
                                                                     EXHIBIT C-2

                              SCANA Service Company
                             Policies and Procedures

     SCANA  Service  Company  ("SCANA  Service")  will  provide  administrative,
management  and other  services to the  subsidiaries  and business  units within
SCANA  Corporation  ("Client  Entities") in accordance with the terms of Service
Agreements.  SCANA Service will provide the necessary  accounting and procedural
infrastructure  to support  the  administration  of the  Service  Agreements  in
accordance  with the  rules  and  regulations  of the  Securities  and  Exchange
Commission  ("SEC") as promulgated in the Public Utility  Holding Company Act of
1935 (the "1935 Act").

Service Requests and Agreements

     SCANA  Service and each Client  Entity will enter into a Service  Agreement
that will set forth,  in general  terms,  the  services to be  performed by each
organization  in SCANA Service  directly for or on behalf of each Client Entity.
Pursuant to the Service  Agreement,  SCANA  Service and each Client  Entity will
prepare  Service  Request forms  designed to provide  guidance as to the service
expectations of the parties thereto.  The Service Request forms will be reviewed
annually, or more often if necessary. The Service Agreements will be approved by
authorized  representatives  of SCANA Service and the  management of each Client
Entity.

Service Requests will typically contain the following information:

1.Type and Scope of Services
2.Any Cost Parameters
3.Payment Terms
4.Applicable Contingencies

Accounting System

     SCANA Service will maintain an accounting  system that provides the ability
to assign costs to the category of service to which they relate. The system also
enables the costs of services  to be charged  directly to the Client  Entity for
which they were  performed or, when  appropriate,  accumulated  in such a manner
that they can be distributed  or allocated to two or more Client  Entities using
an approved  methodology.  The system will also  generate all  necessary  Client
Entity billing information.

     The system is based on the use of codes to assign charges to the applicable
Cost Center, Account Number or Project, Activity,  Resource, and Event ("Account
Codes").  The  Account  Numbers  conform  to the System of  Accounts  for Mutual
Service Companies

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prescribed by the 1935 Act, as modified to include  additional  account  numbers
from the Federal Energy  Regulatory  Commission's  Uniform System of Accounts to
provide for the accumulation of costs of certain utility  operating  activities.
The Account  Codes  facilitate  the  tracking of the cost of each service by its
component costs, such as labor,  materials and outside services, and provide the
ability  to break the costs of  services  down by  amounts  directly  charged to
specific Client Entities and amounts allocated.

     Labor and  labor-related  costs will likely be the most  significant  costs
that the SCANA  Service  incurs.  Accordingly,  SCANA  Service  will  maintain a
time-entry  subsystem that enables SCANA Service  employees to accurately assign
hours worked to the appropriate  Account Codes. All SCANA Service employees will
prepare standard timesheets or similar records that indicate the purpose of each
hour worked. The employee's supervisor will approve timesheets. Information from
the timesheets  will be entered into the time-entry  subsystem no later than the
last pay  period to which it  relates.  Charges  for labor  will be made at each
employee's  effective  hourly rate and will include the cost of pensions,  other
employee benefits and payroll taxes.

     An initial  training  session for employees  will occur in the beginning of
March and will be conducted by accounting  professionals to ensure understanding
of the new coding procedures.  All employees (both from SCANA Service and Client
Entities) who code time and expenses will be included in this training.  Ongoing
support and follow-up will be provided through the same accounting professionals
conducting the initial training. Moreover,  additional training will be provided
during  the May time frame to ensure  understanding  of coding  impact  upon the
system's financial  statements as well as to provide  instruction  regarding the
proper analysis of charges.

     All other accounting  subsystems,  including  accounts payable  processing,
will be designed  to support  the use of the  necessary  Account  Codes.  In all
cases, the SCANA Service will retain the applicable  underlying source documents
that indicate the nature and purpose of the costs incurred.

     To the extent  practicable,  SCANA  Service  employees  will  assign  costs
directly to the Account Codes  associated with the services  rendered.  However,
the full cost of providing  services also includes certain indirect costs, e.g.,
departmental  overheads,  administrative  and general  costs,  and taxes,  which
cannot be associated with specific  services.  Indirect costs will be associated
with the services  performed in proportion to the directly assigned costs of the
services or other relevant cost allocators.

     SCANA Service costs will be directly  charged,  distributed or allocated to
Client Entities in the manner prescribed below.

     1.   Costs accumulated in Account Codes for services specifically performed
          for a single  Client  Entity will be  directly  charged to such Client
          Entity.

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     2.   Costs accumulated in Account Codes for services specifically performed
          for two or more Client  Entities  will be  distributed  to such Client
          Entities using methods  determined on a case-by-case  basis consistent
          with the nature of the work performed and based on one of the approved
          allocation methods.

     3.   Costs  accumulated  in Account Codes for services of a general  nature
          which are  applicable to all Client  Entities or to a class or classes
          of Client  Entities  will be  allocated  to such  Client  Entities  by
          application of one or more approved allocation methods.

Billing

     Monthly, SCANA Service will prepare and submit a bill to each Client Entity
for  services  rendered.  At a minimum,  the bill will  itemize the cost of each
service  charged to the Client Entity.  The bill will be rendered by the 25th of
the following month with payment due 30 days thereafter.

     The management of each Client Entity is responsible  for reviewing the bill
from SCANA Service to determine the accuracy and appropriateness of the charges.

     The accounting  system  contains the detailed  transactions  supporting the
services  billed.  Using the  system,  SCANA  Service  will  assist  the  Client
Entities,  as  necessary,  with  the  review  and  validation  of  charges.  Any
adjustments  required will be made in the subsequent  month.  SCANA Service will
put in place processes and applicable systems designed to provide information to
Client Entities  regarding  services provided and related costs. The information
should  enable  the  Client  Entities  to  determine  if they have  been  billed
consistent with the terms of the Service Agreements.

Accounting Department Responsibilities

     The  SCANA  Service   Accounting   Department   will  be  responsible   for
administering,  monitoring and  maintaining the processes by which SCANA Service
costs are  accumulated  and billed to client  entities.  In connection with this
responsibility, the Accounting Department will:

     1.   Coordinate the preparation of Service Requests

     2.   Control the establishment and use of SCANA Service Account Codes

     3.   Review and evaluate the reasonableness of monthly bills to each Client
          Entity

     4.   Assist Client Entities with the review and validation of charges

     The Accounting  Department  will update all  allocations  used by the SCANA
Service  annually,  or more  often  as  conditions  warrant,  and  maintain  all
documentation supporting the calculations. The Accounting Department will ensure
the allocation methods are appropriate for the type of cost incurred,  have been
approved by the SEC and are consistent with  applicable  orders of state utility
commissions.

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Dispute Resolution

     In the event disputes arise between the SCANA Service and the Client Entity
over amounts billed, the Accounting Department and representatives of the Client
Entity will attempt to resolve the issues.  If  necessary,  the Chief  Financial
Officer will mediate.  Unresolved disputes will be referred to Senior Management
for final disposition.

Internal Review

     The Audit Services  Department  will conduct  periodic  audits of the SCANA
Service  administration  and  accounting  processes.  The  audits  will  include
examinations  of  Service  Agreements,  accounting  systems,  source  documents,
allocation  methods and billings to determine  if services  are  authorized  and
properly  accounted for. In addition,  Service  Request and Agreement  policies,
operating procedures and controls will be evaluated annually.

Evaluation and Measurement

     In order to  encourage  the  efficient  and cost  competitive  provision of
services,  SCANA Service will establish appropriate  benchmarking measures and a
customer review  process.  The customer review process will allow for input from
the Client  Entities  as to the volume and value of the  products  and  services
provided  by  SCANA  Service.  This  review  will be part of the  annual  budget
development process and the completion of the Service Requests and Agreements.

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