On this page today, you’ll read two decidedly different opinions on the continuing statewide debate over the proposal by Virginia-based Dominion Energy to purchase SCANA Corp., the parent company of S.C. Electric & Gas Co.
Against the backdrop of Dominion’s plan to pay each residential SCE&G customer about $1,000 but to continue charging over 20 years for costs associated with the failed V.C. Summer nuclear project, Upstate Sen. Mike Fanning equates the “deal” to a payday loan, saying Dominion “has marched to Columbia, held a gun to our head and wants to ‘make us an offer we can’t refuse.’”
By contrast, former Santee Cooper board Chairman Donald McElveen writes that the Dominion option is the best available and the legislature should not risk the refunds, even higher utility rates and possibly the future of SCANA/SCE&G by rejecting the merger. “We need to put this energy issue behind us, shore up SCANA and then get back to recruiting new jobs and investment in South Carolina.”
Viewing the Dominion-SCANA plan in the context only of what it will net an electric customer, Fanning can rightly make the case that over a 20-year period, consumers will pay more than they will get in the one-time refund.
The City of Orangeburg has filed a petition to intervene before the state's Public Service Commission regarding the proposed sale of SCANA Cor…
Though Dominion has reduced the period to 20 years from SCANA’s plan of nuclear plant charges for 50 or more, and is saying rates are to be lowered by a projected 6-1/2 to 7 percent, customers would continue to pay. Fanning puts the cost per customer at $228 a year or $4,560 over two decades.
He says that amounts to customers getting nothing for their money, an argument put forth by lawmakers determined to retroactively repeal provisions of the law they passed in 2007 allowing SCANA to charge for the nuclear plant, whether completed or not.
Fanning and other politicians put themselves in the corner with many SCE&G customers angry over the entire saga. Their stand may be popular but it is risky – for customers and for a utility company that despite its present problems is vital to the state’s future.
Dominion has made clear it wants the merger to happen in the best interest of SCANA, South Carolina – and Dominion. The company is not making its proposal out of charity. It has natural gas and solar interests in the Palmetto State already and wants SCE&G, whose best option for the future now is the merger.
Dominion is being criticized for spending money in the state advertising its offer to customers and lobbying lawmakers not to stand in the way of the merger. But why wouldn’t the company aggressively pursue an investment it sees as a good opportunity to acquire a high-quality company that before the nuclear fiasco was among the most stable of utilities?
Lawmakers are willingly being party to transferring to Dominion the public anger over the SCANA problems, even though Dominion is the only company having come forth with an offer to purchase SCANA.
The utility cannot make all the debt from the nuclear project disappear. Without the ability to recoup money, albeit less than SCANA had planned, the merger plan will go by the wayside.
And that puts the very future of SCANA in doubt. If the utility is forced into bankruptcy through inability to charge for the nuclear plant and/or no other entity is willing to enter a merger, the future of the state’s largest public company could land in the hands of a federal judge whose first responsibility would be to SCANA’s creditors, not its customers.
At the end of today’s column, Sen. Fanning laments that it is unfortunate SCE&G customers cannot be fully reimbursed for the money spent on the nuclear project. But he pledges that ensuring there will be no further charges is essential.
That is not realistic and mandating such retroactively likely will be found unconstitutional. More importantly, failure to secure the future of SCANA as a standalone company or as a companion with a utility such as Dominion is shortsighted.
To repeat McElveen’s words: “We need to put this energy issue behind us, shore up SCANA and then get back to recruiting new jobs and investment in South Carolina.”