When the General Assembly returns to Columbia, the debacle over the failed V.C. Summer nuclear project in Fairfield County will be high on the agenda.
Ahead of the Tuesday session opening, the equation changed for the better for South Carolina as a whole.
From legislators to lawyers, SCANA Corp. has been under fire as the lead partner in the project that was to bring two new reactors online. Lawmakers have opened inquiries into what went wrong and some want to take away the utility’s legal right to charge customers for the failed project. Multiple lawsuits accuse SCANA executives of misleading customers about the project's viability. Both state and federal authorities are investigating.
Santee Cooper is the partner in the project, and the state-owned utility is also under pressure to put money back in the hands of rate-payers. The governor wants to sell Santee Cooper.
On Wednesday, as South Carolina was amid a winter storm and frigid temperatures with the necessity of reliable electric service never more in evidence, SCANA and Dominion Energy announced that the parent company of S.C. Electric & Gas is to be purchased by the Virginia utility.
The sale would include benefits for SCE&G customers related to the failure of the nuclear project:
• A $1.3 billion cash payment within 90 days upon completion of the merger to all customers, worth $1,000 for the average residential electric customer. Payments would vary based on the amount of electricity used in the 12 months prior to the merger closing.
• An estimated additional 5 percent rate reduction from current levels, equal to more than $7 a month for a typical SCE&G residential customer, resulting from a $575 million refund of amounts previously collected from customers and savings of lower federal corporate taxes under recently enacted federal tax reform.
• A more than $1.7 billion write-off of existing nuclear plant capital and regulatory assets, which would never be collected from customers. This allows for the elimination of all related customer costs over 20 years instead of over the previously proposed 50-60 years.
• Completion of the $180 million purchase of natural-gas fired power station (Columbia Energy Center) at no cost to customers.
SCE&G shareholders also benefit. As the company’s stock and the dividend it pays have been staples for thousands of South Carolinians over decades, shareholders would receive 0.6690 shares of Dominion Energy common stock for each SCANA share.
While the transaction is subject to regulatory approval and the OK of the companies’ stockholders, the real issue in the deal will come down to approval of putting the issue of the nuclear reactors to rest. The merger is “contingent upon South Carolina approval of (the) proposed nuclear solution.”
That is where the governor and legislators come in. Speaker of the House Jay Lucas called the deal “an interesting starting point” but said more fixes are needed.
Our hope is the search for “fixes” does not result in political gamesmanship by politicians that will endanger the future of the utility – which at this point appears to be best assured by the merger with Dominion.
The words of Thomas F. Farrell, II, chairman, president and chief executive officer of Dominion, may be looked at as salesmanship, but they make sense in the present circumstance:
"We believe this merger will provide significant benefits to SCE&G's customers, SCANA's shareholders and the communities SCANA serves. It would lock in significant and immediate savings for SCE&G customers – including what we believe is the largest utility customer cash refund in history – and guarantee a rapidly declining impact from the V.C. Summer project. There also are potential benefits to natural gas customers in South Carolina, North Carolina and Georgia and to their communities. And this agreement protects employees and treats fairly SCANA shareholders, many of whom are working families and retirees in SCANA's communities. The combined resources of our two companies make all this possible."