Suit seeks freeze on upcoming SCANA dividend payout – millions of dollars at stake

A plaintiff in a lawsuit against the power company SCANA and its subsidiary S.C. Electric & Gas has moved in court to have a state judge order a freeze in SCANA’s next dividend payment.

The next quarterly dividend payout to investors is scheduled for Jan. 1.

SCANA’s quarterly dividend is .6125 cents per share, meaning that someone with 100 shares would get a payout of $61.25 on Jan. 1. If a judge freezes or impounds the payout, that would mean people and mutual funds that own SCANA stock would not get their dividend.

In all, SCANA is scheduled to pay out $87.3 million on Jan. 1 to shareholders, according to court documents.

“A large percentage of SCE&G/SCANA shareholders are its own employees and executives,” the court documents note.

A company spokesman said Monday, “We generally do not comment publicly on matters pertaining to current or pending litigation.”

A dividend freeze won’t be automatic.

Any such action by a judge would be “very rare,” said Heath Bartlett of Lexington’s Calmwater Financial, who tracks SCANA and other investments.

SCANA has some 142 million shares outstanding, approximately 66 percent of which are held by institutions, according to Schwab.

The plaintiff in the lawsuit, Edwinda Goodman, says in her motion that if SCANA does issue a quarterly dividend on Jan. 1, the judge should make the power company pay the money into a trust account until litigation against SCANA is resolved.

Currently, SCANA is the target of numerous lawsuits brought by a variety of plaintiffs – ratepayers, shareholders and others – alleging various kinds of civil wrongdoing or negligence in the matter of the failed multibillion-dollar project to build two nuclear reactors at the V.C. Summer power station in Fairfield County.

Goodman’s action alleges that SCANA has taken ratepayers’ money under a state law that allowed it to bill customers for the nuclear plant as construction was ongoing. Now that construction has been halted, SCANA no longer should collect money from ratepayers – money that is allowing the company to pay out sizable quarterly dividends, the action says.

The money from dividend payments to shareholders should be preserved “in order that sufficient assets be available for the potential liabilities,” the move for the freeze says.

According to Goodman’s lawsuit, filed in late August, SCANA misled state utility regulators and power company customers by failing to tell them about the severity of troubles that ultimately caused the companies to abandon the twin nuclear reactor effort.

SCE&G and its junior partner, state-owned Santee Cooper, said July 31 they would not continue the V.C. Summer reactor expansion after spending nine years and $9 billion on the effort northwest of Columbia.

Alleging that SCE&G unfairly charged customers up to $1 billion over the years for its failed nuclear expansion project, the lawsuit seeks to recover money for virtually all of the company’s ratepayers in the Columbia and Charleston areas.

SCANA and SCE&G have approximately 709,000 electric customers in South Carolina. It also serves approximately 1.3 million natural gas customers in South Carolina, North Carolina and Georgia.

Lawyers for Goodman include Ed Bell of Georgetown, Greg Galvin of Bluffton, Creighton Coleman of Winnsboro and State Sen. Vincent Sheheen, D-Kershaw.

This story was originally published December 18, 2017 at 12:17 PM with the headline "Suit seeks freeze on upcoming SCANA dividend payout – millions of dollars at stake."