SCANA reports major financial losses as nuclear headache continues

A tumultuous year, including the failure of its V.C. Summer nuclear expansion project, took a financial toll on embattled SCANA.

The Cayce-headquartered company reported a loss of $119 million, or 83 cents a share, for 2017, compared with earnings of $595 million, or $4.16 a share, for 2016, according to a news release from the utility Thursday.

The company said the loss primarily was because of the abandoned nuclear construction project.

SCANA reported its SCE&G subsidiary wrote off $908 million of the project’s value during the fourth quarter, an after-tax loss of $559 million. That move wrecked SCANA’s profits for the quarter and year.

That “impairment” charge reflected the utility’s November offer to cut its monthly nuclear-related charges to customers by $5 a month, a move rejected as inadequate by S.C. legislators, who say the company must do more.

SCANA said the nuclear debacle hurt its earnings in other ways as well. For example, legal expenses were higher — about $8 million.

For 2017’s fourth quarter, SCANA reported a loss of $445 million, or $3.11 a share, compared with earnings of $124 million, or 87 cents a share, for 2016’s fourth quarter. But the company’s news release Thursday said the board had declared a regular quarterly dividend to stockholders of 61.25 cents per share.

SCANA said its N.C. and Georgia natural gas-selling operations remained solidly profitable.

SCANA did not hold its usual conference call with financial analysts to discuss its earnings, citing its pending sale to Dominion Energy, a larger Virginia utility.

The losses reported Thursday had been widely anticipated, given the troubles SCANA publicly has faced with the V.C. Summer abandonment, said Travis Miller, an analyst with Morningstar. The key question now is what state policymakers do about the project’s failure, he said.

A flurry of bills, filed in the Legislature, seeks to protect ratepayers from further charges for the project. However, Miller said investors apparently were encouraged by a state Senate vote this week to delay until the end of the year any Public Service Commission decision on the proposed Dominion-SCANA merger.

“The recognition that regulators need time to address this in a thoughtful manner is a very positive sign for investors,” he said.

SCANA’s stock responded positively, rising 10 percent to close at $39.93 a share. That spike also might reflect relief that SCANA did not cut its quarterly dividend, which remains 61.25 cents a share. Still, SCANA’s stock price is about $10 below Dominion Energy’s buyout offer.

The troubled utility has been the focus of intense scrutiny since it walked away from the V.C. Summer nuclear construction project July 31. SCANA and state-owned partner Santee Cooper said the project had become too expensive in the wake of chief contractor Westinghouse’s bankruptcy.

The two companies spent about $9 billion over a decade, charging customers more than $2 billion for the work. Customers still are paying for the project through higher rates, even though the twin reactor project won’t be finished.

Dominion now is trying to buy SCANA. But some state legislators question whether the $14.6 billion proposal is a good long-term deal for the state and S.C. ratepayers.

This story was originally published February 22, 2018 at 8:05 AM with the headline "SCANA reports major financial losses as nuclear headache continues."