South Carolina vote to lower electric bills could imperil Dominion-SCANA deal

Dive Brief:

The South Carolina Senate on Wednesday voted to cut the rates of South Carolina Electric & Gas (SCE&G), which would at least temporarily reduce the amount the utility can recover for a multi-billion dollar failed nuclear expansion.
The Senate approved a 13% rate decrease, or about $19/month for the typical customer, according to the Post & Courier. Lawmakers in the House have already voted in favor of a larger rate cut.
Dominion Energy has warned that a rate cut would likely prompt the company to abandon its bid for SCANA Corp., the parent company of SCE&G. Dominion this week released research estimating an $18.7 billion boost to the state's economy, if the acquisition goes through.

Dive Insight:

Lawmakers in South Carolina agree they want to cut SCE&G customer rates, but are undecided over how much. The earlier House bill would have axed all of the utility's nuclear recovery, about 18% of bills.

Now, the two legislative bodies must decide if they can reconcile their approaches to the rate cuts. But at the same time, the Post & Courier says a bipartisan pair of lawmakers are warning against the decision. "Let's let the process work itself out," Sen. Brad Hutto (D), told the paper. "What we ought to think about doing here is doing no harm."

On Tuesday, one day before Senators voted, Dominion released a new analysis illustrating the deal's potential impact on the state. Five South Carolina counties could see economic benefits totaling more than $1 billion, in addition to a package of benefits Dominion has promised customers: cash payments of about $1,000; a 7% rate cut and the company will absorb $1.7 billion in costs for the abandoned V.C. Summer nuclear project. It also plans to purchase a gas-fired plant at no cost to customers.

Dominion Chairman, President and CEO Thomas Farrell II said the deal's immediate value goes "well beyond" the $1.3 billion in cash payments. Those payments, along with the impacts of lower rates, will "flow into the local economy in the form of billions of dollars in increased retail sales, new jobs, added wages and business investment," he said.

Georgia regulators and the Federal Trade Commission have already approved the deal. SCANA shareholders must still weigh in, along with regulators in North Carolina and South Carolina, the Nuclear Regulatory Commission and the Federal Energy Regulatory Commission.