Dominion Energy has agreed to acquire the owner of South Carolina Electric and Gas in a $14.6 billion deal that will refund the utility’s customers for $1.3 billion of the costs of a failed nuclear project.
The average residential electric customer will receive a refund of $1,000 under the agreement between Dominion and SCE&G’s parent, Scana Corp. Dominion will pay about $7.9 billion, or $55.35 per share, for Scana and also assume its debt of $6.7 billion.
Scana, which had been struggling with big cost overruns, scrapped a pair of nuclear reactors at the V.C. Summer Generating Station in July after spending about $9 billion on them with state-owned utility Santee Cooper.
“We believe this merger will provide significant benefits to SCE&G’s customers, Scana’s shareholders and the communities SCANA serves,” Dominion CEO Thomas Farrell said in a news release.
“It would lock in significant and immediate savings for SCE&G customers — including what we believe is the largest utility customer cash refund in history — and guarantee a rapidly declining impact from the V.C. Summer project,” he added.
Customers of SCE&G have been paying $37 million a month for the canceled reactors. “Though canceling the projects saved customers future expenses, they were still on the hook for money already spent,” the Richmond (Va.) Times-Dispatch said.
“The nuclear project became a lightning rod for criticism, with local politicians arguing over who should pay for the aborted project,” Reuters noted.
South Carolina Gov. Henry McMaster called Dominion’s announcement “progress” but not a resolution, since it leaves out Santee Cooper, which also had a major stake in the V.C. Summer nuclear project.
“Over 700,000 electric cooperative customers face the prospect of having their power bills skyrocket for decades to pay off Santee Cooper’s $4 billion in debt from this,” he said. “The only way to resolve this travesty is to sell Santee Cooper.”
Dominion supplies electricity in Virginia and North Carolina. A company spokesman noted that customer growth for Scana’s utilities in North Carolina and South Carolina is about 1 percentage point higher than Dominion’s 1.2% growth in Virginia.