Dominion Energy Inc. has struck a deal to buy troubled energy company Scana Corp.in an all-stock transaction valued at about $7.66 billion and absorb some of the costs of Scana's failed SC nuclear project.
Dominion says it would write off $1.7 billion in costs related to the Summer plant, allowing it to eliminate customer costs for the project over 20 years, instead of the 50-60 years proposed by SCANA.
Those benefits include a US$1.3-billion cash payment within 90 days upon completion of the merger to all customers, worth US$1,000 for the average residential electric customer. The average ratepayer, Farrell said, would realize a $1,000 cash refund, based on usage of 1,000 kilowatt hours per month.
There would also be a write-off of $1.7 billion from the cost of the failed V.C. Summer Nuclear site project that sought to add two new nuclear reactors but was abandoned previous year by SCE&G, money that would never be collected from ratepayers. The company would deliver energy to approximately 6.5 million regulated customer accounts in eight states and have an electric generating portfolio of 31,400 megawatts and 93,600 miles of electric transmission and distribution lines.
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In addition to the payments, the company also plans to lower rates by 5 percent for SCE&G customers. Over seven hundred thousand 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. When it abandoned the project, SCANA cited cost concerns, noting that its share of costs to finish the project as 55% owner would have soared to $9.9 billion, while Santee Cooper, which owns the remaining 45%, said it would have needed to spend about $8 billion to complete construction, plus about $3.4 billion for interest. When including net debt, the value of the deal increases to $14.6 billion.
House Speaker Jay Lucas said in a statement Wednesday that the SCANA acquisition is "an interesting starting point" but more fixes are needed.
State and federal utility regulators will need to approve the deal before it's final. This is to offset payments customers have made towards costs incurred by SCE&G over the VC Summer nuclear plant in SC.
Dominion now serves about 2.5 million electric customers in Virginia and North Carolina and 2.3 million gas customers in Idaho, Ohio, Utah, West Virginia and Wyoming.
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A Virginia-based power company is buying SCANA.
South Carolina Electric & Gas Co.'s parent company SCANA announced Wednesday it was being acquired by Virginia-based Dominion.
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