Dive Brief:
- Dominion Energy yesterday filed an updated offer to acquire SCANA Corp. and its utility subsidiary South Carolina Electric & Gas (SCE&G), proposing to cut customer rates more than two previous offers in an effort to push the merger across the finish line.
- The new proposal before the S.C. Public Service Commission (PSC) would lower SCE&G rates by about 15% — significant relief for customers who have seen bills skyrocket in recent years as the utility struggled with development of the failed V.C. Summer nuclear project.
- Dominion also announced on Monday that it received approval for the merger from the North Carolina Utilities Commission. The companies need seven total approvals, between state and federal requirements, and now only South Carolina remains.
Dive Insight:
Dominion Energy is doggedly pursuing the acquisition of SCANA, and has now put out a third proposal that would cut average customer bills by more than $22/month. That's lower than its previous two offers, and even a few pennies below the temporary rates in effect following action by South Carolina legislators.
That temporary rate cut expires next month, which could drive rates back up if customers resume paying for the V.C. Summer project.
But there are limits to how far Dominion will go to complete the acquisition, company officials warn.
Dominion laid out its improved offer in the testimony of Prabir Purohit, director of mergers and acquisitions and financial analysis at Dominion. He said the company "has fairly and reasonably" proposed to capture merger-related savings for the benefit of customers in the process of the next general rate case in 2020.
Customer advocates in the S.C. Office of Regulatory Staff want to see a 33% reduction in rates — Dominion calls that "drastic."
"Such an amendment to the Customer Benefit Plans package terms would upset their necessary economic
balance and would prevent us from being able to close the merger," Purohit said.
This is the third offer Dominion has put forward. Last month, the company filed an alternate plan to provide a total of $1.91 billion in refunds over a 20-year period, compared with an originally-proposed $1.3 billion in upfront cash refunds that would have amounted to about $1,000 per customer.
The merger has now received approval from SCANA shareholders, the Federal Energy Regulatory Commission, North Carolina and Georgia regulators, the Nuclear Regulatory Commission and the Federal Trade Commission.
The South Carolina PSC began evidentiary hearings this month, and Dominion said it anticipates a decision by Dec. 21.
