Ahead of Friday ruling, top politicians urge PSC to support Dominion’s SCANA buyout
Many South Carolinians could find out Friday how high their future electric bills will be and whether those bills will come from an electric utility owned by a Virginia-based company.
Wall Street was betting Thursday — with roughly 90 percent confidence — the S.C. Public Service Commission will approve the sale of Cayce-based SCANA to Richmond-based Dominion Energy in a deal that includes a rate cut for electric customers of the South Carolina utility.
And the stock market isn’t alone.
Within the last week, the S.C. attorney general and S.C. House speaker have urged the PSC basically to OK Dominion’s offer to buy SCANA and cut by $22 a month the power bills of 730,000 South Carolinians served by its electric subsidiary, SCE&G.
The filings by two of South Carolina’s most powerful politicians have put more pressure on the legislatively appointed PSC to approve SCANA’s buyout,
Barring an appeal to the state Supreme Court, the commission’s decision Friday will settle who — SCE&G’s customers, SCANA’s shareholders or both — should have to pay off the cost of the utility’s failed V.C. Summer nuclear plant expansion project.
Over a decade, SCE&G’s customers paid more than $2 billion in higher power bills for the twin-reactor project, abandoned in July 2017. Nine rate hikes that the PSC OK’d to finance the project cost the typical SCE&G residential customer about $27 a month — 18 percent of a monthly power bill.
As part of its proposed SCANA buyout, Dominion has offered to lower SCE&G’s electric rates by 15 percent, or $22 a month for the average residential customer. However, part of that reduction — about 3.7 percentage points — comes from savings due to federal tax cuts, already owed to customers.
The state’s utility watchdog, the S.C. Office of Regulatory Staff, and other customer-focused groups pushed the PSC to order a deeper rate cut during November’s month-long hearing into the failed nuclear project.
Under Regulatory Staff’s proposal, SCE&G customers would pay roughly $1,300 more for the two unfinished reactors over the next 20 years. Under Dominion’s most recent offer, the same customer would pay about $1,600, according to the utility.
Regulatory Staff also has suggested the PSC impose a number of conditions on a SCANA-Dominion merger before it approves the deal. Those conditions include locking in a requirement that Dominion freeze SCE&G’s rates until at least Jan. 1, 2021; not charge SCE&G’s customers for the $180 million purchase of a natural gas plant in Gaston; and keeping SCE&G’s headquarters and day-to-day operations in Cayce.
The commission’s OK is the last major blessing Dominion needs before it can seal its SCANA buyout. Other national and state regulators already have given Dominion the green light for the deal.
Attorney General Alan Wilson, R-Lexington, and attorneys suing SCANA on behalf of ratepayers have agreed to settle their lawsuit if the Dominion deal is approved.
Attorneys for House Speaker Jay Lucas, R-Darlington, also wrote the PSC this week in support of Dominion’s rate-cut offer.
“The sole goal of Speaker Lucas has been to protect the ratepayers by providing the biggest rate cut permissible under the applicable constitutional test,” they wrote. “The Commission’s paramount consideration … should be the same — to maximize customer benefits and eliminate the uncertainty that would arise from setting a rate” that could be struck down in a court challenge.
Wilson’s endorsement of the Dominion deal is key because his office previously has challenged the constitutionality of the 2007 law that enabled the nuclear project.
Lucas, meanwhile, wields influence over the PSC itself. The Darlington Republican names nearly half of the committee that screens and nominates PSC candidates, and he leads the House when the General Assembly votes on PSC nominees.
However, that doesn’t necessarily mean the PSC will approve the Dominion deal, as Lucas has suggested.
“Because the Public Service Commission is a creature of the General Assembly, it’s reasonable to expect they would give great deference to the speaker of the House,” said Scott Elliott, an attorney representing SCE&G’s industrial electric customers in the PSC case. “But these commissioners are all leaders in their community. Many of them are at the end of a long life of public service.
“I would fully expect them to act independently of the speaker and issue an order that may go beyond the terms of the settlement.”
Wall Street analysts are betting the PSC will let Dominion seal the deal. The gap between SCANA’s stock price and the amount that Dominion has offered to pay for the Cayce-based utility’s shares dropped below $3 Tuesday.
Those stock prices indicate Wall Street thinks the merger has roughly a 90 percent chance of being approved, analysts say.
This story was originally published December 13, 2018 at 7:29 PM.
