Ahead of vote that may kill Dominion-SCANA deal, study finds sale would help SC economy
Dominion Energy’s proposed purchase of Cayce-based SCANA would offer the S.C. economy an $18.7 billion boost, according to a study released Tuesday.
The University of South Carolina’s report — paid for by Dominion — offers ammunition to supporters of the Dominion deal. That proposed buyout offers rate cuts and refunds to electric customers of SCANA's SCE&G subsidiary. Those customers have paid $2 billion for a failed nuclear construction project already and, as part of the Dominion deal, would pay another $3.8 billion over the next two decades.
The study was released just before the S.C. Senate was to debate a potentially deal-killing proposal to slash — by 13 percent – SCE&G's power bills. However, facing a long filibuster from state Sen. Brad Hutto, D-Orangeburg, the Senate adjourned Tuesday without taking a vote — now expected Wednesday.
Virginia-based Dominion has said it will pull out of the deal if lawmakers meddle with SCE&G’s power rates. And the S.C. Chamber of Commerce sent letters to senators Tuesday warning that lawmakers' interference in the process of setting electric rates ultimately could drive up costs for customers and ruin the state's business-friendly reputation.
In the study, USC research economist Joseph Von Nessen estimated that for every $1 in savings that the Dominion deal would provide to SCE&G customers, $1.49 would be generated in new economic activity.
That’s because SCE&G customers likely would spend their Dominion benefits — including refunds worth about $1,000 per SCE&G household and a $10-a-month rate cut — in the local economy, Von Nessen said.
“If a customer buys a television, the businesses that are supplying those goods see an increase in demand. To satisfy that demand, they have to purchase additional material from their own suppliers,” he said. “It ripples through (the economy) across multiple rounds of spending.”
Dominion requested and paid for the six-week study, which compared the costs that SCE&G customers might face under the Dominion deal to their costs if SCE&G offers no rate cuts and forces customers to pay for the failed V.C. Summer project. The latter scenario would cost SCE&G customers $10.2 billion over 60 years.
The study did not consider a separate SCE&G proposal — filed in January as a backup to the Dominion deal — that included a rate cut but also would charge customers over 50 years for most of the cost of two unfinished reactors. That proposal would cost SCE&G customers $8.8 billion over the next half-century — $5 billion more than the $3.8 billion Dominion is asking.
Senate Majority Leader Shane Massey, R-Edgefield, scoffed at the Dominion study Tuesday.
"If you cut the rates even more, and people have even more money to spend, there will be an even bigger impact," Massey said, referring to the Senate's own rate-cut proposal.
This story was originally published April 17, 2018 at 1:25 PM with the headline "Ahead of vote that may kill Dominion-SCANA deal, study finds sale would help SC economy."