Published: Fri, January 12, 2018
Business | By Max Garcia

Dominion Energy To Buy SCANA, Absorb Costs Of Failed Nuclear Project

Dominion Energy To Buy SCANA, Absorb Costs Of Failed Nuclear Project

Dominion Energy Inc. announced on 3 of January that its going to buy Scana Corp at a deal of $7.9 Billion under an all stock deal.

In a conference call with investors, Dominion chief executive Tom Farrell said the merger will "provide substantial, immediate and ongoing relief to SCANA's electric customers".

Under the agreement, SCE&G customers will receive a $1.3 billion payment within 90 days after the merger is completed, as well as a 5% rate reduction from current levels. The average ratepayer, Farrell said, would realize a $1,000 cash refund, based on usage of 1,000 kilowatt hours per month. Dominion agreed to pay customers of Scana $1,000 each, totaling $1.3 billion, due to the costs they incurred from the failed V.C. Summer Nuclear Generating Station and promised to lower their bills as well.

The proposed 5% reduction in residential rates for SCE&G customers will consist of refunds of amounts previously collected from ratepayers as well as a pass-through of lower corporate taxes the utility will pay as a result of the federal tax bill signed by the president on December 22.

Scana, which owns the South Carolina Electric & Gas Co (SCE&G), has been under pressure ever since it scrapped the V.C. Summer nuclear project in July after spending about $9 billion on it with Santee Cooper. Finally, even SCANA customers in SC - myself included - win, since we'll enjoy lower electricity rates and can recoup some of the costs we've paid toward the failed project. The proposed deal is valued at about $14.6 billion, including assumption of debt.

Dominion said the deal, expected to close this year, would immediately boost earnings. Dominion, like SCANA, will continue to work with Santee Cooper on transferring operating licenses, Farrell said.

State and federal utility regulators will need to approve the deal before it's final. The two projects created approximately 200 temporary construction jobs.

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.

SCANA owns SCE&G, which operates electric and gas divisions, as well as PSNC, a gas utility in North Carolina.

Scana, based in Cayce, S.C., had collected more than $1 billion from customers to develop the plant before abandoning the project last summer.

Farrell told analysts that he's already spoken with McMaster and other SC leaders about the deal.

We specialize in shareholder litigation involving buyouts, mergers, and individual shareholder rights throughout the country.

Dominion announced its acquisition of Scana on Wednesday. Just last week, Santee-Cooper board chair Leighton Lord resigned, in a letter to the governor.

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