Wednesday, 23 May, 2018

SCE&G customers could see $1000 refund checks in Dominion Power deal

SCE&G customers could see $1000 refund checks in Dominion Power deal SCE&G customers could see $1000 refund checks in Dominion Power deal
Nellie Chapman | 12 January, 2018, 17:55

SCANA Corp., a company reeling from a decision to abandon two half-built nuclear reactors at the V.C. Summer project in SC, is getting a lifeline from Dominion Energy, one of the nation's largest utilities. Payments will come within 90 days after the merger closes, and will vary based on how much consumers spent on electricity.

SCANA and state-owned Santee Cooper began construction began five years ago on two new reactors at the Summer nuclear plant.

Farrell II said in a press conference today that partial refunds would go to ratepayers following several rate increases by South Carolina Electric & Gas (SCE&G) after start of the now-failed V.C. Summer nuclear plant project.

But both projects encountered massive cost overruns, which the utilities blamed on Westinghouse as well as contractors.

Including the assumption of debt, the acquisition is valued at $14.6 billion. The transaction would be accretive to Dominion Energy's earnings upon closing, which is expected this year upon receipt of regulatory and shareholder approvals. The only way to resolve this travesty is to sell Santee Cooper. The proposal would then require that a typical customer continue to pay 13% of their monthly bill for a period of 20 years, with full profits on the remaining abandoned nuclear project costs.

"Friends of the Earth and Sierra Club will respond aggressively to any proposal which fails to protect ratepayers and assure a clean energy future for SC", the groups said. "We are happy to provide South Carolina Electric & Gas additional renewable resources and help an excellent corporate citizen in Solvay reduce its carbon intensity". There also are potential benefits to natural gas customers in South Carolina, North Carolina and Georgia and to their communities.

Guggenheim Securities analyst Shahriar Pourreza, however, expects regulators to approve the deal.

The South Carolina plant and a similar project being built in Georgia represented a next wave of nuclear construction in the USA, using a new Westinghouse reactor design that was meant to curb the cost overruns that had plagued prior nuclear projects. As a merged entity, the two companies will also complete a $180 million purchase of the gas-fired Columbia Energy Center "at no cost to customers", to ensure reliability.

South Carolina's legislative leaders are weighing in on the proposed acquisition of a troubled SC utility by Dominion Energy.

Scana, based in Cayce, S.C., had collected more than $1 billion from customers to develop the plant before abandoning the project last summer. And in late December, Santee Cooper board chairman Leighton Lord stepped down following three weeks of legal wrangling after McMaster fired him based on allegations that Lord hid critical information about the failed project.