Embattled Cayce, South Carolina-based energy provider SCANA surrendered its surprise Friday stock gains on Monday as a barrage of new negative headlines hit the crony capitalist firm.
SCANA’s publicly traded stock shot up by $2.68 per share on Friday (a 6.2 percent increase) before settling in at $44.37 per share (a 3.7 percent uptick).
On Monday it surrendered virtually all of that increase, closing at $42.98 per share (a 3.24 percent drop).
Investors were puzzled by SCANA’s price movement, with one of them referring to last week’s uptick as “inexplicable.”
The only explanation we can see? That smart money was betting on South Carolina’s notoriously conflicted Public Service Commission (SCPSC) to allow the company to continue charging its customers for a scuttled nuclear power plant – a.k.a. #NukeGate.
This debacle – a case study in government’s failed intervention in the energy industry – has been a disaster for SCANA and Santee Cooper, the state-owned utility that partnered with the company on the scuttled V.C. Summer nuclear power station expansion.
With the enthusiastic support of state legislators and regulators, these two firms spent the past decade building two next generation AP1000 pressurized nuclear water reactors in Jenkinsville, S.C. at a cost of $9.8 billion. This money was spent, but the reactors were never finished. In fact they’re not even half-finished – with the cost to complete them reportedly ranging anywhere from $9-16 billion.
Unable to pony up that kind of cash, Santee Cooper pulled the plug on the project on July 31 – killing an estimated 5,600 jobs, squandering billions of dollars in investment (including more than $2 billion raised through rate increases on consumers) and throwing the state’s energy future into chaos.
Documents released in the fall revealed executives at the two utilities knew over a year-and-a-half ago that the project was doomed – yet continued to raise rates on consumers anyway. In fact, ratepayers are still shelling out an estimated $37 million per month on these reactors.
These rate increases were authorized by the controversial “Base Load Review Act,” a piece of constitutionally dubious special interest legislation advanced by liberal “Republicans” – and then allowed to become law by former governor Mark Sanford.
Not surprisingly, many of the politicians who supported this special interest legislation are now running for their lives.
The fiasco and its fallout have obliterated SCANA’s stock. At this time a year ago, SCANA was trading at over $74 per share. In late October the company’s former CEO Kevin Marsh was forced out – a move the company reportedly tried (and failed) to use as leverage with state lawmakers.
WANNA SOUND OFF?
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