Dominion offers to buy scana in wake of s.c. nuclear plant failure business e gasoline


On the table is $1.3 billion in refunds for the unfinished nuclear reactors, or an average of $1,000 to each SCE&G customer. Another enticement: Electric rates would fall by 5 percent per month, or about $7 a household, rolling back a slice of the higher costs ratepayers have shouldered to finance the scuttled project.

"For our customers, I hope today’s announcement represents a positive resolution to what has been a very difficult situation — a situation that is far better than what we can do on our own," said Addison, a former finance chief who became CEO this month.

House Majority Leader Gary Simrill, R-Rock Hill, said the House will continue its plans to move forward with proposed fixes to the nuclear debacle when the General Assembly returns next week, including eliminating the law that allows SCE&G to charge customers for the unfinished reactors.

South Carolina regulators are considering whether customers of SCE&G, a SCANA subsidiary, should continue paying $37 million a month for work that will not provide a kilowatt of power. State lawmakers also will begin considering legislation next week that would cut off payments for the nuclear project, which account for 18 percent of customers’ electric bills.

Dominion says the sale would cut the time that SCE&G customers needed to continue paying for the unfinished reactors by more than half while assuring the financial stability of its power company, a major economic driver in the state. Customers would pay on average a total of roughly $5,000, or $20 a month, to cover the cost of the reactors over the next 20 years if the sale goes through.

House Speaker Jay Lucas, R-Hartsville, called Dominion’s proposal an "interesting starting point" but said more can be done to give customers the relief and protections they deserve. Negotiations will continue, and the House will insist on "certain provisions," he said in a statement, without specifying.

"I’m not getting the impression this is gaining a lot of traction. There’s no reason to jump on this deal," said the Charleston Republican, who leads the special House panel examining the nuclear fiasco. "They’re dangling this $1,000 rebate to take the attention away from ratepayers still being accountable for this project."

Senate Majority Leader Shane Massey, R-Edgefield, said the timing of the announcement, less than a week before lawmakers return to Columbia for the new session, is meant to pressure legislators to keep the Base Load Review Act, the law that allows SCE&G to keep charging for the unfinished reactors.

"I’m still having a hard time asking customers to continue paying for V.C. Summer," Massey said. "How do you ask people to continue paying for something they’re never going to get? In order to sell that, (Dominion is) going to have to convince people it will be worse if they don’t." Deep discount

SCANA became a takeover target as its stock cratered over the past year with the collapse of its plans to kick-start a new age of nuclear power. The utility was majority partner in the reactor construction project, the nation’s first in decades, that fell apart in July with cost overruns, design woes, work delays and the bankruptcy of the project’s main contractor this spring.

The former Fortune 500 company has struggled with a political and financial maelstrom since the project was abandoned. Investors have punished the company again and again while state regulators considered slashing its revenues and lawmakers demanded refunds of the money customers have already paid, moves that executives say could push SCANA to bankruptcy.

"The big question is really what the regulatory/political environment is in South Carolina," Paul Patterson, a New York-based utility analyst, said of the deal. "What makes this situation so much more uncertain is just the high degree of politics and controversy surrounding the V.C. Summer project."

Dominion has proposed to cut its proposed refund checks within 90 days of the deal being finalized. Refunds would be based on customers’ electricity use during the year before the sale is completed, and Dominion called the plan the "largest utility customer cash refund in history."

But 1.5 percent of Dominion’s rate cut comes from President Donald Trump’s corporate tax cut — savings that customers are already entitled to. The S.C. Office of Regulatory Staff, a watchdog agency, asked utilities last week to draw up plans to share their tax savings with customers.

Work on two reactors at the V.C. Summer Nuclear Power Station in Fairfield County came to a halt July 31. The project’s majority partner, Cayce-based SCANA, tentatively agreed to a sale to Dominion Energy of Richmond, Va. on Wednesday. File/Grace Beahm/Staff

Dominion has pushed south aggressively in recent years, with ambitions to shuttle gas from drilling sites in Pennsylvania and Ohio to the fast-growing Southeast. By buying SCANA, Dominion would extend its reach into the region with another 1,000 miles of gas pipelines and almost 1.4 million gas customers in the Carolinas and Georgia. Price premium

Under the sale terms, investors would swap each of their SCANA shares for roughly two-thirds of a Dominion share, valued at $55.35. The trade represents a 31 percent premium for SCANA investors based on the companies’ average valuation over the past month.

To be sure, there are plenty of regulatory hurdles to clear. In addition to South Carolina regulators, the deal needs approval from SCANA and Dominion shareholders, the U.S. Department of Justice, the Federal Trade Commission, Nuclear Regulatory Commission, Federal Energy Regulatory Commission, and utility commissions in North Carolina and Georgia, states where SCANA sells natural gas.