Benefits include a $1.3 billion cash payment within 90 days of the deal closing, equal to about $1,000 for the average residential electric customer. As regulated utilities are entitled to do, the company was collecting payments from customers to cover the multibillion-dollar costs of the plants over 50 years.
Scana was earlier funding some projects from SCE&G and this annoyed some of its customers because of which, the utility rolled back electricity rates for its residential users.
SCANA and state-owned Santee Cooper began construction began five years ago on two new reactors at the Summer nuclear plant. 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.
Central Electric receives more than 80% of its energy needs from Santee Cooper under a cost-of-service contract through 2058, paying a pro rata share for existing resources, including the suspended nuclear project.
Including assumption of debt, the transaction is valued at approximately $14.6 billion. Further, Dominion believes the acquisition will be immediately accretive to earnings and enhance its earnings-per-share growth. Dominion, like SCANA, will continue to work with Santee Cooper on transferring operating licenses, Farrell said. S.C. House Majority Leader Gary Simrill of Rock Hill told the paper that the House won't change its plans to consider legislation, including taking away the utility's right to keep charging customers for the nuclear project.
Guggenheim Securities analyst Shahriar Pourreza said he expects regulators to approve the deal. SCANA's troubles intensified in September, when South Carolina's attorney general's office and state lawmakers urged state law enforcement to conduct a criminal investigation on how it handled the project. This is to offset payments customers have made towards costs incurred by SCE&G over the VC Summer nuclear plant in SC. It also would fuel the extension of the Atlantic Coast Pipeline into SC, said Shelley Robbins, who tracks energy issues for the environmental group Upstate Forever.
Farrell told analysts that he's already spoken with McMaster and other SC leaders about the deal. Dominion said it would pay off the cost of the abandoned nuclear project in 20 years.
SCANA's stock price has fallen about 40 percent since the nuclear project was canceled, making the company a potential takeover target. Dominion is building a major natural gas pipeline, the Atlantic Coast line, to the SC border, and state officials want it extended, he said.
On Tuesday, Santee Cooper announced without explanation that board chairman Leighton Lord had resigned his position as of December 29.