]

[**]

[**]

[**]

[**]

[**]

[**]

[**]

[**]

[**]

[**]

January 2011 AP1000 Fuel Fabrication Contract Page 11

“[**]” in this Exhibit 10.01 indicates material that has been omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission.

Westinghouse Proprietary Class 2

[**]

2.[**]

[**]

[**]
[**]	[**]
[**]
[**]	[**]
[**]	[**]
[**]
[**]	[**]
[**]	[**]

[**]
[**]	[**]
[**]	[**]
[**]	[**]
[**]	[**]

3.Calculation of Price

a.A provisional total Price will be calculated based on the base price as defined in the Fuel Alliance Agreement plus price adjustment.  For purposes of the provisional total price adjustment, the latest available index value two (2) months prior to the scheduled invoice date will be used.  The price adjustment shall be computed as the change in weighted index value from the base month to the latest available month.  The schedule and amount of each payment shall be made in accordance with the provisions of Appendix 8, Payment Schedules.  The provisional price shall be used as the basis for all progress payments.

January 2011 AP1000 Fuel Fabrication Contract Page 12

“[**]” in this Exhibit 10.01 indicates material that has been omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission.

Westinghouse Proprietary Class 2

b.A final Price will be calculated based on final indices for the reference month(s) as defined in Article 5.C.1.e above.  The final escalation shall be computed as the change in weighted index values from the base month to the reference month.  The invoice for the final Price adjustment payment will be issued when all final index values are available.  The final Price adjustment is calculated as the difference between the final Price and the provisional Price.  Payment of this invoice is due [**] days after the Owner has received all required invoices and associated documentation and found them in order.  The schedule and amount of each payment shall be made in accordance with the provisions of Appendix 8, Payment Schedules.

D.Price Adjustment – Variation of EUP Delivery Time

1.The Owner is required to deliver the EUP to Westinghouse DDP (Incoterms 2000) Fabrication Facility as defined in Appendix 5, OWNER’S EUP as required for each Initial Cores and Reload Region fabrication with an EUP Hold Time as defined in Article 6.C, Material Delivery Schedule.

2.The Owner shall have the right to request a reduction of the EUP Hold Time as defined in Article 6.C, Material Delivery Schedule at the same time as the FSDD is defined as specified in Article 6.A, Fuel Assembly Delivery Schedules.  Westinghouse shall have the right to accept, reject or modify the Owner’s request for EUP Hold Time reduction at its sole discretion within [**] of the request.  In the event that both Parties agree to reduce the EUP holding time, the price of the Reload Region shall be [**] as defined in Article 5.D.4.

3.Westinghouse shall have the right to request an increase of the EUP Hold Time as defined in Article 6.C, Material Delivery Schedule at the same time as the FSDD is defined as specified in Article 6.A, Fuel Assembly Delivery Schedules.  The Owner shall have the right to accept, reject or modify Westinghouse’s request for EUP Hold Time increase at its sole discretion within [**] of the request.  In the event that both Parties agree to increase the EUP Hold Time, the price of the Reload Region of Fuel Assemblies shall be [**] as defined in Article 5.D.4.

4.The Fuel Assembly fabrication price adjustment in US dollars for agreed variation in EUP Hold Time as defined above in Article 5.D.2 and Article 5.D.3, above shall be calculated for each Reload Region of Fuel Assemblies as defined below in Equation 5.D.4-1.  The price adjustment calculated by equation 5.D.4-1 below shall be rounded to the nearest US dollar:

[**]Equation 5.D.4-1

Where:

[**]

January 2011 AP1000 Fuel Fabrication Contract Page 13

“[**]” in this Exhibit 10.01 indicates material that has been omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission.

Westinghouse Proprietary Class 2

[**]

[**]

[**]

[**]

[**]

[**]

[**]

[**]

[**]

[**]

[**]

January 2011 AP1000 Fuel Fabrication Contract Page 14

“[**]” in this Exhibit 10.01 indicates material that has been omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission.

Westinghouse Proprietary Class 2

5.The EUP Hold Time price adjustment shall be included in the first Fuel Assembly invoice issued by Westinghouse after the delivery of the EUP to the Fabrication Facility.

6.This price adjustment shall not be effective to the extent that the Owner, for its convenience, delivers the EUP earlier than the agreed or contractual EUP Hold Time in the absence of Westinghouse’s formal request for early EUP delivery.  Nonetheless, Westinghouse will make reasonable efforts to accommodate the Owner’s convenience for early EUP delivery at no additional charge subject to the availability of storage space at the Fabrication Facility and the Owner’s grant of rights for Westinghouse to use the EUP in its Fabrication Facility upon delivery.

January 2011 AP1000 Fuel Fabrication Contract Page 15

“[**]” in this Exhibit 10.01 indicates material that has been omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission.

Westinghouse Proprietary Class 2

ARTICLE 6SCHEDULES

A.Fuel Assembly Delivery Schedules

1.The Owner and Westinghouse shall, at least [**] in advance of the date the last Fuel Assembly and Core Components of the Initial Core are required to be shipped, mutually establish an Initial Core Tentative Scheduled Delivery Date, hereinafter referred to as ICTSDD.  Simultaneous with the establishment of the ICTSDD, the Owner shall provide an updated estimate of the long-term fuel and burnable absorber requirement schedules presented in Appendix 4, REPRESENTATIVE RELOAD REGION FUEL ASSEMBLY REQUIREMENTS AND SCHEDULE.  The ICTSDD will be updated by mutual agreement of the Owner and Westinghouse every [**] subsequent to the initial estimate.  Adjustments to the ICTSDD during the [**] period from the initial estimate shall be no earlier than the original estimate and no greater than a total of [**] later unless otherwise mutually agreed by the Parties.

2.Not later than [**] prior to the previously established ICTSDD, Owner and Westinghouse will mutually establish an Initial Core Final Scheduled Delivery Date, hereinafter referred to as ICFSDD.  The ICFSDD shall not be more than [**] later or earlier than the final ICTSDD unless otherwise mutually agreed.

3.Westinghouse will not commence delivery of the Initial Core Fuel Assemblies earlier than [**] prior to the ICFSDD, unless otherwise mutually agreed.

4.For other hardware, such as primary source assemblies, replica assemblies, model fuel assembly, model core components, the delivery dates will be by mutual agreement.

5.For each Reload Region, Owner and Westinghouse, at least [**] in advance of the date the last Fuel Assembly of that Region is required to be Delivered, will mutually establish a Tentative Scheduled Delivery Date, hereinafter referred to as TSDD.  Simultaneous with the establishment of the TSDD, the Owner shall provide an updated estimate of the long-term fuel requirement schedules presented in Appendix 4, REPRESENTATIVE RELOAD REGION FUEL ASSEMBLY REQUIREMENTS AND SCHEDULE.

6.Not later than [**] prior to the previously established TSDD, Owner and Westinghouse will mutually establish a Final Scheduled Delivery Date, hereinafter referred to as FSDD.  The FSDD shall not be more than [**] later or earlier than the TSDD unless otherwise mutually agreed. At the same time as the FSDD is established, Owner shall request the shipping schedule.

7.Westinghouse will either agree to the proposed shipping schedule or request an alternate schedule within [**]. Westinghouse will not commence delivery of the Reload Region of Fuel Assemblies earlier than [**] prior to the FSDD, unless otherwise mutually agreed.

January 2011 AP1000 Fuel Fabrication Contract Page 16

“[**]” in this Exhibit 10.01 indicates material that has been omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission.

Westinghouse Proprietary Class 2

8.The prices and terms of the Contract are based on shipment of Fuel Assemblies on a nominal [**] Cycle basis as presented in Appendix 4, REPRESENTATIVE RELOAD FUEL ASSEMBLY REQUIREMENTS AND SCHEDULE and in accordance with this Article 6.A, Delivery Schedules.  No adjustment to the schedules, as required in this Article 6.A shall exceed [**] without the mutual agreement of the Parties.

9.Any change in shipment schedules which causes the Final Scheduled Delivery Date to exceed the limits of this Article 6.A, Delivery Schedules by more than [**] shall be subject to adjustment in accordance with Article 8, EXTENSION OR SUSPENSION.

10.With the exception of primary source assemblies, Westinghouse will use its commercially reasonable efforts to ship the Core Components to be used in the Initial Core in the Fuel Assembly for which the specific Core Component is to reside during the Initial Core.

11.Westinghouse will assemble the primary source assembly at the Plant upon arrival of the primary source rodlets at the Plant.  The Owner will provide its assistance in receiving the primary source and returning the shipping cask as required by the Supplier of the primary source rodlets.

12.Spare NG-RCCAs, GRCAs and thimble plugging devices will be shipped to the Owner in containers suitable for covered warehouse storage typical in the commercial nuclear power industry of these Core Components, until eventual use.

B.Energy Requirements Schedule

1.Owner will notify Westinghouse of its estimate of its operating requirements for all Cycles affected by the given Reload Region design at least [**] in advance of the TSDD, if Westinghouse is to perform the core design scope.

2.Westinghouse, or Owner, will provide the tentative enrichments and loadings for the Reload Region within [**] after Owner notifies Westinghouse in accordance with Article 6.B.1, above.

3.If Westinghouse is performing the Core design, Owner will notify Westinghouse of its final operating requirements for the given Cycle, and tentative requirements for the applicable subsequent Cycles, at least [**] prior to the TSDD, unless otherwise agreed by the Parties.

4.Westinghouse will notify Owner of final proposed design enrichments and loadings for the Reload Region within [**] after Owner notifies Westinghouse in accordance with Article 6.B.3, above unless otherwise agreed by the Parties.

5.Owner to provide final approval of the Westinghouse proposed final design enrichments and loadings no later than [**] after Westinghouse provides the proposed design enrichments and loadings unless otherwise agreed by the Parties.

January 2011 AP1000 Fuel Fabrication Contract Page 17

“[**]” in this Exhibit 10.01 indicates material that has been omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission.

Westinghouse Proprietary Class 2

6.When Owner performs the Core design, Owner is to provide the final core loading plan at least [**] prior to the FSDD.

C.Material Delivery Schedule

1.The reference EUP Hold Time for the Reload Regions constituting the Initial Core shall be [**].

2.The reference EUP Hold Time for the Reload Regions constituting Reload Regions shall be [**].

3.The actual EUP Hold Time for each Reload Region Delivered under this Contract shall be determined by the Parties as defined in Article 5.D.2 and Article 5.D.3.

4.The Owner shall deliver the EUP required for each Reload Region to Westinghouse no later than the actual EUP Hold Time as defined in Article 6, SCHEDULES.  Changes to the EUP Hold Time can be made as defined in Article 4, CHANGES TO GENERAL WORK SCOPE, of the General Terms and Conditions, and/or Article 5.D, Price Adjustment – Variation of EUP Delivery Time.  In addition, Westinghouse may, at its sole discretion, delay the FSDD on a [**] basis or until such time as a new manufacturing slot with sufficient capacity becomes available to compensate the late EUP delivery.

5.EUP Delivery shall be deemed to have occurred when either the Owner physically delivers the EUP DDP Fabrication Facility (Incoterms 2000) or other mutually agreed to locations, or in the case Westinghouse maintains a delivery optimization program with the Owner’s Enricher, the Owner authorizes the Book Transfer of the EUP to Westinghouse’s account.

January 2011 AP1000 Fuel Fabrication Contract Page 18

“[**]” in this Exhibit 10.01 indicates material that has been omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission.

Westinghouse Proprietary Class 2

ARTICLE 7[**]

A.[**]

[**]

[**]

[**]

[**]

B.[**]

[**]

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C.[**]

[**]

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January 2011 AP1000 Fuel Fabrication Contract Page 19

“[**]” in this Exhibit 10.01 indicates material that has been omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission.

Westinghouse Proprietary Class 2

[**]

[**]

[**]

[**]

D.[**]

[**]

[**]

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January 2011 AP1000 Fuel Fabrication Contract Page 20

“[**]” in this Exhibit 10.01 indicates material that has been omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission.

Westinghouse Proprietary Class 2

[**]

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January 2011 AP1000 Fuel Fabrication Contract Page 21

“[**]” in this Exhibit 10.01 indicates material that has been omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission.

Westinghouse Proprietary Class 2

E.[**]

[**]

[**]

[**]

[**]

[**]

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F.[**]

[**]

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January 2011 AP1000 Fuel Fabrication Contract Page 22

“[**]” in this Exhibit 10.01 indicates material that has been omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission.

Westinghouse Proprietary Class 2

[**]

[**]

[**]

[**]

[**]

January 2011 AP1000 Fuel Fabrication Contract Page 23

“[**]” in this Exhibit 10.01 indicates material that has been omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission.

Westinghouse Proprietary Class 2

[**]

[**]

[**]

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January 2011 AP1000 Fuel Fabrication Contract Page 24

“[**]” in this Exhibit 10.01 indicates material that has been omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission.

Westinghouse Proprietary Class 2

[**]

[**]

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G.[**]

[**]

[**]

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January 2011 AP1000 Fuel Fabrication Contract Page 25

“[**]” in this Exhibit 10.01 indicates material that has been omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission.

Westinghouse Proprietary Class 2

[**]

H.[**]

[**]

[**]

[**]

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I.[**]

[**]

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January 2011 AP1000 Fuel Fabrication Contract Page 26

“[**]” in this Exhibit 10.01 indicates material that has been omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission.

Westinghouse Proprietary Class 2

[**]

[**]

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J.[**]

[**]

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January 2011 AP1000 Fuel Fabrication Contract Page 27

“[**]” in this Exhibit 10.01 indicates material that has been omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission.

Westinghouse Proprietary Class 2

K.[**]

[**]

January 2011 AP1000 Fuel Fabrication Contract Page 28

“[**]” in this Exhibit 10.01 indicates material that has been omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission.

Westinghouse Proprietary Class 2

ARTICLE 8EXTENSION OR SUSPENSION

A.Extension or Suspension

1.At Westinghouse’s option, the Work may be deemed to be suspended in the event Westinghouse is delayed due to acts or omissions of Owner or Owner’s contractors or suppliers.

2.In the event of an extension or suspension, if in Westinghouse’s opinion any of the Work is in a state of performance such that interruption of the work would result in substantially increased costs, Westinghouse, after notice to Owner, may complete and store that portion of the Work.

3.In the event the delivery schedules are extended or the Work is suspended pursuant to this Article 8.A, the Contract terms and conditions will be equitably adjusted pursuant to Article 8.B, Resumption and Adjustment.

4.[**]

B.Resumption and Adjustment

1.Westinghouse will resume any Work which has been suspended when Westinghouse is satisfied that Owner has successfully resolved the cause(s) triggering such suspension, subject to the availability of the Fabrication Facility and other affected manufacturing facilities, qualified personnel, pre-existing commitments, and resolution of all other effects of such extension or suspension.

2.The delivery schedules and the time for performance will be extended by a period of time necessary to overcome the effects of any suspension of the Work.

3.The base price of the affected item will be equitably adjusted by Westinghouse to reflect any additional expense and risk incurred by Westinghouse by reason of such extension or suspension and, if appropriate, storage.  [**]

4.Westinghouse will make reasonable efforts to minimize such additional expense.

5.Other pertinent provisions of the Contract, such as the Scheduled Delivery Date and terms of payment, will be adjusted as necessary and appropriate.

6.All such adjustments shall be made promptly after Owner’s request for such extension or suspension, or, if appropriate, after Westinghouse has deemed the work suspended pursuant to Article 8. A, Extension or Suspension.

January 2011 AP1000 Fuel Fabrication Contract Page 29

“[**]” in this Exhibit 10.01 indicates material that has been omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission.

Westinghouse Proprietary Class 2

7.Owner will make all payments due to Westinghouse for such extension on suspension pursuant to the provisions of Article 5, INVOICING AND PAYMENT.

January 2011 AP1000 Fuel Fabrication Contract Page 30

“[**]” in this Exhibit 10.01 indicates material that has been omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission.

Westinghouse Proprietary Class 2

ARTICLE 9TERM AND TERMINATION

A.[**]

[**]

[**]

[**]

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[**]	[**]
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January 2011 AP1000 Fuel Fabrication Contract Page 31

“[**]” in this Exhibit 10.01 indicates material that has been omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission.

Westinghouse Proprietary Class 2

B.[**]

[**]

[**]

[**]

[**]

[**]

C.[**]

[**]

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January 2011 AP1000 Fuel Fabrication Contract Page 32

“[**]” in this Exhibit 10.01 indicates material that has been omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission.

Westinghouse Proprietary Class 2

[**]

[**]

[**]

D.Termination for Change of Control

The Owner will promptly notify Westinghouse of an attempt to effect a change in ownership of one or both Units or Owner and the Parties will cooperate to devise mechanisms to protect Westinghouse’s interests affected by such change.  Nonetheless, Westinghouse shall have the right to terminate this Contract in the event of a Change in Control of one or both Units or control of the Owner which is adverse, in Westinghouse’s reasonable discretion, to its business interests.  [**]

E.Termination for Cause

1.Owner may terminate the Contract in the event that:

a.Westinghouse breaches its material obligations under this Contract; or

b.[**]

c.Westinghouse goes into liquidation other than as part of a corporate reorganization or enters into composition with its creditors or becomes insolvent or shall cease to carry on its business.

January 2011 AP1000 Fuel Fabrication Contract Page 33

“[**]” in this Exhibit 10.01 indicates material that has been omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission.

Westinghouse Proprietary Class 2

[**]

2.[**]

3.Westinghouse may terminate the Contract in the event that:

a.Breaches its material obligations under this Contract; or

b.Owner shall go into liquidation other than as part of a corporate reorganization or enters into composition with its creditors or becomes insolvent or shall cease to carry on its business, or

c.Owner’s attempt to assign the Contract to a competitor of Westinghouse in the nuclear fuel fabrication industry without Westinghouse’s consent.

[**]

F.General Obligations at Termination

1.[**]

2.After receipt of a notice of termination and except as otherwise directed by the Owner, Westinghouse shall:

a.Stop work under the Contract on the date specified in the notice of termination;

January 2011 AP1000 Fuel Fabrication Contract Page 34

“[**]” in this Exhibit 10.01 indicates material that has been omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission.

Westinghouse Proprietary Class 2

b.Place no further orders or subcontracts for materials, services or facilities except as directed by the Owner;

c.Terminate all orders and subcontracts to the extent directed by the Owner;

d.Either:

i.To the extent permissible, assign to the Owner, in the manner, at the times, and to the extent directed by the Owner, all of the right, title, and interest of Westinghouse under the orders and subcontracts so terminated, in which case the Owner shall settle or pay at its sole expense, on behalf of itself and Westinghouse, any or all claims arising out of the termination of such orders and subcontracts; or

ii.Settle all outstanding liabilities and all claims arising out of such termination of orders and subcontracts, which settlements shall be final for all the purposes of this article;

e.Transfer title and deliver to the Owner in the manner, at the times, and to the extent, if any, directed by the Owner:

i.The fabricated, parts, work in progress, completed work, articles, and other material produced as a part of, or acquired in connection with the performance of the work terminated by the notice of termination; and

ii.The completed or partially completed non-proprietary plans, drawings, information, and other property which, if the contract had been completed, would have been required to be furnished to the Owner.

f.Use its best efforts to sell any property of the types referred to in Article 9.2.e.i; provided, however, that Westinghouse shall not be required to extend credit to any purchaser.

g.Complete performance of such part of the Work as shall be directed by the Owner; and

h.Take such action as may be necessary, or as the Owner may direct, for the protection, defabrication and preservation of the property related to this Contract which is in the possession of Westinghouse and in which the Owner has or may acquire an interest.

3.All [**] the provisions of Article 5, COMPENSATION, of the Alliance Agreement.

4.A Regulatory shutdown order shall be deemed to be final if a non-appealable order is issued by a Regulatory Authority having jurisdiction over the Plant or if Owner abandons its efforts to reverse such shutdown order or comply with the terms to re-start the Unit.

5.The termination fees set forth above are subject to price adjustment in accordance with Article 5, INVOICING AND PAYMENT of this Contract.

January 2011 AP1000 Fuel Fabrication Contract Page 35

“[**]” in this Exhibit 10.01 indicates material that has been omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission.

Westinghouse Proprietary Class 2

6.Payment of Termination Costs and termination fees shall be made by Owner within [**] of issuance of the Westinghouse invoice.

7.All costs to complete in-process Work and all termination charges shall be due and payable as listed in Articles 5.A, Invoicing and 5.B, Terms of Payment.

8.Provision of the remedies in the manner and for the period of time provided herein shall constitute complete fulfillment of all the liabilities of the Parties for termination or partial termination of the Contract and damages resulting therefrom, whether the claims by the Parties are based in contract, in tort (including negligence and strict liability), under any warranty or otherwise.

9.Except as expressly set forth in Article 9.B.1, in no event will Westinghouse be required to refund any payments received from Owner prior to the date of termination.

January 2011 AP1000 Fuel Fabrication Contract Page 36

“[**]” in this Exhibit 10.01 indicates material that has been omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission.

Westinghouse Proprietary Class 2

ARTICLE 10LIMITATION OF LIABILITY

A.Neither Westinghouse nor its Suppliers will be liable to Owner, whether in contract, in tort (including negligence and strict liability), under any warranty, or otherwise, for any special, indirect, incidental, or consequential loss or damage whatsoever; any loss of use of equipment, Plant or power system, cost of capital, loss of profits or revenues or the loss of use thereof, cost of purchased or replacement power (including additional expenses incurred in using existing power facilities), increased costs of any kind or claims of customers of the Client.

B.The provisions of this Article 10, LIMITATION OF LIABILITY shall apply to the full extent permitted by law, regardless of fault and notwithstanding any other provisions of the Contract.

C.THE REMEDIES SET FORTH HEREIN ARE EXCLUSIVE AND THE TOTAL CUMULATIVE LIABILITY OF WESTINGHOUSE AND ITS SUPPLIERS UNDER THE CONTRACT OR FOR ANY ACT OR OMISSION IN CONNECTION THEREWITH OR RELATED THERETO, WHETHER IN CONTRACT, IN TORT (INCLUDING NEGLIGENCE AND STRICT LIABILITY), UNDER ANY WARRANTY, OR OTHERWISE, WILL BE LIMITED TO: [**].

January 2011 AP1000 Fuel Fabrication Contract Page 37

“[**]” in this Exhibit 10.01 indicates material that has been omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission.

Westinghouse Proprietary Class 2

ARTICLE 11THIRD PARTY FUEL SUPPLY

A.Fuel Assemblies Purchased from Others

1.The Owner shall notify Westinghouse of its intent to request tenders for reload fuel supply no later than [**] prior to Delivery of the final Fuel Assembly under this Contract.

2.Westinghouse shall furnish the Owner the pre-award information specified in Appendix 10.A, Pre-Award Information, for the purpose of tender preparation and contract award, as indicated within [**] of the Owners request for data.

3.The Owner may transmit to other qualified fuel supplier(s) the information contained in Appendix 10.A, Pre-Award Information.  Such information shall be subject to the restriction that it will be provided only for the purpose of obtaining fuel for Owner at the Plant and that it will be treated as Westinghouse Intellectual Property by the Owner under the provisions of Article 10 of the General Terms and Conditions, PROPRIETARY INFORMATION.  Such third party shall execute an appropriate non-disclosure, licensing or similar agreement either with or as agreed to by Westinghouse.  A sample agreement with a third party is provided herein as Appendix 9, PROPRIETARY INFORMATION AGREEMENT (SAMPLE).

4.Following the award of a contract for the supply of Reload fuel assemblies to another supplier, upon request by the Owner, and to the extent that the information is available at the time of the award, Westinghouse shall provide the post-award compatibility information as set forth in Appendix 10.B, Post-Award Information, subject to the restriction that it will be transmitted only to the supplier receiving the reload fuel supply award and that it will be treated as Westinghouse Proprietary Information by the Owner and said supplier for the limited use of supplying fuel only to the Owner’s Plant under the provisions of Article 10 of the General Terms and Conditions, PROPRIETARY INFORMATION.

5.All dimensions and compositions to be provided shall be nominal and will not include tolerances, unless otherwise specifically identified.  Information provided shall be based upon data used by Westinghouse for Fuel Assembly design.  Westinghouse shall have no responsibility with respect to the utilization or application of any furnished information.

B.Lead Use Fuel Assembly (LUA)

1.In order to permit the Owner to determine qualification of other fuel manufacturers, Westinghouse shall, upon the Owner’s request, permit the insertion of LUAs at any scheduled refueling.

2.It is the responsibility of the Owner to demonstrate that these LUAs are compatible with Westinghouse’s supplied Fuel Assemblies and Core Components.

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Westinghouse Proprietary Class 2

3.The number of such LUAs present in the core at any point in time shall be limited to a [**]  Further, insertion of third-party supplied qualification assemblies shall not be of essentially similar designs to those previously inserted.

4.Westinghouse shall be furnished with the post-award information as defined in Appendix 10 B, Post-Award Information, from the other supplier and used in the Owner’s evaluation of compatibility with Fuel Assemblies and Core Components supplied by Westinghouse.

C.[**]

[**]

[**]

[**]

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ARTICLE 12CHANGES TO GENERAL WORK SCOPE

A.Owner may request changes within the general scope of Work covered in the Agreement Documents and, if accepted by Westinghouse, the price, terms of payment, warranties, delivery schedules, and other pertinent provisions of the Agreement Documents shall be equitably adjusted in accordance with Fuel Alliance Agreement prior to making any such change.  Any necessary analytical effort, plus any prototypes, tests, laboratory examinations, or any other investigative work on the proposed change(s) will be to the account of Owner at the time and material rates in effect at the time such work is performed and set forth in the Fuel Alliance Agreement.

B.Changes in the scope of Work required because of regulatory requirements or commitments by Owner to any Regulatory Authority will be in accordance with and governed by the provisions of Article 12.A above.

C.Westinghouse may make changes in the scope of Work hereunder without compensation from Owner if such changes will not adversely affect its warranties, the technical soundness of the Work, operability or ability to license the Plant, or the schedule; provided, however, that no change which increases Owner’s cost for Fuel Assembly or Core Component interface, for installation, or for Plant operation and maintenance will be made without mutual agreement.

---  Signature page follows  ---

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Westinghouse Proprietary Class 2

IN WITNESS WHEREOF, the Parties have hereto set their respective signatures to this Contract.

SOUTH CAROLINA ELECTRIC & GAS COMPANY
By:	/s/ Kevin B. Marsh
Name	Kevin B. Marsh
Title	President
Date	January 25, 2011

WESTINGHOUSE ELECTRIC COMPANY LLC
By:	/s/ Aris S. Candris
Name	Aris S. Candris
Title	President & CEO
Date	January 27, 2011

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Westinghouse Proprietary Class 2

APPENDIX 1[**]

[**]

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APPENDIX 2[**]

[**]

[**]	[**]	[**] [**]	[**]
[**]	[**]	[**]	[**]
[**]	[**]	[**]	[**]
[**]	[**]	[**]	[**]
[**]	[**]	[**]	[**]
[**]	[**]	[**]	[**]
[**]	[**]	[**]	[**]

[**]

[**]	[**]
[**]	[**]
[**]	[**]
[**]	[**]

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Westinghouse Proprietary Class 2

APPENDIX 3[**]

[**]

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APPENDIX 4[**]

[**]

[**]	[**]	[**]	[**]	[**]	[**]	[**]	[**]
[**]		[**]	[**]	[**] [**] [**] [**] [**]	[**] [**] [**] [**] [**]	[**] [**] [**] [**] [**]	[**] [**] [**] [**] [**]
[**]		[**]	[**]	[**] [**]	[**] [**]	[**]	[**]

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APPENDIX 5OWNER’S EUP

The following terms and conditions shall apply to the provision of the Owner’s EUP to Westinghouse.

A.General

1.Owner shall supply nominally one hundred percent (100%) of the EUP (both enriched and natural) required to meet the final EUP loading for each Initial Core and Reload Region to be fabricated by Westinghouse as specified in Article 6.C, Material Delivery Schedule.  Variations of the lead time for the Owner to supply EUP are limited to those defined in Article 6.C, Material Delivery Schedule.  The Owner shall use the design uranium loadings and Assay(s) provided by Westinghouse for planning and advance ordering purposes.  Any differences between design and final loading as well as variations between design and final Assay(s) will be accommodated through the provisions of Appendix 5.F, EUP Accounting Procedure.

2.The Owner shall provide the EUP for the fabrication of the Fuel Assemblies of the Plant in accordance with the following terms and conditions either by physical delivery as described in Appendix 5.B, EUP Delivery by Physical Delivery or by Book Transfer as described in Appendix 5.C, EUP Delivery by Book Transfer.  The Owner may also deliver EUP by a combination of these methods at its discretion.  Feed and SWU content of any delivered EUP shall be calculated as defined in Appendix 5.D, Standard Enricher Formulae for Calculating SWU and Feed.  Any disputes regarding the Assay, quality or quantity of physically delivered EUP shall be resolved as defined in Appendix 5.E, EUP Dispute Procedure.

3.Any cost of transportation for EUP will be to Owner’s account. The cost will be on a $/KgU basis for the fiscal year in which the EUP is delivered. [**]

4.Accounting for the Feed and SWU contained within the Owner’s EUP shall be made in accordance with the conditions set forth in Appendix 5.F, EUP Accounting Procedure.

5.Unless otherwise agreed to by the Parties, all EUP to be delivered by the Owner shall be in type 30B cylinders and meet the ASTM “Standard Specification for Uranium Hexafluoride Enriched to Less Than 5% U235”, C996-96 for non-reprocessed uranium (hereinafter referred as “ASTM C996-96”).  All natural uranium to be delivered by Owner as UF6 shall meet the ASTM Specification C787-90.

6.The actual quantities of EUP delivered shall be subject to a permissible variation by weight of plus or [**], and the actual Assay shall be subject to a permissible variation by weight of plus or minus [**] around such quantities and Assays as previously notified by Westinghouse or determined by Owner.  Notwithstanding this final agreement date, the Parties shall cooperate in the time period prior to the commitment date above and use each of their respective reasonable efforts to optimize the overall EUP supply

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cost of the Initial Core and Reload Region.  These efforts may include the optimization of Assays, blending requirements, EUP source(s), delivery mode(s), form of uranium and quantity.  However, in no event shall either Party be required to commit to any additional requirements beyond the Contract requirements that are not in its business interest or are not otherwise addressed and/or compensated by a separate agreement.

7.The Parties may agree to the supply of EUP as UF6 in quantities and/or Assays that differ from the final Fuel Assembly enrichments for their individual convenience.  Each Party will take reasonable efforts to accommodate the other’s request to optimize the EUP supply.  Nonetheless, the Party requesting deviation from the actual design Assay and/or quantities shall be responsible for costs associated with its request in excess of what would have occurred if the actual design quantity(ies) and Assay(s) had been provided, including the loss of SWU due to blending.

8.If any delivery of EUP is delayed or does not take place for reasons attributable to Owner’s failure, Westinghouse will provide its reasonable assistance to the Owner to obtain replacement delivery of EUP.  In the event that the delayed delivery of EUP impacts the then current manufacturing schedule, Westinghouse shall promptly reschedule delivery after such time as suitable material is made available to Westinghouse.  The delay shall be considered to have been caused by Owner.  Westinghouse shall use reasonable efforts to minimize the delay in delivery to the Owner.  In the event of Owner’s failure to deliver acceptable material in compliance with the requirements of Article 6.C, Material Delivery Schedule, Westinghouse shall be excused from Contract penalty of any kind.  All reasonably incurred efforts or costs incurred by Westinghouse to recover from the Owner’s failure to make timely EUP delivery shall be to the Owner’s account.

9.Westinghouse shall not be responsible for withdrawal, handling, packaging, logistics, sampling or other associated charges levied by the Enricher for EUP and, if required, similar charges levied by the conversion facility for natural uranium.

10.Any duties, taxes or other governmental levies or dues, where ever they may be incurred prior to delivery of EUP to Westinghouse, shall be to the account of the Owner or Enricher.

11.For purposes of calculating adjustments, the Transaction Tails Assay associated with each delivery of EUP to the Fabrication Facility shall be [**] unless otherwise agreed in writing by the Parties.

12.All SWU and Feed Book Transferred and/or physically delivered shall be of an origin(s) and/or specification(s) that is legal for use by Westinghouse as determined by the Regulatory Authorities with jurisdiction over the Fabrication Facility.  The Owner’s failure to meet this condition shall be treated as if the material was not delivered as described above in Appendix 5.A.7.

13.While any of Owner’s EUP is in Westinghouse’s possession, Westinghouse shall bear full responsibility for compliance with the requirements of the United States Department of Energy, the United States Nuclear Regulatory Commission and other applicable laws

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and government regulations concerning control and accountability of enriched and/or natural uranium, and, with respect to all fabricated Fuel Assemblies delivered hereunder, shall provide Owner with complete certified reports stating the quantity(ies) and Assay(s) of the enriched and/or natural uranium contained in each fuel rod and Finished Fuel Assembly.  Westinghouse’s enriched and/or natural uranium accountability and safeguards program shall be subject to audit by Owner.

14.Notwithstanding any of the foregoing, Westinghouse may commingle and treat as fungible Owner’s EUP with other EUP in Westinghouse’s possession.

B.EUP Delivery by Physical Delivery

1.Westinghouse shall take delivery of the EUP at the Fabrication Facility in the form of uranium hexafluoride (UF6) contained in 30B type cylinders and delivered by the Owner in the quantity, quality and Assay required by the time specified above for the affected Sub-region.  The Owner shall allow [**] from the physical delivery of EUP to the Fabrication Facility for analysis and acceptance by Westinghouse.

2.The Owner shall provide sufficient Enriched Uranium in the form of UF6 to compensate for the heel in each 30B cylinder.  The maximum heel quantity of each 30B UF6 cylinder will not exceed that defined by ANSI-N14.1.  Further, Westinghouse will take its reasonable efforts to maximize the extraction of material from each cylinder and thereby minimize the actual heel quantity.

3.The Owner shall provide a copy of the quantity and quality certificate for each cylinder or master cylinder, as applicable, of EUP to be delivered to Westinghouse no later than [**] in advance of the actual physical delivery of EUP.

4.At the Owner’s request and according to provisions of existing EUP logistics agreement with the Owner or its agent(s), Westinghouse will make clean empty 30B cylinders available to be collected by the Owner at the gate of the Fabrication Facility, if available.  This provision is conditioned upon the Owner authorizing cleaning of the empty cylinders as provided in Appendix 5.B.5.  The Owner shall at its own cost make delivery of the cylinders to its designated Enrichment Facility for loading with the EUP and the subsequent supply to the Fabrication Facility. Unless otherwise agreed each uniform lot (master cylinder) shall be accompanied with one P10 sample tube or for each 30B cylinder if traceability to a parent cylinder is not possible.

5.After the cylinders are emptied, subject to an agreed cleaning cost paid by the Owner, the cylinders may be cleaned at the Fabrication Facility using its standard cleaning procedures. One hundred percent (100%) of the recovered heel quantity will be credited to the account of the Owner.

C.EUP Delivery by Book Transfer

1.In the event Owner’s EUP is to be provided by Book Transfer from Enricher’s account at the Fabrication Facility to Owner’s account at the Fabrication Facility:

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a.It is understood and agreed that the Enricher shall have a separate storage and delivery agreement, otherwise known as a “Delivery Optimization Program”, with Westinghouse such that the specifications and delivery mechanisms required to execute a Book Transfer between the Owner and Westinghouse are enabled.  Subject to that separate agreement being in place, the following conditions shall apply:

1.Westinghouse shall promptly provide Owner with a written confirmation of the Book Transfer credit to Owner’s account.

2.EUP credited to Owner’s account shall be deemed to be in conformance with the applicable specifications as defined above.

D.Standard Enricher Formulae for Calculating SWU and Feed

1.The Feed component, or normal uranium feed per unit of product (feed factor):

Equation A5.D.1-1

where:F2P=Feed Component (KgU) per unit of product (KgU)

Xp=Product Assay (weight percent U235)

Xt=Transaction Tails Assay (weight percent U235)

Xf=Feed Assay (equal to 0.711 weight percent U235)

Note:the percents (%) must be converted to decimals for use in the equations.

2.SWU Component, or Separative Work Unit of product (SWU factor):

Equation A5.D.2-1

where:Equation A5.D.2-2

where:Xp, Xt, and Xf are defined above and ln = natural logarithm (base e)

3.For the application of the above formulas:

a.Uranium is expressed in KgU in the form of UF6, rounded to the nearest gram (third decimal place).

b.The uranium Assay is expressed in weight percent rounded to the fourth decimal place.

c.Intermediate calculations are carried to at least eight decimal places.

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d.Feed and SWU factors for each KgU of an Assay are rounded to the third decimal place.

e.The rounding is done by the standard rounding procedure.

E.EUP Dispute Procedure

Should Westinghouse dispute quality or enrichment of the EUP, made available by the Owner:

1.Westinghouse and the Owner shall exchange the information they have on analysis.  They shall promptly agree to choose a referee laboratory.

2.The Enricher shall send its reserve sample of the disputed EUP to the referee laboratory agreed upon by both Parties, with the instructions to obtain an umpire analysis.  This laboratory shall promptly complete its analysis and then promptly notify to the Parties the results of said analysis.

3.If the dispute only relates to the results of the quantity, Westinghouse may commence fabrication before settlement of the dispute.

4.If the dispute relates to the conformity of the EUP to the ASTM C996-96 requirements, Westinghouse shall quarantine such material until settlement of the dispute.  If Westinghouse’s results are confirmed on settlement of the dispute, the Owner shall instruct Westinghouse on disposal arrangements for such non-conforming EUP.  In such case, the Owner shall reimburse Westinghouse for additional extra costs of such disposal such as EUP transport, cylinder rental or insurance charges and promptly replace the disputed EUP.

5.In the case that the Owner’s results are confirmed on settlement of the dispute, Westinghouse shall fabricate the Fuel Assemblies using the Owner’s EUP.  Westinghouse shall have no right to claim for extra costs arising from the EUP dispute as mentioned in the above paragraph.

6.The results to be taken as final shall be the one situated between the two extreme results.

7.If the results of the referee laboratory fall outside those found by the Owner and Westinghouse, the Assay value of the Owner or Westinghouse closest to that of the referee shall be the one finally adopted.

8.The expenses of the referee laboratory including the cost of delivery of the samples, shall be paid by the Party whose Assay results are farthest from those of the referee, unless the referee laboratory’s results fall exactly half-way between those of the parties, in which case each Party shall pay one-half the expense.

9.Under the terms of this Section, nothing herein shall prevent the Parties from performing the analysis again themselves or otherwise resolving any differences in analysis without having recourse to a referee laboratory provided that both Parties mutually agree hereto in writing.

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F.EUP Accounting/Reconciliation Procedure

1General

The fabrication of Fuel Assemblies may result in the use of quantities of natural and enriched uranium that are different from that supplied by Owner. Owner shall supply both natural uranium and enriched uranium as specified in Appendix 5.A. Westinghouse shall deliver to Owner Fuel Assemblies containing natural and enriched uranium in the form of UO2. The material variance in natural and enriched uranium actually supplied by Owner and by Westinghouse shall be settled in accordance with the provisions specified below.  An example of Feed/SWU reconciliation is provided in Table 5.1.  An example of EUP reconciliation is provided in Table 5.2.

2.Procedure.

a.Depending on the material supplied by Owner, the following reconciliation procedures will apply.  For uranium hexafluoride reconciliation, the procedure will be to compare the calculated values of Feed and SWU that are contained in the enriched uranium hexafluoride supplied by Owner with the calculated values of Feed and SWU, contained in the Fuel Assemblies as enriched UO2, that are delivered by Westinghouse and make a financial settlement based on the Feed and SWU differences and the actual prices paid by Owner for Feed and SWU. The Feed includes two components, namely U3O8, and conversion. This procedure will also be used to compare the quantity of natural uranium hexafluoride supplied by Owner for axial blankets with the quantity of natural UO2 delivered by Westinghouse and make a financial settlement based on the difference and the actual price paid by Owner for the natural uranium hexafluoride.

b.For EUP reconciliation, the procedure will be to compare the value of EUP supplied by Owner with the calculated value of enriched UO2 that is delivered by Westinghouse and make financial settlement based on the differences and the actual prices paid by Owner for EUP.  The unit prices for the UO2 shipped in Fuel Assemblies can be developed by linear interpolation, using the Owner’s EUP pricing schedule.

c.Sufficient EUP price information will be provided by Owner for a given Sub-region at the appropriate time, to bound all actual enrichments.  These prices, with the associated enrichments, will be used to determine the dollar ($) difference between the value of the EUP shipped to Westinghouse and the UO2 contained in the shipped Fuel Assemblies.

d.The financial settlement will be made no later than three (3) months after Shipment of the Initial Core or Reload Region.

e.In Table 5.1, the number of kilograms of natural uranium hexafluoride, the number of kilograms of enriched uranium hexafluoride, the number of SWU, the transaction tail value(s) and the enrichment(s) in weight percent U235, are denoted by KgU Nat, KgU, SWU, TAILS, and W/0 respectively.

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f.In Table 5.2, the enrichment of the EUP, the number of kilograms of EUP, the dollar price of the EUP, are denoted by W/0, KgUe, and $/KgUe respectively.

3.Calculated Values of Feed and SWU in Material Supplied by Owner

The KgU, W/0 and Tails (agreed to by Owner and Enricher) of the enriched uranium hexafluoride supplied by Owner, including samples delivered to Westinghouse, will be listed and be grouped by nominal W/0 and transaction tail values as shown in Section I of Table 5.1. Based on the actual W/0 and transaction tail values, the Feed Factor (“FF”) and SWU Factor (“SF”) will be calculated and shown using the accepted Enricher tables in effect on the date of this Fuel Contract.

4.Feed Values

The Feed or KgU Nat values are determined by multiplying the KgU at each W/0 times the calculated FF.

5.SWU Values

The SWU values are determined by multiplying the KgU at each W/0 times the calculated SF.

Also included in Section I of the reconciliation, but not shown on Table 5.1, will be a listing of natural uranium hexafluoride supplied by Owner for axial blankets.

6.Calculated Values of Feed and SWU in Material Shipped by Westinghouse

If the enriched uranium hexafluoride supplied to Westinghouse by Owner was enriched at different transaction tail values, then, for each nominal W/0, the percentage of the total KgU supplied by Owner to Westinghouse at such nominal W/0 which was enriched at each transaction tail value will be determined. For purposes of reconciliation, it shall be assumed that the KgU at such nominal W/0 are supplied to Owner by Westinghouse with (1) the same transaction tail value(s) and (2) the same percentage(s) for such transaction tail value(s) as determined above.  [**]

Also included in Section II of the reconciliation, but not shown on Table 5.1, will be a listing of natural uranium hexafluoride shipped by Westinghouse for axial blankets.

7.Reconciliation

The Feed and SWU reconciliation at each of the transaction tail values, as shown in Section IV of Table 5.1, will be accomplished by comparing the Feed and SWU values for the material supplied by Owner with the Feed and SWU values for the material shipped by Westinghouse. The Owner will provide to Westinghouse prior to Shipment a

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statement of direct costs for Feed and SWU for the applicable transaction tails. In the case of SWU, the cost will include the price paid to the Enricher for SWU and will not include such things as packaging and handling, sampling, variable tails charges, transportation, interest on late payment or late Feed charges. For purposes of reconciliation and determination of Feed costs, Owner will apply the lowest cost Feed associated with the total Initial Core or Reload Region against the KgUs with the highest transaction tails first. The purpose is to use low price Feed with high transaction tails and use high price Feed with low transaction tails to minimize the dollar amount one Party may owe the other Party.

[**].

8.Verification of KgU and Enrichment

The KgU and enrichment(s) of uranium hexafluoride supplied by Owner shall be the final shipper KgU and enrichment(s) as reported by Enricher on the Nuclear Material Transaction Reports (NRC Form 741) or equivalent. The KgU and enrichment(s) contained in the Fuel Assemblies shipped by Westinghouse shall be the final shipper KgU and enrichment(s) as reported on the Nuclear Material Transaction Reports (NRC Form 741) or equivalent.

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TABLE 5.1

[**]

[**]
[**]	[**]	[**]	[**]	[**]	[**]	[**]	[**]	[**]
[**]	[**]	[**]	[**]	[**]	[**]	[**]	[**]	[**]
		[**]	[**]	[**]	[**]	[**]	[**]	[**]
	[**]	[**]	[**]	[**]	[**]	[**]	[**]	[**]
		[**]	[**]	[**]	[**]	[**]	[**]	[**]
	[**]	[**]	[**]	[**]	[**]	[**]	[**]	[**]
[**]		[**]				[**]		[**]
[**]	[**]	[**]	[**]	[**]	[**]	[**]	[**]	[**]
	[**]	[**]	[**]	[**]	[**]	[**]	[**]	[**]
	[**]	[**]	[**]	[**]	[**]	[**]	[**]	[**]
[**]		[**]				[**]		[**]
[**]		[**]				[**]		[**]
[**]	[**]	[**]	[**]	[**]	[**]	[**]	[**]	[**]
		[**]	[**]	[**]	[**]	[**]	[**]	[**]
	[**]	[**]	[**]	[**]	[**]	[**]	[**]	[**]
	[**]	[**]	[**]	[**]	[**]	[**]	[**]	[**]
		[**]	[**]	[**]	[**]	[**]	[**]	[**]
	[**]	[**]	[**]	[**]	[**]	[**]	[**]	[**]
		[**]	[**]	[**]	[**]	[**]	[**]	[**]
	[**]	[**]	[**]	[**]	[**]	[**]	[**]	[**]
[**]		[**]				[**]		[**]
[**]		[**]				[**]		[**]
[**]
[**]	[**]	[**]	[**]	[**]	[**]	[**]	[**]	[**]
[**]	[**]	[**]	[**]	[**]	[**]	[**]	[**]	[**]
[**]		[**]	[**]	[**]	[**]	[**]	[**]	[**]
[**]		[**]				[**]		[**]

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[**]
[**]
[**]	[**]		[**]	[**]
[**]	[**]		[**]	[**]
[**]	[**]		[**]	[**]
[**]			[**]	[**]
[**]			[**]	[**]
[**]		[**]
[**]
[**]	[**]		[**]	[**]
[**]	[**]		[**]	[**]

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[**]

[**]

		[**]	[**]	[**]	[**]
[**]	[**]	[**]	[**]	[**]	[**]
		[**]	[**]	[**]	[**]
[**]	[**]	[**]	[**]	[**]	[**]
		[**]	[**]	[**]	[**]
[**]					[**]

[**]

[**]

[**]	[**]
[**]	[**]
[**]	[**]
[**]	[**]
[**]	[**]
[**]	[**]
[**]	[**]

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APPENDIX 6CYCLE DESIGN REPORT CONTENTS

The Cycle Design Report describes the nuclear, thermal/hydraulic and mechanical design for the Initial Core, each reload Cycle, and each Unit for Core operation purposes.  This scope is subject to changes as agreed to by the Parties.

1.A description of the Core, including Initial Core and Reload Region design enrichments and loadings, the Core loading pattern, and the quantity and location of integral and insert burnable absorbers;

2.Calculated Core power distributions for normal operating conditions at Beginning of Cycle (“BOC”), Middle of Cycle (“MOC”) and End of Cycle(“EOC”) and expected power margin during baseload operation throughout Cycle exposure;

3.BOC control rod worth, control rod groupings recommendations throughout Cycle exposure, the expected operating insertion range of the control rod groups, including insertion limits, ARO position recommendations, and GRCA exchange recommendations, and Core shutdown margin for BOC and EOC conditions; and

4.Predictions of Core physics parameters including cycle lifetime, BOC and EOC fuel isotopic concentrations, and BOC startup reactivity coefficients for the Cycle.

5.Startup physics test input data and predicted results.

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APPENDIX 7 INTENTIONALLY LEFT BLANK

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APPENDIX 8[**]

[**]

[**]

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January 2011 AP1000 Fuel Fabrication Contract Page 59

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Westinghouse Proprietary Class 2

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January 2011 AP1000 Fuel Fabrication Contract Page 60

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APPENDIX 9PROPRIETARY INFORMATION AGREEMENT (SAMPLE)

AGREEMENT effective as of                  by and among Westinghouse Electric Company LLC (“Westinghouse”), South Carolina Electric & Gas Company (“Owner”) and one or more representatives of ___________________________, (said representatives and organization hereafter severally and collectively referred to as “Recipient”).

W I T N E S S E T H :

WHEREAS, Owner and Westinghouse are parties to a Fuel Contract dated as of ____________________ covering the supply of nuclear fuel assemblies for _________ _________________________________ (“Plant”); and

WHEREAS, Recipient [insert specific work that Recipient is performing] for Owner in connection with the Plant; and

WHEREAS, to fulfill Recipient’s obligations to Owner, Recipient will require certain Westinghouse proprietary information which Westinghouse treats as proprietary, relating to the fuel assembly design and construction (“Information”); and

WHEREAS, Westinghouse is willing to disclose Information to Recipient either directly or through Owner on the terms and conditions set forth below.

NOW, THEREFORE, in view of the promises and mutual covenants contained herein, the Parties agree as follows.

1.Recipient will use Information disclosed to it either directly by Westinghouse or through Owner to Recipient solely in fulfilling Recipient’s responsibility to Owner in [insert specifics with respect to the type of work to be performed in connection with the Plant].

2.Recipient will maintain the Information disclosed under this Agreement proprietary.

3.Recipient will not use the proprietary information for any purpose except in accordance with Paragraph 1, above.

4.Recipient shall not transmit or further disclose Information furnished hereunder to any other party including parent organizations of Recipient, sister organizations of Recipient, other divisions or subsidiaries of Recipient, consultants of Recipient, and subcontractors of Recipient, without first obtaining the prior written approval of Westinghouse.  In the event Westinghouse approves of such disclosure or transmittal, by specific written consent, Recipient will first obtain the commitment from said other party making the terms of this Agreement applicable to such other party and shall thereafter disclose or transmit such Information to such other party only on a proprietary basis.  In the event the other party is a governmental authority, Recipient shall use its best efforts to effect such transmittal only through Westinghouse or Owner, but in any event no disclosure

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may be made by Recipient unless Westinghouse in its sole opinion determines that the applicable rules and regulations of the authority provide protection for Information similar to that afforded hereunder.  In the event Westinghouse deems that they do not offer such protection, Recipient shall not make such disclosure unless such disclosure is made pursuant to an order of a court of competent jurisdiction, and Westinghouse is given timely notice thereof and a reasonable opportunity to seek a protective order.

5.Recipient shall not make any copy or in any way reproduce or excerpt the Information to be maintained proprietary hereunder, except insofar as necessary to accomplish the purposes set forth in Paragraph 1 above (provided such excerpts and copies include Westinghouse’s proprietary markings), without the prior written consent of Westinghouse.

6.Recipient or Owner may not assign this Agreement.

7.Westinghouse retains all rights, title, and interest in and to the Information transmitted under this Agreement.  Recipient shall return such Information to Westinghouse or Owner together with any copies or reproduction thereof upon completion of the purposes of Paragraph 1 above or upon the written request of Owner, except Recipient may retain a copy of such Information solely as required by governmental regulatory authorities as part of established and approved quality assurance programs, but for no other purpose.

8.Nothing herein contained shall apply to any information:

a.which is now generally known or available on an unrestricted basis to the trade or public or which becomes so known or available on an unrestricted basis without the fault of Recipient;

b.which is already possessed by Recipient in writing without restriction as to its disclosure or use prior to its receipt from Westinghouse or from Westinghouse through Owner;

c.which is disclosed in any issued patent, publication, or other source from and after the time it becomes generally available to the public; or

d.which is acquired on an unrestricted basis from any third party, provided that Recipient does not know or have reason to know or is not informed subsequent to disclosure by such third party and prior to disclosure by Recipient, that such information was acquired under an obligation to maintain as proprietary.

9.It is mutually understood that nothing herein shall be construed as granting or implying any right under any Letters Patent or to use any Information claimed therein, or as permitting Recipient to unfairly obtain the right to use Information which becomes publicly known through an improper act or omission on its part.

10.As between RECIPIENT and WESTINGHOUSE, all rights with respect to INFORMATION, heretofore or hereafter acquired under the patent or copyright laws of the United States and all foreign countries, are hereby expressly reserved to WESTINGHOUSE who may divulge such INFORMATION under this Agreement.

January 2011 AP1000 Fuel Fabrication Contract Page 62

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11.RECIPIENT shall not, at any time, without the prior written approval of WESTINGHOUSE, file, cause or authorize the filing of any patent application in any country in respect of any invention derived from the Information supplied hereunder.

12.This Agreement shall enure to the benefit of Westinghouse and shall be enforceable by it.

13.Neither Westinghouse nor its suppliers or subcontractors of any tier shall be liable with respect to or resulting from the use (or the results of such use) or misuse of any information furnished hereunder.

14.Westinghouse makes no warranty or representation, whatsoever, as to the sufficiency or accuracy of the information or as to the results to be obtained therefrom and assumes no responsibility arising from any use or misuse thereof.

15.RECIPIENT agrees not to directly or indirectly transfer, re-export or disclose any WESTINGHOUSE Information, or any direct or indirect products or technical data resulting therefrom to any country, natural person or entity, except in accordance with the laws, regulations or rulings of the United States of America relating to the exportation or re-exportation of commodities or technical data.  Any such transfer, re-export, or disclosure by RECIPIENT of WESTINGHOUSE Information or any direct or indirect products or technical data resulting therefrom to a country listed in 10 CFR § 810.8 (a) will be permitted only after the U.S. Department of Energy provides specific authorization for such transfer, and only with the prior written consent of WESTINGHOUSE. RECIPIENT will insert a similar provision in any agreement it has for the furnishing to third parties or its clients of any direct or indirect products or technical data resulting from such Information or Information if such third parties are authorized by WESTINGHOUSE to receive such WESTINGHOUSE Information pursuant to this Agreement; provided, however, that RECIPIENT shall be solely responsible for its and such third parties’ and clients’ compliance with applicable requirements of U.S. re-export control laws and regulations.  The obligations set forth in this Paragraph 15 shall survive the expiration or termination of this Agreement and shall apply so long as relevant U.S. governmental regulations remain in effect.   In the event of any ambiguity or inconsistency between the provisions of this Article and any other Article of this Agreement, this Paragraph 15 shall be controlling.

14.RECIPIENT agrees to indemnify and hold harmless WESTINGHOUSE from any fines, penalties, or liabilities (including reasonable attorney’s fees) arising from RECIPIENT’s act or omission affecting WESTINGHOUSE’s compliance with United States export control regulations with respect to the Information.  WESTINGHOUSE shall be entitled to all other remedies available in either law or equity to enforce RECIPIENT’s compliance with the provisions of this Agreement.

January 2011 AP1000 Fuel Fabrication Contract Page 63

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IN WITNESS WHEREOF, the Parties have hereto set their respective signatures to this Agreement.

SOUTH CAROLINA ELECTRIC & GAS COMPANY	WESTINGHOUSE ELECTRIC COMPANY LLC
By:	By:
Name	Name
Title	Title
Date	Date

RECIPIENT

By:

Name

Title

Date

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APPENDIX 10COMPATIBILITY DATA

A.Pre-Award Information

The following list of data is the standard compatibility and fuel transition data package agreed by Westinghouse to be provided to other suppliers in order for it to obtain tenders for fuel assembly reloads.  Such provision of data shall only be made at the nominal values without tolerance.  No transmittal of any data shall be made until such time as the Parties and the prospective supplier(s) have executed a three-party non-disclosure/limited use agreement acceptable to Westinghouse as provided Article 18, PROPRIETARY INFORMATION, of this Contract.  Additional data may be included in the list below upon Owner’s request provided that it is demonstrated to Westinghouse’s satisfaction and at its sole discretion that such additional data is necessary for a competent third party to reasonably complete their bid response.  The price associated with the provision of such additional data will be agreed between the Parties at a future date.  Any data provided to the prospective new supplier will be provided only under the condition that the data is that used by Westinghouse and is correct and appropriate only for Westinghouse’s use.  The Owner agrees and understands that there is no warranty for subsequent use or misuse of any data provided to a third party and shall indemnify and hold Westinghouse harmless for any such actions or consequences of the new supplier for said use or misuse.

1.Reactor Description

a.Number of Fuel Assemblies

b.NSSS Power rating

c.Core thermal power rating

d.Equivalent diameter of the core

e.Active height of the core

f.Pitch between Fuel Assemblies

g.Number and location of the control rod drive mechanisms

h.Drawings showing the core (nominal dimensions only)

2.General Fuel Assembly

a.Fuel Assembly length.

b.Fuel rods, guide thimbles and instrumentation tube location and identification in a Fuel Assembly.

c.Drawing of the outline of fuel assembly showing:

d.Dimensions,

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e.Depth of insertion of a control rod, with the origin at the top of the adaptor plate.

2.1.Fuel rod

a.Fuel pellet material

b.Density and nominal dimensions of fuel pellets

c.Fuel stack length

d.Cladding material

e.Outside diameter and thickness of the fuel cladding

f.Pitch between fuel rods

2.2.Guide thimble and instrumentation tube

a.Number of guide thimble and instrumentation tube

b.Material and nominal dimensions of guide thimble and instrumentation tube

2.3.Grids

a.Type of grid

b.Number and axial location of grids

c.Materials of grids per assembly

2.4.Nozzle

Dimensions of the outline of the top and bottom nozzles

3.Control rod

3.1.General

a.Total travel length

b.Depth of insertion of a control rod, with the origin at the top of the adaptor plate

3.2.Neutron absorbing rod

a.Material of the absorbing part

b.Length and diameter of the absorbing part

c.Material and outside diameter of the cladding

4.Thermal hydraulic data

a.Number of loops

b.Coolant flow per loop

c.Coolant temperature at vessel inlet

January 2011 AP1000 Fuel Fabrication Contract Page 66

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d.Operating pressure of the primary circuit

B.Post-Award Information

The following list of data is the standard compatibility and fuel transition data package agreed by Westinghouse to be provided to other suppliers after such supplier has been awarded with a reload fuel supply contract.  Such provision of data shall only be made at the nominal values without tolerance.  No transmittal of any day shall be made until such time as the Parties and the new reload fuel supplier have executed a three non-disclosure/limited use agreement acceptable to Westinghouse as provided Article 18, PROPRIETARY INFORMATION, of this Contract.  Additional data may be included in the list below upon Owner’s request provided that it is demonstrated to Westinghouse’s satisfaction and at its sole discretion that such additional data is necessary for a competent third party to complete a technically defensible evaluation. The price associated with the provision of such additional data will be agreed between the Parties at a future date.  Any data provided to the new supplier will be provided only under the condition that the data is that used by Westinghouse and is correct and appropriate only for Westinghouse’s use.  The Owner agrees and understands that there is no warranty for subsequent use or misuse of any data provided to a third party and shall indemnify and hold Westinghouse harmless for any such actions or consequences of the new supplier for said use or misuse.

1.General Information Related to the Fuel Assemblies

a.Overall height

b.Type of grid

c.Total number of grid

d.Number of grid in the active height

e.Grid material

f.Number of guide thimbles for control rod

g.Guide-thimble material

h.Outside diameter and thickness of guide thimbles

i.Number of instrumentation tube

j.Instrumentation tube material

k.Outside diameter and thickness of instrumentation tube

l.Material of top and bottom nozzles

m.Pitch between fuel assembly

n.Drawings with dimensions (nominal only) of a fuel assembly and its skeleton showing axial positions of grids.

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2.Fuel rods

a.Number per assembly

b.Location in assembly

c.Nominal pitch between fuel rods

d.Overall length

e.Cladding outside diameter

f.Cladding material

g.Cladding thickness

h.Pellet diameter

i.Active fuel length

j.Nominal smear density of pellets stack

k.Average enrichment of the Fuel Assemblies in the final reload

3.Information Related to the Reactor

3.1Control rods

a.Height and diameter of the neutron absorber

b.Composition and density of the absorber

c.Cladding material

d.Cladding thickness

e.Number and location of control rods

f.Drawings with nominal dimensions of the control rod assembly.

3.2.Neutron sources and thimbles plugs

a.Neutron source locations in the core

b.Drawing with nominal dimensions of neutron source assembly and thimble plug assembly.

3.3.Incore instrumentation

a.Location of the penetration for in-core instrumentation

b.Nominal diameter of instrumentation tube

3.4.Vessel internal equipment – core cavity

a.Dimensions of core baffle

b.Nominal distance between core plates in cold conditions

January 2011 AP1000 Fuel Fabrication Contract Page 69

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Westinghouse Proprietary Class 2

c.Drawings of core plates, including nominal dimensions of locating pins and of holes (height, diameter)

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3.5.Handling tools

a.Drawing of the head of handling tools for Fuel Assemblies with nominal dimensions.

b.Drawing of the head of handling tools for thimble plugs, control rods clusters and neutron source assemblies with nominal dimensions.

3.6.Thermal hydraulics and reactor operation

a.Core thermal power

b.Thermal power produced inside the fuel rods

c.Best estimate mass flow rate of coolant per loop

d.Best estimate bypass mass flow rate

e.Flow area through the core plates

f.Coolant temperature at core inlet at full power and no load

g.Nominal pressure of the primary circuit

3.7.Nuclear Design Information

a.Number of Fuel Assemblies per Reload Region

b.Fuel density and mass of uranium per Reload Region

c.Loading pattern of a reference previous cycle and the associated EOC average burn-up distribution.

January 2011 AP1000 Fuel Fabrication Contract Page 71

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APPENDIX 11INTENTIONALLY LEFT BLANK

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APPENDIX 12[**]

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ATTACHMENT EDEFINED TERMS

The following terms shall have the meanings set forth below unless the context clearly indicates otherwise.  Words importing persons include partnerships, joint ventures, corporations or other legally recognized entities.  Words importing only the singular include the plural and vice versa when the context requires.  Contractual provisions set forth as part of these definitions shall be applicable throughout the Agreement Documents, except in referenced documents where specific definitions may be provided.  Where any term appears in the Agreement Documents but is not defined herein or specifically defined therein, that term shall have the meaning commonly used in the commercial nuclear power industry.  Definitions may apply to more than one Contract Document but shall not enlarge or increase any rights and responsibilities of the Parties beyond the specific document to which such definition applies.

1.Affiliate means, with respect to any person, any other person who directly or indirectly controls, is controlled by, or is under direct or indirect common control with, such person, and includes any person in like relation to an Affiliate.  A person shall be deemed to “control” another person if such person possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of such other person, whether through the ownership of voting securities, by contract or otherwise; and the term “controlled” shall have a similar meaning.

2.Agreement Documents shall mean these defined terms and all the provisions of the Fuel Alliance Agreement, the General Terms and Conditions, the Contract for Unit 1 Fuel Fabrication and Related Services, the Contract for AP1000 Fuel Fabrication and Related Services, the Fuel Technology License Agreement and the provisions of the appendices.

3.Assay shall mean the total weight of U235 divided by the total weight of all uranium isotopes, multiplied by 100 and expressed as weight percent (w/o).

4.[**]

5.Book Transfer shall mean the transfer of EUP delivered to and held in a third party account at the Fabrication Facility to the account of Owner at the Fabrication Facility.

6.Change in Control means, with respect to a legal person:

1.any Change in ownership, where the effect of such change is to result in control of the decisions made by or on behalf of such legal person subsequently being with a different entity or entities than prior to such change;

2.any other change in respect of the power to elect a majority of the directors of the legal person or otherwise control the decisions made on behalf of such person; or

3.any other change of direct or indirect power to direct or cause the direction of the management, actions or policies of such legal person.

©2011 Westinghouse Electric Company LLC

All Rights Reserved

“[**]” in this Exhibit 10.01 indicates material that has been omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission.

Westinghouse Proprietary Class 2

7.Converter’s Facility shall mean the manufacturing and/or storage facility of the company processing uranium concentrates into natural uranium hexafluoride product for subsequent enrichment or fuel fabrication for Owner.

8.Core shall mean all of the fuel assemblies and core components contained in the reactor vessel of the Unit at any one time.  The Core may or may not comprise only the Fuel Assemblies and Core Components during the term of the Agreement Documents.

9.Core Component shall mean any external burnable absorber assembly, primary or secondary source assembly, Rod Cluster Control Assembly (RCCA), Gray Rod Control Assembly (GRCA) or Thimble Plugging Device (TPD) as supplied by Westinghouse hereunder based on the Unit-specific requirements.

10.[**]

11.Cycle shall mean that period of operation of the Unit between scheduled Plant shutdowns for refueling commensurate with the energy production and outage timing.

12.Delivery shall mean the act by which the Fuel Assembly(ies) or Core Components are supplied by Westinghouse to Owner DDP (Incoterms 2000) Plant Site.

13.Effective Date shall have the meaning set forth in the introductory paragraphs.

14.Enriched Uranium Product or EUP shall mean the uranium hexafluoride (UF6) provided to Westinghouse as the feedstock for the fabrication of Fuel Assemblies.  This definition of EUP shall also include uranium that has not been enriched to the extent that this material is required for the fabrication of Fuel Assemblies, as the context requires.  EUP shall conform to ASTM Standard Specification C996-96 while natural uranium shall conform to ASTM Standard Specification C787-90.

15.Enricher shall mean the entity that is under contract with the Owner to provide EUP for the manufacture of Fuel Assemblies and that is responsible for the delivery of EUP to Westinghouse on behalf of Owner.

16.Enrichment Facility shall mean the manufacturing and/or storage facility of the Enricher from which the delivery of EUP from the Enricher to Westinghouse is made on behalf of Owner.

17.EPC Agreement shall mean the Engineering, Procurement and Construction Agreement among Owner, Westinghouse and Shaw dated as of May 23, 2008 as amended to design, develop, and supply AP1000 Nuclear Power Plants and related facilities structures and improvements at the V.C. Summer Station.

18.EP-RCCA shall mean the chrome plated Enhanced Performance Rod Cluster Control Assembly.  EP-RCCAs are standard full length Rod Cluster Control Assemblies with a silver-indium-cadmium (Ag-In-Cd) absorber.

19.EUP Hold Time or Hold Time shall mean the time, measured in months, between the delivery to the Fabrication Facility of the EUP required for fabrication of the Initial Core or a Reload Region and the Delivery of the completed Initial Core or Reload Region to the Plant.

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20.Fabrication Facility shall mean the Westinghouse manufacturing and/or assembly plant in Columbia, South Carolina at which Westinghouse manufactures and/or assembles the Fuel Assemblies and Core Components to be supplied hereunder.

21.Feedshall mean natural uranium in the form of UF6, which has never been irradiated, enriched or depleted, with an approximate Assay of 0.711 w/o and is measured in KgU (kilogram uranium as UF6).

22.Final Scheduled Delivery Date (FSDD)shall be the date by which the last Fuel Assembly in a Reload Region is scheduled to be Delivered.

23.Fuel Alliance shall have the meaning set forth in the introductory paragraphs of the Fuel Alliance Agreement.

24.Fuel Alliance Agreement shall mean the Fuel Alliance Agreement document, including all its Attachments.

25.Fuel Alliance Directors shall mean the key, single point of contact for each Party in the management of the Fuel Alliance, as further described in Article 3 of the Fuel Alliance Agreement.

26.[**]

27.Fuel or Fuel Assembly shall mean that physical entity, including all fittings and other appurtenances, which physically contains the EUP, which is handled as a single entity and which is supplied by Westinghouse hereunder.

28.Fuel Fabrication Contract shall mean the Contract for Unit 1 Fuel Fabrication and Related Services (the “Unit 1 Fabrication Contract”), the Contract for AP1000 Fuel Fabrication and Related Services for Units 2 and 3 (the “AP1000 Fabrication Contract”), (together referred to as the “Fuel Fabrication Contracts”).

29.Initial Core shall mean the full complement of 157 Fuel Assemblies and Core Components in the reactor that produces the first sustained nuclear chain reaction at the Unit.

30.Initial Core Final Scheduled Delivery Date (ICFSDD) shall be the date by which the last Fuel Assembly in the Initial Core is required to be Delivered.

31.Initial Core Tentative Scheduled Delivery Date (ICTSDD) shall be the date by which the last Fuel Assembly in the Initial Core is tentatively scheduled to be Delivered.

32.Information shall mean the information owned by Westinghouse and provided by Westinghouse under the Agreement Documents.

33.Laws shall mean all aspects of all ordinances, laws, statutes, requirements, codes, rules and regulations of all bodies of government and governmental agencies having jurisdiction over any aspect of the Work.

34.Lead Use Assemblies or LUA shall mean the unique combination of structural and

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physical components, including all fittings and other appurtenances, which physically contains the EUP, which is handled as a single entity and which is supplied by other nuclear fuel fabricators.

35.[**]

36.NG-RCCA shall mean the Next Generation Rod Cluster Control Assembly.

37.NRC shall mean the United States Nuclear Regulatory Commission, as established by the Energy Reorganization Act of 1974, or any other federal agency which may succeed to the licensing and regulatory authority of the NRC.

38.NSSS shall mean the Nuclear Steam Supply System portion of the Plant.

39.Owner shall have the meaning as set forth in the opening paragraph of the Fuel Alliance Agreement.

40.Owner Party means any of Owner’s agents, representatives, contractors and subcontractors of any tier and its or their directors, officers and employees, including Owner personnel, but excluding Westinghouse, any Suppliers and any Westinghouse personnel.

41.Party or Parties shall mean the Owner and/or Westinghouse as the context requires.

42.Planning Process shall mean the process by which Westinghouse and Owner collaborate, to accurately and proactively identify, plan, and monitor certain fuel projects with a schedule horizon of at least 3 Cycles per Plant and a detailed forecast of at least 18 months, as described in the Fuel Alliance Agreement.

43.Planning Team shall mean the group of individuals responsible for the Planning Process at the Plant, as described in the Fuel Alliance Agreement.

44.Plant shall mean as applicable Unit 1 and, when completed, Units 2 and 3 including all materials and equipment that are integral to or ancillary to any such nuclear power plant.

45.Products shall mean the Fuel Assemblies, Core Components, and/or Fuel-related Services including drawings, documentation, and technical materials paid for by Owner under the respective Fuel Fabrication Contract issued pursuant to this Fuel Alliance Agreement.

46.Project Planning Document shall mean a document that is jointly and proactively maintained and includes all fuel projects under the Fuel Alliance Agreement (whether prospective, planned, or in-progress) with a forward look of at least 3 Cycles per Plant.

47.Reference Design(s)shall mean the designs described in [**] of the respective Fuel Fabrication Contract as the case may be.

48.Reload or Reload Region shall mean the group of fresh and un-irradiated Fuel Assemblies which are scheduled to be inserted into the reactor vessel of a Unit at the

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same time, excluding any re-insert Fuel Assemblies that have been irradiated and discharged for any reason or that have been delivered in a previous Reload Region or as delivered as part of the Initial Core.

49.Regulatory shall mean any act or failure to act of a Regulatory Authority.

50.Regulatory Authority shall mean any federal, state, or local governmental body or agency (including any legislative or judicial body) which exercises authority or control over the manufacture, licensing, or operation of the Fuel Assemblies, Core Components Services, or the construction, operation, maintenance, or environmental effects of the Plant.

51.Repair shall mean the process of restoring a nonconforming characteristic to a condition such that the capability of an item to function reliably and safely is unimpaired, even though that item still does not conform to the original requirement. (NQA-1, 1994).

52.Rework shall mean the process by which an item is made to conform to original requirements by completion or correction. Rework shall be performed in accordance with procedures approved by Manufacturing and Quality Control. (NQA-1, 1994).

53.Scheduled Delivery Date or SDD shall mean the date that the last Fuel Assembly of the Initial Core or a Reload Region is required to be Delivered.

54.Service Alliance Agreement shall mean the Alliance Agreement between SCE&G and Westinghouse Electric Company and Stone and Webster dated June 30, 2009 as amended.

55.Services shall mean fuel-related activities provided by Westinghouse in connection with and pursuant to the Agreement Documents, excluding the manufacture of hardware.

56.Shaw shall mean Stone & Webster, Inc., a Shaw Group Company having a place of business in Baton Rouge Louisiana, Charlotte, North Carolina, Stoughton Massachusetts and other locations.

57.Site shall mean the area which is described in the Owner’s Government Indemnity Agreement with the NRC for the Plant.

58.Steering Committee shall mean the body that will strategically direct and drive performance of the Fuel Alliance, as described in the Fuel Alliance Agreement.

59.Sub-region shall mean the group of Fuel Assemblies within an Initial Core or Reload Region whose mass-weighted average enrichment is within ±0.10 w/o U235.

60.Supplier shall mean any subcontractor or supplier of any tier, who supplies equipment, materials, or services to Westinghouse in connection with Westinghouse’s obligations under the Contract.

61.SWU or Separative Work Units shall mean the amount of enrichment services required to enrich natural uranium Feed material to produce EUP at a specified Assay and Transactional Tails Assay.

62.[**]

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[**]

63.Tentative Scheduled Delivery Date (TSDD) shall be the date by which the last Fuel Assembly in a Reload Region is tentatively scheduled to be Delivered.

64.[**]

65.Transactional Tails Assay shall mean the Assay of tails material from the Enricher for purposes of calculating the Feed component and the SWU component of EUP to be delivered by the Owner.

66.Unit means each of the individual nuclear power plant units, including their respective nuclear steam supply system, that do or will constitute the Plant.

67.Westinghouse shall have the meaning as set forth in the opening paragraph of the Fuel Alliance Agreement.

68.Work shall mean the entire responsibility of Westinghouse for providing fuel hardware, core components, Services, and the licensing of technology, including manufacturing, assembly, supply, shipment, and delivery more fully described in and performed under the Unit 1 Fabrication Contract, the AP1000 Fabrication Contract, or the Fuel Technology License Agreement, respectively, issued pursuant under the Fuel Alliance Agreement.  In addition, Work includes all Products, Services, and responsibilities of Westinghouse’s agents, contractors, suppliers and subcontractors.

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GENERAL TERMS AND CONDITIONS

BETWEEN

WESTINGHOUSE ELECTRIC COMPANY LLC

AND

SOUTH CAROLINA ELECTRIC & GAS COMPANY

FOR

V. C. SUMMER NUCLEAR STATION UNITS 1, 2 & 3

Disclosure of this document, in whole or in part, is subject to the proprietary information

restrictions set forth in ARTICLE 10, PROPRIETARY INFORMATION, hereof.

©2011 Westinghouse Electric Company LLC

All Rights Reserved

“[**]” in this Exhibit 10.01 indicates material that has been omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission.

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ARTICLE	TITLE		PAGE
RECITALS			1
ARTICLE 1	AGREEMENT DOCUMENTS AND DEFINITIONS		2
A.	Agreement Documents		2
B.	Definitions		2
ARTICLE 2	DELIVERY, TITLE, AND RISK OF LOSS		3
A.	Delivery		3
B.	Title		3
C.	Risk of Loss		3
D.	Delivery to Storage		3
E.	Protection of Work and Property		4
ARTICLE 3	TAXES		5
ARTICLE 4	CHANGES TO GENERAL WORK SCOPE		6
ARTICLE 5	FORCE MAJEURE		7
ARTICLE 6	LIMITATION OF LIABILITY		8
ARTICLE 7	INSURANCE, INDEMNITY AND NUCLEAR REQUIREMENTS		9
A.	Westinghouse Insurance		9
B.	Owner Insurance		11
C.	Additional Nuclear Requirements		12
D.	Waivers by Owner		12
E.	Third Party Property Protection		13
F.	Definition		13
G.	[**]		13
ARTICLE 8	LICENSES, PERMITS, AUTHORIZATIONS, AND LICENSING SUPPORT		14
ARTICLE 9	PATENTS		16
ARTICLE 10	PROPRIETARY INFORMATION		18
ARTICLE 11	TRANSFER		20
ARTICLE 12	QUALITY ASSURANCE		21
A.		Quality Assurance Program	21
B.		Access for Inspection and Audits	21
C.		10 CFR Part 21	22
ARTICLE 13	DISPUTES		23
ARTICLE 14	MISCELLANEOUS PROVISIONS		25
A.		No Waivers	25
B.		Modification	25
C.		Assignment	25
D.		Interpretation	25
E.		Survival	26
F.		Applicable Law	26
G.		Severability	27
H.		Notices	27
I.		Order of Precedence	28
J.		Relationship of Parties	28

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ARTICLE	TITLE	PAGE
K.	Integration	29
L.	Signs	29
M.	Publications and Photographs	29
N.	Kickbacks and Gratuities	29
O.	Creditworthiness	29
P.	Laws and Regulations	30

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RECITALS

THESE GENERAL TERMS AND CONDITIONS, dated this 27th day of January, 2011, is by and between South Carolina Electric & Gas Company (“Owner”), and Westinghouse Electric Company LLC (“Westinghouse”), a limited liability company duly organized and existing under and by virtue of the laws of the State of Delaware, with an office at 1000 Westinghouse Drive, Cranberry Township, Pennsylvania 16066 (“Westinghouse”) and provides for the fabrication of nuclear fuel and associated services as hereinafter described.

WHEREAS, Owner presently is the operator of one and will be the operator of three nuclear-fueled electricity generating units (the “Plants”), located at the V. C. Summer Nuclear Station in the state of South Carolina; and

WHEREAS, Westinghouse is engaged in the business of designing, developing and supplying commercial nuclear power facilities and providing nuclear fuel fabrication, core components and related support technology and services necessary to operate these commercial nuclear power facilities; and,

WHEREAS, Owner requires a supplier of nuclear fuel, core components and related services necessary to operate its Plants; and,

WHEREAS, Westinghouse desires to provide the nuclear fuel fabrication, core components and related support technology and services necessary to operate the Owner’s commercial nuclear power facilities.

WHEREAS, the Parties intend these General Terms and Conditions to apply with respect to the Contract for AP1000 Fuel Fabrication and Related Services and the Contract for Unit 1 Fuel Fabrication and Related Services all as set forth and referenced in such contracts and that these General Terms and Conditions are hereby incorporated by reference in such contracts as though fully set forth therein.

WITNESSETH:

NOW, THEREFORE, in consideration of the mutual covenants herein and other good and valuable consideration, the sufficiency of which the Parties acknowledge, the Parties, intending to be legally bound, stipulate and agree as follows:

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ARTICLE 1AGREEMENT DOCUMENTS AND DEFINITIONS

A.Agreement Documents

The Agreement Documents between the parties shall consist of the these General Terms and Conditions, the Contract for Unit 1 Fuel Fabrication and Related Services (the “Unit 1 Fabrication Contract”), the Contract for AP1000 Fuel Fabrication and Related Services for Units 2 and 3 (the “AP1000 Fabrication Contract”), (together referred to as the “Fuel Fabrication Contracts”) and all documents incorporated by reference therein including, without limitation, the Fuel Alliance Agreement, the Fuel Technology License and any Appendices to the foregoing and all agreed upon modifications thereto.  The Agreement Documents set forth the entire agreement of the parties with respect to the work contemplated by the same, and there are not other understandings between the parties with respect to such work.  The Agreement Documents supersede all other oral or written communications made between the parties before or at the time of the execution of the Agreement Documents.  No modification or amendment of the Agreement Documents shall be of any effect unless made in writing and executed by both parties.

B.Definitions

Defined terms which are common for all Agreement Documents shall be located in Attachment E, DEFINED TERMS.  In the event a term requires a definition that is different from the definition set forth in the Attachment E, for the purposes of the Agreement Documents it shall be defined as specifically set forth in the respective Agreement Document.

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ARTICLE 2DELIVERY, TITLE, AND RISK OF LOSS

A.Delivery

Delivery of Fuel Assemblies and Core Components shall be DDP Fabrication Facility except as otherwise provided for in Article 2.D, Delivery to Storage.

B.Title

1.Title to the Fuel Assemblies and Core Components, shall pass to Owner upon Delivery. Title to the EUP furnished to Westinghouse by Owner hereunder shall remain with Owner at all times.

2.Notwithstanding the foregoing, Westinghouse may commingle and treat as fungible Owner’s EUP with other EUP in Westinghouse’s possession.

C.Risk of Loss

1.Risk of loss or damage to the Fuel Assemblies and Core Components whether or not subject to repair, replacement, or modification, will pass to Owner upon Delivery.  In the event that any Fuel Assemblies or Core Components are removed from the Site by Westinghouse for warranty work, Owner shall load such items on board carrier at the Site, and risk of loss or damage will pass back to Westinghouse when such items are properly loaded onboard the carrier.

2.Westinghouse shall assume responsibility for loss or damage to Owner’s EUP from the time Owner supplies EUP in accordance with Article 3.A.1 of the applicable Fuel Fabrication Contract and Appendix 5, “Owner’s EUP”, until Delivery of the Fuel Assemblies in which it is contained.  In the event that any Fuel Assemblies are removed from the Site by Westinghouse for warranty work, Westinghouse shall assume responsibility for loss or damage to Owner’s EUP until Delivery of Fuel Assemblies. Westinghouse’s total liability for any loss or damage of the EUP shall be limited to the Owner’s proportional share of the extent of the compensation received from Westinghouse’s insurers in regard to the EUP so lost or damaged.

D.Delivery to Storage

1.Either Party may elect to place fabricated Fuel Assemblies, Core Components, or parts thereof, into storage at the Fabrication Facility.

2.In the event Owner requests storage of Fuel Assemblies, Core Components, or parts thereof, at the Fabrication Facility for any reason not the fault of Westinghouse, Westinghouse may provide such storage at Fuel Alliance rates for storage in effect at the time, depending on availability of appropriate storage facilities.  Any taxes imposed on the stored Fuel Assemblies, the contained EUP, or the Core Components shall be for Owner’s account. When Westinghouse is able to Deliver and Owner is able to receive Fuel Assemblies and/or Core Components and upon payment of any additional amounts

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due Westinghouse, Westinghouse will Deliver the Fuel Assemblies and/or Core Components to the Plant Site.

3.In the event Westinghouse requests storage of Fuel Assemblies or Core Components at the Fabrication Facility as provided in Article 2.D.1 for any reason, Westinghouse shall provide such storage [**].  When Westinghouse is able to Deliver and Owner is able to receive Fuel Assemblies and/or Core Components, Westinghouse will Deliver the Fuel Assemblies and/or Core Components to the Plant Site.

4.If the Fuel Assemblies or Core Components are placed in storage at the Fabrication Facility as provided in Article 2.D.1, Delivery under the Contract will be deemed to have occurred at the time of placement into storage, and title and risk of ownership thereto shall pass to Owner at that time notwithstanding Article 2.B, Title and 2.C, Risk of Loss; provided however that Westinghouse shall assume the risk of loss to the Fuel Assemblies and, to the extent provided for in Article 2.C.2. (above), the EUP contained therein, as a bailee during the period of storage. Until Delivery of the Fuel Assemblies or Core Components, Westinghouse shall have a custodial care obligation for the fabricated Fuel Assemblies and the contained uranium in such fabricated Fuel Assemblies or Core Components while such Fuel Assemblies or Core Components remain in storage at the Fabrication Facility; and Westinghouse shall reimburse Owner in the event of a loss from its insurance proceeds.

5.All payments and reimbursements due hereunder shall be paid pursuant to the provisions of Fuel Alliance Agreement.

E.Protection Of Work And Property

For Work performed at the Plant, Westinghouse shall protect all Work and property from damage or loss that may result from the performance of Work at the Site under the Fuel Alliance Agreement.  Should the Work be suspended temporarily, Westinghouse shall take such steps as may be necessary or advisable to protect it against damage or loss.  Work or property destroyed, damaged, or lost by an act or omission of Westinghouse shall be replaced or repaired to Owner’s satisfaction at Westinghouse’ expense. Should any Work or property require such replacement or repair prior to final payment, and Westinghouse fails or refuses to replace or repair it in accordance with the Fuel Alliance Agreement, Owner may replace or repair such Work or property; or, if final payment has been made, Westinghouse shall reimburse Owner such amounts. [**]

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ARTICLE 3TAXES

A.For purposes of this Article, taxes shall be defined as either “Owner Taxes” or “Westinghouse Taxes.”

1.“Owner Taxes” shall mean all of Owner’s own taxes including income, gross receipts, unincorporated business income, ad valorem, real property, sales tax on goods and services purchased hereunder, use and personal property taxes (tangible and intangible) on items that become permanently incorporated into the facility, as well as any other assessments based on its own income, revenue, or gross receipts, imposed by any state, local or Federal governmental body. The price does not include any federal, state, or local sales, use, gross receipts, value added, excise, duty, or similar taxes and governmental fees now or hereafter imposed on Owner’s nuclear material regardless of the taxing authority; or any property taxes on fabricated Fuel Assemblies incurred after Delivery.  None of these taxes are included in the price and are to the account of Owner.

2.“Westinghouse Taxes” shall mean all of Westinghouse’s own taxes, including employment taxes, excise, sales taxes on purchased good and services, use and personal property taxes on consumables and on other tangible property that does not become permanently incorporated into the facility, as well as any other assessments based on its own income, or gross receipts, imposed by any state, local or Federal governmental body.  Additionally, Westinghouse Taxes includes any license, documentation, recording and registration fees, all levies, imports, duties, assessments, fees (customs or otherwise), charges and withholdings of any nature whatsoever, and all penalties, fines, additions to tax, and interest imposed by any local state or Federal government body due to any action, inaction or omission of Westinghouse or its Suppliers.

B.Subject to Article 3.C, below, Westinghouse shall be fully responsible for “Westinghouse Taxes” and Owner shall be fully responsible for “Owner Taxes” under the Agreement Document, for the Work or otherwise.

C.Unless otherwise specified, Westinghouse shall exclude any sales and use tax in any submitted price and on any resulting invoices to Owner.  If sales and use taxes are excluded, Owner shall be responsible for the payment to the appropriate state of any sales and use taxes applicable to the Work directly to the appropriate taxing authority. When required by the taxing authority and requested by the Owner, Westinghouse shall itemize each invoice to show as separate items, labor, material and equipment, freight, and other separable charges for the Work hereunder.

D.For Work performed in the State of South Carolina on contracts of ten thousand dollars ($10,000) or more which involve labor, any nonresident contractor must comply with applicable laws.

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ARTICLE 4CHANGES TO GENERAL WORK SCOPE

A.Owner may request changes within the general scope of Work covered in the Agreement Documents and, if accepted by Westinghouse, the price, terms of payment, warranties, delivery schedules, and other pertinent provisions of the Agreement Documents shall be equitably adjusted in accordance with Fuel Alliance Agreement prior to making any such change.  Any necessary analytical effort, plus any prototypes, tests, laboratory examinations, or any other investigative work on the proposed change(s) will be to the account of Owner at the time and material rates in effect at the time such work is performed and set forth in the Fuel Alliance Agreement.

B.Changes in the scope of Work required because of regulatory requirements or commitments by Owner to any Regulatory Authority will be in accordance with and governed by the provisions of Article 4.A above.

C.Westinghouse may make changes in the scope of Work hereunder without compensation from Owner if such changes will not adversely affect its warranties, the technical soundness of the Work, operability or ability to license the Plant, or the schedule; provided, however, that no change which increases Owner’s cost for Fuel Assembly or Core Component interface, for installation, or for Plant operation and maintenance will be made without mutual agreement.

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ARTICLE 5FORCE MAJEURE

A.Neither Party shall be liable to the other for any loss or damage due to any failure or delay in performance hereunder resulting from any cause beyond such Party’s reasonable control, including, but not limited to, acts of God; acts or omissions of civil or military authority; acts or omissions of the other Party hereto; fires; floods; hurricanes; tornados; epidemic; quarantine restrictions; strikes or other labor disputes; wars or warlike circumstances; terrorism; or compliance with changes in applicable regulations or directives of national, state or local governments or any department thereof effective after the date of the Agreement Documents.  The Party asserting the force majeure as an excuse from performance shall have the burden of establishing the existence of the force majeure event.  That Party must give the other Party notice verbally within twenty-four hours of becoming aware of the effects of the occurrence of a force majeure event confirmed in writing within ten days thereafter, such notice to state the nature of the event and the anticipated length of delay and shall include an outline of the remediation plan for approval.  Such Party shall take all reasonable steps to mitigate the effects of any force majeure event as soon as practicable (provided, however, that this shall not require settlement of labor disputes negotiated in good faith).  Any written or verbal notice shall be directed to the other Party’s Fuel Alliance Director.

B.In the event of a delay in performance excusable under this Article 5, the date of Delivery as defined in Article 2, DELIVERY, TITLE, AND RISK OF LOSS, or time for performance of the Work will be extended by a period of time reasonably necessary to overcome the effect of the delay.  The expense of any special measures taken by Westinghouse at the request of Owner to overcome such effect and Westinghouse expenses associated with delays resulting from any act or failure to act of Owner or Owner’s subcontractors or suppliers will be for Owner’s account.

C.Westinghouse shall promptly notify Owner of any actual or anticipated delay in performance and take all reasonable steps to avoid or end delays without additional cost to Owner.

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ARTICLE 6LIMITATION OF LIABILITY

A.Neither Westinghouse nor its Suppliers will be liable to Owner, whether in contract, in tort (including negligence and strict liability), under any warranty, or otherwise, for any special, indirect, incidental, or consequential loss or damage whatsoever; any loss of use of equipment, Plant or power system, cost of capital, loss of profits or revenues or the loss of use thereof, cost of purchased or replacement power (including additional expenses incurred in using existing power facilities), increased costs of any kind or claims of customers of the Client.

B.The provisions of this Article 6, LIMITATION OF LIABILITY shall apply to the full extent permitted by law, regardless of fault and notwithstanding any other provisions of the Contract.

C.THE REMEDIES SET FORTH HEREIN ARE EXCLUSIVE AND THE TOTAL CUMULATIVE LIABILITY OF WESTINGHOUSE AND ITS SUPPLIERS UNDER THE CONTRACT OR FOR ANY ACT OR OMISSION IN CONNECTION THEREWITH OR RELATED THERETO, WHETHER IN CONTRACT, IN TORT (INCLUDING NEGLIGENCE AND STRICT LIABILITY), UNDER ANY WARRANTY, OR OTHERWISE, [**].

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ARTICLE 7INSURANCE, INDEMNITY AND NUCLEAR REQUIREMENTS

A.Westinghouse Insurance

1.During any time that Westinghouse performs Work at the Site pursuant to the Agreement Documents, Westinghouse must provide and maintain, until the Work is completed and accepted, and require any approved subcontractor to furnish and maintain at all times during the course of the work to be performed hereunder policies of insurance, including Workers’ Compensation, liability insurance, and other minimum insurance coverages as follows:

a.Commercial General Liability Coverage –

(i)$1,000,000 occurrence/$2,000,000 aggregate Bodily Injury and Property Damage

(ii)Broad Form Property Damage, including Contractual Liability

(iii)Independent contractors, if subcontractors will be utilized

(iv)Explosion, Collapse and Underground Hazard (XCU), if the Work involves excavation or underground construction

b.Automobile Liability Coverage - $1,000,000

All owned, hired, and non-owned automotive equipment used in connection with the insured operation.

c.Workers’ Compensation – Statutory

d.Employers’ Liability - $1,000,000

This coverage must include an “all-states” endorsement, as well as coverage under U.S. Longshoremen’s and Harbor Workers Act where applicable.   Each of the Suppliers must maintain Workers’ Compensation coverage regardless of statutory requirements pertaining to the number of employees in their organization.

e.for Services provided inside of the Protected Area, Umbrella Excess Liability

- $1,000,000 Aggregate

f.for Services provided inside of the Radiation Controlled Area (RCA), Umbrella Excess Liability - an additional amount to equal $5,000,000 Aggregate

2.The insurance requirements stated herein may be changed only by specific written agreement by Owner. The insurance limits set forth herein are subject to adjustment at the option of Owner after the initial five (5) year terms and every three (3) years thereafter, to reflect any changes in the Consumer Price Index since the Effective Date.

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3.Before any Work is started hereunder to be performed at the Site, Westinghouse shall provide Owner an insurance certificate evidencing coverages as required herein and in a form reasonably satisfactory to Owner. Such certificate shall provide that at least thirty (30) days written notice be given to Owner prior to any material change or cancellation of the insurance.  All applicable insurance certificates shall be on Accord forms showing the certificate holder as:

SCANA Corporation and/or its subsidiaries
c/o Supplier Strategy - D 211
220 Operation Way
Cayce, SC  29033-3701

4.All insurance shall be with sound insurance companies which have an AM Best rating of A-VII / A-IX or a long term insurer financial strength rating from Standard & Poor’s of A- or better, as the minimum and are authorized to do business in the state where the Work is performed.

5.Neither a failure of Westinghouse to provide the required certificate of insurance nor Westinghouse’s submission of a certificate of insurance not in conformance with the insurance requirements stated herein shall relieve Westinghouse from the obligation to have in force the required insurance coverages.

6.None of Westinghouse’s insurance policies shall have any “other insurance” clause or language which would jeopardize the primacy of Westinghouse’s insurance with respect to Westinghouse’s liability for any claim asserted by Owner’s self-insured status.

7.Except for Workers’ Compensation and Professional Liability (when required) coverage, all of Westinghouse’s insurance policies must list “SCANA Corporation and its subsidiaries” as an additional insured.

8.Coverage provided by Westinghouse shall be primary and non-contributory to the extent of Westinghouse’s liability or responsibility for claimed damages as set forth herein.

9.None of Westinghouse’s personnel shall be deemed for any purpose to be solely or dually employed by Owner.  If any employee of Westinghouse shall recover benefits under Owner’s Workers’ Compensation as a result of injury or disease sustained in, or Unemployment Insurance coverage resulting from, performing Work hereunder while on Westinghouse’s payroll, Westinghouse shall reimburse Owner for the full amount of such benefits and any cost or expenses incurred by Owner related thereto.

10.Westinghouse shall accept the provisions of all the workers’ compensation laws of the state in which the Work is performed and any re-enactments and supplements thereto.  In addition, Westinghouse shall maintain workers’ compensation coverage for all its employees performing the Work, regardless of whether required to do so by state law.

11.Westinghouse shall insure the Fuel Fabrication Facility in amounts that are consistent with practice in the industry, as determined by consultation with its insurance advisors and taking into account the amount of EUP located at the Fuel Fabrication Facility from

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time to time, the durability of the material, methods and location of storage, and others factors deemed relevant by Westinghouse and its advisors.

B.Owner Insurance

1.Property Damage and Nuclear Liability

a.The Owner shall, without cost to Westinghouse, prior to arrival of nuclear fuel at the Site obtain and maintain Financial Protection and an Indemnification Agreement, for protection against liability for nuclear incidents both in such form and amount as will satisfy the requirements of Section 170 of the Atomic Energy Act of 1954, as amended. In the event that the nuclear liability protection system contemplated by Section 170 of the Atomic Energy Act of 1954, as amended, is repealed, changed, or is not renewed, Owner will use best efforts to maintain in effect during the period of operation liability protection through government indemnity, statutory limitation of liability or commercial liability insurance to the extent available on reasonable terms which will not result in a material impairment of the protection provided. In any event, the protection provided pursuant to this provision shall remain in effect until the decommissioning of the Plant.

b.The Owner will, without cost to Westinghouse obtain and maintain property insurance in a form and amount required by the Nuclear Regulatory Commission.

c.Neither Westinghouse nor Suppliers of any tier shall be liable to Owner or its insurers or any other party for (1) any on-Site property damage due to the nuclear energy hazard, and (2) losses or damages caused by reason of unavailability of the nuclear power station, or by reason of shutdowns of the station or other facilities or service interruptions (including loss of profits or revenue, inventory or use charges, cost of replacement power, cost of capital or claims by customers). To the extent Owner or its insurers recover damages from a third party for damage due to the nuclear energy hazard to which the foregoing waivers apply, Owner will indemnify Westinghouse and/or its Suppliers of any tier against any liability which such third party recovers over from Westinghouse and/or its Suppliers for such nuclear damage. “Nuclear energy hazard” shall mean radioactive, toxic, explosive or other hazardous properties of “source material”, “special nuclear material”, or “by-product material” as such terms are defined in the Atomic Energy Act of 1954, as amended. Owner hereby waives and will require its insurers waive any right of recovery against Westinghouse for damages due to the nuclear energy hazard.

d.As used in this section, the term “on-Site property” means any property at the Site as defined for nuclear liability and indemnity purposes; the term “damage” means loss, damage or loss of use; the term “liable” or “liability” means liability of any kind at any time, whether in contract, tort (including negligence) or otherwise. The provisions hereof providing for limitations of or protection against

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Westinghouse’s liability shall survive termination of the Agreement Documents or completion of the Work hereunder.

2.If Owner procures property damage insurance applicable to occurrences at the Site and third party non-nuclear liability insurance, or either of such types of insurance, such insurance will name Westinghouse and its Suppliers as additional insured.

C.Additional Nuclear Requirements

1.Westinghouse shall comply with all provisions of Title 10 Code of Federal Regulations Part 21. Defects or non-compliances of the Work reported to the Nuclear Regulatory Commission by Westinghouse shall also be reported to Owner’s Manager - Nuclear Licensing.

2.Section 210 of the Energy Reorganization Act of 1974 (42 USC 5851) prohibits any employer, including a Nuclear Regulatory Commission licensee, or a contractor, or a subcontractor, or an agent of a licensee, from discriminating against any employee with respect to his or her compensation, terms, conditions or privileges of employment because the employee assisted or participated, or is about to assist or participate, in any manner in any action to carry out the purposes of either the Energy Reorganization Act or the Atomic Energy Act of 1954.  Westinghouse shall abide by this law and require same of any subcontractor employed in the performance of the Contract.

3Westinghouse promptly shall report to Owner any allegations by Westinghouse’s employees that they have been discriminated against for raising concerns about the quality of Westinghouse’s product or service provided to Owner.

4For Work performed at V. C. Summer Nuclear Station, Westinghouse and their employees shall comply with all of the Owner’s requirements for Site access.

5.Should activities of Westinghouse involve access to or knowledge of Owner Safeguards Information, this information shall not be reproduced or disclosed by Westinghouse or any of its agents or employees, unless prior written authorization is obtained from Owner.  This information will be protected in accordance with 10 CFR73.21 and any additional requirements of Owner.

D.Waivers by Owner

1.Except as set forth in Article 2.E, Protection of Work and Property, Westinghouse shall not be liable for any loss of, damage to, or loss of use of property or equipment wherever located, including such loss, damage, or loss of use arising out of or resulting from a Nuclear Incident.  Owner waives and, to the extent permitted by its insurers, will require its insurers to waive all rights of recovery against Westinghouse on account of any such loss, damage, or loss of use.

2.In the event Owner recovers damages from a third party based on losses at the Site resulting from the hazardous properties of source, special nuclear, or byproduct material (as defined in the Atomic Energy Act of 1954, as amended), Owner shall indemnify Westinghouse against claims by such third party which are based on Owner’s recovery

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of such damages.  In addition, Owner waives and will require its insurers to waive all rights of recovery against Westinghouse, for any and all cost or expenses arising out of or in connection with the investigation and settlement of claims or the defense of suits for damage resulting from the nuclear energy hazard.

E.Third Party Property Protection

Except as set forth in Article 2.E, Protection of Work and Property, Owner will indemnify Westinghouse for any liability arising out of loss of or damage to property at the Site, including that which arises out of a Nuclear Incident.  In addition, Owner shall obtain for the benefit of Westinghouse, protection against liability for, arising out of, or resulting from damage to any property or equipment located at the Site which is used or intended for use by Owner in connection with the operation of the Plant (including but not limited to the nuclear fuel) and which is owned by parties other than Owner.  Owner will indemnify Westinghouse against any liability of any kind for loss or damage to the Units which are co-located at the Site, or any property thereon.

F.Definition

The term “Westinghouse,” as used in this Article 7 shall include Westinghouse Electric Company LLC and any Suppliers, as well as their Affiliates, and the directors, officers, and employees of any of them related to their Work under the Agreement Documents.

G.[**]

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ARTICLE 8LICENSES, PERMITS, AUTHORIZATIONS, AND LICENSING SUPPORT

A.Owner will be responsible for all dealings with any Regulatory Authority.  This will include obtaining, maintaining, and paying for all licenses, permits, and authorizations required for any activities at the Site and the operation and maintenance of the Plant.

B.For any Cycle for which Westinghouse is supplying Initial Core or Reload Fuel Assemblies, Westinghouse will, in addition to its obligations set forth in Article 2, WESTINGHOUSE SCOPE OF SUPPLY, of the applicable Fuel Fabrication Contract, perform nuclear fuel related safety analyses and provide necessary fuel related licensing support required by the NRC to fulfill the Owner’s licensing requirements pursuant to the following provisions.

1.If safety analysis or licensing documentation is required because of a demonstrated deficiency in the Fuel Assembly design, or because of design changes initiated by Westinghouse, such analyses and any additional documentation required in the FSAR and/or the Reload Evaluation Report will be provided by Westinghouse at Westinghouse’s expense.

2.Safety analysis or licensing documentation required for any other reason shall be performed at the rates then in effect set forth in the Services Alliance Agreement.  Should the Services Alliance Agreement no longer be in effect at the time the Work is performed Owner agrees to pay Westinghouse’s standard commercial time and material rates in effect at the time the analyses are performed.  This shall include, but not be limited to:

a.requirements resulting from changes in NRC rules and regulations in effect and as interpreted on the Effective Date, such as criteria revision or additional accidents to be analyzed;

b.a change from the Unit’s licensing basis in effect and as interpreted on the Effective Date;

c.a general policy decision of the NRC;

d.results of an Initial Core or Reload evaluation or of an Initial Core or Reload safety analysis which are outside FSAR or other licensing limits;

e.Core design changes necessitated by Owner’s operating requirements; or

f.a change initiated by Owner.

C.As long as Westinghouse is the Fuel Assembly, Core Component and Services supplier, Westinghouse will, subject to availability of personnel and equipment and if requested by Owner, perform additional analyses required to support licensing efforts of Owner relative to any federal agencies other than the NRC, or with state or local governmental bodies at the rates then in effect set forth in the Service Alliance Agreement.  Should the Services Alliance Agreement no longer be in effect at the time the Work is performed

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Owner agrees to pay at Westinghouse’s standard commercial time and material rates in effect at the time the analyses are performed.

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ARTICLE 9PATENTS

A.Westinghouse shall assume at its sole expense the defense of and shall indemnify and hold Owner harmless from any and all claims, demands, costs, suits, actions, proceedings, fines, penalties and attorneys’ fees (and interest thereon) finally awarded resulting from or relating to any actual or asserted infringement by Westinghouse of any patent, design, trade name, trademark, service mark or copyright of the United States, Canada, a European Union country, or another country where equipment furnished hereunder was manufactured in connection with any Work or equipment furnished by Westinghouse hereunder, except to the extent the claim resulted from following directions, specifications, drawings, plans or procedures prepared by Owner or by third parties for Owner and selected solely by Owner.  As a condition precedent to Westinghouse’s indemnification obligation hereunder, Owner shall promptly notify Westinghouse in writing and give sole authority, all necessary information, and reasonable assistance in a timely manner for the defense of said suit or proceeding. Owner may, at its own cost, monitor through its own counsel any such suit or proceeding if it so desires. Westinghouse has an affirmative duty to promptly notify Owner when Westinghouse is made aware of a claim of alleged infringement.  In the event Work or equipment so defended is held to constitute infringement or its use is enjoined, Westinghouse shall, at its own expense, either: (a) procure for Owner the right to continue to use such Work and/or equipment; (b) re-perform the Work or replace the equipment with substantially equivalent non-infringing Work or equipment; or (c) modify the Work and/or equipment so that it becomes non-infringing; provided, however, that such Work re-performed and equipment replaced or modified conforms to the requirements of the Contract or if (a), (b) or (c) above is not commercially practicable then (d) refund the purchase price of the infringing Work.  If a suit or proceeding is brought against Westinghouse arising out of a design, modification or combination by Owner, then Owner shall protect Westinghouse to the same extent that Westinghouse has agreed to protect Owner herein.  Westinghouse will not be responsible for any settlement of any suit or proceeding made without their prior written consent.

B.The entire right, title and interest in patents or other intellectual property rights (i.e. copyrights, trade secrets, maskworks, etc.) first conceived or reduced to practice under the Agreement Documents shall be with Westinghouse irrespective of where conceived or reduced to practice.  Westinghouse shall, at its discretion, file Patents on any invention conceived or first reduced to practice during the course of the Agreement Documents.  Owner shall provide reasonable assistance as required in that regard.  It is understood that nothing herein shall be construed as granting or implying any right to Owner under any patent or other intellectual property rights or to use any invention covered thereby, or as permitting Owner to obtain without Westinghouse permission the right to use Information which becomes publicly known through an improper act or omission on the part of Owner.

C.Owner shall not, without the prior written approval of Westinghouse, file, cause to be filed, or authorize the filing of any patent application in any country, which patent

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application is directed to or incorporates Information or an invention contained in Information.

D.THIS ARTICLE 9, PATENTS, IS THE EXCLUSIVE STATEMENT OF ALL THE DUTIES OF THE PARTIES RELATING TO PATENTS, COPYRIGHTS, TRADEMARKS OR ANY OTHER INTELLECTUAL PROPERTY RIGHTS, AND DIRECT OR CONTRIBUTORY PATENT, COPYRIGHT, OR OTHER INTELLECTUAL PROPERTY RIGHT INFRINGEMENTS AND OF ALL THE REMEDIES OF THE PARTIES RELATING TO ANY CLAIMS, SUITS OR PROCEEDINGS INVOLVING PATENTS, COPYRIGHTS, TRADEMARKS OR ANY OTHER INTELLECTUAL PROPERTY RIGHTS.  COMPLIANCE WITH THIS ARTICLE 9 AS PROVIDED HEREIN SHALL CONSTITUTE FULFILLMENT OF ALL LIABILITIES OF THE PARTIES HEREUNDER WITH RESPECT TO INFRINGEMENT OF PATENTS, COPYRIGHTS, TRADEMARKS OR ANY OTHER INTELLECTUAL PROPERTY RIGHTS.

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ARTICLE 10PROPRIETARY INFORMATION

A.Westinghouse shall not use Owner’s name as a reference or for any other purpose without obtaining prior written consent from an authorized representative of Owner, and this consent shall be obtained separately for each proposed usage.  Usage of Owner’s service marks, trademarks, logos or any other such intellectual property is specifically forbidden.

Owner shall not use Westinghouse name for any purpose without obtaining prior written consent from an authorized representative of Westinghouse, and this consent shall be obtained separately for each proposed usage.  Usage of Westinghouse service marks, trademarks, logos or any other such intellectual property is specifically forbidden.

B.The Parties have a proprietary interest in information that may be furnished pursuant to the Agreement Documents and is so designated in writing by the owning Party.  The recipient shall not in any manner disclose or communicate to any third party the information, proprietary information, or intellectually property (“herein collectively referred to as “Intellectual Property” of the other Party without its written consent.  In the event the owning Party approves of such disclosure or transmittal, such third party shall execute an appropriate non-disclosure, licensing or similar agreement either with or as agreed to by the owning Party.  A sample agreement with a third party is provided herein as Appendix 9, PROPRIETARY INFORMATION AGREEMENT (SAMPLE).  However, nothing contained herein shall be construed as restricting or creating any liability for the disclosure or communication of Intellectual Property which:

a.was in the rightful possession or otherwise rightfully known to the recipient without restriction prior to receipt hereunder;

b.is or becomes generally available to the public or trade on a non-restricted basis without fault of the recipient;

c.is received from a third party without restriction and without breach of any obligation of nondisclosure;

d.is independently developed by the recipient prior to its receipt hereunder; or,

e.is contained in any published patent or published patent application which becomes published or otherwise generally known to the trade through no wrongful act of the recipient.

C.The act of copyrighting any portion of the Intellectual Property shall not be construed as causing such portion of the Intellectual Property to be in the public domain, or generally available to the trade on a non proprietary basis, and nothing herein shall permit, or be construed as permitting, the recipient to treat as non-proprietary any of the Intellectual Property which becomes publicly known through any improper act or omission by the recipient.

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D.Both Parties shall take all proper steps to prevent unauthorized disclosure, communication or use of Intellectual Property by it, its officers, directors, employees, or agents.

E.No Westinghouse Intellectual Property shall be disclosed to any entity that is owned in whole or in part by, or be subsidiaries of Westinghouse’s competitors in the commercial nuclear material or commercial nuclear fuel businesses.  Both Parties will maintain records of each disclosure to all entities and the governing proprietary information non-disclosure agreements and will, upon request of the other Party, provide a summary thereof on a timely basis.  A sample agreement is provided as Appendix 9, PROPRIETARY INFORMATION AGREEMENT (SAMPLE).

F.Both Parties have a proprietary interest in the Agreement Documents.  Accordingly, the Contract will not be disclosed in whole or in part to third parties without the prior written permission of the other Party.

G.When required by appropriate Regulatory Authority, including governmental regulations, applicable law or regulation, by order of a court of competent jurisdiction or lawful subpoena (hereinafter collectively referred to as “Governmental Authority”), either Party may disclose such Intellectual Property owned by the other Party to such Governmental Authority; provided, however, that prior to making any such disclosure, the disclosing Party will:  (a) provide the non-disclosing Party with timely advance written notice of the Intellectual Property requested by such Governmental Authority and the disclosing Party’s intent to so disclose; (b) minimize the amount of Intellectual Property to be provided consonant with the interests of the non-disclosing party and its Suppliers and the requirements of the Governmental Authority involved; and (c) make every reasonable effort (which shall include participation by non-disclosing Party together with the disclosing Party in discussions with the Governmental Authority involved) to secure proprietary treatment and minimization of the Intellectual Property to be provided.  In the event that efforts to secure proprietary treatment are unsuccessful, the non-disclosing Party shall have the right to revise the unreleased copies of such Intellectual Property prior to the disclosing Party’s release to minimize the disclosure of such Intellectual Property in a manner consonant with its interests and the requirements of the Governmental Authority involved.

H.Upon any termination or expiration of the Agreement Documents, a Party in possession of the other Party’s Intellectual Property shall, at its own expense, deliver to the owner of such Intellectual Property, or destroy at the Intellectual Property owner’s sole option, all Intellectual Property owned by such Party, and shall provide the owner of the Intellectual Property with written, certification that all copies thereof have been either returned to the owner or destroyed, and that all computer programs in any manner associated with or derived from the Intellectual Property have been deleted from its library of executable programs, unless otherwise agreed.  Intellectual Property that has been stored as a QA record, as required by the NRC for record keeping purposes by Owner is not subject to the provisions of this Article 10.H.

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ARTICLE 11TRANSFER

Before Owner shall be able to transfer Fuel Assembly(ies), Core Component(s) or parts thereof furnished or serviced hereunder (except temporarily for storage or repair work or permanently for disposal or reprocessing), or the transfer of any interest therein, Owner shall obtain for Westinghouse written assurances from the transferee of limitation of and protection against liability following the proposed transfer at least equivalent to that afforded Westinghouse and its Suppliers hereunder.  If Owner shall sell, assign, license, or otherwise transfer the Fuel Assemblies or Core Components provided hereunder without Westinghouse’s prior written consent, Owner shall become the indemnitor of Westinghouse against any liabilities incurred in excess of those that would have been incurred had no such transfer taken place.

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ARTICLE 12QUALITY ASSURANCE

A.Quality Assurance Program

1.Westinghouse will maintain a quality assurance program which will meet the requirements of the Nuclear Regulatory Commission (NRC) related to quality assurance and quality control, including the eighteen (18) criteria set forth in Appendix B to Part 50 of Title 10 of the Code of Federal Regulations (10 CFR 50, Appendix B).

2.Owner may request requirements in addition to those outlined in the Westinghouse Quality Assurance Program, provided that such requirements are reasonably consistent with such Quality Assurance Program and procedures.  In such event, the changes will be implemented as described in Article 4, CHANGES TO GENERAL WORK SCOPE.

3.In the event these requirements are changed or modified by the NRC after the date of the Agreement Documents, as amended, Westinghouse will implement such changes or modifications in the manufacture of Fuel Assemblies, Core Components and/or the performance of Services under the Agreement Documents as described in Article 4, CHANGES TO GENERAL WORK SCOPE.

4.During the course of the Work, Westinghouse and its Suppliers will prepare and maintain quality assurance records in accordance with the requirements of Westinghouse’s quality assurance program and the applicable NRC regulations.  If the NRC regulations require transmittal to Owner of quality assurance records prepared and maintained in accordance with the requirements of NRC regulations, such records will be transmitted to Owner.

5.Quality assurance records required by applicable NRC regulations to be retained by Westinghouse for Owner will not be released (i) unless required by a governmental authority, or (ii) without the prior written authorization of Owner.

B.Access for Inspection and Audits

1.Owner’s personnel who are performing activities in conjunction with the Agreement Documents, and other agents designated by Owner and acceptable to Westinghouse shall have access at reasonable times, without interfering with production, and under reasonable conditions established by Westinghouse, to the Fabrication Facility.  Westinghouse will use its commercially reasonable efforts to obtain similar access rights to the facilities of its Suppliers which are involved in the performance of Work for Owner.  Such access shall be for purposes of observing implementation of the quality assurance programs and compliance therewith, witnessing non-proprietary tests and inspections related to the quality of the fabricated Fuel Assemblies, Core Components, and observing manufacturing Work in progress for Owner.

2.At Owner’s request, Owner may inspect completed Fuel Assemblies or Core Components at the Fabrication Facility.  During the course of the Work, Westinghouse will make its quality assurance procedures and those of its Suppliers available for review

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by Owner and Owner’s acceptable representatives at the facilities at which such procedures are normally located.

3.Quality assurance records which are under the control of Westinghouse will be made available for review and audit by Owner and Owner’s acceptable representatives at the facilities at which such records are normally maintained.  During these audits, Westinghouse shall provide access to all information reasonably required for proper verification that the quality assurance program for Work performed under the Agreement Documents is being fully implemented.

4.Westinghouse shall supply Owner with such information and access as is reasonably necessary to demonstrate that the quality assurance requirements of the NRC are being met.  Any proprietary information disclosed under this provision shall be treated in accordance with the provisions of Article 10, PROPRIETARY INFORMATION.  Neither the conduct of any audit nor the failure to conduct an audit shall relieve Westinghouse of its obligations under the Agreement Documents.

C.10 CFR Part 21

The Work provided under the Agreement Documents is subject to the provisions of 10 CFR Part 21.  Owner shall be concurrently notified of any reports made to the NRC pursuant to 10 CFR Part 21 arising out of the performance of the Agreement Documents.

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ARTICLE 13DISPUTES

A.All disputes arising from, or in connection with the performance of the Agreement Documents, shall be settled through discussion between the two Parties. In case no agreement is reached within sixty (60) days of the formal declaration of the Fuel Alliance Directors of dispute by a Party, unless otherwise extended by agreement of the Parties, the disputes shall be submitted to arbitration as provided below.

B.The Parties agree that any dispute (“Arbitrable Claim”) that is not otherwise resolved in accordance with the terms hereof and the terms of the Fuel Alliance Agreement, shall be submitted to final and binding arbitration for resolution and in accordance with the Commercial Arbitration Rules of the AAA in effect at the time of the arbitration. Unless the Parties otherwise mutually agree in writing, the arbitral panel (“Arbitral Panel”) shall consist of three (3) people.  Each Party shall give written notice of its selection of a person to serve as a member of the Arbitral Panel (“Member”), who shall have no less than ten (10) years of experience in the litigation of complex disputes including preferably experience in the nuclear power generation industry.  Within thirty (30) days after the selection of the Members of the Arbitral Panel, the Members shall agree in writing on their nomination of a person to serve as the chairman of the Arbitral Panel, who shall be a practicing attorney validly licensed to practice law in a jurisdiction in the United States and/or a retired judge, and who shall have no less than twenty (20) years of experience in the litigation of complex disputes including preferably experience in the nuclear power generation industry (the “Chairman”).  (References herein to “Member” shall include the Chairman unless the context otherwise requires.)  In the event that the Members do not agree on the person to serve as the Chairman within such thirty (30) day period, the AAA shall choose an independent third person to serve as the Chairman, who must meet the qualification criteria specified above. All Members of the Arbitral Panel must be neutral, act impartially, and be free from any conflict of interest. Each Party shall be responsible for one-half of the fees and expenses of the Arbitral Panel, unless the Arbitral Panel includes an award of fees and expenses in the award.  The Arbitral Panel shall be governed by the provisions of the Agreement Documents and the governing Law, and shall not be entitled to award any punitive, special, indirect, penal, incidental or consequential loss or damages. The decision of the Arbitral Panel shall be issued in a writing that sets forth the Arbitral Panel’s reasoned decision.  The Arbitral Panel shall not be entitled to deviate from the construction, procedures or requirements of the Agreement Documents. In the absence of bias, fraud, or wilful misconduct by an arbitrator, any decision rendered by the Arbitral Panel in any arbitration shall be final and binding upon the Parties under the Federal Arbitration Act 9 U.S.C. §§ 1 et seq., and judgment thereon may be entered in any court having jurisdiction.

C.Pending the final resolution of any claim, Westinghouse shall proceed diligently with the performance of the Work and its other duties and obligations and Owner shall continue to compensate Westinghouse as set forth under the Agreement Documents without diminution of effort; provided Westinghouse is being compensated for the Work pursuant to the terms of the Agreement Documents, including but not limited to the provisions of

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the relevant appendices to the Agreement Documents, the Fuel Alliance Agreement and provided that the Parties agree that such duties and obligations can be safely and prudently performed.

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ARTICLE 14MISCELLANEOUS PROVISIONS

A.No Waivers

The failure of any Party to pursue any rights open to it by virtue of any breach of Agreement Documents by the other Party shall not be construed as a waiver of any right by the non-pursuing Party to exercise such rights at a later date for the same or any other breach of the Agreement Documents.

B.Modification

No waiver, modification, or amendment of any of the provisions of the Agreement Documents shall be binding unless it is in writing and signed by a duly authorized representative of the Party to be bound thereby.

C.Assignment

Neither party shall assign the Agreement Documents without the prior, written consent of the other Party. Westinghouse shall not assign any monies due or to become due to it hereunder without the prior, written consent of Owner. This Article 14.C, Assignment, shall in no respect prohibit subcontracting by Westinghouse of portions of the Work provided hereunder.

Notwithstanding any provision of the Agreement Documents, either Party shall have the right, without such consent, to assign all or a part of its rights, title and interest in the Agreement Documents to:  (1) a parent, subsidiary or an affiliate; provided that such parent, subsidiary or affiliate to which Owner intends to so assign the Agreement Documents is not a competitor or affiliated with a competitor of Westinghouse in the commercial nuclear fuel fabrication industry and maintains the NRC license for the Plant.  In addition, Owner may assign all or part of its rights, title and interest in the Agreement Documents, without such consent, to (2) a trust, cooperative, or other entity utilized by Owner for purposes of financing, or (3) an entity (other than a competitor or affiliated with a competitor of Westinghouse’s in the commercial nuclear fuel fabrication industry) that acquires all or a portion of the Plant, however, the assigning Party shall remain fully responsible for all obligations under the Agreement Documents.

D.Interpretation

1.Titles, headings, and subheadings of the various articles and paragraphs of the Agreement Documents are used for convenience only and shall not be deemed to be a part thereof or be taken into consideration in the interpretation or construction of the Agreement Documents.

2.Words importing the singular only shall also include the plural and vice versa where the context requires.  Words in the masculine gender shall be deemed to include the feminine gender and vice versa.

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3.Unless the context otherwise requires, any reference to a document shall mean such document as amended, supplemented or otherwise modified and in effect from time to time.

4.Unless otherwise stated, any reference to a Party shall include its successors and permitted assigns, and any reference to a Government Authority shall include any entity succeeding to its functions.

5.Wherever a provision is made in the Agreement Documents for the giving of notice, consent or approval by any person, such notice, consent or approval shall be in writing, and the word “notify” shall be construed accordingly.

6.Unless the context requires otherwise, with regard to general oversight of the Work, review of the drawings and specifications and other documents, access to the Fabrication Facility and Work and other similar rights of Owner, the term Owner shall be deemed to also include employees and approved contractors.  Unless the context requires otherwise any reference contained herein to the Agreement Documents or any other agreement or any schedule, Exhibit or Appendix hereto or thereto shall mean the Agreement Documents or such other agreement or such schedules, Exhibits and Appendices, as they may be amended or supplemented, unless otherwise stated.

7.Words and abbreviations not otherwise defined in the Agreement Documents which have well-known nuclear industry meanings in the United States are used in the Agreement Documents in accordance with those recognized meanings.

8.Neither Westinghouse nor Owners shall assert or claim a presumption disfavoring the other by virtue of the fact that the Agreement Documents was drafted primarily by legal counsel for the other, and the Agreement Documents shall be construed as if drafted jointly by Owners and Westinghouse and no presumption or burden of proof will arise favoring or disfavoring any Party by virtue of the authorship of any of the provisions of the Agreement Documents.

E.Survival

The rights regarding Proprietary Information, Limitation of Liability, Patents, License, Insurance, Indemnification and Nuclear Provisions, Transfer, and any other provision providing protection against or limitation of liability of Westinghouse and its Suppliers shall survive termination, expiration or cancellation of the Agreement Documents.  No amendment, modification or alteration of the Agreement Documents shall be binding unless the same shall be in writing and duly executed by the Parties.  If any term or condition is under any circumstances deemed invalid, the remaining terms and conditions shall be construed with the invalid provision(s) deleted.

F.Applicable Law

The Agreement Documents shall be construed and interpreted in accordance with the laws of the State of New York without giving effect to the principles thereof relating to conflicts of laws.

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G.Severability

Should any portion of the Agreement Documents be declared illegal or unenforceable by a court of competent jurisdiction, the remainder of the Agreement Documents shall remain in full force and effect, provided, however, that if either Party is affected adversely in any substantial way, the Parties shall negotiate in good faith to appropriately amend the Agreement Documents.

H.Notices

1.Notice Definitions

a.Except as otherwise provided in the Agreement Documents or agreed by the Parties during the performance thereof, all notice required by the Agreement Documents shall be in writing and shall be delivered by certified mail or courier with confirmation of receipt to the Owner or Westinghouse as appropriate at their office addresses set forth below:

b.Owner’s Contact Information

Name	[**]
Address:	[**]
City, State ZIP Code	[**]
Fax:	[**]
Telephone:	[**]
Email:	[**]

c.Westinghouse’s Contact Information

Name	[**]
Address:	[**]
City, State ZIP Code	[**]
Fax:	[**]
Telephone:	[**]
Email:	[**]

d.Westinghouse Electronic Payment Information

Bank:	[**]
City	[**]
SWIFT #:	[**]
ACCOUNT:	[**]
For the account of:	[**]

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e.Each Party shall promptly notify the other Party of any modification to the above details.

2.Date of Notice

The date of any notice shall be the date it is first received by the addressee or the office of the addressee, whichever is the earlier.

I.Order of Precedence

In the event of conflict between these General Terms and Conditions, any Appendix and/or any other referenced document, the order of precedence shall be:

1.The Fuel Alliance Agreement;

2.These General Terms and Conditions;

3.The applicable Fuel Fabrication Contract (AP1000 Fabrication Contract or Unit 1 Fabrication Contract);

4.The Appendices to the applicable Fuel Fabrication Contract (AP1000 Fabrication Contract or Unit 1 Fabrication Contract);

5.The Fuel Technology License Agreement; and,

6.The Defined Terms

Any amendment shall have priority over the document it amends, and any amended document shall have the same precedence as stated in this provision.  The various documents constituting the contractual obligations between the Parties shall, insofar as is possible, be so interpreted as to be consistent with one another.  Any Agreement Document not listed above shall, in the event of any inconsistency between it and any of the Agreement Documents listed above, be considered to be subordinate.

J.Relationship of Parties

1.Under the terms of the Agreement Documents, Owner is not an employee, agent, partner, contractor or representative of Westinghouse.  Furthermore, nothing contained herein shall be deemed to create a joint venture relationship between Owner and Westinghouse.  The respective obligations and rights of Westinghouse and Owner limited by the terms of the Agreement Documents, and both Parties acknowledge that they do not have authority to incur any obligations or responsibilities on behalf of the other Party, except as specifically agreed under the terms of the Agreement Documents.

2.It is the intention of the parties to create between themselves the relationship of owner and independent contractor.  Westinghouse shall control the manner and details of performance of the Work hereunder, subject to compliance with specifications, drawings, plans, and the reasonable rules, regulations and procedures of Owner governing the operation of the Plant, Owner’s interest being in the result.  No employees, contractors, subcontractors, or agents of Westinghouse shall at any time be deemed or have the rights of employees of Owner, and neither Westinghouse nor any of their employees, contractors, subcontractors, or agents shall be eligible to participate in any employee

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benefit plan sponsored by or participated in by the Owner.  Prior to any individual being assigned to the Work, the Westinghouse shall require that individual to execute the written acknowledgment required by the Form IC-1, Appendix 5.   The executed original of the Form IC-1 shall be provided to Owner prior to start of any Work.

K.Integration

The Agreement Documents set forth the entire agreement of the Parties with respect to the Work contemplated by the same, and there are no other understandings between the Parties with respect to such Work.  The Agreement Documents supersede all other oral or written communications made between the Parties before or at the time of the execution of the Fuel Alliance Agreement.  No modification or amendment of the Agreement Documents shall be of any effect unless made in writing and executed by the authorized representatives of both Parties.

L.Signs

The Site shall be maintained free from any and all advertising and signboards of every kind, except those approved by Owner. The foregoing restrictions do not apply in the case of signage (a) which the Westinghouse reasonably believe are important in ensuring the safety of the public, Westinghouse, and/or Owner; (b) which is required by Laws or (c) is affixed to Westinghouse property for identification purposes.

M.Publications and Photographs

Publications and advertisements concerning the Work and/or the Fuel Alliance Agreement shall not at any time be made by or on behalf of Westinghouse, unless prior written authorization therefor is obtained from Owner. Publications and advertisements concerning the Westinghouse and/or the Fuel Alliance Agreement shall not at any time be made by or on behalf of Owner, unless prior written authorization therefore is obtained from Westinghouse. Picture taking shall not be allowed on the Site, or the Fabrication Facility except with written permission of Owner or Westinghouse, respectively.

N.Kickbacks and Gratuities

Westinghouse and Suppliers are prohibited from providing, soliciting or accepting any kickback. Westinghouse and Suppliers are prohibited from offering or giving a gratuity to an officer, official or employee of the Owner.  Westinghouse shall promptly report any violation or suspected violation to Owner’s Director – Corporate Security and Claims.

O.Creditworthiness

The Agreement Documents are conditioned upon and subject to all Parties maintaining their financial creditworthiness required to perform their responsibilities hereunder.  At any time during the term of the Agreement Documents, Westinghouse or Owner may request reasonable information to support its financial due diligence procedures. All Parties agree to assist in this reasonable financial review.  If reasonable grounds for insecurity of payment and/or

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performance arises or if either Party believes in good faith that the creditworthiness of the other Party has been diminished such Party may demand satisfactory adequate assurance of payment and/or performance from the other Party.

P.Laws and Regulations

1.Westinghouse is responsible for knowing the requirements of all Laws. Westinghouse shall not rely on Owner for any information regarding the substance, existence, applicability, requirements or interpretation of any Laws.

2.Westinghouse shall comply with all Laws applicable to its responsibilities under the Agreement Documents, including but not limited to worker employment eligibility laws. Westinghouse shall be solely responsible for supervision of its employees and Suppliers and their compliance with Laws, whether or not on premises owned or controlled by Owner. Should Westinghouse become aware of any violations of any Laws in the performance of the Work, it shall promptly notify designated Owner personnel.

3.Westinghouse shall, at its own expense, obtain, and at all times during the term of the Agreement Documents, maintain as current, any and all licenses, permits, certifications and/or registrations required by federal, state and local governments, regulatory authorities, and commissions, including the applicable contractors’ licensing board, which are necessary to perform the Work. Such licenses shall apply to the proper classifications required for undertaking the Work.  Westinghouse shall, upon request by Owner, furnish satisfactory evidence of being so licensed.

4.Each Party agrees not to directly or indirectly transfer, re-export or disclose any Information, or any direct or indirect products or technical data resulting therefrom to any country, natural person or entity, except in accordance with the laws, regulations or rulings of the United States of America relating to the exportation or re-exportation of commodities or technical data, including but not limited to 15 CFR Parts 730 et seq. 10°CFR Part 110 10 CFR Part 810, as issued from time to time, or any successor laws, regulations or rulings.

5.Any such transfer, re-export or disclosure by any Party to a country listed in 10 CFR 810.8 (a) will be permitted only after the U.S. Department of Energy provides specific authorization for such transfer.  Owner will insert a similar provision in any agreement it has for the furnishing to third parties or its clients of any direct or indirect products or technical data resulting from such Information or Information; provided, however, that Owner shall be solely responsible for compliance with applicable requirements of U.S. re-export control laws and regulations.

6.The obligations set forth in Article 14.P.4 and Article 14.P.5 shall survive the expiration or termination of the Alliance Documents and shall apply so long as relevant US governmental regulations remain in effect.  In the event of any ambiguity or inconsistency between the provisions of Articles 14.P.4 and 14.P.5 and any other Article of the Alliance Documents, Articles 14.P.4 and 14.P.5 shall be controlling.

--- Signature page follows ---

January 2011 General Terms and Conditions Page 30

“[**]” in this Exhibit 10.01 indicates material that has been omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission.

Westinghouse Proprietary Class 2

IN WITNESS WHEREOF, the Parties have hereto set their respective signatures to this Contract.

SOUTH CAROLINA ELECTRIC & GAS COMPANY
By:	/s/ Kevin B. Marsh
Name	Kevin B. Marsh
Title	President
Date	January 25, 2011

WESTINGHOUSE ELECTRIC COMPANY LLC
By:	/s/ Aris S. Chandris
Name	Aris S. Chandris
Title	President & CEO
Date	January 27, 2011

January 2011 General Terms and Conditions Page 31

“[**]” in this Exhibit 10.01 indicates material that has been omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission.

EX-10.02

Exhibit 10.02

INDEPENDENT CONTRACTOR AGREEMENT

THIS INDEPENDENT CONTRACTOR AGREEMENT (hereinafter “Agreement”) is effective as of the 7th day of January, 2011, by and between South Carolina Electric & Gas Company (hereinafter “SCE&G”) and William B. Timmerman (hereinafter “Contractor”), pursuant to which Contractor will provide services, as set forth below, to assist SCE&G under the terms and conditions and for the consideration set forth below.

RECITALS

WHEREAS, SCE&G currently employs Contractor as its Chief Executive Officer and whereas SCE&G and Contractor have agreed upon a November 30, 2011 retirement date, at which time he shall have resigned as a director and officer of SCE&G and all of its affiliates (the “Retirement Date”).

WHEREAS, Contractor, during his tenure as Chief Executive Officer of SCE&G, led the development and implementation of SCE&G’s plans to construct and operate two new Westinghouse A-1000 nuclear power plants, thereby obtaining detailed knowledge of the regulatory requirements, financing, construction and other matters concerning a new nuclear project.

WHEREAS, SCE&G desires to engage Contractor post-retirement as an independent contractor and not as an employee of SCE&G to provide those services as requested by SCE&G’s Chief Executive Officer (the “CEO”), in the CEO’s discretion, including but not limited to (i) consulting on nuclear engineering projects and (ii) consulting on other generation projects (all such services referred to collectively herein as “Contractor Services”).

WHEREAS, SCE&G does not seek and does not assert any control over the day-to-day activities of Contractor in performing the services necessary to accomplish the objectives set forth herein.  Furthermore, Contractor will be solely responsible for scheduling his work hours to timely accomplish the objectives described herein.  SCE&G is only concerned with the final product and not the manner in which the independent contractor goes about his work.

WHEREAS, Contractor understands that he will be performing services under this Agreement as an independent contractor and not as an employee of SCE&G and, therefore, will be solely responsible for all federal and state tax obligations imposed with respect to payments received from SCE&G.  Further, SCE&G will not pay any Federal Insurance Contributions Act (“FICA”) taxes or Federal Unemployment Tax Act (“FUTA”) taxes, will not withhold or pay any income tax withholding or FICA taxes on Contractor’s behalf, and will not cover Contractor for workers’ compensation purposes. Contractor is a fully independent contractor offering services to SCE&G and the general public and, therefore, is able to perform work for companies other than SCE&G, subject to the provisions of this Agreement, including specifically Section 8.

WHEREAS, Contractor agrees to release and indemnify SCE&G of any and all liability for any claim for workers’ compensation benefits, any claim for any tax liabilities or consequences which could arise out of Contractor’s failure to pay taxes from Contractor’s pay in accordance with state or federal law.

THEREFORE, in consideration of the mutual promises set forth herein, SCE&G and Contractor agree as follows:

1.RECITALS.  The parties acknowledge and agree that the above recitals are true and correct and are incorporated herein by reference for all purposes as if set forth fully herein.

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2.SERVICE PERIOD.  The engagement of Contractor to provide “Contractor Services” (as defined above) hereunder shall commence as of the business day following the Retirement Date and shall continue until the earlier of: the five (5) year anniversary of such commencement date or the Commercial Operation date of V.C. Summer Nuclear Station Unit 2, unless terminated on an earlier date in accordance with Section 9 below (such period, the “Service Period”).

3.DUTIES AND RESPONSIBILITIES OF CONTRACTOR.  During the Service Period, Contractor shall provide Contractor Services.

It is intended that Contractor’s change in status from Chief Executive Officer and employee to Contractor hereunder shall be a “separation from service” within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended and the regulations thereunder (the “Code”).  Furthermore, in no event shall Contractor provide services at a level that would invalidate Contractor’s “separation from service” from SCE&G for purposes of Section 409A of the Code.

Nothing herein shall preclude Contractor from engaging in other business ventures or services so long as Contractor is not otherwise in breach of this Agreement or any other agreement Contractor may have with SCE&G (including, but not limited to the provisions of Section 8 below), and Contractor shall have complete control over the manner and means by which Contractor Services are provided hereunder.  SCE&G acknowledges that Contractor has or may have other clients, subject to Section 8 below.

4.SERVICE FEES.  During the Service Period, SCE&G shall pay Contractor an annual rate of three-hundred and sixty-thousand dollars ($360,000) (the “Service Fees”), to be paid quarterly in arrears; provided that payment of the first quarterly Service Fees shall be paid with the Service Fees of the second quarter (i.e., the first six months of Service Fees shall be paid in one installment as soon as practicable after the six-month anniversary of the commencement of Contractor Services hereunder.)

5.EXPENSES.  Contractor shall be fully responsible for all of Contractor’s expenses incurred in connection with the performance of Contractor Services hereunder; provided that SCE&G agrees to reimburse Contractor for such reasonable authorized expenses for which Contractor has obtained the CEO’s prior written approval and has documented in accordance with SCE&G policy, which policy may be altered from time to time by SCE&G in its sole discretion.

6.STATUS OF CONTRACTOR AS INDEPENDENT CONTRACTOR.

6.1.SCE&G and Contractor confirm that it is their express intention that Contractor’s relationship with SCE&G is that of an “independent contractor” and nothing in this Agreement shall in any way be construed to constitute the Contractor as an agent, employee, partner, joint venturer or representative of SCE&G.  Without limiting the generality of the foregoing, Contractor is not authorized to bind SCE&G to any liability or obligation or to represent that Contractor has any such authority.  Contractor agrees to furnish his own premises and materials necessary for Contractor’s performance of his obligations under this Agreement and shall incur all expenses associated with his performance hereunder.  SCE&G and Contractor agree that neither Contractor (nor any of his employees, as applicable) will receive any employment-related benefits from SCE&G or otherwise be eligible to participate in any benefit plans or programs, if any, maintained by SCE&G.

6.2.SCE&G shall not withhold payroll, state, federal, social security, employment or any other taxes from the Service Fees paid to Contractor, and Contractor shall be solely responsible for payment of any such taxes.  SCE&G shall report all Service Fees paid to Contractor on a

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1099-MISC form at the end of each calendar year.  Contractor hereby accepts exclusive liability for the payment of all federal, state, and other taxes, all contributions for unemployment insurance or old age pensions or annuities, and all social security payments which are measured by payments to Contractor (or the employees of Contractor, as applicable) for the performance of the Contractor Services.  Contractor acknowledges and agrees that he shall not be entitled to unemployment insurance benefits unless unemployment compensation is provided by Contractor or by some entity other than SCE&G.  Contractor agrees to fully defend, indemnify and hold harmless SCE&G from the payment of taxes, interest, penalties or contributions which are required of SCE&G by any government agency at any time as the result of payment of the amounts set forth herein or which SCE&G may otherwise be compelled to pay (except to the extent required by law to be withheld and in fact withheld).  Contractor further agrees to comply with all valid administrative regulations respecting the assumption of liability for such taxes and contributions.  For all tax purposes, including but not limited to, FICA; the Social Security Act; the Immigration Reform and Control Act; FUTA; income tax withholdings; and any and all other federal, state, or local laws, rules, and regulations, Contractor and each of his employees, if any, shall be treated as an independent contractor and not an employee of SCE&G.

6.3.As an independent contractor, Contractor acknowledges and agrees that the following provisions shall apply:

6.3.1.Contractor shall choose the time, location, and manner in which all services are performed, according to his own judgment, as long as the objectives set forth by the CEO are met in a satisfactory manner as determined by the CEO in his sole discretion.  SCE&G does not have the right to control the details and means by which Contractor’s services are rendered.  SCE&G only seeks the benefits of the results of Contractor’s efforts and, except as otherwise provided in this Agreement, Contractor assumes and retains discretion for the methods, details, means, techniques and procedures to be utilized in the performance of Contractor’s services covered by this Agreement.  In particular, other than SCE&G’s right to request Contractor’s services from time to time, SCE&G has no right or authority and will not direct or control Contractor regarding the number of hours spent for the preparation and performance of the tasks assigned, productivity, the place of work, and the dates and time of work.

6.3.2.In the event that Contractor wishes to work on SCE&G’s premises or utilize SCE&G resources for the purposes of accomplishing the objectives herein, Contractor agrees that he will obtain the CEO’s prior written approval.

6.3.3.While Contractor is ineligible for employee benefits provided by SCE&G, this provision is not intended to void or adversely affect Contractor’s rights to benefits he earned and to which he was fully vested while he was an employee of SCE&G or one of its affiliates prior to the Retirement Date.

6.3.4.Furthermore, if the Internal Revenue Service, or any other enforcement authority or agency or court of competent jurisdiction, shall determine that Contractor should be reclassified as an employee of SCE&G or one of its affiliates, Contractor specifically agrees and understands that such determination will not have a retroactive effect for purposes of eligibility to participate in any employee benefit plan of SCE&G, even if such determination is applicable to prior years.

6.4.Contractor’s Assistants.  Contractor shall have the right to engage assistance in completing the duties set forth herein as he deems appropriate provided that any such individual shall be

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subject to the terms and conditions herein, including without limitation, the confidentiality provisions of Section 7 below.  Contractor shall be responsible for paying any and all compensation and any applicable employment taxes that might be owed to any such assistants and Contractor shall indemnify and hold SCE&G harmless against any such liabilities.  Contractor agrees to provide his assistants with workers’ compensation coverage.

6.5.No Representations/Commitments.  Contractor will not make any representation, warranty, agreement or commitment on behalf of SCE&G without the advance written authorization of SCE&G.

7.CONFIDENTIALITY.  Contractor acknowledges that, in order to successfully perform the services described herein, it is necessary for SCE&G to entrust Contractor with certain valuable proprietary information and non-public knowledge of certain modes of business operation, and particular information concerning the affairs, practices, and other information concerning SCE&G and any of its affiliates (“Confidential Information”).  Contractor acknowledges that he has acquired or will acquire Confidential Information in the course of or incident to performing services hereunder and Contractor agrees that neither he nor his employees or any third person or firm engaged by Contractor will directly or indirectly, at any time, during the term of this Agreement or, if this Agreement is terminated, at any time after this Agreement is terminated, use or cause to be used any such Confidential Information in connection with any activity or business other than the business contemplated by this Agreement for SCE&G.  Contractor also agrees that he will not disclose such Confidential Information to any other party unless such disclosure has been authorized in writing by the CEO, except as may be required by any applicable law or by order of a court of competent jurisdiction, a government body or except to the extent that such information has already been made public by SCE&G.  Upon the termination of this Agreement for any reason, Contractor and any person or firm engaged by Contractor agree that each immediately will return to SCE&G, any and all Confidential Information and all other materials (including computers, fax machines, printers, cell phone and other equipment) or documents, including without limitation mailing lists, rolodexes, computer print-outs, and computer disks and tapes belonging to SCE&G which contain information pertaining to SCE&G’s business, methods, customers, potential customers or employees unless the CEO agrees in writing to Contractor’s retention thereof.

8.EMPLOYMENT LIMITATIONS.   Without the CEO’s prior written approval, the Contractor shall not, during the Service Period, (a) become employed on a full-time basis for any employer or (b) in any manner, directly or indirectly, either individually or in partnership or in conjunction with any person or persons, firm, association, syndicate, company or corporation as principal, agent, shareholder owning 5% or more of any class of equity securities, independent contractor, employee, director or in any other manner whatsoever, carry on or be engaged in or be concerned with or advise any electric or gas utility or supplier with a service territory contiguous to or overlapping the service territory of SCE&G and any of its affiliates or any person or persons, firm, association, syndicate, company or corporation engaged in or involved with nuclear related issues for electric utilities or the generation of electricity (which expressly include, but are not limited to, all Westinghouse Electric Company LLC and The Shaw Group, Inc. entities and affiliates).

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9.TERMINATION.

9.1.General.  The Service Period shall terminate as provided in Section 2, provided that the Service Period and this Agreement shall terminate immediately upon Contractor’s death or upon thirty (30) days notice of Contractor’s breach of the Employment Limitations provisions in Section 8 above or any material breach of this Agreement.

9.2.Termination Upon Breach.  In the event that the Service Period and this Agreement terminate on account of Contractor’s breach (as described in Section 9.1 above), this Agreement shall automatically become void and Contractor shall not be entitled to receive any further Service Fees or any other benefits/payments hereunder.

10.GENERAL PROVISIONS.

10.1.Governed by South Carolina Law.  This Agreement shall be governed by the laws of the State of South Carolina.

10.2.Notices.  Any notice required or permitted under this Agreement shall be in writing and sent to the other party by certified mail, registered mail, express delivery or overnight courier (providing proof of delivery) at the address below or to such other address as a party hereto may specify in writing.

SCE&G	Contractor
Chief Executive Officer	William B. Timmerman
220 Operation Way, Mail Code D-302	505 Forest Rd.
Cayce, SC 29033	Sea Island, GA 31561
803 217-9000	912 638-1099

10.3.Entire Agreement.  This Agreement, including any Addendums, constitutes the entire agreement between the parties and supersedes and replaces any and all previous agreements, either oral or written.  Notwithstanding the foregoing, Contractor shall be entitled to all compensation or benefits for which he is entitled pursuant to the terms of any SCE&G benefit plan(s).  No modifications, amendments, or changes to this Agreement shall be binding on the parties unless and until the parties have approved the modifications in writing.

10.4.Severability / Blue Pencil.  If any provision of this Agreement is found, held, or deemed to be void, unlawful, or unenforceable for any reason, then such invalid or unenforceable section shall be removed and not affect the other parts of this Agreement, which parts shall remain in full force and effect.  If a court should determine that any portion of this Agreement is overbroad or unreasonable, such provision shall be given effect to the maximum extent possible by narrowing or enforcing in part that aspect of the provision found to be overbroad or unreasonable.

10.5.Waivers Not Continuing.  No breach of any provision hereof can be waived unless in writing.  Waiver of any breach of any provision shall not be deemed to be a waiver of any further breach of the same or any other provision of this Agreement.

10.6.Assignability.  SCE&G may transfer or assign this Agreement (in or whole or in part) to any subsidiary or affiliate of SCE&G or to any entity with which SCE&G may be merged or consolidated, or which may acquire substantially all of the existing business of SCE&G.  This

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Agreement shall inure to the benefit of and shall be binding upon the successors or permitted assigns of SCE&G.  If this Agreement is assigned in accordance with the foregoing provisions, all references herein to SCE&G shall likewise be deemed to be references to the successor or assignee.  Contractor may not transfer, assign, pledge, encumber, hypothecate or otherwise dispose of this Agreement for any part of Contractor’s interest herein.

10.7.Laws.  Contractor agrees to be responsible for compliance with all federal, state and local laws, rules and regulations applicable to his performance of this contract.

10.8.Use of SCE&G’s Name or Logo.  Contractor shall not use SCE&G’s name or logo as a reference or for any other purpose without prior consent from an authorized representative of SCE&G.

10.9.Reports.  Contractor agrees that the Contractor will, from time to time during the Service Period, keep SCE&G advised as to the Contractor’s activities and progress in performing Contractor Services under this Agreement.  The Contractor further agrees that the Contractor will, as requested by SCE&G, prepare written reports with respect to such progress, subject to the Company’s requested timing, specifications and format.

10.10.Work for Hire.  Contractor agrees that all copyrightable material, notes, records, drawings, designs, inventions, improvements, developments, discoveries and trade secrets conceived, discovered, developed or reduced to practice by Contractor, solely or in collaboration with others, during the Service Period that substantially relate to the business of SCE&G (and/or its products and services) that Contractor may be directed to undertake, investigate or experiment with or that Contractor may become associated with in work, investigation or experimentation in SCE&G’s line of business in performing Contractor Services under this Agreement (collectively, “Inventions”), are the sole property of the Company.  The Contractor also agrees to assign (or cause to be assigned) and hereby assigns fully to SCE&G all Inventions and any copyrights, patents, mask work rights or other intellectual property rights relating to all Inventions at the expense of SCE&G.  Contractor agrees to assist SCE&G, or its designee, at SCE&G’s expense, in every proper way to secure SCE&G’s rights in Inventions and any copyrights, patents, mask work rights or other intellectual property rights relating to all Inventions in any and all countries, including the disclosure to SCE&G of all pertinent information and data with respect to all Inventions, the execution of all applications, specifications, oaths, assignments and all other instruments that SCE&G may deem necessary in order to apply for and obtain such rights and in order to assign and convey to SCE&G, its successors, assigns and nominees the sole and exclusive right, title and interest in and to all Inventions, and any copyrights, patents, mask work rights or other intellectual property rights relating to all Inventions.  The Contractor also agrees that the Contractor’s obligation to execute or cause to be executed any such instrument or papers shall continue after the termination of the Service Period.

10.11.Section Headings.  The section headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.

10.12.Voluntary Nature of Agreement.  Contractor acknowledges and agrees that he is executing this Agreement voluntarily and without any duress or undue influence by SCE&G or anyone else; that he has carefully read this Agreement and has asked any questions needed to understand the terms, consequences and binding effect of this Agreement and fully

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understands it; and that he has been provided an opportunity to seek the advice of attorneys of his choice before signing this Agreement.

10.13.Modification.  This Agreement shall not be altered, modified, amended or terminated (other than as provided in Section 9) except by a written instrument signed by the parties hereto.

10.14.Survival. The covenants, agreements, representations and warranties contained in or made pursuant to this Agreement shall survive the termination of Contractor’s relationship with SCE&G and the Service Period.

* * * * *

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IN WITNESS WHEREOF, the parties execute this Independent Contractor Agreement this 7th day of January, 2011.

South Carolina Electric & Gas Company:
By:	/s/ Kevin B. Marsh
Title:	President
Contractor
/s/ William B. Timmerman
William B. Timmerman

ACKNOWLEDGEMENT

In conformance with Section 6 of this Agreement, William B. Timmerman, in his individual capacity, specifically waives entitlement to any benefits SCE&G provides to its employees.  This provision in no way voids or adversely affect his rights to benefits he earned and to which he was fully vested while he was an employee of SCE&G or one of its affiliates prior to the Retirement Date.  In addition, if a court, the Internal Revenue Service, or any other enforcement authority or agency shall determine that William B. Timmerman should be reclassified as an employee of SCE&G or one of its affiliates, William B. Timmerman specifically agrees and understands that such determination will not have a retroactive effect for purposes of eligibility to participate in any employee benefit plan of SCE&G, even if such determination is applicable to prior years.

/s/ William B. Timmerman

William B. Timmerman

[Signature Page to SCE&G/Timmerman Independent Contractor Agreement]

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EX-31.01

Exhibit 31.01

CERTIFICATION

I, William B. Timmerman, certify that:

1.I have reviewed this quarterly report on Form 10-Q of SCANA Corporation;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:   May 3, 2011
	/s/William B. Timmerman
	William B. Timmerman
	Chairman of the Board and Chief Executive Officer

60

EX-31.02

Exhibit 31.02

CERTIFICATION

I, Jimmy E. Addison, certify that:

1.I have reviewed this quarterly report on Form 10-Q of SCANA Corporation;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:   May 3, 2011
	/s/Jimmy E. Addison
	Jimmy E. Addison
	Senior Vice President and Chief Financial Officer

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EX-31.03

Exhibit 31.03

CERTIFICATION

I, William B. Timmerman, certify that:

1.I have reviewed this quarterly report on Form 10-Q of South Carolina Electric & Gas Company;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:   May 3, 2011
	/s William B. Timmerman
	William B. Timmerman
	Chairman of the Board and Chief Executive Officer

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EX-31.04

Exhibit 31.04

CERTIFICATION

I, Jimmy E. Addison, certify that:

1.I have reviewed this quarterly report on Form 10-Q of South Carolina Electric & Gas Company;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:   May 3, 2011
	/s/Jimmy E. Addison
	Jimmy E. Addison
	Senior Vice President and Chief Financial Officer

63

EX-32.01

Exhibit 32.01

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of SCANA Corporation (the “Company”) on Form 10-Q for the quarter ended March 31, 2011 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I certify pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, that:

(1)The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 3, 2011

/s/William B. Timmerman

William B. Timmerman

Chairman of the Board and Chief Executive Officer

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

64

EX-32.02

Exhibit 32.02

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of SCANA Corporation (the “Company”) on Form 10-Q for the quarter ended March 31, 2011 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I certify pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, that:

(1)The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 3, 2011

/s/Jimmy E. Addison

Jimmy E. Addison

Senior Vice President and Chief Financial Officer

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

65

EX-32.03

Exhibit 32.03

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of South Carolina Electric & Gas Company (the “Company”) on Form 10-Q for the quarter ended March 31, 2011 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I certify pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, that:

(1)The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 3, 2011

/s/William B. Timmerman

William B. Timmerman

Chairman of the Board and Chief Executive Officer

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

66

EX-32.04

Exhibit 32.04

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of South Carolina Electric & Gas Company (the “Company”) on Form 10-Q for the quarter ended March 31, 2011 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I certify pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, that:

(1)The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 3, 2011

/s/Jimmy E. Addison

Jimmy E. Addison

Senior Vice President and Chief Financial Officer

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

67