
             As filed with the Securities and Exchange Commission on
                                February 14, 2000

                                File No. 70-9533

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


                        PRE-EFFECTIVE AMENDMENT NO. 2 TO
                             APPLICATION-DECLARATION
                                   ON FORM U-1
                                      UNDER

                 THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935


SCANA CORPORATION
SOUTH CAROLINA ELECTRIC AND
         GAS COMPANY
SOUTH CAROLINA GENERATING
         COMPANY, INC.
SOUTH CAROLINA FUEL
         COMPANY, INC.
SOUTH CAROLINA PIPELINE
         CORPORATION
SCANA ENERGY MARKETING INC.
SCANA ENERGY TRADING, LLC
SCANA PROPANE GAS, INC.
SCANA PROPANE STORAGE, INC.
SCANA COMMUNICATIONS, INC.
SERVICECARE INC.
PRIMESOUTH, INC.
PALMARK, INC.
PALMETTO LIME, LLC
SCANA RESOURCES, INC.
SCANA DEVELOPMENT
         CORPORATION
SCANA PETROLEUM
         RESOURCES, INC.
SCANA SERVICE COMPANY
1426 Main Street
Columbia, South Carolina  29201
PUBLIC SERVICE COMPANY OF
         NORTH CAROLINA,
         INCORPORATED
SONAT PUBLIC SERVICE
         COMPANY LLC
CLEAN ENERGY ENTERPRISES
CARDINAL PIPELINE COMPANY, LLC
PINE NEEDLE LNG COMPANY, LLC
PSNC BLUE RIDGE CORPORATION
PSNC CARDINAL PIPELINE COMPANY
PSNC PRODUCTION CORPORATION
400 Cox Road
Gastonia, North Carolina 28054


<PAGE>




                    (Name of companies filing this statement
                  and addresses of principal executive offices)

                                SCANA Corporation

                    (Name of top registered holding company)

                                 Kevin B. Marsh
                                H. Thomas Arthur
                                SCANA Corporation
                                1426 Main Street

                         Columbia, South Carolina 29201
                            Telephone: (803) 217-9000
                            Facsimile: (803) 217-9336

                   (Names and addresses of agents for service)

                    The Commission is also requested to send
                 copies of any communication in connection with
                                 this matter to:

                                 William S. Lamb
                               Sheri E. Bloomberg
                               Markian M.W. Melnyk
                     LeBoeuf, Lamb, Greene & MacRae, L.L.P.
                               125 W. 55th Street
                            New York, New York 10019
                            Telephone: (212) 424-8000
                            Facsimile: (212) 424-8500


<PAGE>



                  The Applicants  hereby amend and restate their  application as
follows:

Item 1.  DESCRIPTION OF THE PROPOSED TRANSACTION

         A.       Introduction and General Request

                  1.       General

     SCANA  Corporation,  a  South  Carolina  Corporation  ("SCANA"),  filed  an
Application/Declaration  on Form U-1 (File No.  70-9521) (the "Merger U-1") with
the Securities and Exchange  Commission (the "Commission") under Section 9(a)(2)
and Section 10 under Section (3)(a)(1)  pursuant to Rule 2 of the Public Utility
Holding Company Act of 1935, as amended (the "Act"),  seeking approvals relating
to the  proposed  acquisition  by  SCANA  of  Public  Service  Company  of North
Carolina, Incorporated, a North Carolina Corporation ("PSNC"), pursuant to which
PSNC will become a wholly  owned  subsidiary  of SCANA (the  "Merger"),  and for
other related  transactions.  SCANA will register as a holding company under the
Act upon the consummation of the proposed acquisition contemplated in the Merger
U-1. Each of the entities that will be directly or indirectly owned subsidiaries
of SCANA upon  consummation  of the  acquisition  described in the Merger U-1 is
referred  to  herein   individually  as  a  "Subsidiary"   and  collectively  as
"Subsidiaries".  For  purposes of  sections  E.3.,  "Non-Utility  Subsidiaries",
E.4.a.,  "Guarantees",  and E.5.,  "Changes  in  Capital  Stock of Wholly  Owned
Subsidiaries",  the terms  "Subsidiary"  and  "Subsidiaries"  shall also include
other direct or indirect  subsidiaries that SCANA may form after the Merger with
the approval of the Commission, pursuant to the Rule 58 exemption or pursuant to
Section 34 of the Act.  SCANA and the  Subsidiaries  are  sometimes  hereinafter
collectively  referred  to as the  "SCANA  System" or as the  "Applicants".  For
purposes  of  section   E.4.b.,   "Money  Pool",   the  term   "Subsidiary"   or
"Subsidiaries" shall include only the companies  specifically named on the cover
and on the signature page of this

                                       -1-


<PAGE>



Application/Declaration.  SCANA  Propane Gas, Inc.  and  SCANA Propane  Storage,
Inc. are included in this Application/Declaration solely with respect to section
H, "Tax Allocation Agreement".  The Commission is asked to reserve  jurisdiction
over the participation in the relevant money pool  of future companies formed by
SCANA until a specific post-effective  amendment is filed, naming the subsidiary
to be added as a participant in the relevant money pool.

     2. General Request

     This  Application/Declaration  seeks the  authorization and approval of the
Commission with respect to the ongoing  financing  activities,  the provision of
intra-system  services, and other matters pertaining to SCANA and PSNC and their
subsidiaries  after giving effect to the Merger and  registration  of SCANA as a
holding company. Specifically,  this Application/Declaration seeks the following
authorizations and approvals of the Commission:

     (a) In order to ensure  that the SCANA  System is able to meet its  capital
requirements  immediately following  registration and plan its future financing,
SCANA  and  its  Subsidiaries   hereby  request   authorization   for  financing
transactions for the period beginning with the effective date of an order issued
pursuant to this filing and  continuing for a period of three (3) years from the
date of such order (the "Authorization Period").

     (b) SCANA also hereby requests that the Commission  approve the designation
of SCANA Service  Company (as defined below) as a subsidiary  service company in
accordance with the provisions of Rule 88 of the Act and the Services  Agreement
(as defined below) as a basis for SCANA Service to comply with Section 13 of the
Act and the Commission's rules thereunder.

     (c) SCANA also  requests that the  Commission  approve the issuance of 10.0
million  shares of common  stock under  dividend  reinvestment  and  stock-based
management  incentive and employee benefit plans pursuant to Sections 6(a) and 7
of the Act, all as more specifically described below.

                                       -2-


<PAGE>



     (d) SCANA also  requests the  Commission  approve the  aggregate  financing
request in the amount of $2.385 billion,  representing financing  authorizations
relating  to  equity  securities  and  debt  as  more  fully  described  in this
Application/Declaration.

     (e) SCANA also requests the  authorization  and approval of the  Commission
under other  sections of the Act and  applicable  rules and  regulations  of the
Commission  promulgated thereunder with respect to intrasystem  guarantees,  the
formation and operation of a Utility Money Pool and a Non-Utility Money Pool and
the payment of dividends out of capital or unearned surplus by PSNC described in
this Application/Declaration.

     (f) SCANA also requests that the Commission  approve an exemption from Rule
45 with respect to SCANA's  agreement  for the  allocation of  consolidated  tax
among  SCANA  and the  Subsidiaries  (the  "Tax  Allocation  Agreement").  SCANA
requests that the Commission reserve jurisdiction over the implementation of the
Tax  Allocation  Agreement  until  such  time as the  matter  can be more  fully
considered by the Commission.

     B. Description of the Parties to the Transaction

     Following the  consummation of the Merger,  SCANA will have three operating
public utility company subsidiaries (the "Utility Subsidiaries"): South Carolina
Electric & Gas Company  ("SCE&G"),  a public utility  company engaged (i) in the
generation,  transmission,  distribution and sale of electricity and (ii) in the
purchase  and sale of natural gas in South  Carolina,  having  electric  service
extending into 24 counties and natural gas operations  encompassing  all or part
of 31  counties in South  Carolina;  South  Carolina  Generating  Company,  Inc.
("GENCO"),  which owns and operates the Williams Station generating  facility in
Goose Creek,  South Carolina,  selling  electricity solely to SCE&G; and PSNC, a
public utility  company  franchised to serve a 31-county area in North Carolina,
transporting, distributing and selling

                                       -3-


<PAGE>



natural gas to  approximately  340,000  residential,  commercial  and industrial
customers in 95 cities in North Carolina.  A list of SCANA's other  Subsidiaries
is set forth on the cover of this filing and in the Merger U-1 and the  exhibits
thereto. All of SCANA's direct and indirect Subsidiaries, other than the Utility
Subsidiaries, are herein called the "Non-Utility Subsidiaries".

     SCANA Service  Company,  a subsidiary  service company  incorporated in the
State of South Carolina ("SCANA Service"),  will enter into a services agreement
(the "Services Agreement") with each of the Subsidiaries in the SCANA system. (A
copy of the  form of the  Services  Agreement  as well as an  appendix  entitled
"Service  Company  Policy and  Procedures"  are filed as  Exhibits  C-1 and C-2,
respectively.) SCANA Service will provide SCANA, PSNC and the other companies of
the SCANA system with a variety of administrative, management, environmental and
support services,  either directly or through  agreements with associate or non-
associate companies, as needed.

     The authorized  capital stock of SCANA Service  consists of 1,000 shares of
common  stock,  no par  value  per  share,  issued  to SCANA  for  $1,000.  Upon
consummation of the Merger,  all issued and outstanding  shares of SCANA Service
common stock will remain held by SCANA.

     C. Overview of the Financing Request

     The  Applicants  hereby  request  authorization  to engage in the financing
transactions set forth herein during the Authorization  Period.  The approval by
the  Commission of this  Application/Declaration  will give the  Applicants  the
flexibility  that will allow them to respond  quickly and  efficiently  to their
financing  needs  and  to  changes  in  market  conditions,   allowing  them  to
efficiently and effectively carry on competitive business activities designed to
provide   benefits   to   customers   and   shareholders.   Approval   of   this
Application/Declaration is consistent with

                                       -4-


<PAGE>



existing Commission precedent, both for newly registered holding company systems
(see e.g., New Century Energies,  Inc.,  Holding Co. Act Release No. 26750 (Aug.
1, 1997); Ameren Corporation, Holding Co. Act Release No. 26809 (Dec. 30, 1997);
Conectiv,  Inc., Holding Co. Act Release No. 26833 (Feb. 26, 1998); and Dominion
Resources,  Inc., Holding Co. Act Release No. 27112 (Dec. 15, 1999)) and holding
company systems that have been registered for a longer period of time (see e.g.,
The  Columbia  Gas System,  Inc.,  Holding Co. Act Release No.  26634 (Dec.  23,
1996);  Gulf States Utilities  Company,  Holding Co. Act Release No. 26451 (Jan.
16, 1996)).

     The financing  authorizations  requested  herein relate to (i) (a) external
issuances by SCANA of common stock,  long-term debt,  short-term debt, and other
securities for cash and (b) the entering into by SCANA of transactions to manage
interest rate risk ("hedging  transactions");  (ii) issuances of debt securities
(including  commercial  paper) and the entering into of hedging  transactions by
the Utility  Subsidiaries  to the extent not exempt  pursuant to Rule 52;  (iii)
issuances by Non-Utility  Subsidiaries of debt  securities  which are not exempt
pursuant  to Rule 52;  (iv) the  establishment  of a  utility  money  pool  (the
"Utility  Money  Pool") and a  non-utility  money pool (the  "Non-Utility  Money
Pool") and the issuance of intra-system  guarantees by SCANA and the Non-Utility
Subsidiaries  on behalf of the  Subsidiaries;  (v) the  ability of wholly  owned
Subsidiaries  to alter  their  capital  stock in order to  engage  in  financing
transactions with their parent company and to engage in a reverse stock split to
reduce franchise taxes,  subject,  in the case of Utility  Subsidiaries,  to the
approval  of, if  required,  a state  utility  commission  in a state  where the
utility is  incorporated  and doing  business;  (vi) the ability of PSNC and its
Subsidiaries to pay dividends out of capital or unearned surplus;  and (vii) the
formation of financing  entities and the issuance by such entities of securities
otherwise authorized to be issued and sold pursuant

                                       -5-


<PAGE>



to this  Application/Declaration  or pursuant to applicable exemptions under the
Act, including  intra-system  guarantees of such securities and the retention of
existing financing entities.

     D. Parameters for Financing Authorization

     Authorization   is  requested   herein  to  engage  in  certain   financing
transactions  during the  Authorization  Period for which the specific terms and
conditions are not at this time known,  and which may not be covered by Rule 52,
without  further prior approval by the Commission.  The following  general terms
will be applicable where appropriate to the financing  transactions requested to
be authorized hereby:

     1. Effective  Cost of Money on  Borrowings.  The effective cost of money on
long-term debt borrowings occurring pursuant to the authorizations granted under
this   Application/Declaration  will  not  exceed  300  basis  points  over  the
comparable  term U.S.  Treasury  securities  and the effective  cost of money on
short-term  debt  borrowings  pursuant  to  authorizations  granted  under  this
Application/Declaration  will not exceed 300 basis  points  over the  comparable
term London Interbank Offered Rate ("LIBOR").

     2. Maturity of Debt. The maturity of indebtedness will not exceed 50 years.

     3. Issuance Expenses.  The underwriting fees,  commissions or other similar
remuneration  paid  in  connection  with  the  non-competitive  issue,  sale  or
distribution  of a security  pursuant to this  Application/Declaration  will not
exceed 5% of the principal or total amount of the security being issued.

     4. Use of Proceeds.  The proceeds  from the sale of  securities in external
financing transactions will be used for general corporate purposes including (i)
the financing,  in part, of the capital  expenditures of the SCANA system,  (ii)
the financing of working  capital  requirements  of the SCANA system,  (iii) the
acquisition, retirement or redemption pursuant to

                                       -6-


<PAGE>



Rule 42 of securities previously issued by SCANA or its Subsidiaries without the
need for prior Commission  approval,  and (iv) other lawful purposes,  including
direct or indirect  investment in companies  authorized under the Merger U-1 and
in Rule 58 companies and ETCs. The  Applicants  represent that no such financing
proceeds  will be used to acquire a new  subsidiary  unless  such  financing  is
consummated  in  accordance  with an order  of the  Commission  or an  available
exemption under the Act.

     SCANA represents that, at all times during the  Authorization  Period,  its
common  equity  (as  reflected  in its most  recent  10-K or 10-Q filed with the
Commission  pursuant  to the 1934 Act) as well as that of SCE&G and PSNC will be
at least 30% of their respective  consolidated  capitalizations  (common equity,
preferred stock and debt (long and short-term)).

     E. Description of Specific Types of Financing

     1. SCANA External Financing

     SCANA requests  authorization to obtain funds  externally  through sales of
common stock,  long-term debt and short-term  debt  securities.  With respect to
common  stock,  SCANA also  requests  authority  to issue  common stock to third
parties  in  consideration  for  the  acquisition  by  SCANA  or  a  Non-Utility
Subsidiary of equity or debt securities of a company being acquired  pursuant to
Rule 58, Section 34 of the Act or pursuant to an order issued in connection with
the Merger U-1. In addition,  SCANA seeks the  flexibility to enter into certain
hedging transactions to manage rate risk.

     (a) Common Stock

     The   aggregate   amount  of   financing   obtained  by  SCANA  during  the
Authorization Period from issuance and sale of common stock, no par value (other
than for employee  benefit  plans or stock  purchase  and dividend  reinvestment
plans),  when combined  with  issuances of long- term debt, as described in this
section,  shall not exceed  $1.935  billion  for the uses set forth in Section D
above.

     i. General

     Subject  to the  foregoing,  SCANA may issue and sell  common  stock or, if
pursuant to employee benefit plans,  issue options  exercisable for common stock
and common stock upon the exercise of options. SCANA may also buy back shares of
such stock or such options during the  Authorization  Period in accordance  with
Rule 42.

     Common stock financings may be effected pursuant to underwriting agreements
of a type  generally  standard  in the  industry.  Public  distributions  may be
pursuant  to  private  negotiation  with  underwriters,  dealers  or  agents  as
discussed below or effected through competitive  bidding among underwriters.  In
addition,  sales may be made  through  private  placements  or other  non-public
offerings to one or more  persons.  All such common stock sales will be at rates
or prices and under conditions negotiated or based upon, or otherwise determined
by, competitive capital markets.

     SCANA may sell common stock covered by this  Application/Declaration in any
one of the following  ways: (i) through  underwriters  or dealers;  (ii) through
agents;  (iii) directly to a limited number of purchasers or a single purchaser;
or (iv)  directly to employees  (or to trusts  established  for their  benefit),
shareholders and others through its employee benefit plans or stock purchase and
dividend  reinvestment  plans.  If  underwriters  are  used  in the  sale of the
securities,  such securities will be acquired by the  underwriters for their own
account  and may be  resold  from  time  to  time  in one or more  transactions,
including  negotiated  transactions,  at a fixed  public  offering  price  or at
varying prices  determined at the time of sale. The securities may be offered to
the public either through underwriting syndicates (which may be represented by a
managing

                                       -7-


<PAGE>



underwriter  or  underwriters  designated  by SCANA) or  directly by one or more
underwriters  acting  alone.  The  securities  may be sold  directly by SCANA or
through agents designated by SCANA from time to time. If dealers are utilized in
the sale of any of the  securities,  SCANA  will  sell  such  securities  to the
dealers as principals.  Any dealer may then resell such securities to the public
at varying  prices to be  determined  by such  dealer at the time of resale.  If
common  stock is being  sold in an  underwritten  offering,  SCANA may grant the
underwriters thereof a "green shoe" option permitting the purchase from SCANA at
the same price of additional shares then being offered solely for the purpose of
covering over-allotments.

     ii. Acquisitions

     Under the terms of the Merger U-1, Rule 58 and Section 34 of the Act, SCANA
is  authorized  to acquire  securities  of companies  engaged in  energy-related
consumer services, "energy-related businesses" as described in Rule 58 and ETCs.
Historically,  similar  acquisitions have occasionally  involved the exchange of
parent  company stock for  securities of the company being  acquired in order to
provide  the  seller  with  certain  tax  advantages.   These  transactions  are
individually negotiated. The SCANA common stock to be exchanged may be purchased
on the open market pursuant to Rule 42, or may be original issue. Original issue
stock may be registered  under the Securities Act of 1933, as amended (the "1933
Act"),  but at  present  it is  expected  that the  common  stock  would  not be
registered  and the common stock  acquired by the third parties would be subject
to resale  restrictions  pursuant to Rule 144 under the 1933 Act. SCANA does not
intend to engage  in any such  transaction  where  original  issue  stock is not
registered  while a public offering is being made,  other than a public offering
pursuant to a  compensation,  dividend or stock purchase plan, a public offering
of debt or a public  offering in  connection  with a similar  acquisition  of an
"energy-related business" as described in Rule 58 and ETCs.

                                       -8-


<PAGE>



     The ability to offer stock as  consideration  may make a  transaction  more
economical for SCANA as well as for the seller of the business. The SCANA common
stock would be  valued at market value  based upon the closing price  on the day
before  closing of  the sale  or based upon  average  high and  low prices for a
period prior to the closing  of the sale as negotiated by the parties.  From the
perspective of  the Commission,  the use  of stock  as  consideration  valued at
market value is no different than a sale of common  stock on the open market and
use of the proceeds to acquire securities, the acquisition of which is otherwise
authorized.

     (b) Long-Term Debt

     SCANA requests Commission  authorization during the Authorization Period to
issue  long-term debt  securities in an amount,  when combined with issuances of
common  stock  (other  than for benefit  plans or stock  purchase  and  dividend
reinvestment  plans) under this  Application/Declaration,  not to exceed  $1.935
billion.  This  amount  includes  financing  for the cash  portion of the Merger
consideration  of  approximately  $700 million.2/ Such long-term debt securities
would  be  comprised  of  medium-term  notes  under  an  indenture  (the  "SCANA
Indenture") or  institutional  debt. Any long-term debt security would have such
designation,  aggregate principal amount, maturity,  interest rate(s) or methods
of determining the same,  terms of payment of interest,  redemption  provisions,
sinking fund terms and other terms and conditions

--------

     2 As noted in the Merger U-1, SCANA has entered into a Credit  Facility for
$300  million of merger  financing  and  intends to finance the  remaining  $400
million  through  the  issuance  of 2- year notes in a 144A  offering  under the
Securities Act of 1933.

                                       -9-


<PAGE>



as SCANA may determine at the time of issuance.  Moreover,  SCANA will not issue
any  new  long-term  debt  unless  its  outstanding   long-term  debt  is  rated
"investment  grade" by at least one  nationally  recognized  statistical  rating
organization.  The request for  authorization  for SCANA to issue long-term debt
securities is consistent with  authorization  that the Commission has granted to
other  combination  gas and electric  holding  companies.  See;  Cinergy  Corp.,
Holding Co. Act Release No. 26909 (Aug. 21, 1998)  (authorizing  the issuance of
up to $400 million of unsecured debt securities);  Conectiv,  Inc.,  Holding Co.
Act Release No.  26921  (Sept.  28,  1998)  (authorizing  issuance of up to $250
million of debentures);  and Dominion  Resources,  Inc., Holding Co. Act Release
No. 27112 (Dec. 15, 1999)  (authorizing  the issuance of debt  securities by the
registered  holding  company,  including  the  refinancing  of $4.5  billion  of
acquisition indebtedness).

     i. Terms of SCANA Indenture

     The SCANA  Indenture  permits the  issuance of a wide  variety of unsecured
debt securities in one or more series.  Securities issuable (which may be issued
with original  issue  discount) can include  securities as to which  payments of
interest or principal are based on a formula or index,  and  securities on which
payment of  interest  or  principal  are  denominated  in a foreign  currency or
currencies.  The  terms  of  a  specific  issue  of  securities,  including  any
applicable  negative  covenants,  are set  under the  SCANA  Indenture  by (i) a
supplemental  indenture or (ii) an officer's  certificate  and company order, as
applicable.

     The SCANA Indenture  permits variable terms,  such as the principal amount,
interest rate, redemption terms,  denominations,  events of default, etc., to be
included or excluded in or made applicable to a particular series of securities.
These terms will be set forth either in (i) a supplemental  indenture or (ii) an
officer's  certificate  and  company  order,  as  applicable.   In  theory,  any
combination  of the  variable  terms  could be  included  in a single  series of
securities

                                      -10-


<PAGE>



which,  under  current  practice,  would  be  called  "notes",  "debentures"  or
"medium-term  notes".  The SCANA Indenture also permits any series of securities
to be issued either in certificated form or in "global" form (i.e., transferable
only  by  book-entry  on the  records  of a  securities  depository  such as The
Depository Trust Company).

     Other than certain provisions  relating to restrictions on liens, the SCANA
Indenture  contains  no  negative  covenants  or  restrictions.  Any  additional
covenants or restrictions negotiated at the time of issuance will be included in
either (i) a supplemental indenture or (ii) an officer's certificate and company
order, as applicable,  establishing a particular  security.  The SCANA Indenture
contains the following event of default  provisions:  (i) defaults in payment of
the SCANA  Indenture  securities;  (ii) defaults under covenants under the SCANA
Indenture,   (iii)  failures  to  comply  with   instruments   governing   other
indebtedness and certain other agreements; and (iv) certain events of insolvency
with respect to SCANA subject, as applicable, to customary grace periods.

     The SCANA  Indenture has been  qualified  under the Trust  Indenture Act of
1939, as amended. As of December 31, 1999, the following  medium-term notes were
issued and outstanding under the SCANA Indenture:

       Amount                 Interest Rate        Maturity Date
       ------                 -------------        -------------
$   20.0 million                  6.15%              7/3/2000
$   20.0 million                  6.51%              7/1/2003
$   60.0 million                  6.05%             1/13/2003
$   75.0 million                  6.25%              7/8/2003
$  115.0 million                  5.81%            10/23/2008
$   25.0 million                  6.90%             2/15/2007
$  150.0 million                  5.5175%           7/14/2000
$   50.0 million                  7.44%            10/19/2004

     A copy of any new  supplemental  indenture  under the SCANA Indenture or an
officer's  certificate and company order executed and delivered pursuant to this
Authorization will


                                      -11-


<PAGE>



be filed under  cover of the first  quarterly  report  under Rule 24 filed after
such execution and delivery.

     ii.  Terms of Borrowings from Banks and Other Financial Institutions.

     Borrowings  from  the  banks  and  other  financial  institutions  will  be
unsecured and will rank pari passu with debt  securities  issued under the SCANA
Indenture and the short-term credit  facilities (as described  below).  Specific
terms of any borrowings  will be determined by SCANA at the time of issuance and
will comply in all regards with the  parameters on financing  authorization  set
forth in Section D above.  A copy of any additional  note or agreement  executed
and delivered  pursuant to this  Authorization  will be filed under cover of the
first quarterly report under Rule 24 filed after such execution and delivery.

     (c) Short-Term Debt

     To refund  pre-Merger  short-term  debt,  to provide for the  reissuance of
pre-Merger  letters of credit and to provide  financing  for  general  corporate
purposes, working capital requirements and Subsidiary capital expenditures until
long-term  financing  can be  obtained,  SCANA  requests  authorization  to have
outstanding at any one time during the Authorization  Period, up to $450 million
of short-term debt consisting of institutional  borrowings,  commercial paper or
bid notes (all as described  below) and  short-term  debt issued under the SCANA
Indenture.

     SCANA  currently has the  following  short-term  debt  facilities in place,
which will remain in place following the Merger: (1) SCANA maintains uncommitted
bank lines of credit in the current  amount of $128 million  (these  uncommitted
lines have no expiration date); (2) SCANA also maintains committed lines of bank
credit for $100 million (evenly divided between  Wachovia Bank, N.A. and Bank of
America, N.A.) which expire on June 29, 2000;

                                      -12-


<PAGE>



(3) SCANA maintains  committed lines of credit with other banks in the amount of
$2.3 million; and (4) as noted in the table in Section E.1(b)(i), SCANA has $150
million  outstanding  of  medium-term  notes issued with a one-year term and due
July 14, 2000. If requested by the Nuclear  Regulatory  Commission  (the "NRC"),
SCANA  will also  obtain a letter of  credit in an amount up to $50  million  in
connection  with its guarantee of SCE&G's  decommissioning  costs  (disclosed in
Item 4.a below).  These  amounts are included  within the overall  authorization
amount requested above.

     SCANA may also sell  commercial  paper,  from time to time, in  established
domestic or European  commercial  paper markets.  Such commercial paper would be
sold to dealers at the discount rate or the coupon rate per annum  prevailing at
the date of issuance for commercial  paper of comparable  quality and maturities
sold to  commercial  paper  dealers  generally.  It is expected that the dealers
acquiring  commercial  paper from SCANA will reoffer such paper at a discount to
corporate,  institutional  and,  with  respect  to  European  commercial  paper,
individual investors. Institutional investors are expected to include commercial
banks,  insurance  companies,  pension funds,  investment  trusts,  foundations,
colleges and universities and finance companies.

     (d) Total Financing Sought

     The aggregate  amount of equity and debt  financing to be obtained by SCANA
during the Authorization Period shall be $2.385 billion.

     (e) Other Securities

     In addition to the specific  securities for which  authorization  is sought
herein,  SCANA may also find it necessary  or  desirable  to minimize  financing
costs or to obtain new capital under  then-existing  market  conditions to issue
and sell other types of securities from time

                                      -13-


<PAGE>



to time during the  Authorization  Period.  The issuance of any such  securities
would  be  subject  to the  aggregate  $2.6  billion  limit on  equity  and debt
discussed in Section  E.1(d),  and to the parameters on financing  authorization
set  forth in  Section  D above.  SCANA  requests  that the  Commission  reserve
jurisdiction  over the issuance of additional  types of  securities.  SCANA also
will undertake to file a post-effective  amendment in this proceeding which will
describe the general terms of each such security and the amount to be issued and
to request a  supplemental  order of the  Commission  authorizing  the  issuance
thereof by SCANA.

     (f) Interest Rate Risk Management Devices

     SCANA  requests  authority  to  enter  into,  perform,  purchase  and  sell
financial  instruments  intended to manage the  volatility  of  interest  rates,
including  but not limited to interest  rate swaps,  caps,  floors,  collars and
forward agreements or any other similar agreements.  SCANA would employ interest
rate swaps as a means of prudently  managing the risk associated with any of its
outstanding  debt  issued  pursuant  to  this  authorization  or  an  applicable
exemption  by, in effect,  synthetically  (i)  converting  variable rate debt to
fixed rate debt,  (ii) converting  fixed rate debt to variable rate debt,  (iii)
limiting the impact of changes in interest  rates  resulting  from variable rate
debt and (iv) providing an option to enter into interest rate swap  transactions
in future periods for planned issuances of debt securities.  In no case will the
notional  principal  amount  of  any  interest  rate  swap  exceed  that  of the
underlying debt instrument and related interest rate exposure.  Thus, SCANA will
not engage in "leveraged" or "speculative" transactions. The underlying interest
rate  indices  of such  interest  rate  swaps  will  closely  correspond  to the
underlying  interest  rate indices of SCANA's debt to which such  interest  rate
swap  relates.  SCANA will only enter into interest  rate swap  agreements  with
counterparties  whose senior debt ratings,  as published by Standard & Poor's, A
Division of The McGraw-Hill Companies, are

                                      -14-


<PAGE>



greater than or equal to "BBB+",  or an equivalent rating from Moody's Investors
Service, Inc., Fitch IBCA, Inc. or Duff & Phelps Credit Rating Co.

     SCANA  and its  Subsidiaries  will  comply  with SFAS 80  ("Accounting  for
Futures  Contracts"),  SFAS 133  ("Accounting  for  Derivatives  Instruments and
Hedging  Activities") when it is implemented or such other standards relating to
accounting for  derivative  transactions  as are adopted and  implemented by the
Financial  Accounting  Standards  Board ("FASB").  In addition,  these financial
instruments will qualify for hedge accounting treatment under FASB rules.

     2. Utility Subsidiary Financing

     As indicated on Exhibit I-1 hereto, the Utility Subsidiaries have financing
arrangements  in place.  These  arrangements  will remain in place following the
Merger and are described in more detail in Exhibit I-1 hereto.

     Rule 52 provides an exemption from the prior authorization  requirements of
the Act for  most of the  issuances  and  sales  of  securities  by the  Utility
Subsidiaries  because they must be approved by the relevant state public utility
commission,  which,  depending on the particular  subsidiary involved,  may mean
either the South Carolina  Public Service  Commission (the "SCPSC") or the North
Carolina Utilities Commission (the "NCUC"). However, certain external financings
by the Utility  Subsidiaries for which  authorization is requested herein may be
outside the Rule 52 exemption.  The authority herein sought excludes  financings
exempt under Rule 52. Financings  obtained under this authorization will be used
for general  corporate  purposes  and working  capital  requirements,  including
contributions to the Utility Money Pool.

     (a) Short-Term Debt

     Authority is requested  for SCE&G to issue  commercial  paper and establish
credit lines in the aggregate  amount of $300 million to be  outstanding  at any
one time during the

                                      -15-


<PAGE>



Authorization Period.  Authority is requested for PSNC to issue commercial paper
and  establish  credit  lines in the  aggregate  amount  of $125  million  to be
outstanding at any one time during the Authorization Period.

     The above-named Utility  Subsidiaries  request authority to sell commercial
paper, from time to time, in established  domestic commercial paper markets in a
manner  similar to SCANA as  discussed  above.  Such  Utility  Subsidiaries  may
further  maintain  back up lines of credit in an aggregate  amount not to exceed
the amount of authorized commercial paper.

     Credit lines may be set up for use by the Utility  Subsidiaries for general
corporate  purposes in addition to credit lines to support  commercial  paper as
described in this  subsection.  The Utility  Subsidiaries  will borrow and repay
under such lines of credit,  from time to time, as it is deemed  appropriate  or
necessary.  Subject  to the  limitations  described  herein,  each such  Utility
Subsidiary  may engage in other types of  short-term  financings  as it may deem
appropriate in light of its needs and market conditions at the time of issuance.

     (b) Interest Rate Swaps

     The Utility Subsidiaries request authority to enter into, perform, purchase
and sell  financial  instruments  intended to manage the  volatility of interest
rates,  including but not limited to interest rate swaps, caps, floors,  collars
and forward  agreements or any other  similar  agreements to the extent the same
are not exempt under Rule 52. Each Utility  Subsidiary may employ  interest rate
swaps as a means of managing risk associated  with any of its  outstanding  debt
issued pursuant to this  authorization or an applicable  exemption.  The Utility
Subsidiaries  request  authority to make and  continue use of financial  hedging
instruments in connection with Utility operations. The Utility Subsidiaries will
not engage in speculative transactions.

                                      -16-


<PAGE>



     To the extent not exempt  under  Rule 52,  the  Utility  Subsidiaries  also
request  authority to enter into interest rate risk  management  transactions of
the same type and under the same conditions as are requested above by SCANA.

     SCANA  and its  Subsidiaries  will  comply  with SFAS 80  ("Accounting  for
Futures  Contracts"),  SFAS 133  ("Accounting  for  Derivatives  Instruments and
Hedging Activities"), when it is implemented or such other standards relating to
accounting for  derivative  transactions  as are adopted and  implemented by the
FASB. In addition, these financial instruments will qualify for hedge accounting
treatment under FASB rules.

     3. Non-Utility Subsidiary Financings

     As noted on Exhibit  I-2  hereto,  certain  Non-Utility  Subsidiaries  have
financing  arrangements in place.  These  arrangements are expected to remain in
place following  consummation of the Mergers.  Certain  guarantees in favor of a
direct or indirect  Non-Utility  Subsidiary issued by another  Subsidiary may be
replaced by SCANA  guarantees as described  below.  In addition,  the Merger U-1
contemplates,  and the order  permitting the Merger U-1 to become effective will
authorize,  the formation or retention of other Non-Utility  Subsidiaries  named
herein which do not currently have outstanding  debt. It is expected that future
financing  by all such  Non-Utility  Subsidiaries  will be made  pursuant to the
terms of Rule 52.

     The  Non-Utility  Subsidiaries  are engaged in and expect to continue to be
active in the  development  and expansion of their  existing  energy-related  or
otherwise  functionally-related,  non-utility businesses. They will be competing
with  large,  well-capitalized  companies  in  different  sectors  of the energy
industry and other  industries.  In order to quickly and  effectively  invest in
such competitive  arenas, it will be necessary for the Non-Utility  Subsidiaries
to have the  ability  to engage in  financing  transactions  which are  commonly
accepted for such types of investments.

                                      -17-


<PAGE>



The  majority  of  such  financings   will  be  exempt  from  prior   Commission
authorization pursuant to Rule 52(b). The Non-Utility Subsidiaries, however, may
engage,  from time to time, in types of security  financing with  non-affiliates
that  are  not  exempt  from  prior   Commission   approval.   The   Non-Utility
Subsidiaries,  therefore,  (i) request that the Commission reserve  jurisdiction
over the issuance of such additional types of securities and the amounts thereof
and (ii) will undertake to cause a post-effective  amendment to be filed in this
proceeding which will request a supplemental order of the Commission authorizing
the issuance thereof by the subject Non-Utility Subsidiary.

     4. Guarantees, Intra-system Advances and Intra-System Money Pool

     (a) Guarantee and Intra-system Advances

     SCANA requests  authorization to enter into  guarantees,  obtain letters of
credit,  enter into expense  agreements or otherwise provide credit support with
respect  to the  obligations  of its  Subsidiaries  as  may  be  appropriate  or
necessary  to enable such  Subsidiaries  to carry on in the  ordinary  course of
their respective  businesses in an aggregate principal amount not to exceed $305
million  outstanding at any one time (not taking into account obligations exempt
pursuant to Rule 45).  Included in this amount are  guarantees  and other credit
support mechanisms  by SCANA in favor of its Subsidiaries  which were previously
issued.

     The existing  intra-system  guarantees and support provided by SCANA, which
are expected to remain in place following the Merger, are as follows:  (1) SCANA
guarantees the obligations of its marketing subsidiary (SCANA Energy) to Atlanta
Gas Light Company  (estimated amount $40 million);  (2) SCANA guarantees GENCO's
$52.6  million  7.78%  Senior  Secured  Notes due  December 31, 2011 and GENCO's
$35.85 million 6.5%  Pollution  Control  Facilities  Revenue Bonds and (3) SCANA
provides a $5 million letter of credit to Primesouth to

                                      -18-


<PAGE>



support Primesouth's ability to bid on contracts. If requested by the NRC, SCANA
will obtain a letter of credit in an amount up to $50 million to satisfy the NRC
requirements on cash available to fund SCE&G's decommissioning costs. SCANA will
guarantee  up to $50 million of SCE&G's  decommissioning  costs and support such
guarantee  through any such letter of credit.  These amounts are included within
the overall  authorization  amount requested  above.  SCANA also has outstanding
advances in favor of certain of its  Subsidiaries in an amount of  approximately
$600 million which are expected to remain in place  following  the Merger.  Such
outstanding  advances by SCANA to its  Subsidiaries  are open  advances  with no
maturities and are callable by SCANA at any time.

     SCANA  requests  that this  guarantee  authority  include  the  ability  to
guarantee  debt.  The  debt  guaranteed  will  comply  with the  parameters  for
financing authorization set forth in Section D above.

     (b)  Authorization  and  Operation of the Money Pools SCANA and the Utility
Subsidiaries  hereby request  authorization to establish the Utility Money Pool,
and the  Utility  Subsidiaries,  to the extent  not  exempted  by Rule 52,  also
request  authorization to make unsecured short-term  borrowings from the Utility
Money Pool and to contribute surplus funds to the Utility Money Pool and to lend
and extend credit to (and acquire promissory notes from) one another through the
Utility Money Pool. In addition to the Utility Subsidiaries, SCANA requests that
South  Carolina  Fuel  Company,  Inc.  ("South  Carolina  Fuel") be  allowed  to
participate in the Utility Money Pool as a result of its financing  relationship
with SCE&G.  Thus,  for purposes of this Section  E.4(b) only,  the term Utility
Subsidiaries  shall include  South  Carolina  Fuel.  In addition,  SCANA and the
remaining  Subsidiaries,  all of  which  are  Non-Utility  Subsidiaries,  hereby
request authorization to establish the Non-Utility Money Pool.

                                      -19-


<PAGE>



The Non-Utility Money Pool activities of all of the Non-Utility Subsidiaries are
exempt from the prior approval  requirements  of the Act under Rule 52. SCANA is
requesting  authorization  to  contribute  surplus  funds and to lend and extend
credit to (a) the Utility  Subsidiaries  through the Utility  Money Pool and (b)
the Non-Utility Subsidiaries through the Non-Utility Money Pool.

     The Applicants believe that the cost of the proposed borrowings through the
two Money Pools will generally be more  favorable to the borrowing  participants
than the comparable cost of external short-term borrowings, and the yield to the
participants  contributing available funds to the two Money Pools will generally
be higher than the typical yield on short-term investments.

     i. Utility Money Pool

     Under the proposed terms of the Utility Money Pool,  short-term funds would
be available  from the  following  sources for  short-term  loans to the Utility
Subsidiaries  from time to time:  (1) surplus funds in the treasuries of Utility
Money Pool  participants  other than SCANA, (2) surplus funds in the treasury of
SCANA, and (3) proceeds from bank borrowings by Utility Money Pool  participants
or the sale of commercial paper by SCANA or the Utility Subsidiaries for loan to
the Utility Money Pool  ("External  Funds").  Funds would be made available from
such sources in such order as SCANA  Service,  as  administrator  of the Utility
Money Pool, may determine would result in a lower cost of borrowing,  consistent
with the  individual  borrowing  needs and  financial  standing of the companies
providing funds to the pool. The  determination  of whether a Utility Money Pool
participant  at any time has surplus  funds to lend to the Utility Money Pool or
shall lend funds to the Utility  Money Pool would be made by such  participant's
chief financial officer or treasurer,  or by a designee thereof, on the basis of
cash flow projections

                                      -20-


<PAGE>



and other relevant factors,  in such participant's sole discretion.  See Exhibit
J-1 for a copy of the Form of Utility Money Pool Agreement.

     As discussed in more detail below, a separate  Non-Utility  Money Pool will
be  established  by SCANA  with  certain  Non-Utility  Subsidiary  companies  of
SCANA./3 Funds made available by SCANA for loans through the money pools will be
made available first for loans through the Utility Money Pool and thereafter for
loans through the Non-Utility Money Pool.

     Utility Money Pool participants that borrow would borrow pro rata from each
company that lends,  in the proportion that the total amount loaned by each such
lending  company bears to the total amount then loaned through the Utility Money
Pool. On any day when more than one fund source (e.g., surplus treasury funds of
SCANA and other Utility Money Pool participants  ("Internal Funds") and External
Funds),  with  different  rates of interest,  is used to fund loans  through the
Utility  Money Pool,  each  borrower  would  borrow pro rata from each such fund
source in the Utility Money Pool in the same proportion that the amount of funds
provided  by that fund  source  bears to the total  amount of  short-term  funds
available to the Utility Money Pool.

     Borrowings from the Utility Money Pool would require  authorization  by the
borrower's chief financial officer or treasurer,  or by a designee  thereof.  No
party would be required to effect a borrowing  through the Utility Money Pool if
it is  determined  that it could (and had  authority  to) effect a borrowing  at
lower cost directly from banks or through the sale of its own commercial  paper.
No loans  through  the  Utility  Money Pool would be made to, and no  borrowings
through the Utility Money Pool would be made by, SCANA.

--------

     3    Such  other   subsidiaries   consist   of  each  of  the   Non-Utility
          Subsidiaries including SCANA Service.

                                      -21-


<PAGE>



     The  cost of  compensating  balances,  if any,  and  fees  paid to banks to
maintain  credit lines and accounts by Utility Money Pool  participants  lending
External  Funds  to the  Utility  Money  Pool  would  initially  be  paid by the
participant  maintaining  such  line.  A portion of such costs -- or all of such
costs in the event a Utility Money Pool participant establishes a line of credit
solely for  purposes of lending any  External  Funds  obtained  thereby into the
Utility  Money  Pool --  would be  retroactively  allocated  every  month to the
companies  borrowing  such  External  Funds  through the  Utility  Money Pool in
proportion to their  respective  daily  outstanding  borrowings of such External
Funds.

     If only  Internal  Funds make up the funds  available in the Utility  Money
Pool,  the interest rate  applicable and payable to or by  Subsidiaries  for all
loans of such Internal Funds will be the rates for high-grade  unsecured  30-day
commercial  paper sold through  dealers by major  corporations  as quoted in The
Wall Street Journal.

     If only External  Funds  comprise the funds  available in the Utility Money
Pool,  the interest rate  applicable  to loans of such  External  Funds would be
equal to the lending  company's  cost for such External  Funds (or, if more than
one Utility Money Pool  participant  had made  available  External Funds on such
day,  the  applicable  interest  rate  would be a  composite  rate  equal to the
weighted  average of the cost  incurred  by the  respective  Utility  Money Pool
participants for such External Funds).

     In cases where both  Internal  Funds and  External  Funds are  concurrently
borrowed  through  the  Utility  Money Pool,  the rate  applicable  to all loans
comprised  of such  "blended"  funds  would  be a  composite  rate  equal to the
weighted  average of (a) the cost of all Internal  Funds  contributed by Utility
Money  Pool  participants  (as  determined  pursuant  to  the   second-preceding
paragraph  above)  and (b) the cost of all such  External  Funds (as  determined
pursuant to the

                                      -22-


<PAGE>



immediately  preceding  paragraph above). In circumstances  where Internal Funds
and External Funds are available for loans through the Utility Money Pool, loans
may be made exclusively from Internal Funds or External Funds,  rather than from
a "blend" of such  funds,  to the extent it is  expected  that such loans  would
result in a lower cost of borrowings.

     Funds not  required  by the  Utility  Money  Pool to make  loans  (with the
exception  of funds  required  to satisfy  the Utility  Money  Pool's  liquidity
requirements)   would   ordinarily  be  invested  in  one  or  more   short-term
investments,   including:   (i)  interest-bearing   accounts  with  banks;  (ii)
obligations issued or guaranteed by the U.S.  government and/or its agencies and
instrumentalities,  including  obligations  under repurchase  agreements;  (iii)
obligations issued or guaranteed by any state or political  subdivision thereof,
provided  that such  obligations  are  rated  not less than "A" by a  nationally
recognized  rating agency;  (iv)  commercial  paper rated not less than "A-1" or
"P-1" or their equivalent by a nationally  recognized  rating agency;  (v) money
market funds;  (vi) bank  certificates of deposit,  (vii) Eurodollar  funds; and
(viii) such other  investments  as are  permitted by Section 9(c) of the Act and
Rule 40 thereunder.

     The interest  income and investment  income earned on loans and investments
of surplus funds would be allocated among the  participants in the Utility Money
Pool in accordance with the proportion each participant's  contribution of funds
bears to the total  amount of funds in the  Utility  Money  Pool and the cost of
funds provided to the Utility Money Pool by such participant.

     Each  Applicant  receiving a loan  through the Utility  Money Pool would be
required to repay the principal amount of such loan,  together with all interest
accrued  thereon,  on demand  and in any event not later than one year after the
date of such loan.  All loans made through the Utility Money Pool may be prepaid
by the borrower without premium or penalty.

                                      -23-


<PAGE>



     ii. Non-Utility Money Pool

     The  Non-Utility  Money  Pool  will  be  operated  on the  same  terms  and
conditions as the Utility Money Pool,  except that SCANA funds made available to
the Money  Pools  will be made  available  to the  Utility  Money Pool first and
thereafter to the Non-Utility Money Pool. No loans through the Non-Utility Money
Pool would be made to, and no  borrowings  through  the  Non-Utility  Money Pool
would be made by,  SCANA.  South  Carolina  Fuel  will  not  participate  in the
Non-Utility  Money Pool as it is  participating  in the Utility Money Pool.  See
Exhibit  J-2 for a copy of the form of  Non-Utility  Money Pool  Agreement.  All
contributions  to, and borrowings  from, the  Non-Utility  Money Pool are exempt
pursuant  to the  terms  of Rule 52  under  the Act,  except  contributions  and
extensions of credit by SCANA, authorization for which is hereby requested.

     iii. Other  Contributions to Money Pool SCANA and the Utility  Subsidiaries
may contribute funds from the issuance of short term debt as authorized above to
the Utility Money Pool.  SCANA may  contribute  funds from the issuance of short
term debt to the  Non-Utility  Money Pool and the Non-Utility  Subsidiaries  may
contribute  funds from the issuance of short term debt to the Non-Utility  Money
Pool.

     iv. Operation of the Money Pools and Administrative Matters

     Operation  of the Utility and  Non-Utility  Money Pools,  including  record
keeping and  coordination  of loans,  will be handled by SCANA Service under the
authority of the  appropriate  officers of the  participating  companies.  SCANA
Service will administer the Utility and Non-Utility  Money Pools on an "at cost"
basis and will maintain  separate records for each money pool.  Surplus funds of
the Utility Money Pool and the Non-Utility Money Pool may be

                                      -24-


<PAGE>



combined in common  short-term  investments,  but separate records of such funds
shall be maintained by SCANA Service as administrator of the pools, and interest
thereon shall be separately  allocated,  on a daily basis, to each money pool in
accordance  with the  proportion  that the amount of each money  pool's  surplus
funds bears to the total amount of surplus funds  available for investment  from
both money pools.

     v. Use of Proceeds

     Proceeds of any short term borrowings by the Applicants may be used by each
such  Applicant (i) for the interim  financing of its  construction  and capital
expenditure  programs;  (ii)  for  its  working  capital  needs;  (iii)  for the
repayment,  redemption or refinancing of its debt and preferred  stock;  (iv) to
meet  unexpected  contingencies,   payment  and  timing  differences,  and  cash
requirements; and (v) to otherwise finance its own business and for other lawful
general corporate  purposes.  SCE&G may borrow up to $30 million at any one time
outstanding  from the Utility  Money Pool,  PSNC may borrow up to $15 million at
any one time outstanding, and GENCO may borrow up to $25 million at any one time
outstanding.  Borrowings by South Carolina Fuel under the Utility Money Pool are
exempt  pursuant  to  Rule 52  under  the Act.  The  use  of  proceeds from  the
financings  would  be  limited  to  use  in  the  operations  of the  respective
businesses  in which such  Subsidiaries  are already  authorized to engage.  The
authorization  sought herein  is substantially  the same  as that  given  to New
Century  Energies,  Inc.,  Holding Co. Act  Release No. 26750 (Aug. 1, 1997) and
Conectiv,  Holding Co. Act Release No. 26833 (Feb. 26, 1998).

     5. Changes in Capital Stock of Wholly Owned Subsidiaries

     The  portion  of  an  individual  Subsidiary's  aggregate  financing  to be
effected  through the sale of stock to SCANA or other  immediate  parent company
during the Authorization  Period pursuant to Rule 52 and/or pursuant to an order
issued  pursuant to this file cannot be  ascertained at this time. It may happen
that the proposed sale of capital securities (i.e., common

                                      -25-


<PAGE>



stock or preferred  stock) may in some cases exceed the then authorized  capital
stock of such Subsidiary.  In addition, the Subsidiary may choose to use capital
stock with no par value. Also, a wholly-owned Subsidiary may wish to engage in a
reverse stock split to reduce  franchise  taxes.  As needed to accommodate  such
proposed  transactions  and to provide  for future  issues,  request is made for
authority  to  change  the  terms of any  wholly-owned  Subsidiary's  authorized
capital stock  capitalization by an amount deemed  appropriate by SCANA or other
intermediate  parent  company.  This  request  for  authorization  is limited to
SCANA's  wholly-owned  Subsidiaries  and will not affect the aggregate limits or
other conditions  contained herein. A Subsidiary would be able to change the par
value,  or change  between  par  value  and  no-par  stock,  without  additional
Commission approval. Any such action by a Utility Subsidiary would be subject to
and would only be taken upon the receipt of any necessary approvals by the state
commission in the state or states where the Utility  Subsidiary is  incorporated
and doing business. See New Century Energies,  Inc., Holding Co. Act Release No.
26750 (Aug. 1, 1997);  Conectiv,  Inc.,  Holding Co. Act Release No. 26833 (Feb.
26, 1998); Dominion Resources, Inc., Holding Co. Act Release No. 27112 (Dec. 15,
1999). Each of SCE&G and PSNC will maintain,  during the  Authorization  Period,
30% common equity in its capitalization.

     6. Payment of Dividends out of Capital or Unearned Surplus by PSNC

     As a result of the  application of the purchase method of accounting to the
Merger,  the  current  retained  earnings  of PSNC  will be  recharacterized  as
additional  paid-in-capital.  In  addition,  the  Merger  will  give  rise  to a
substantial level of goodwill,  the difference between the aggregate fair values
of all  identifiable  tangible and intangible  (non-goodwill)  assets on the one
hand, and the total  consideration to be paid for PSNC and the fair value of the
liabilities  assumed,  on the other. In accordance with the  Commission's  Staff
Accounting Bulletin No. 54, Topic 5J

                                      -26-


<PAGE>



("Staff  Accounting  Bulletin"),  the goodwill will be "pushed down" to PSNC and
reflected as additional  paid-in-capital in its financial statements. The effect
of these accounting  practices would be to leave PSNC with no retained earnings,
the traditional source of dividend payment, but, nevertheless,  a strong balance
sheet showing a significant equity level. The Applicants  request  authorization
to pay dividends out of the additional  paid-in-capital account up to the amount
of PSNC's aggregate retained earnings immediately prior to the Merger and out of
earnings before the amortization of the goodwill thereafter.

     In purchase accounting,  the total value of the acquisition,  which must be
assigned to PSNC's assets, is the total  consideration to be paid for PSNC, plus
the  fair  value  of all  liabilities  assumed  in the  acquisition.  Generally,
goodwill is the residual  balance of the total value remaining after fair values
have been  assigned to all of PSNC's  identifiable  assets  (both  tangible  and
non-goodwill  intangible  assets).  Accordingly,  the  excess  of  the  purchase
consideration  over the fair market value of the acquired assets of PSNC will be
assigned to goodwill for generally accepted accounting purposes.

     As  indicated  in the  Staff  Accounting  Bulletin,  registrants  that have
substantially all (generally  defined as in excess of 95%) of their common stock
acquired by a third party,  in a business  combination  accounted  for under the
purchase  method,  should reflect the push-down of goodwill in the  registrant's
post-acquisition financial statements. For any post-acquisition reporting of the
consolidated PSNC financial  statements,  push down accounting will be reflected
in those  statements  and the full amount of goodwill  associated  with the PSNC
acquisition will be reflected.

                                      -27-


<PAGE>



     The application of "push down" accounting represents a change in the manner
of accounting.  For FERC and state commission reporting purposes,  goodwill will
be recorded in PSNC's books. The original  historical basis of PSNC's books will
not be disturbed.

     As a result of the push down of the goodwill, the common equity balances of
PSNC  and  PSNC's  subsidiaries  are  effectively  reset  as if  they  were  new
companies,  because  a new  basis  of  accounting  has been  pushed  down to the
entities. Accordingly,  retained earnings are eliminated.  Immediately following
this accounting treatment, the only components with a recorded value would be:

     o    Common  stock - which  would  continue to reflect the par value of the
          common stock issued.

     o    Paid-in-capital  - which would reflect a value  consistent  with total
          common shareholders' equity minus the par value recorded in the common
          stock line.

In other words, the resulting common  shareholders'  equity will equal the total
consideration paid for the entity.

                  Based on 1998 financial information,  the application of these
accounting  principles  to the Merger will result in  following  adjustments  to
PSNC's books:

<TABLE>
<CAPTION>


$'000                          1998             Adjustments1         Adjustments2            Restated
<S>                          <C>                <C>                  <C>                     <C>

Common Stock                  20,378                ---                   ---                 20,378
Paid-in-capital              134,742               68,654               471,173               674,569
Retained earnings             68,654              (68,654)                ---                   ---
Accumulated                    ---                  ---                   ---                   ---
comprehensive
income, net
Total equity                 223,774                ---                 471,173               694,947
----------------------  ------------------  -------------------- --------------------- ---------------------
</TABLE>

     Adjustments 1 -- Capital accounts are restated as Paid-in-Capital.

     Adjustments 2 -- Goodwill is added to Paid-in-Capital.

                                      -28-


<PAGE>



     The push down of the net assets at fair market  value also has an impact on
the net income of PSNC. The net assets include an  acquisition  adjustment  that
will be amortized over 35 years. PSNC's net income will be reduced by the amount
of the amortization.  For example,  net income of $24.8 million in 1998 would be
reduced by a goodwill  amortization  of $13.5 million.  The resulting net income
after  amortization  would be $11.3  million.  FASB has issued an exposure draft
which proposes a reduction in the amortization period for transactions  effected
after the adoption of the standard. SCANA will comply with all of the provisions
of any such standard that is ultimately adopted.

     Section 12 of the 1935 Act, and Rule 46 thereunder,  generally prohibit the
payment of dividends out of "capital or unearned  surplus" except pursuant to an
order of the Commission.  The legislative  history  explains that this provision
was intended to "prevent  the milking of operating  companies in the interest of
the controlling  holding company groups." S. Rep. No. 621, 74th Cong., 1st Sess.
34 (1935)./4 In determining  whether to permit a registered  holding  company to
pay dividends out of capital surplus,  the Commission considers various factors,
including: (i) the asset value of the company in relation to its capitalization,
(ii) the  company's  prior  earnings,  (iii) the company's  current  earnings in
relation  to the  proposed  dividend,  and (iv)  the  company's  projected  cash
position after payment of a dividend. See Eastern Utilities Associates,  Holding
Co. Act Release No.  25330 (June 13,  1991)  ("EUA"),  and cases cited  therein.
Further,  the  payment  of the  dividend  must  be  "appropriate  in the  public
interest." Id., citing Commonwealth & Southern  Corporation,  13 S.E.C. 489, 492
(1943).


     The  Applicants  request  authority  for  PSNC  to  pay  dividends  out  of
additional  paid-in-capital  up to the  amount of PSNC's  consolidated  retained
earnings prior to the Merger

--------

     4 Compare Section 305(a) of the Federal Power Act.

                                      -29-


<PAGE>



and out of earnings before the amortization of goodwill  thereafter.  In no case
would  dividends be paid if the equity of PSNC as a percentage  of total capital
was below 30% on a consolidated  basis.  This restriction is intended to protect
both investors and consumers.

     In support of their request,  Applicants  assert that each of the standards
of Section 12(c) of the 1935 Act enunciated in the EUA case are satisfied:

     (i)  After the  Merger,  and  giving  effect to the push down of  goodwill,
          PSNC's common equity as a percentage of total  capitalization  will be
          61.6%,  substantially in excess  of the  traditional levels  of common
          equity  capitalization that  the Commission  has authorized  for other
          registered  holding  company  systems.  The Applicants'  commitment to
          maintain the capitalization of PSNC at or above 30% common equity on a
          consolidated basis  should result  in a  capital structure  consistent
          with industry norms.

     (ii) PSNC  has a  favorable  history  of prior  earnings  and it has a long
          record of consistent dividend payments./5

     (iii)Applicants  anticipate that PSNC's cash flow after the Merger will not
          differ  significantly  from its pre-Merger cash flow and that earnings
          before the  amortization of goodwill  ("Gross  Earnings"),  therefore,
          should  remain  stable  post-  Merger.  The  Applicants  believe  that
          dividends  paid out of future  earnings  will  continue  to  reflect a
          dividend payout ratio of between 65% and 75% of Gross Earnings,  based
          on a rolling 5-year average.

     (iv) The projected  cash position of PSNC after the Merger will be adequate
          to meet the  obligations  of each  company.  As of September 30, 1999,
          PSNC had cash balances of $7.2 million on a  consolidated  basis.  The
          amortization  of goodwill is a non-cash  expense  that will not affect
          the cash flow of PSNC. PSNC is forecast to have sufficient cash to pay
          dividends in the amounts contemplated.

     (v)  The proposed dividend payments are in the public interest.  PSNC is in
          sound financial condition as indicated by its credit ratings.  Indeed,
          PSNC's senior unsecured  debentures were rated A2 by Moody's Investors
          Service,  Inc.  prior to  announcement  of the Merger  and,  following
          announcement, were put under review for possible upgrade. The positive
          implications  for PSNC are a result  of its  association  with  SCANA,
          including the higher-rated SCE&G. The expectations of continued strong
          credit  ratings  by PSNC  should  allow it to  continue  to access the
          capital markets to finance its operations and growth. In addition, the
          dividend payments are consistent with investor  interests because they
          allow the capital structure of PSNC to be adjusted to more appropriate
          levels of debt and equity.  Lastly, a prohibition on dividend payments
          out of additional paid-in-capital would impair the ability of SCANA to
          service the acquisition debt incurred in connection with the Merger.

     7. Financing Entities

     Authority  is sought for the  Subsidiaries  to organize  new  corporations,
trusts,  partnerships or other entities  created for the purpose of facilitating
financings through their

--------
     5 In recent years, PSNC's net income and dividends have been:


     Year          Net Income ($ millions)        Dividends Paid ($ millions)
     1994                    20.0                             14.3
     1995                    21.4                             14.2
     1996                    23.9                             16.2
     1997                    26.3                             17.3
     1998                    24.8                             18.6


                                      -30-


<PAGE>



     issuance  to  third  parties  of  income  preferred   securities  or  other
     securities   authorized   hereby  or  issued   pursuant  to  an  applicable
     exemption./6  Request is also made for these  financing  entities  to issue
     such securities to third parties in the event such issuances are not exempt
     pursuant to Rule 52.  Additionally,  request is made for authorization with
     respect  to  (i)  the  issuance  of  debentures   or  other   evidences  of
     indebtedness by any of the Subsidiaries to a financing entity in return for
     the  proceeds  of  the  financing,  (ii)  the  acquisition  by  any  of the
     Subsidiaries  of  voting  interests  or  equity  securities  issued  by the
     financing  entity  to  establish  any such  Subsidiary's  ownership  of the
     financing  entity (the equity portion of the entity generally being created
     through a  capital  contribution  or the  purchase  of  equity  securities,
     ranging from 1 to 3 percent of the  capitalization of the financing entity)
     and  (iii) the  guarantee  by the  Applicants  of such  financing  entity's
     obligations in connection therewith. Each of the Subsidiaries also requests
     authorization  to enter  into an  expense  agreement  with  its  respective
     financing  entity,  pursuant to which it would agree to pay all expenses of
     such entity. Any amounts issued by such financing entities to third parties
     pursuant to this  authorization  will be  included in the overall  external
     financing  limitation  authorized  herein for the immediate  parent of such
     financing  entity.  However,  the underlying  intra-system  mirror debt and
     parent guarantee shall not be so included.  The authorization sought herein
     with respect to financing  entities is substantially the same as that given
     to New Century Energies,  Inc.,  Holding Co. Act Release No. 26750 (Aug. 1,
     1997);  Conectiv,  Holding Co. Act Release No.  26833 (Feb.  26,  1998) and
     Dominion  Resources,  Inc.,  Holding Co. Act Release  No.  27112 (Dec.  15,
     1999).

--------

     6 SCE&G has an  existing  subsidiary  trust that has issued $50  million in
trust preferred  securities to the public and holds $50 million principal amount
of  debentures  of SCE&G.  Authorization  is requested to retain this  financing
arrangement.

                                      -31-


<PAGE>



     F. Intra-system Provision of Services

     1. Service Company

     In order to ensure  adequate  oversight  and  realize  economies  of scale,
certain  administrative  and  service  functions  for the SCANA  System  will be
consolidated  and provided  through  SCANA  Service./7  As a general  rule,  the
individual  system  companies  will  maintain  services  that can  benefit  from
individualized  application  at the company level,  with SCANA Service  offering
system-wide  coordination and strategy  services,  oversight  services and other
services  where  economies  can be captured by  centralization  of services.  In
particular,  it is  anticipated  that the following  services will be offered by
SCANA Service to system companies:

     a. Corporate Compliance.

     The compliance  group oversees  compliance  with all laws,  regulations and
policies  applicable  to  all  of  SCANA's  businesses  and  directs  compliance
training.

     b. Internal Auditing.

     This service  involves  conducting  periodic audits of  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.

     c. Strategic Planning.

     This group will advise and assist system  companies with the preparation of
strategic business plans and corporate strategies.

     d. Public Affairs.

--------

     7 As discussed  with the Staff,  SCANA may continue to provide  services to
system  companies  through March 31, 2000 at cost. SCE&G will continue as common
paymaster for the payroll system through December 31, 2000 to eliminate problems
of over-withholding FICA.

                                      -32-


<PAGE>



     The public affairs group will maintain relationships with government policy
makers, conduct lobbying activities and provide community relations functions.

     e. Gas Supply and Capacity Management (Regulated Subsidiaries).

     Through SCANA Service,  the Utility Subsidiaries will be able to coordinate
the  management  of their gas  supply and  capacity  in order to ensure the most
efficient  use and  capture  economies  of scale as a  larger  purchaser  in the
market,  although  individual  Utility  Subsidiaries  may remain as the contract
party under a supply agreement. The non-regulated marketing subsidiaries such as
SCANA Energy  Marketing  will not use SCANA  Service for gas supply and capacity
management, but will instead maintain a separate gas supply group.

     f. Legal Services.

     SCANA  Service  will  provide  various  legal  services  and general  legal
oversight, as well as handle claims.

     g. Marketing and Sales.

     SCANA Service will offer to assist system companies in developing marketing
strategies to promote their  products and their brand names.  Individual  system
companies may maintain independent  marketing personnel to handle the day-to-day
detail with respect to their marketing campaigns.

     h. Financial Services.

     The  services  offered  will  include  corporate  tax,  treasury  services,
corporate  accounting  and reporting,  hedging  policy and oversight,  financial
planning  and rates (for  regulated  Subsidiaries  and other  Subsidiaries  that
interact with regulators or regulated  companies).  The individual companies may
maintain their own corporate and accounting  group with SCANA Service  providing
advice and assistance on accounting matters, including the development of

                                      -33-


<PAGE>



accounting practices,  procedures and controls,  the preparation and analysis of
financial reports and the filing of financial reports with regulatory bodies, on
a system-wide basis.

     i. Information System Services.

     SCANA  Service  will  offer to  provide  the system  with  electronic  data
processing services.

     j. Executive.

     The members of SCANA's  executive  staff will work through SCANA Service to
assist system  companies in the  formulation  and execution of general plans and
policies,  including  operations,   issuances  of  securities,   appointment  of
executive  personnel,  budgets  and  financing  plans,  expansion  of  services,
acquisitions  and  dispositions  of  property,  public  relationships  and other
related matters.

     k. Investor Relations.

     SCANA Service will  maintain  relationships  with the financial  community,
provide shareholders'  services, and perform corporate secretarial functions for
the benefit of system companies.

     l. Customer Services.

     SCANA Service will provide billing,  mailing,  remittance processing,  call
center and customer communication services for electric and gas customers.

     m. Purchasing.

     SCANA Service will provide procurement services.

     n. Risk Management.

     SCANA Service will provide insurance,  claims, security,  environmental and
safety services.

                                      -34-


<PAGE>



     o. Telecommunications.

     SCANA  Service will provide  telecommunications  services,  the majority of
which will be telephone equipment.

     p. Employee Services.

     SCANA Service will offer to assist system companies in developing  employee
relations  policies  and  programs  and  to  provide  personnel  training  in  a
coordinated  manner across the SCANA system.  Each individual system company may
maintain a human resources group to handle the individualized application of the
policies and programs.  SCANA Service will also provide employee communications,
mail  services,  facilities  management  for the  offices  owned  by the  system
companies  and  aviation  services  for  efficient   transportation  of  company
personnel.  SCE&G intends to transfer  ownership in the employee  service center
located in  Georgetown,  South  Carolina  to SCANA  Service to further its human
resources function.

     In  accordance  with the  Services  Agreement,  services  provided by SCANA
Service  will be directly  assigned if possible or  allocated  as  necessary  by
activity, project, program, work order or other appropriate basis. To accomplish
this,  employees of SCANA  Service will record  transactions  utilizing the DMIS
data capture and accounting  system currently in place at SCANA.  Costs of SCANA
Service will be  accumulated  in accounts  and directly  assigned if possible or
allocated as necessary to the appropriate  system company in accordance with the
guidelines set forth in the Services  Agreement (Exhibit C-1). It is anticipated
that SCANA  Service will be staffed  primarily by  transferring  personnel  from
SCANA,  SCE&G and PSNC. SCANA Service's  accounting and cost allocation  methods
and procedures are  structured so as to comply with the  Commission's  standards
for service  companies in registered  holding company  systems.  SCANA Service's
billing  system  will use the  "Uniform  System of Accounts  for Mutual  Service
Companies"

                                      -35-


<PAGE>



established by the Commission for holding-company systems, as may be adjusted to
use the FERC uniform  system of accounts.  Exhibit C-2  discusses the system and
procedures  that will be used to implement the Services  Agreement.  SCANA shall
submit an amended service company policy and procedures manual to the Commission
on or  before  July 31,  2000 in order to  reflect  changes  in the  policy  and
procedures of SCANA Service.

     As compensation for services,  the Services  Agreement will provide for the
client companies to "pay to SCANA Service the cost of such services, computed in
accordance with the applicable rules and regulations (including, but not limited
to Rules 90 and 91) under the Act and appropriate  accounting  standards." Where
more than one  company is involved in or has  received  benefits  from a service
performed,  the Services  Agreement will provide that client  companies will pay
their fairly  allocated pro rata share in accordance with the methods set out in
a schedule to the Services Agreement. Thus, charges for all services provided by
SCANA Service to affiliated  utility  companies,  non-utility  companies and the
holding  company will be on an "at cost" basis as determined  under Rules 90 and
91 of the Act.

     No change in the  organization of SCANA Service,  the type and character of
the  companies  to be  serviced,  the methods of  allocating  cost to  associate
companies,  or in the scope or character of the services to be rendered  subject
to Section 13 of the Act, or any rule, regulation or order thereunder,  shall be
made  unless and until  SCANA  Service  shall  first  have given the  Commission
written  notice  of the  proposed  change  not  less  than 60 days  prior to the
proposed effectiveness  of any  such change.  If,  upon the receipt  of any such
notice, the Commission shall notify

                                      -36-


<PAGE>



SCANA Service within the 60-day period that a question  exists as to whether the
proposed  change is consistent  with the provisions of Section 13 of the Act, or
of any rule, regulation or order thereunder,  then the proposed change shall not
become  effective  unless  and until  SCANA  Service  shall  have filed with the
Commission an appropriate  declaration  regarding  such proposed  change and the
Commission shall have permitted such declaration to become effective.

     SCANA will structure the Services Agreement so as to comply with Section 13
of the Act and the Commission's rules and regulations thereunder.

     Rule 88 (b) provides that "(a) finding by the commission  that a subsidiary
company of a registered holding company . . . is so organized and conducted,  or
is to be so conducted,  as to meet the  requirements of Section 13(b) of the Act
with respect to reasonable assurance of efficient and economical  performance of
services  or  construction  or  sale  of  goods  for the  benefit  of  associate
companies, at cost fairly and equitably allocated among them (or as permitted by
(Rule 90), will be made only pursuant to a declaration filed with the Commission
on Form U-13- 1, as specified in the instructions for that form, by such company
or  the  persons  proposing  to  organize  it."  Notwithstanding  the  foregoing
language,  the  Commission  has on at least two recent  occasions  made findings
under Section 13(b) based on  information  set forth in an  application  on Form
U-1, without requiring the formal filing on a Form U-13-1.  See Unitil Corp., 51
SEC Docket 562 (Apr.  24, 1992);  CINergy  Corp.,  57 SEC Docket 2353 (Oct.  21,
1994).  In  this  Application,   SCANA  has  submitted  substantially  the  same
application information as would have been submitted in a Form U-13-1.

     Accordingly,  it is  submitted  that it is  appropriate  to find that SCANA
Service  will  be so  organized  and  shall  be so  conducted  as  to  meet  the
requirements of Section 13(b), and that

                                      -37-


<PAGE>



the  filing  of a Form  U-13-1  is  unnecessary,  or,  alternatively,  that this
Application  should be deemed to constitute a filing on Form U-13-1 for purposes
of Rule 88.

     2. Other Services

     SCE&G, PSNC and other associate companies of SCANA request authorization to
enter,  from time to time,  into  leases of office  or other  space  with  other
associate  companies.  Any such lease will comply with the requirements of Rules
87, 90 and 91. See Central  Power & Light  Company,  Holding Co. Act Release No.
26408 (Nov. 13, 1995).

     SCE&G,  GENCO and PSNC may also provide to one another services  incidental
to their utility  businesses such as maintenance  and emergency  repairs and the
services of personnel with specialized  expertise.  Except as otherwise provided
below,  these incidental  services will be occasional in nature.  These services
will be provided at cost in  accordance  with the standards of the Act and Rules
87, 90 and 91 thereunder.

     As indicated above,  because the Utility Subsidiaries will retain ownership
of software they have  developed or that involve some form of license  agreement
with third parties, other system companies will enter into license agreements to
use this  software.  These license  agreements  will be structured in accordance
with the  requirements of Rules 87, 90 and 91. In addition,  SCE&G will continue
to provide  billing  system  services to  ServiceCare,  Inc. and SCE&G and SCANA
Communications,  Inc.  will  cooperate on matters  relating to ground leases and
repair operations. Each of these services will be provided at cost as determined
under Rule 90 and 91 of the Act.

     In addition,  it is expected that SCE&G will  transfer  title to the system
mainframe  computer,  certain related peripheral  hardware and equipment and the
employee training center in

                                      -38-


<PAGE>



Georgetown,  South  Carolina to SCANA  Service to  facilitate  the  provision of
efficient coordinated services.

     In  addition,  Primesouth,  Inc.  maintains a contract  with SCE&G  whereby
Primesouth,  Inc.  operates  a power  plant  facility  on behalf  of SCE&G.  The
contract is priced "at cost" as determined under Rules 90 and 91 of the Act.

     Finally,  South  Carolina  Fuel  acquires,  owns and provides  financing to
SCE&G's  nuclear  fuel,  fossil  fuel  and  sulfur  dioxide  emission  allowance
requirements.  South  Carolina Fuel enters into  contracts with SCE&G to provide
these  fuel-related  services to SCE&G. These services are provided "at cost" as
determined under Rules 90 and 91 of the Act.

     G.   Direct  Stock  Purchase  and  Dividend  Reinvestment  Plan,  Incentive
          Compensation Plans and other Employee Benefit Plans

     SCANA  proposes,  from time to time during a period of three years from the
date of an Order  issued by the  Commission,  to issue  and/or  acquire  in open
market  transactions  or by some other method which complies with applicable law
and Commission interpretations then in effect up to 10.0 million shares of SCANA
common stock under SCANA's direct stock purchase and dividend reinvestment plan,
certain  incentive  compensation  plans and certain other employee benefit plans
described below.

     1. Direct Investment and Dividend Reinvestment Plan

     SCANA maintains a dividend  reinvestment  plan with a direct stock purchase
feature  called the SCANA  Investor  Plus Plan ("SCANA  Investor  Plus").  SCANA
Investor Plus will remain in effect following  consummation of the Merger.  Upon
consummation of the Merger,  PSNC will terminate its dividend  reinvestment plan
and  participants  in the PSNC plan will be eligible to become  participants  in
SCANA Investor Plus.

     Set forth below is a description  of the principal  terms of SCANA Investor
Plus:


                                      -39-


<PAGE>



     SCANA Investor Plus offers  shareholders  the  opportunity to buy, hold and
sell shares of SCANA  Corporation  common stock.  Any United States resident may
purchase shares through this plan. Residents of some states will receive SCANA's
information from a registered  broker-dealer.  The minimum initial investment is
$250 for the  purchase  of shares by a person  who is not  currently  a SCANA or
SCE&G  shareholder.  Additional  cash  payments  may be sent to  SCANA.  SCANA's
minimum cash investment  amount is $25 and the maximum is $100,000 in a calendar
year. The current commission charge for purchasing shares is $.06 per share. The
Plan purchases shares twice a month - usually on the 1st and 15th. All cash must
be received at least two business days prior to a purchase  date.  Cash received
and reinvested  dividends are sent to the Plan's  custodian  (currently  Merrill
Lynch) on the purchase date.  Plan shares are sold through the custodian  weekly
at a current  commission charge of $.18 per share. A statement is sent each time
there is activity in a shareholder's account.

     Since February 1, 1997, SCANA Investor Plus has acquired shares in the open
market.  All  cash  received  for  this  Plan  is used to buy  shares  for  Plan
participants.

     The total number of shares issued under this plan in 1998 was 720,154.

     A full  statement  of the  current  provisions  of SCANA  Investor  Plus is
included in SCANA's Registration Statement on Form S-3 (Exhibit E-1 hereto).

     2. Employee Stock-Based Plans

     (a) SCANA currently  maintains the following  employee  stock-based  plans:
SCANA Stock Purchase Savings Plan, SCANA  Non-Employee  Directors Plan and SCANA
Performance  Share Plan (the "SCANA Plans").  PSNC currently  maintains  several
employee stock-based plans including the 1997 Nonqualified Stock Option Plan and
Employee Stock Purchase Plan (collectively,  the "PSNC Plans").  The SCANA Plans
will remain in effect

                                      -40-


<PAGE>



following  consummation  of the Merger.  At the  election  of SCANA,  one of the
following  things  will  happen  with  respect  to the  PSNC  Plans  immediately
following consummation of the Merger:

     o    SCANA and PSNC will take such action as may be  necessary  so that the
          PSNC Plans will  provide for the  issuance  only of SCANA common stock
          and, with respect to outstanding  options and/or awards,  provide that
          the holder  thereof  shall be  entitled to a number of shares of SCANA
          common  stock,  equal to the number such holder would have received if
          such option or award has been exercised  prior to  consummation of the
          Merger, with appropriate adjustments to the exercise price; or

     o    PSNC shall use its best  efforts  to take all  actions  necessary  and
          appropriate to provide that each outstanding option to purchase shares
          of PSNC Common  Stock or other  similar  interest  (collectively,  the
          "PSNC  Options")  granted under any of the PSNC Plans,  whether or not
          then  exercisable  or vested,  shall be  cancelled  and,  in  exchange
          therefor,  each holder of such PSNC Option shall  receive an amount in
          cash in respect thereof as set forth in the Merger Agreement.

     Set  forth  below is a summary  of  certain  features  of each of the SCANA
Plans,  which summary is qualified by reference to each such plan (Exhibits E-2,
E-3 and E-4 hereto):

     (b)  SCANA  Stock  Savings  Plan.  Employees  18  years  of age or more may
participate  in this plan and save up to 15% of their  base  salary on a pre-tax
(401(K)) or after- tax basis.  Employee  investment  choices  currently  include
SCANA common stock or a money  market  fund.  Employees  are fully vested in the
amounts they contribute to the plan. SCANA will match up to 6% of the employee's
contribution, with the SCANA contribution being shares of

                                      -41-


<PAGE>



SCANA common stock.  The SCANA  contribution  may not be withdrawn for two years
following the year of  contribution  if the employee has less than five years of
service with SCANA.  Employees can make contribution rate changes once every 120
days and can change from pre-tax to after-tax (and vice versa) annually.

     (c) SCANA  Non-Employee  Directors  Plan.  The  purpose  of this plan is to
promote the achievement of long-term objectives of SCANA by linking the personal
interests of eligible  directors,  non-employee  individuals  who are members of
SCANA's Board of Directors,  to those of SCANA's shareholders and to attract and
retain  eligible  directors of  outstanding  competence  by mandating  that each
quarter 41% of the  retainer  fees of each  participant  be paid in SCANA common
stock.  This plan is a  compensation  plan  pertaining  only to said 41% of each
participant's  retainer fee and is not a pension or welfare  benefit plan and is
not a deferred  compensation plan. SCANA common stock is purchased for this plan
on the first day of each quarter as the quarterly retainer fees are paid. Shares
are currently  purchased through open market  transactions.  The total number of
shares  issued from this plan in 1998 was 2,940.  The  average  number of shares
issued annually in 1997 and 1998 was 2,784.

     (d) SCANA  Performance  Share  Plan.  SCANA's  Performance  Share Plan pays
bonuses to executives based on SCANA's Total Shareholder Return ("TSR") relative
to a group of peer companies over a three-year  period.  The peer group includes
84 electric and gas  utilities,  none of which has annual  revenues of less than
$100 million.

     TSR is the  stock  price  increase  over the  three-year  period  plus cash
dividends paid during the period,  divided by stock price as of the beginning of
the period. Comparing SCANA's TSR to the TSR of a large group of other utilities
reflects  SCANA's  recognition that investors could have invested their funds in
other utility companies and measures how well SCANA did

                                      -42-


<PAGE>



when  compared  to others  operating  in similar  interest,  tax,  economic  and
regulatory environments.

     Executives  selected  to  participate  in the  Performance  Share  Plan are
assigned  target  awards  at the  beginning  of  each  three-year  period  based
primarily on salary level, level of responsibilities and competitive  practices.
Awards under this plan represent a significant portion of executives'  "at-risk"
compensation. To provide additional incentive for executives, and to ensure that
executives are only rewarded when  shareholders  gain, actual payouts may exceed
the median of the market only when  performance is above the 50th  percentile of
the peer group.  For lesser  performance,  awards will be at or below the market
median.

     Payouts  occur when SCANA's TSR is in the top  two-thirds of the peer group
and vary  based on SCANA's  ranking  against  the peer  group.  Executives  earn
threshold  payouts  of 0.4 times  target at the 33rd  percentile  of  three-year
performance.  Target  payouts will be made at the 50th  percentile of three-year
performance.  Maximum  payouts will be made at 1.5 times target when SCANA's TSR
is at or above the 75th  percentile of the peer group. No payouts will be earned
if performance is at less than the 33rd percentile.  Awards may be paid in stock
or cash or a combination of stock and cash.

     The total  number of shares  issued from the plan in 1998 was  20,021.  The
average number of shares issued annually in 1997 and 1998 was 26,285.

     H. Tax Allocation Agreement

     The Applicants ask the Commission to approve the Tax Allocation  Agreement.
Approval is  necessary  because the Tax  Allocation  Agreement  provides for the
retention  by SCANA of certain  payments  for tax losses  that it has  incurred,
rather than the allocation of such

                                      -43-


<PAGE>



losses to  Subsidiaries  without  payment as would otherwise be required by Rule
45(c)(5). Exhibit K-1 is a copy of the proposed Tax Allocation Agreement.

     Provisions  in a tax  allocation  agreement  between a  registered  holding
company and its subsidiaries  must comply with Section 12 of the Act and Rule 45
thereunder.  Rule 45(a) of the Act generally  prohibits any  registered  holding
company or subsidiary  company from,  directly or indirectly,  lending or in any
manner  extending  its  credit to or  indemnifying,  or making any  donation  or
capital contribution to, any company in the same holding company system,  except
pursuant to a Commission order. Rule 45(c) provides that no approval is required
for a  tax  allocation  agreement  between  eligible  associate  companies  in a
registered  holding  company  system,  that "provides for allocation  among such
associate   companies  of  the  liabilities  and  benefits   arising  from  such
consolidated tax return for each tax year in a manner not inconsistent with" the
conditions of the rule. Of interest here, Rule 45(c)(5) provides that:

     The agreement  may,  instead of excluding  members as provided in paragraph
     (c)(4), include all members of the group in the tax allocation, recognizing
     negative corporate taxable income or a negative corporate tax, according to
     the allocation  method  chosen.  An agreement  under this  paragraph  shall
     provide that those associate  companies with a positive allocation will pay
     the  amount  allocated  and  those  subsidiary  companies  with a  negative
     allocation will receive current payment of their corporate tax credits. The
     agreement shall provide a method for  apportioning  such payments,  and for
     carrying over uncompensated benefits, if the consolidated loss is too large
     to be used in full. Such method may assign priorities to specified kinds of
     benefits. (Emphasis added.)

                                      -44-


<PAGE>



Under the rule, only "subsidiary companies," as opposed to "associate companies"
(which includes the holding company in a holding company  system),  are entitled
to be paid for corporate tax credits.  However,  if a tax  allocation  agreement
does not fully comply with the provisions of Rule 45(c),  it may  nonetheless be
approved by the Commission under Section 12(b) and Rule 45(a).

     In connection with the 1981 amendments to Rule 45, the Commission explained
that  the  distinction  between  associate  companies,  on  the  one  hand,  and
subsidiary  companies,  on the other,  represented a policy decision to preclude
the holding company from sharing in consolidated return savings.  The Commission
noted that  exploitation of utility  companies by holding  companies through the
misallocation  of consolidated tax return benefits was among the abuses examined
in the investigations  underlying the enactment of the 1935 Act. Holding Co. Act
Release No.  21968  (March 25,  1981),  citing  Sen.  Doc.  92,  Part 72A,  70th
Congress,  1st Sess. at 477-482. It must be noted,  however,  that the result in
Rule  45(c)(5)  is not  dictated  by the  statute  and,  as the  Commission  has
recognized,  there  is  discretion  on the part of the  agency  to  approve  tax
allocation  agreements that do not, by their terms, comply with Rule 45(c) -- so
long as the policies and provisions of the Act are otherwise satisfied.  In this
matter,  where the holding  company is seeking  only to receive  payment for tax
losses that have been  generated by it, the proposed  arrangement  will not give
rise to the types of problems  (e.g.,  upstream loans) that the Act was intended
to address. Compare Section 12(a) of the Act.

     As a result of the  Merger,  SCANA will be creating  tax  credits  that are
non-recourse to the Subsidiaries.  As a result, SCANA should retain the benefits
of those tax credits.  Accordingly,  the Applicants  request that the Commission
approve the Tax Allocation Agreement.

     SCANA  requests  that  the  Commission   reserve   jurisdiction   over  the
implementation of the Tax Allocation Agreement until such time as the matter can
be more fully considered by the

                                      -45-


<PAGE>



Commission.  Until such time, the applicants  have attached a copy of an interim
Tax Allocation  Agreement among SCANA and the  Subsidiaries as Exhibit K-2 which
shall  govern the  parties  after the  effective  time of the Merger  until such
approval of the Tax Allocation Agreement.

     I. Filing of Certificates of Notification

     It is proposed that,  with respect to SCANA,  the reporting  systems of the
Securities Exchange Act of 1934, as amended (the "1934 Act") and the 1933 Act be
integrated  with the  reporting  system  under  the Act.  This  would  eliminate
duplication  of filings  with the  Commission  that cover  essentially  the same
subject matters, resulting in a reduction of expense for both the Commission and
SCANA.  To effect  such  integration,  the  portion of the 1933 Act and 1934 Act
reports containing or reflecting  disclosures of transactions occurring pursuant
to the  authorizations  granted  in this  proceeding  would be  incorporated  by
reference into this proceeding through Rule 24 certificates of notification. The
certificates  would also  contain  all other  information  required  by Rule 24,
including the  certification  that each  transaction  being reported on had been
carried out in accordance  with the terms and conditions of and for the purposes
represented in this  Application/Declaration.  Such certificates of notification
would be filed  within 60 days after the end of the last  calendar  quarter,  in
which transactions occur.

     The Rule 24 certificates will contain the following information:

     a.   If sales of common stock by SCANA are reported, the purchase price per
          share and the market  price per share at the date of the  agreement of
          sale;

     b.   The total  number of shares of SCANA  common  stock issued or issuable
          pursuant to options granted during the quarter under employee  benefit
          plans and dividend  reinvestment  plans including any employee benefit
          plans or dividend reinvestment plans hereafter adopted;

                                      -46-


<PAGE>



     c.   If SCANA common stock has been  transferred  to a seller of securities
          of a company being acquired, the number of shares so issued, the value
          per share and  whether the shares are  restricted  in the hands of the
          acquiror;

     d.   If a  guarantee  is  issued  during  the  quarter,  the  name  of  the
          guarantor,  the  name  of the  beneficiary  of the  guarantee  and the
          amount, terms and purpose of the guarantee;

     e.   The  amount and terms of any  short-term  debt  issued by any  Utility
          Subsidiary during the quarter;

     f.   The  amount and terms of any  financings  consummated  by any  Utility
          Subsidiary that are not exempt under Rule 52;

     g.   A list of U-6B-2 forms filed with the  Commission  during the quarter,
          including the name of the filing entity and the date of filing;

     h.   Consolidated  balance sheets as of the end of the quarter and separate
          balance  sheets  as of the  end  of  the  quarter  for  each  company,
          including  SCANA,  that  has  engaged  in   jurisdictional   financing
          transactions during the quarter; and

     i.   Future  registration  statements filed under the 1933 Act with respect
          to securities that are subject of the Application/Declaration  will be
          filed or incorporated by reference as exhibits to the next certificate
          filed pursuant to Rule 24.

     J. Statement Pursuant to Rule 54

     Rule 54  promulgated  under the Act states that in  determining  whether to
approve  the issue or sale of a security  by a  registered  holding  company for
purposes other than the

                                      -47-


<PAGE>



acquisition of an exempt wholesale  generator ("EWG") or foreign utility company
("FUCO"),  or other  transactions  by such  registered  holding  company  or its
subsidiaries  other than with respect to EWGs or FUCOs, the Commission shall not
consider the effect of the capitalization or earnings of any subsidiary which is
an EWG or FUCO upon the registered  holding  company system if Rules 53(a),  (b)
and (c) are satisfied. SCANA does not, and after the Merger will not, retain any
EWGs or FUCOs. Therefore, Rules 53(a), (b) and (c) are satisfied.

Item 2. Fees, Commissions and Expenses

Estimated Legal Fees and Expenses                $     35,000
Estimated Miscellaneous Expenses                        5,000
                                              ---------------
         Total                                  $      40,000

Item 3. Applicable Statutory Provisions

     Sections  6(a), 7, 9(a), 10, 12 and 13 of the Act and Rules 42, 43, 45, 52,
54 and 88 are considered applicable to the proposed transactions.

     To  the  extent  that  the  proposed  transactions  are  considered  by the
Commission to required authorization, exemption or approval under any section of
the Act or the rules and regulations  other than those set forth above,  request
for such authorization, exemption or approval is hereby made.

Item 4. Regulatory Approvals

     The SCPSC has jurisdiction over issuances of securities by SCE&G and GENCO,
other than  securities  payable  within one year of the date of  issuance or the
renewal of short-term obligations for a two-year or shorter period. The NCUC has
jurisdiction  over  issuances of securities by PSNC,  other than the issuance of
notes with a maturity of two years or less or renewals thereof for a six-year or
shorter period.

                                      -48-


<PAGE>



     Except as stated above,  no state or federal  regulatory  agency other than
the Commission under the Act has jurisdiction over the proposed transactions.

Item 5. Procedure

     The   Applicants   hereby   request  that  there  be  no  hearing  on  this
Application/Declaration  and  that the  Commission  issue  its  order as soon as
practicable  after the filing hereof.  On August 31, 1999, the Commission issued
and  published  the  requisite  notice  under  Rule  23  with  respect  to  this
Application/Declaration;  such notice specifying  September 27, 1999 as the date
by  which  comments  may be  entered  and the  date on  which  an  order  of the
Commission  granting  and  permitting  the   Application/Declaration  to  become
effective  may  be  entered  by  the  Commission.  On  September  24,  1999,  an
intervention  was filed with the  Commission  by Paul S.  Davis;  however,  this
intervention was withdrawn by Mr. Davis on December 15, 1999.

     The  Applicants  hereby  (i)  waive a  recommended  decision  by a  hearing
officer,  (ii) waive a recommended  decision by any other responsible officer or
the  Commission,  (iii) consent that the Division of Investment  Management  may
assist in the preparation of the  Commission's  decision and (iv) waive a 30-day
waiting  period between the issuance of the  Commission's  order and the date on
which it is to become effective.

Item 6. Exhibits and Financial Statements

     Exhibits

     A-1  Restated  Articles of  Incorporation  of SCANA as adopted on April 26,
          1989  (Filed  with  the  Commission  as  Exhibit  3-A to  Registration
          Statement No. 33-49145 and incorporated by reference herein).

                                      -49-


<PAGE>



     A-2  Articles of Amendment  of SCANA,  dated April 27, 1995 (Filed with the
          Commission as Exhibit 4-B to  Registration  Statement No. 33-62421 and
          incorporated by reference herein).

     A-3  By-Laws of SCANA as revised and  amended on  December  17, 1997 (Filed
          with the  Commission  as  Exhibit  3-C to Form 10-K for the year ended
          December 31, 1997 and incorporated by reference herein).

     B-1  Amended  and  Restated  Agreement  and  Plan of  Merger,  dated  as of
          February 16, 1999 and amended and restated as of May 10, 1999,  by and
          among PSNC,  SCANA,  New Sub I, Inc. and New Sub II, Inc.  (Filed with
          the  Commission  as Exhibit  10 to Form 8-K filed on May 14,  1999 and
          incorporated by reference herein).

     C-1  Form of Services Agreement between SCANA Service and each Subsidiary.

     C-2  Service Company Policy and Procedures.

     D-1  SCANA  Indenture  (Filed with the  Commission as Exhibit 4A to SCANA's
          Registration  Statement  No.  33-32107 and  incorporated  by reference
          herein).

     E-1  SCANA  Investor Plus Plan (Filed with the  Commission by  Registration
          Statement No. 333-86803 and incorporated by reference herein).

     E-2  SCANA  Stock  Purchase  Savings  Plan (Filed  with the  Commission  as
          Exhibit  4.3 to  SCANA's  Registration  Statement  No.  333-87281  and
          incorporated by reference herein).

     E-3  SCANA  Non-Employee  Directors  Plan  (Filed  with the  Commission  as
          Exhibit  4.3 to  SCANA's  Registration  Statement  No.  333-18973  and
          incorporated by reference herein).

                                      -50-


<PAGE>



     E-4  SCANA  Performance  Share Plan (Filed with the  Commission  as Exhibit
          10.01(e) to Registration  Statement No.  33-49333 and  incorporated by
          reference herein).

     F-1  Opinion of counsel (Previously filed).

     G-1  Annual  Report of SCANA on Form 10-K for the year ended  December  31,
          1998 (Filed with the Commission on March 18, 1999 and amended on April
          27, 1999 and incorporated by reference herein).

     G-2  Quarterly  Report of SCANA on Form 10-Q for the period ended March 31,
          1999 (Filed with the  Commission on May 17, 1999 and  incorporated  by
          reference herein).

     G-3  Quarterly  Report of SCANA on Form 10-Q for the period  ended June 30,
          1999 (Filed with the Commission on August 13, 1999 and incorporated by
          reference herein).

     G-4  Quarterly  Report of SCANA on Form 10-Q for the period ended September
          30,  1999  (Filed  with  the  Commission  on  November  15,  1999  and
          incorporated by reference herein).

     G-5  Annual Report of PSNC on Form 10-K for the fiscal year ended September
          30,  1999  (Filed  with  the  Commission  on  December  23,  1999  and
          incorporated by reference herein).

     G-6  Withdrawn.

     G-7  Withdrawn.

     G-8  Withdrawn.

     H-1  Proposed Form of Notice (Previously filed).

                                                        -51-


<PAGE>



     I-1  Description of Existing  Financing  Arrangements  and Orders - Utility
          Subsidiaries (Previously filed).

     I-2  Description   of  Existing   Financing   Arrangements   -  Non-Utility
          Subsidiaries (Previously filed).

     J-1  Form of Utility Money Pool Agreement.

     J-2  Form of Non-Utility Money Pool Agreement.

     J-3  Form of Utility Money Pool Promissory Note (Previously filed).

     J-4  Form of Non-Utility Money Pool Promissory Note (Previously filed).

     K-1  Form of Tax Allocation Agreement (Previously Filed).

     K-2  Interim Tax Allocation Agreement.

     L-1  Withdrawn.


     Financial Statements

     FS-1 SCANA  Unaudited  Pro  Forma  Condensed   Consolidated  Balance  Sheet
          (Previously filed).

     FS-2 SCANA Unaudited Pro Forma Condensed  Consolidated  Statement of Income
          and Cash Flow (Previously filed).

     FS-3 Notes to SCANA  Unaudited Pro Forma Condensed  Consolidated  Financial
          Statements (Previously filed).

     FS-4 SCANA  Consolidated  Balance  Sheet as of March 31, 1999  (included in
          Exhibit G-2).

     FS-5 SCANA Consolidated  Statement of Income as of March 31, 1999 (included
          in Exhibit G-2).

     FS-6 SCANA  Consolidated  Balance  Sheet as of June 30, 1999  (included  in
          Exhibit G-3).

                                      -52-


<PAGE>



     FS-7 SCANA  Consolidated  Statement of Income as of June 30, 1999 (included
          in Exhibit G-3).

     FS-8 SCANA Consolidated Balance Sheet as of September 30, 1999 (included in
          Exhibit G-4).

     FS-9 SCANA  Consolidated  Statement  of Income  as of  September  30,  1999
          (included in Exhibit G-4).

     FS-10PSNC Consolidated  Balance Sheet as of September 30, 1999 (included in
          Exhibit G-5).

     FS-11PSNC  Consolidated  Statement  of  Income  as of  September  30,  1999
          (included in Exhibit G-6).

     FS-12 Withdrawn.

     FS-13 Withdrawn.

     FS-14 Withdrawn.

     FS-15 Withdrawn.


                                      -53-


<PAGE>



Item 7. Information as to Environmental Effects

     The proposed  transaction  involves  neither a "major  federal  action" nor
"significantly  affects the quality of the human environment" as those terms are
used in Section  102(2)(C) of the National  Environmental  Policy Act, 42 U.S.C.
Sec.  4321 et seq.  No  federal  agency is  preparing  an  environmental  impact
statement with respect to this matter.

                                      -54-


<PAGE>



                                    SIGNATURE

     Pursuant to the  requirements  of the Public Utility Holding Company Act of
1935, the Applicants have duly caused this Pre-effective  Amendment No. 2 to the
Application/  Declaration  to be  signed  on  their  behalf  by the  undersigned
thereunto duly authorized.

Date:  February 14, 2000                       SCANA CORPORATION


                                                /s/ H. Thomas Arthur
                                               Name:  H. Thomas Arthur
                                               Title: Senior Vice-President
                                                      and General Counsel
                                      -55-

