Dominion Energy officials, expressing optimism Wednesday in their plan to buy SCANA, said the deal will help lower power bills for S.C. customers saddled with payments for the failed V.C. Summer nuclear power project in Fairfield County.
In a conference call with investors, Dominion chief executive Tom Farrell said the merger will “provide substantial, immediate and ongoing relief to SCANA’s electric customers.’’
The average residential customer will get a $1,000 payment and a 5 percent reduction in power bills, Farrell said. Customers now are paying about 18 percent of their monthly bills for the failed project.
“We believe this is the largest utility customer refund ever made.’’
More than $1.7 billion of nuclear assets will be taken over by Dominion “and never collected from customers,’’ officials said. The merger between Dominion and SCANA is not final. It must win shareholder, and state and federal regulatory approvals. That could take most of this year.
The deal, worth $14.6 billion, would help Dominion expand its presence in the rapidly growing Southeast by adding “attractive, regulated electric and natural gas franchises,’’ Farrell said.
Dominion already owns a pipeline network in South Carolina and is building its Atlantic Coast regional line from West Virginia to near the North Carolina-South Carolina border. The company previously has indicated interest in extending the line into South Carolina.
“We do a lot of business in South Carolina’’ now, Farrell said. “We think it is a very natural extension for our company to move into the fast-growing Southeast with a high-quality group of employees and assets.’’
Noting the loss of future power from the abandoned nuclear reactors, Farrell said, “There's going to be a continuing need for power generation growth that will be fueled almost certainly by natural gas and renewables.''
Critics of the SCANA nuclear project were skeptical. Some said the $1,000 rebate still would not pay the full cost of what customers have spent. It also would fuel the extension of the Atlantic Coast Pipeline into South Carolina, said Shelley Robbins, who tracks energy issues for the environmental group Upstate Forever. Conservationists oppose the pipeline, arguing it will disrupt communities and scar the environment.
“This is a case of meet your new boss, same as the old boss,” said Gudrun Thompson, an energy attorney for the Southern Environmental Law Center. “This is a for-profit company thinking it can throw a little cash at South Carolina customers now, hoping they won’t notice they’re signing on for decades of payouts for a power plant that won’t power a single light bulb.’’
Dominion officials said the deal wasn’t necessary for the Virginia utility, but it “enhances’’ its growth profile.
Wednesday’s conference call provided more details on an historic acquisition that will change the energy landscape in South Carolina, where SCANA is the only large investor-owned utility headquartered in the Palmetto State.
SCANA, the parent company of SCE&G, has been under fire and its stock price reeling since it announced July 31 it was walking away from the V.C. Summer project after the company and its junior partner, the state-owned Santee Cooper utility, had spent $9 billion and 10 years trying to build two reactors. Thus far, SCE&G customers have been charged $1.8 billion for that project, with SCANA previously indicating it would continue the charges.
During the conference call, Dominion officials said the deal with SCANA is not related to Santee Cooper, which S.C. Gov. Henry McMaster wants to sell, or to rate payers of the state-owned utility. At least four companies, including Dominion, have expressed interest in buying Santee Cooper, which supplies power to most of South Carolina’s electric cooperatives.
“We think we’re providing very fair benefits to the SCANA electric customers,’’ Farrell said. “Santee Cooper is a different kind of a situation. This deal is not contingent in any way upon an outcome of Santee Cooper. There is, reportedly, a lot of interest at Santee Cooper and, hopefully, those people will pursue it.’’
Dominion is a Fortune 500 company headquartered in Richmond, Va. The company operates nuclear plants, stores natural gas, operates pipelines and provides solar electricity.
The company’s assets extend from to New England and the western United States, where it merged last year with the Questar energy company that serves parts of the Rocky Mountains. The September 2016 merger made Dominion one of the nation’s biggest electric and natural gas companies.
Dominion owns 15,000 miles of natural gas pipelines, operates three nuclear power stations and 18 natural gas plants. The utility has more than 6 million customers in 14 states, employing 16,000 people.
In contrast, SCE&G, the S.C. division of SCANA, and Santee Cooper, its partner in the V.C. Summer project, serve about 2.5 million customers. Together, the two companies employ about 7,500 workers.