Money woes at SCANA? Utility releases latest financial report in wake of nuclear fiasco

SCANA and partner Santee Cooper abandoned construction of two nuclear reactors in South Carolina July 31, 2017. Ratepayers were charged billions of dollars for the project.
SCANA and partner Santee Cooper abandoned construction of two nuclear reactors in South Carolina July 31, 2017. Ratepayers were charged billions of dollars for the project. Photo courtesy of High Flyer

SCANA, the struggling South Carolina-based utility staggered by the failure last year of its nuclear construction project, announced a better financial picture Thursday than it has in recent months.

The utility said it made a third-quarter profit of $67 million, or 47 cents a share, compared to earnings of $34 million, or 24 cents a share, during 2017’s third quarter.

SCANA’s shares closed up 8 cents, at $37.37 a share, after the earnings report However, that is still far below a $48-a-share buyout offer for the utility by Virginia-based Dominion Energy..

Profits in 2017’s third-quarter were hurt by a $132 million writedown associated with the V.C. Summer nuclear project. During this year’s third-quarter, SCANA said its revenues were reduced by $101 million after its SCE&G subsidiary was ordered to lower its rates tied to that nuclear debacle.

Overall, the company continues to struggle.

SCANA’s earnings for the first nine months of 2018 were $82 million less than in the first nine months of 2017. The utility reported profits of $244 million, or $1.71 a share, for the first nine months of this year. During the same period in 2017, SCANA reported a profit of $326 million, or $2.28 a share.

However, the weather helped SCANA. During the first nine months of the year, “abnormal weather increased electric revenues” by 23 cents a share. During the same period in 2017, weather cut earnings by 12 cents a share.

SCANA, the parent company of SCE&G, has been criticized heavily since quitting the V.C. Summer nuclear construction project on July 31, 2017. The utility and its junior partner, the state-owned Santee Cooper utility, said last year they could no longer justify the project’s ever-increasing cost following the bankruptcy of chief contractor Westinghouse Electric. The two utilities spent $9 billion on two unfinished reactors.

Ratepayers and state policy makers were irate.

SCANA raised rates for its 728,000 electric customers to pay for the nuclear construction effort, charging those customers $2 billion. At one point, customers were paying an average of $27 a month for the nuclear project. However, the S.C. Legislature and Public Service Commission subsequently ordered the utility to lower its rates.

However, many issues related to the V.C. Summer collapse remain unresolved.

That has translated into bad financial news for the utility its shareholders.

In August, the company announced a dramatic drop in earnings as it set aside $109 million for state-ordered rate cuts connected to the V.C. Summer construction disaster in 2017.

Higher legal and financial advisory costs — as well as the loss of some tax deductions due to tax reform — also have hurt the utility this year, cutting its earnings.

Earlier this year, SCANA’s board slashed dividends to stockholders by about 80 percent. However, the utility said Thursday it would pay a dividend of 12.37 cents a share for the quarter that ends Dec. 31.

SCANA shareholders also approved the utility’s sale to Dominion. But the merger needs regulatory approval in South Carolina. That will be decided after a hearing next month in Columbia.

Headquartered in Cayce, SCANA’s SCE&G subsidiary serves customers primary in the Charleston and Columbia areas. The utility also has operations in Georgia and North Carolina.