SCANA Corp.’s stock price has changed little this week despite the disclosure of financial troubles by the company hired by SCANA subsidiary SCE&G to build two nuclear plants.
Westinghouse Electric Co. on Tuesday reaffirmed its commitment to finish building the two plants under a fixed-price contract and provide new construction schedules to support that work to SCE&G for review. The renewed commitment came after Westinghouse’s parent company, Toshiba, announced that it plans a fourth-quarter, $6.3 billion write off in its nuclear division.
Toshiba’s announcement initially raised concerns about the future of SCE&G’s plants in Jenkinsville. Those concerns were alleviated some by Westinghouse’s commitment, which included plans to finish both reactors by the end of 2020. Both plants are years behind schedule and a combined $4.2 billion over the initial budget.
SCANA’s stock gained just more than a half-point Wednesday — or about 1 percent — after falling 1.3 points on Tuesday. The stock closed Wednesday at $67.47.
Westinghouse, a subsidiary of Toshiba Corp., is the lead contractor on the two reactors under construction at SCE&G’s V.C. Summer nuclear power plant in Jenkinsville, about 25 miles north of Columbia.
SCANA is expected to discuss the Westinghouse-Toshiba situation during its quarterly earnings at 3 p.m. Thursday.
“The key for SCANA in all of this is continuing to gain the support of regulators and ratepayers,” said Travis Miller, Morningstar Research Services utilities research director, who tracks SCANA and SCE&G.
“For shareholders, the key issue is that SCANA completes the project and produces the earnings growth that management is projecting based on the project,” he said.
SCANA’s cooperation with regulators and the manner it interacts with ratepayers is very important, Miller noted.
However, the reason SCANA stock prices – and its shareholders – have not reacted more vigorously this week to Toshiba and Westinghouse’s financial uncertainties is the state’s Base Load Review Act, passed by the General Assembly in 2006, Miller said.
The law allows SCE&G to collect finance costs through rate hikes before construction of the plant is completed, Miller said. The law also protects shareholders against financial losses, Miller said.
“This is different than most utilities – virtually all utility projects (in the country),” Miller said.
SCE&G’s detractors, who contend the Summer nuclear project is in a financial “meltdown,” remain skeptical of its completion without more ratepayer money. “We expect much higher bills,” said Leslie Minerd, co-founder of a SCANA protest group called “SCAMA,” which will stage a protest at the State House Thursday at 11 a.m.
Roddie Burris: 803-771-8398