The following discussion should be read in conjunction with Management's Discussion and Analysis of Financial Condition and Results of Operations appearing in SCANA Corporation's (SCANA, and together with its consolidated subsidiaries, the Company) Annual Report on Form 10-K for the year ended December 31, 2008.

Earnings Per Share

Earnings per share was as follows:

Third Quarter Year to Date 2009 2008 2009 2008 Earnings per share $ .84 $ .80 $ 2.23 $ 2.22

Third Quarter

Earnings per share increased $.11 due to the tax benefit and related interest income arising from the resolution of an income tax uncertainty in favor of the Company and $.06 due to increased allowance for funds used during construction. This increase was partially offset by lower electric margin of $.02, lower gas margin of $.02, dilution from additional shares outstanding of $.03 and by higher operating expenses which are explained in the following pages.

Year to Date

Earnings per share increased $.11 due to the tax benefit and related interest income arising from the resolution of an income tax uncertainty in favor of the Company and by $.17 due to increased allowance for funds used during construction. These items were partially offset by lower electric margin of $.04, lower gas margin of $.04, higher interest expense of $.04, dilution from additional shares outstanding of $.09 and higher operating expenses which are explained in the following pages.

Dividends Declared

The Company's Board of Directors has declared the following dividends on common
stock during 2009:

Declaration Date  Dividend Per Share     Record Date         Payment Date
February 19, 2009        $.47             March 10,           April 1, 2009
                                     2009
April 23, 2009            .47             June 10,            July 1, 2009
                                     2009
July 30, 2009             .47             September            October 1, 2009
                                     10, 2009
October 28, 2009          .47             December 10,         January 1, 2010
                                     2009

Electric Operations

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

                                 Third Quarter                       Year to Date
Millions of dollars        2009    % Change        2008      2009     % Change       2008
Operating revenues     $  615.3        (8.4 )% $  671.4   $ 1,633.2       (5.9 )% $ 1,735.1
Less: Fuel used in        220.1       (17.7 )%    267.5       595.1      (11.4 )%     671.8
generation
     Purchased power        3.1       (58.1 )%      7.4        11.0      (61.1 )%      28.3
   Margin              $  392.1        (1.1 )% $  396.5   $ 1,027.1       (0.8 )% $ 1,035.0

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Electric sales for three and nine months ended September 30, 2009 and 2008, and the amount and percentage change by customer class were as follows:

                             Third Quarter                  Year to Date
  Sales (Million KWH)   2009    2008    % Change      2009     2008    % Change
 Residential            2,350   2,350          -      6,153    6,035        2.0 %
 Commercial             2,112   2,144       (1.5 )%   5,676    5,756       (1.4 )%
 Industrial             1,447   1,625      (11.0 )%   4,014    4,765      (15.8 )%
 Other                    158     163       (3.1 )%     429      435       (1.4 )%
  Total Retail Sales    6,067   6,282       (3.4 )%  16,272   16,991       (4.2 )%
 Wholesale                586     702      (16.5 )%   1,587    1,814      (12.5 )%
  Total Sales           6,653   6,984       (4.7 )%  17,859   18,805       (5.0 )%

Third Quarter

Margin decreased due to lower residential and commercial customer usage (including the effects of weather) of $3.3 million, lower industrial sales of $3.3 million and lower margins on off-system sales of $4.9 million, partially offset by higher residential and commercial customer growth of $2.1 million and an increase in base rates by the Public Service Commission of South Carolina (SCPSC) under the Base Load Review Act (the BLRA) of $2.4 million which became effective for bills rendered on or after March 29, 2009.

Year to Date

Margin decreased due to lower off-system sales of $13.0 million and lower industrial sales of $9.8 million, partially offset by higher residential and commercial customer usage (including the effects of weather) of $1.8 million, residential and commercial customer growth of $5.4 million and an increase in base rates by the SCPSC under the BLRA of $4.2 million which became effective for bills rendered on or after March 29, 2009.

Gas Distribution

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

                                 Third Quarter                     Year to Date
Millions of dollars        2009    % Change        2008     2009    % Change      2008
Operating revenues     $  114.0       (35.6 )% $  177.1   $ 667.7      (22.8 )% $ 865.3
Less: Gas purchased        64.8       (50.1 )%    129.8     420.8      (32.6 )%   624.0
for resale
   Margin              $   49.2         4.0 %  $   47.3   $ 246.9        2.3 %  $ 241.3

Gas sales volume for Gas Distribution for the three and nine months periods ended September 30, 2009 and 2008, and the amount and percentage change by customer class were as follows:

                                     Third Quarter                    Year to Date
Sales (Thousand Dekatherms)     2009     2008    % Change      2009       2008     % Change
 Residential                    4,293    4,276        0.4 %    44,215     43,672        1.2 %
 Commercial                     5,622    5,576        0.8 %    27,244     27,037        0.8 %
 Industrial                    41,317   41,702       (0.9 )%  119,539    120,568       (0.9 )%
Sales for Resale                1,809    1,464       23.6 %     7,443      6,339       17.4 %
  Total Retail Sales           53,041   53,018          -     198,441    197,616        0.4 %
 Transportation Volumes        31,779   31,514        0.8 %    99,688    104,310       (4.4 )%
   Total Sales                 84,820   84,532        0.3 %   298,129    301,926      (1.3) %

Third Quarter

Operating revenues and gas purchased for resale decreased primarily due to lower commodity prices. Margin at SCE&G increased $0.5 million primarily due to the SCPSC-approved increase in retail gas base rates which became effective with the first billing cycle of November 2008. Margin at PSNC Energy increased by $1.2 million primarily due to the North Carolina Utilities Commission (NCUC)-approved increase in retail gas base rates which became effective for services rendered on or after November 1, 2008 and due to customer growth.

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Year to Date

Operating revenues and gas purchased for resale decreased primarily due to lower commodity prices. Margin at SCE&G decreased due to lower customer usage of $3.0 million, partially offset by an increase of $2.5 million due to the SCPSC-approved increase in retail gas base rates which became effective with the first billing cycle of November 2008. Margin at PSNC Energy increased by $5.5 million primarily due to the NCUC-approved increase in retail gas base rates which became effective for services rendered on or after November 1, 2008 and due to customer growth.

Gas Transmission

Gas Transmission is comprised of the operations of Carolina Gas Transmission
Corporation (CGT). Gas transmission revenues (including transactions with
affiliates) were as follows:

                                   Third Quarter                   Year to Date
Millions of dollars           2009   % Change       2008     2009   % Change     2008
Transportation revenue    $   12.6        7.7 % $   11.7   $ 38.4        5.2 % $ 36.5

Third Quarter and Year to Date

Transportation revenue increased primarily due to the sale of additional firm transportation capacity.

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 (loss) available to
common shareholders were as follows:

                                        Third Quarter                     Year to Date
Millions of dollars               2009    % Change        2008      2009   % Change       2008
Operating revenues            $   64.1       (21.2 )% $   81.3   $ 372.2      (17.0 )% $ 448.2
Income (loss) available to        (3.6 )        *         (0.5 )    15.4      (25.2 )%    20.6
common shareholders

*Greater than 100%

Third Quarter and Year to Date

Operating revenues decreased as a result of lower average retail prices arising from lower natural gas commodity prices and lower sales volume. These decreases in margin result primarily from a shift in the marketplace as more customers have opted for a fixed-rate pricing plan to lock in recent lower natural gas prices. Fixed rate plans generally result in lower margins as their terms are known and the gas cost can be hedged. Income available to common shareholders decreased primarily as a result of lower margin, partially offset by lower operating expenses.

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:

                                Third Quarter                      Year to Date
Millions of dollars       2009    % Change        2008      2009   % Change         2008
Operating revenues    $  163.8       (61.1 )% $  421.4   $ 579.7      (52.4 )% $ 1,217.5
Net income                 1.3       (13.3 )%      1.5       3.2        100 %        1.6

Third Quarter and Year to Date

Operating revenues decreased primarily due to lower natural gas commodity prices. Year to date income available to common shareholders increased primarily due to lower bad debt expense.

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Other Operating Expenses

Other operating expenses arising from the operating segments previously
discussed were as follows:

                                  Third Quarter                     Year to Date
Millions of dollars         2009    % Change        2008      2009   % Change       2008
Other operation and     $  162.9         1.6 %  $  160.4   $ 484.8       (3.9 )% $ 504.4
maintenance
Depreciation and            82.5        (0.6 )%     83.0     247.8        2.5 %    241.6
amortization
Other taxes                 44.9        11.7 %      40.2     134.8        6.0 %    127.2

Third Quarter

Other operation and maintenance expenses increased primarily due to higher incentive compensation and other benefits. Depreciation and amortization expense decreased $3.9 million due to a true up of depreciation expense related to SCE&G's synthetic fuel investments in the third quarter of 2008, partially offset by net property additions in 2009. Other taxes increased primarily due to higher property taxes.

Year to Date

Other operation and maintenance expenses decreased primarily due to lower generating, transmission and distribution expense of $4.6 million, lower customer service expense of $5.5 million, and $2.5 million due to a Georgia Public Service Commission settlement and related legal costs in 2008. Depreciation and amortization expense increased primarily due to net property additions, partially offset by $3.9 million due to a true up of depreciation expense related to SCE&G's synthetic fuel investments in third quarter of 2008. 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. Other income (expense) changed for the three and nine months ended September 30, 2009 compared to 2008 primarily due to increased interest income and lower pension income described below.

Resolution of Economic Impact Zone (EIZ) Tax Credit Uncertainty

SCE&G earned an Economic Income Zone state income tax credit (EIZ credit) in 1996 based on qualifying property additions. This EIZ credit exceeded the Company's state tax liability for the 1996 tax year, leaving $15.3 million unused. The Company's attempt to carry forward the unused credit to tax years 1997 and 1998 was contested by the South Carolina Department of Revenue. In September 2009, the South Carolina Supreme Court decided the matter in the Company's favor. As a result of the favorable resolution of this uncertainty, the Company recorded the refund for the previously contested EIZ credit of $15.3 million and an additional $14.3 million of interest income.

Prior to this favorable Supreme Court decision, and pursuant to accounting guidance concerning income tax uncertainties, the value of the contested credit had not been reflected in the Company's statement of income. SCE&G's practice is to amortize EIZ credits to income over the lives of the properties that gave rise to the credits. Accordingly, upon resolution of this prior uncertainty, the Company recorded a multi-year catch-up adjustment in the third quarter 2009 of approximately $6.3 million ($4.0 million after federal tax effect) as a reduction in income taxes. The remainder of these EIZ credits (approximately $9.0 million) will be amortized to income over approximately 12 years (the remaining life of the related properties) as a reduction in income taxes. The interest income of $14.3 million ($8.8 million after tax effect) was recorded in the third quarter of 2009 within other income.

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Pension Expense (Income)

Pension expense (income) was recorded on the Company's income statements and
balance sheets as follows:

                                               Third Quarter        Year to Date
Millions of dollars                            2009       2008     2009      2008
Income Statement Impact:
 Reduction in employee benefit costs        $      -    $ (0.2 ) $     -   $  (0.4 )
 Other income                                   (0.8 )    (3.6 )    (2.8 )   (11.0 )
Balance Sheet Impact:
 Increase (reduction) in capital                 2.9      (0.1 )     7.4      (0.2 )
expenditures
 Component of amount (due to) payable from       0.7      (0.1 )     2.0      (0.2 )
Summer Station co-owner
 Regulatory asset                                7.8         -      23.4         -
Total Pension Expense (Income)              $   10.6    $ (4.0 ) $  30.0   $ (11.8 )

The Company is recording pension expense in 2009, while it recorded pension income in 2008. This unfavorable change is due to the significant decline in plan asset values during the fourth quarter of 2008 stemming from turmoil in the financial markets. However, no contribution to the pension trust will be necessary in or for 2009, nor will limitations on benefit payments apply. Additionally, in February 2009, SCE&G was granted accounting orders by the SCPSC under which it will mitigate a significant portion of this increased pension expense by deferring as a regulatory asset the amount of pension expense above that which is included in current rates for its retail electric and gas distribution regulated operations. These costs are being deferred until future rate filings, at which time the accumulated deferred costs will be addressed prospectively.

Allowance for Funds Used During Construction (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 increased in 2009 due to the Company's various construction projects, including the new nuclear generating units and pollution abatement projects at coal-fired plants.

Interest Expense

Interest charges increased primarily due to the additional borrowings described in Note 3 to the condensed consolidated financial statements.

Income Taxes

Income tax expense decreased primarily due to lower income before taxes, which excludes the allowance for equity funds used during construction, a nontaxable item, and due to the recognition in the third quarter of 2009 of the tax benefit arising from the resolution of an income tax uncertainty (e.g., previously contested EIZ tax credits (See Other Income (Expense) - Resolution of Economic Impact Zone (EIZ) Tax Credit Uncertainty above)).

LIQUIDITY AND CAPITAL RESOURCES

Cash requirements for the Company's regulated subsidiaries arise primarily from their operational needs, funding their construction programs, payment of dividends to SCANA and refinancing of securities when deemed prudent. The ability of the regulated subsidiaries to replace existing plant investment, to expand to meet future demand for electricity and gas and to install equipment necessary to comply with environmental regulations will depend on their ability to attract the necessary financial capital on reasonable terms. Regulated subsidiaries recover the costs of providing services through rates charged to customers. Rates for regulated services are generally based on historical costs. As customer growth and inflation occur and these subsidiaries continue their ongoing construction programs, rate increases will be sought. The future financial position and results of operations of the regulated subsidiaries will be affected by their ability to obtain adequate and timely rate and other regulatory relief, as requested.

The issuance of various securities by the Company or its regulated subsidiaries, including short- and long-term debt, is subject to customary approval or authorization by one or more state or federal regulatory bodies, including state public service commissions and the Federal Energy Regulatory Commission (FERC).

In September 2009, PSNC Energy entered into an agreement to issue and sell $100 million of ten-year unsecured notes. PSNC Energy has until March 31, 2010 to draw funds on the notes.

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In June 2009, SCANA issued $30 million of Floating Rate Senior Notes due June 1, 2034. This final installment of notes, together with notes in the same series previously issued in 2007 and 2008, represents total borrowings in the series of $110 million principal amount. Proceeds from these notes were used to finance capital expenditures and for general corporate purposes.

In March 2009, SCE&G issued $175 million of First Mortgage Bonds bearing an annual interest rate of 6.05% and maturing on January 15, 2038. Proceeds from the sale were used to repay short-term debt and for general corporate purposes.

In January 2009, SCANA closed on the sale of 2.875 million shares of common stock at $35.50 per share. Proceeds of $100.5 million were used to finance capital expenditures, including the construction of new nuclear units, and for general corporate purposes. In addition, SCANA issued stock valued at $68.0 million (when issued) during the nine months ended September 30, 2009 through various compensation and dividend reinvestment plans.

Each of the rating agencies that rate the Company and its subsidiaries issued downgrades in 2009. The principal reasons stated by the rating agencies for these downgrades were the Company's increased debt to finance capital expenditures and the overall business risk associated with nuclear generation construction. The ratings as of November 4, 2009 of SCANA and SCE&G are as follows:

SECURITIES RATINGS (As of November 4, 2009)

                          SCANA                     SCE&G
        Rating           Senior     Senior   Senior   Preferred Commercial
        Agency          Unsecured   Secured Unsecured   Stock     Paper      Outlook
Moody's                   Baa2         A3     Baa1      Baa3       P-2       Negative
Standard & Poor's (S&P)    BBB         A-     BBB+      BBB-       A-2        Stable
Fitch                      BBB+        A       A-       BBB+        F2        Stable

The outlook applies to all ratings provided by the applicable rating agency for
SCANA and SCE&G.

Securities ratings used by Moody's, S&P and Fitch are as follows:

 Long-term (investment grade)          Short-term
Moody's (1)  S&P (2) Fitch (2)      Moody's    S&P Fitch
    Aaa        AAA      AAA      Prime-1 (P-1) A-1  F1
     Aa        AA       AA       Prime-2 (P-2) A-2  F2
     A          A        A       Prime-3 (P-3) A-3  F3
    Baa        BBB      BBB        Not Prime    B    B
                                                C    C
                                                D    D

(1) Additional Modifiers: 1, 2, 3 (Aa to Baa) (2) Additional Modifiers: +, -
(AA to BBB)

A security rating should be evaluated independently of other ratings and is not a recommendation to buy, sell or hold securities. The assigning rating organization may revise or withdraw its security ratings at any time.

SCE&G and GENCO have obtained FERC authority to issue short-term indebtedness (pursuant to Section 204 of the Federal Power Act). SCE&G may issue up to $700 million of unsecured promissory notes or commercial paper with maturity of one year or less, and GENCO may issue up to $100 million of short-term indebtedness. FERC's approval expires in February 2010.

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

                                 SCANA                         SCE&G (a)(b)                     PSNC Energy (b)

                     September 30,    December 31,      September 30,     December 31,    September 30,   December 31,
Millions of
dollars                  2009             2008              2009              2008            2009            2008
Lines of credit:
 Committed
long-term (expire
  December 2011)
  Total            $           200   $          200   $           650   $          650   $           250     $      250
  LOC advances                   -               15                75              285                 -            156
  Weighted average
interest rate                    - %           2.17 %             .52 %           1.61 %               - %         1.72 %
  Outstanding
commercial paper
  (270 or fewer
days)                            -                -               242               34                69             46
  Weighted average
interest rate                    - %              - %             .36 %           5.69 %             .35 %         6.15 %
 Letters of credit
supported by LOC                 3                -                .3                -                 -              -
 Available                     197              185               333              331               181             48

(a) Nuclear and fossil fuel inventories and emission allowances are financed through the issuance by Fuel Company of LOC advances or short-term commercial paper.
(b) SCE&G, Fuel Company and PSNC Energy may issue commercial paper in the amounts of up to $350 million,

$250 million and $250 million, respectively.

The committed long-term facilities are revolving lines of credit under credit agreements with a syndicate of banks. Wachovia Bank, National Association and Bank of America, N.A. each provide 14.3% of the aggregate $1.1 billion credit facilities, Branch Banking and Trust Company, UBS Loan Finance LLC, Morgan Stanley Bank, and Credit Suisse, each provide 10.9%, and The Bank of New York and Mizuho Corporate Bank, Ltd each provide 9.1%. Four other banks provide the remaining 9.6%. These bank credit facilities support the issuance of commercial paper by 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 SCE&G (including Fuel Company) and PSNC Energy. In addition, a portion of the credit facilities supports SCANA's borrowing needs.

Challenging conditions during 2008 tested the Company's liquidity and its ability to access short-term funding sources. During this period, all of the banks in the Company's committed revolving credit facilities fully funded draws requested of them. As of September 30, 2009, the Company had drawn approximately $75 million from its $1.1 billion facilities, had approximately $311 million in commercial paper borrowings outstanding, was obligated under $3 million in LOC-supported letters of credit and had approximately $103 million in cash and temporary investments. The Company regularly monitors the commercial paper and short-term credit markets to optimize the timing for repayment of the outstanding balance on its draws, while maintaining appropriate levels of liquidity.

At September 30, 2009, the Company had net available liquidity of approximately $814 million, and the Company's committed revolving credit facilities have a stated expiration of December 2011. The Company's long-term debt portfolio has a weighted average maturity of approximately 14 years and bears an average cost of 5.96%. Most long-term debt, including facility draws, effectively bears fixed interest rates. To further preserve liquidity, the Company rigorously reviewed its projected capital expenditures and operating costs for 2009 and reduced them where possible without impacting safety, reliability, and core customer service.

The Company also obtains cash from SCANA's stock plans. Since July 1, 2008, shares of SCANA common stock purchased on behalf of participants in SCANA's Investor Plus Plan and Stock Purchase-Savings Plan have been acquired through original issue shares, rather than on the open market. This provided over $40 million of additional cash during 2008 and is expected to provide approximately $80 million annually for 2009 and forward. Due primarily to new nuclear construction plans, the Company anticipates keeping this strategy in place for the foreseeable future. The Company anticipates that its contractual cash obligations will be met through internally generated funds, the incurrence of additional short- and long-term indebtedness and sales of equity securities. The Company expects, barring further impairment of the capital markets, that it has or can obtain adequate sources of financing to meet its projected cash requirements for the foreseeable future, including cash requirements for nuclear . . .