Embattled crony capitalist utility SCANA has called for a special meeting of its shareholders in two months time to vote on a proposed merger with Virginia-based Dominion Energy.
According to a news release from the West Columbia, S.C.-based company, this meeting to “consider and vote” on the Dominion deal will take place on July 31 – exactly one year after state-owned utility Santee Cooper pulled the plug on the V.C. Summer nuclear power station expansion project (a.k.a. #NukeGate).
SCANA and Santee Cooper were joint partners in this spectacularly failed project, which has left ratepayers in the Palmetto State reeling … and left the politicians who created the debacle scrambling for political cover.
To recap: These two utilities spent ten years building (or rather not building) two next generation nuclear reactors at the V.C. Summer nuclear power station in Fairfield County, S.C. Announced in 2007, the reactors were supposed to have been operational in 2017 at a cost of $9.8 billion.
The money was spent, but the reactors simply weren’t completed … and the utilities couldn’t afford the $10-16 billion price tag required to finish them. And so last July, Santee Cooper pulled the plug on the project – killing an estimated 5,600 jobs and throwing the state’s energy and economic future into chaos. The state-owned utility’s decision – announced just eight days after it proposed new rate hikes to fund the project – prompted a flood of lawsuits, criminal investigations and full-court press by lawmakers to try and undo the damage they did (or at least give that impression to voters).[timed-content-server show=’2018-Jan-17 00:00:00′ hide=’2018-Jun-18 00:00:00′]
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Lawmakers are on the hook for this hole in the ground because SCANA and Santee Cooper were able to socialize more than $2 billion (and counting) of its investment risk via the now notorious Base Load Review Act (BLRA). This legislation – approved by liberal state lawmakers and allowed to become law in 2007 by former governor Mark Sanford – paved the way for the utilities to impose an eighteen percent “nuclear surcharge” on ratepayers, a charge they are still paying.
Various legislative proposals have been introduced to lower or eliminate this surcharge – at least temporarily – but lawmakers are clearly worried that scrapping the BLRA entirely will invite a protracted legal battle (one the state would likely lose).
Furthermore, scrapping the BLRA entirely would kill the Dominion deal SCANA shareholders are now set to vote on.
Under the terms of the Dominion proposal, the nuclear surcharge would be lowered from 18 to 11 percent over the next seven years and from 11 percent to zero over the next 12 years. Of course Dominion’s offer includes something else – $1.3 billion in upfront relief to ratepayers.
That’s roughly $1,000 in upfront cash to each SCANA customer.
SCANA’s special shareholder meeting will be held at 9:00 a.m. EDT on July 31, 2018, at the Columbia Conference Center (169 Laurelhurst Avenue, Columbia, SC 29210).
While a sale of SCANA remains a distinct possibility, Santee Cooper is in an increasingly untenable position.
South Carolina governor Henry McMaster has been unable at this point to find a viable suitor for the state-owned utility – which he was hoping to unload in a fire sale ahead of his June 12 GOP primary election. One good reason for that? The utility’s increasingly precarious fiscal position – including a likely downgrade of its debt (news of which broke exclusively on this site earlier this month).
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