Based in Columbia, South Carolina, SCANA Corporations (NYSE: SGC) engages in the generation, distribution, and sale of electric and natural gas utility services in portions of North and South Carolina. Through its main subsidiary, South Carolina Electric and Gas (NYSE: SCE&G), SCANA markets its services throughout the southeast of the United States. Its other wholly-owned nonregulated subsidiaries perform power plant maintenance and management services, provide fiber optic and other telecommunication services, and give service contracts to homeowners in the southeast for certain home appliances. Another subsidiary even provides administrative services to the other subsidiaries. . SCANA operates in the southeast of the United States, particularly in North and South Carolina. While it has struggled with profitability and productivity, it currently operates in markets with above-average population growth, and thus its customer base is growing. It enjoys close partnerships with regulators and subsidies such as SCE&G and Public Service Company of North Carolina, Incorporated (PSNC Energy). The company has also greatly profited from recent rises in gas and electric rates.
The primary sources of SCANA’s revenue are the electric and gas services provided to customers in the southeast. Other sources include telecommunication services, service contracts for homeowners, and power plant management. As seen by the charts below, operating revenue steadily increased from 2002 to 2005, and did not significantly change during 2006.
Aside from a severe 27 percent drop in 2005, operating income has steadily increased since before 2003. Revenues continued to remain high during 2005’s income drop, despite a 4 percent drop in 2006. . Between 2006 and 2005, territorial sales volumes decreased by 786 MWh because of lower industrial sale volumes and unfavorable weather. These decreases were partially offset by an increase due to residential and commercial customer growth. Between 2005 and 2004, sales volumes increased due to customer growth, partially offset a decrease due to unfavorable weather, resulting in a net 278 MWh increase.
SCANA uses oil and coal for gas, and as a result, it is especially sensitive to changes in coal, gas, oil and other commodity availability. Any changes affect operating costs and their competitive position in the market. Certain subsidaries can recover the cost of fuel used in electric generation through retail customers' bills. However, rises in costs of fuel affect electric prices and negatively affects the position of electricity as opposed to alternative sources of energy. Increases in gas costs may also result in lower usage by customers unable to switch to alternate fuels. 
The government sets SCANA's prices. At any given time, it's profitability is dependent on the whims of the government. The company must comply with extensive governmental regulartions on the federal, state and local levels, changes that are ongoing and often unpredictable. The effects shape the positioning and management of facilities, safety, reliability of our transmission system, security of key assets, etc. In addition, compliance with extensive federal, state and local environmental laws and regulations requires the company to commit large amounts of capital toward monitoring, pollution management equipment, and licenses at facilities. Changes in stipulations by governmental authorities may impose additional costs or require the company to curtail activities. 
In the past, SCANA has had fewer sales and delivered less gas, and thus earned less income, when weather conditions are worse than usual. In the future, bad weather could diminish the revenues and results of operations and subsequently harm the company’s position in the financial market. In addition, severe weather can be destructive, causing outages and property damage, adversely affecting operating expenses and revenues. 
SCANA is vulnerable to interest rate fluctuations which can raise borrowing expenses, and may not have access to capital at favorable rates, both of which may adversely affect operations. Business plans reflect the expectation that the company be able to access capital markets on sufficient terms for funding purposes. Moreover, the ability to maintain short-term liquidity by using commercial paper programs depends on maintenance of investment grade debt ratings. 
A large part of certain subsidaries’ generating capacity is derived from nuclear power, the use of which exposes SCANA to regulatory, environmental and business risks. These risks could increase our costs or otherwise constrain our business, thus negatively affecting operational procedures, cash flows and financial condition. For instance, there exist serveral potential harmful effects on the environment and human health as a result of a release of radioactive materials used to manage nuclear facilities and radioactive materials. 
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