Dive Brief:
- The South Carolina Public Service Commission (PSC) on Friday approved Virginia-based Dominion Energy's bid to acquire SCANA Corp. and its utility, South Carolina Electric & Gas (SCE&G).
- The decision could bring to an end the almost year-and-a-half long battle over who will pay for SCE&G's failed V.C. Summer nuclear expansion project, but Dominion said it would wait for the final order to be published to close the deal.
- The PSC's decision was unanimous, but the meeting was interrupted by enviromental protestors and a conservative policy group has said the deal is a good one for Dominion, less so for ratepayers. Chances of an appeal will depend on what is in the final order, due by Dec. 21.
Dive Insight:
SCANA and Dominion executives aren't over the finish line yet, but the Friday afternoon decision moves South Carolina closer toward mitigating the impact of the Summer project on customer bills.
Dominion Chairman, President and CEO Thomas Farrell in a statement said the company was "encouraged" by the vote "and awaits an order to review prior to making a final decision to close the merger with SCANA."
For SCE&G customers who have seen nine rate hikes to pay for the nuclear plant development, the merger with Dominion would mean a rate cut of $22/month.
Dominion made two earlier bids for SCE&G but continued to sweeten the deal for customers; the current offer would cut bills by about 15%.
Last summer, SCANA and its partner on the Summer project, Santee Cooper, decided to abandon efforts to build two new nuclear reactors. Officials had concluded total costs could have exceeded $25 billion — a 75% increase over initial estimates.
SCANA CEO Jimmy Addison said the PSC's decision last week moved the companies "one step closer to a final resolution and the certainty that stakeholders have been hoping for."
But not everyone is impressed. Customer advocates in the S.C. Office of Regulatory Staff had called for a 33% reduction in rates, and renewables advocates say Dominion isn't going to do enough to add solar energy.
The Palmetto Promise Institute, a conservative think tank focused on issues in the state, said Dominion's most recent bid for the company is "a good faith offer, but it is a clear win for Dominion and SCANA stockholders (including SCANA executives with stock), and a missed opportunity to protect ratepayers as fully as they should be."
The PSC directive says Dominion's most recent offer "provides significant customer bill relief for SCE&G’s customers without damaging SCE&G’s creditworthiness or putting at risk SCE&G’s financial soundness or ability to provide reliable service to the Company’s customers."
