It looks like those sale rumors were accurate … or at least mostly accurate.
Virginia-based Dominion Energy has entered into an agreement to purchase Cayce, South Carolina-based SCANA – the crony capitalist energy provider at the heart of the #NukeGate debacle.
If approved by a multitude of regulators and shareholders of both companies, the $14.6 billion deal would provide immediate cash refunds of $1,000 per household to SCANA customers – as well as a $7 per month reduction in current rates for electricity.
That amounts to a five percent rate cut – which is bigger than what SCANA proposed back in November. However the $1.3 billion payout falls well short of the $2 billion ratepayers have already shelled out on a project that is never going to produce a single kilowatt of power.
Ratepayers are also still paying $37 million per month on the #NukeGate fiasco – in which SCANA and its state-owned partner Santee Cooper failed spectacularly in their bid to build a pair of next generation nuclear reactors near Jenkinsville, S.C.
So in addition to not being made whole, ratepayers would still be on the hook for a significant chunk of the botched project’s costs moving forward.
Is that a good deal?
“It doesn’t feel like a refund to consumers,” one source close to the situation told us. “It feels like a very high interest rate loan if customers continue to pay for (the unfinished) nuclear plant.”
Of course the flip side of that argument is that there is no “good deal” in this situation, and that hopelessly conflicted South Carolina politicians – who got ratepayers into this mess in the first place – are limited in their ability to compel anything resembling such a deal.
A month ago, this news site reported exclusively on rumors that SCANA would be sold. At the time, our sources indicated that the impending sale would be a two-part deal – with Dominion acquiring the company’s natural gas assets and Florida-based NextEra Energy acquiring its electric assets.
SCANA executives flatly denied the speculation at the time, although as we noted in our coverage these executives “haven’t exactly been shooting straight of late.”
It seems that trend is continuing …
(Click to view)
How did we get here? To recap: With the enthusiastic support of state legislators and regulators, SCANA and its state-owned partner Santee Cooper 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.
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.
#NukeGate has also prompted a flood of lawsuits and a rapidly escalating, multi-jurisdictional criminal probe. It has also sent SCANA’s stock tumbling – and cost the utility’s top executives their jobs. 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.
SCANA’s stock closed at $38.87 on Wednesday – down a whopping 48 percent from its December 2016 peak of $74.69. The stock was poised to climb considerably in light of the merger speculation, however.
While the proposed sale of SCANA to Dominion prepares to run the regulatory gamut, efforts continue to unload Santee Cooper.
WANNA SOUND OFF?
Got something you’d like to say in response to one of our stories? Please feel free to submit your own guest column or letter to the editor via-email HERE. Got a tip for us? CLICK HERE. Got a technical question? CLICK HERE. Want to support what we’re doing? SUBSCRIBE HERE.