State regulators approved Dominion Energy’s $15 billion purchase of troubled South Carolina-based utility SCANA Friday. South Carolina’s Public Service Commission approved the Virginia-based company’s offer of cash and stock to buy SCANA, which is the parent company of South Carolina Electric & Gas.
SCANA needed a buyer after spending $5 billion on a pair of reactors abandoned a year ago at the V.C. Summer plant in Fairfield County, South Carolina, costing thousands of jobs. The move spawned more than a dozen lawsuits and followed the bankruptcy of lead contractor Westinghouse. The project totaled an estimated $9 billion.
Friday’s approval of the deal was the final hurdle needed for the merger to close and it followed more than an hour of heated comment and debate, often interrupted by angry protesters. The approved deal would cut SCE&G customer rates by about $22 a month, a smaller rate deduction than what customer advocates had requested initially.
Here’s what you need to know about the purchase:
What happened?
Friday’s approval follows a drawn-out process involving a failed nuclear reactor expansion spearheaded by private utility SCANA and its partner, state-owned Santee Cooper. The two companies began construction on the V.C. Summer plant in 2013, a project that was done in an effort to meet what they predicted would be soaring electricity demand.
Cost overruns, construction delays and the bankruptcy of the project's lead contractor led the two companies to abandon the expansion in July 2017 — after the two utilities had already spent more than $9 billion.
Why is it important?
Over 737,000 SCE&G customers have already paid more than $2 billion toward the failed reactor project through their monthly bills — and electricity was never produced in return. According to the Charlotte Observer, SCE&G customers have seen electric rates rise by 18 percent since 2009 due to the nuclear project. When it shut down, thousands of workers lost their jobs. The failure drove multiple lawsuits and investigations by both the state and federal government into the actions of some of the company’s top executives.
The Dominion Energy deal:
The Virginia-based company originally offered $1,000 rebate checks to the impacted SCE&G customers. South Carolina legislators passed a temporary 15 percent rate cut for those customers earlier this year. The finalized deal approved by regulators gets rid of the rebate checks and keeps the rate cut passed by lawmakers, in the end cutting about $22 off the average customer’s monthly bill.
South Carolina Gov. Henry McMaster said regulators made “the best of a bad situation” in passing the deal.
"Since we learned of SCANA and Santee Cooper's decision to abandon the VC Summer Project, my goal has been to ensure that the customers bear no burden for the failings of others," McMaster said. "The Public Service Commission - which I am confident has vigorously sought to make the best of a bad situation - has conducted a transparent, open process and has carefully deliberated the positions of ratepayers, the power companies, and the court."
In the end, however, it falls short of what consumer advocacy groups had pushed for, which was a 20 percent rate cut that would remove closer to $30 a month from customer payments. But Dominion Energy said a large cut would force them to abandon the deal.
SCE&G customers will continue to feel the impact of the nuclear project over the next 20 years, as they continue to pay $2.3 billion (that's in addition to the $2 billion they’ve already paid for the project) in their monthly bills.
The purchase is an expansion opportunity for Dominion, which already sells electricity and gas in North Carolina, Virginia, West Virginia and Ohio.
The Associated Press contributed to this report.
