Embattled SCANA said Thursday its second-quarter earnings dropped dramatically as it set aside $109 million for state-ordered rate cuts stemming from 2017’s failed V.C. Summer nuclear construction project.
SCANA said its second-quarter profits were $8 million, or 6 cents a share. During 2017’s second quarter, profits were $121 million, or 85 cents a share, the Cayce-based utility said in a news release before the stock market opened.
The utility said its profits dropped because of rate cuts ordered by the Public Service Commission for the April-to-June quarter. Those rate cuts cost the company $109 million, or 61 cents a share. Higher legal costs and financial advisory fees, as well as the impact of tax reform also hurt earnings, the utility said.
SCANA reported earnings of $177 million for the first six months of 2018, compared to a profit of $292 million for the first half of 2017.
SCANA is an energy holding company whose major subsidiary is SCE&G, the longtime power company for Columbia, Charleston and the Lowcountry.
The utility has been besieged since its V.C. Summer nuclear construction project failed last July 31. SCANA and its junior partner in the project, the state-owned Santee Cooper utility, quit the project after its chief contractor, Westinghouse, filed for bankruptcy in early 2017.
When the two S.C. utilities walked away from the twin-reactor construction project, they had spent $9 billion in the decadelong effort. To pay for the work, SCE&G had raised rates on its customers nine times.
However, the Legislature passed a bill in June to temporarily wipe out much of the $27-a-month charge that SCE&G customers continue to pay for the failed project. SCANA is challenging the constitutionality of that law in court. A permanent decision on SCE&G’s rates is expected to be made by the state Public Service Commission in December.
This week, SCANA shareholders voted to sell out to Dominion Energy of Virginia. Dominion’s buyout, however, is contingent on winning regulatory approvals later this year from the S.C. Public Service Commission, as well as utility regulators in North Carolina and from the U.S. Nuclear Regulatory Commission.
SCANA’s stock price was unfazed by the lower profits.
In trading Thursday, SCANA shares were up more than $1 a share to close at $41.35. If the Dominion buyout is approved, those shares will be worth almost $48 a share.
Because of its troubles, SCANA’s board earlier this summer slashed dividends to stockholders by about 80 percent for the second quarter, which ended June 30. Shareholders had been shielded from dividend cuts previously. The cut dropped quarterly dividends to 12.37 cents per share, down from 61.25 cents per share.
SCANA said Thursday future dividends “will be evaluated quarterly” by its board.