Politics & Government

Dominion completes buyout of SCANA after 17-month nuclear fiasco

Nearly 730,000 electric customers in South Carolina are getting a new power company.

And about 5,200 full- and part-time SCANA employees in Georgia and both Carolinas are getting new bosses.

Virginia-based Dominion Energy on Wednesday finalized its buyout of Cayce-based SCANA Corp., the troubled power company that lost $5 billion and, now, its independence to a failed nuclear construction project.

“Dominion Energy is pleased to add SCANA’s fast-growing, high-performing Southeastern businesses to our 18-state footprint,” Dominion chief executive Tom Farrell said in a news release. “Together, we are committed to providing safe, dependable, affordable and clean energy to the communities served by SCANA and to maintaining its excellent record of reliability and customer service.”

An hour after acquiring SCANA, Dominion announced the departure of SCANA chief executive Jimmy Addison and named his replacement – a current Dominion senior vice president.

Rodney Blevins, a 54-year-old Virginia Tech and Duke University graduate, has been Dominion Energy’s senior vice president and chief information officer since 2014.

Addison, 58, SCANA’s chief financial officer for 11 years before ascending to CEO last January, will advise Blevins until Addison retires on Feb. 1, Dominion said.

“Jimmy Addison is well-respected throughout the energy and utilities sector,” Farrell said. “I sincerely thank him for his leadership during the challenging times of the past 18 months. Jimmy has had an outstanding career at SCANA, and we wish him well in retirement.”

SCANA’s subsidiaries will become part of a new Dominion division called the Southeast Energy Group. SCE&G is expected to be renamed Dominion Energy South Carolina at some point, sources have told The State. But those plans have not been announced publicly.

The Wednesday announcement closes a dark and uncertain chapter in SCANA’s long and proud history.

The company’s flagship subsidiary, SCE&G, began providing power in 1846 as Charleston Gas Light Company and grew into South Carolina’s largest homegrown utility — a corporate darling known for its service reliability, philanthropy and legislative influence.

But that was all before July 2017, when the company’s $9 billion effort to build two more nuclear reactors at the V.C. Summer Nuclear Station in Fairfield County went belly up after years of mismanagement, cost overruns and construction delays. The abrupt collapse shocked lawmakers and enraged SCE&G customers who — after nine rate hikes — have paid more than $2 billion in the form of higher power bills for the useless reactors.

After months of lawsuits and investigative hearings, Dominion swooped in last January with an offer to buy out SCANA, lower rates and refund SCE&G’s electric customers some of what they had paid toward V.C. Summer.

A year of haggling between Dominion and S.C. lawmakers, regulators and ratepayer attorneys led to the S.C. Public Service Commission’s ruling last month that approved Dominion’s plan to purchase SCANA and lower SCE&G’s electric rates by about 15 percent — or $22 a month for the typical residential customer.

SCE&G customers have been paying lower rates since last summer, when the General Assembly temporarily slashed the utility’s nuclear bloated rates by almost 15 percent. The rates will drop permanently — and by a few more cents — with the Dominion takeover.

“Today marks a significant milestone in the history of Dominion Energy and SCANA,” Addison said in a statement. “Employees at our respective companies have been working hard for months on integration planning, and I am confident that will lead to a smooth transition.

“These two companies share common values, and this combination provides SCANA’s businesses with the scale and stability to meet customers’ growing energy needs in the years to come. I am particularly proud that despite the intense efforts that went into planning for the integration and attaining approval of the combination of the companies over the past year, employees across our three-state region maintained their focus on providing energy to our customers safely and reliably. We will now hit the ground running with Dominion Energy and embrace change.”

Dominion sealed the deal Wednesday despite appeals from a handful of groups asking the S.C. Public Service Commission to reconsider several pieces of the commission’s recent order approving the SCANA buyout. Those appeals were not expected to hamper the Dominion deal.

In fact, one group that appealed, the S.C. Small Business Chamber of Commerce, wrote in a statement Wednesday that Dominion’s announcement should give the PSC leeway to “correct numerous errors” in its ruling without worrying about driving Dominion off.

That includes the PSC’s ruling that Dominion can not charge customers for construction costs incurred at the nuclear project after March 2015, but that Dominion could charge customers some $400 million in financing expenses for those disallowed costs, the group said.

Dominion was already the fourth largest electric and gas utility in America. Now, it adds SCE&G and two SCANA natural gas subsidiaries: SCANA Energy in Georgia and PSNC Energy in Georgia.

With the takeover, Dominion now has 7.5 million customers in 18 states. It already had etched out a small foothold in South Carolina in 2014 when it bought Carolina Gas Transmission Corp. — a 1,500-mile interstate gas pipeline with roughly 115 employees — from SCANA.

“The addition of SCANA makes geographic sense and aligns well with our core, regulated energy businesses,” Farrell said. “These are well-run regulated operations that we expect will help improve Dominion Energy’s risk profile and growth outlook.”

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Avery G. Wilks is The State’s senior S.C. State House and politics reporter. He was named the 2018 S.C. Journalist of the Year by the South Carolina Press Association. He grew up in Chester, S.C., and graduated from the University of South Carolina’s top-ranked Honors College in 2015.