Dominion Energy and SCANA merge in US$14.6bn deal

Dominion Energy's Cove Point LNG Terminal in Lusby Md. is seen

Dominion Energy's Cove Point LNG Terminal in Lusby Md. is seen

Utility giant Dominion Energy Inc. agreed Wednesday to acquire Scana Corp. and assume its liabilities from a major nuclear power project in SC that it scrapped a year ago.

Dominion will purchase SCANA through an all-stock merger. The average ratepayer, Farrell said, would realize a $1,000 cash refund, based on usage of 1,000 kilowatt hours per month.

The company will also assume Scana's debt of $6.7 billion, making the total deal worth $14.6 billion, and write off more than $1.7 billion in connection with the abandoned nuclear plant.

Meanwhile, SCANA chief executive, Jimmy Addison added: "Dominion Energy is a strong, well-regarded company in the utility industry and its commitment to customers and communities aligns well with our values".

The average residential customer will get a $1,000 payment and a 5 percent reduction in power bills, Farrell said.

SCANA's South Carolina Electric & Gas was a majority partner with state-owned Santee Cooper in a project to bring two new nuclear reactors online at the existing V.C. Summer nuclear plant in Jenkinsville. Over seven hundred thousand electric cooperative customers face the prospect of having their power bills skyrocket for decades to pay off Santee Cooper's $4 billion in debt from this.

"The take-it-or-leave-it deal falls far short of protecting ratepayers from absorbing the costs of the nuclear fiasco, while replacing the unneeded nuclear plant with unnecessary natural gas capacity instead of cheaper and cleaner energy alternatives", Friends of the Earth said in a release Wednesday. The acquisition is expected to close in 2018 pending regulatory and shareholder approval, according to the statement.

A SC state official said a year ago that customers had already paid $1.4 billion for the plant, which comes to about 18% of a typical residential bill.

State and federal utility regulators will need to approve the deal before it's final. Its presence in SC is now limited to two solar fields in Jasper County and a natural gas transportation line.

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Dominion has electricity and gas operations in North Carolina, Virginia, West Virginia and Ohio.

Thomas Farrell - the chairman, president and CEO of Dominion Energy - said the transaction would "lock in significant and immediate savings" for SCE&G customers, including the "largest utility customer cash refund in history".

The South Carolina plant and a similar project being built in Georgia represented a next wave of nuclear construction in the US, using a new Westinghouse reactor design that was meant to curb the cost overruns that had plagued prior nuclear projects.

Scana made an attractive target as the company's market value plummeted after the utility halted a controversial nuclear expansion in late July. Dominion said it would pay off the cost of the abandoned nuclear project in 20 years.

Farrell told analysts that he's already spoken with McMaster and other SC leaders about the deal. Just last week, Santee-Cooper board chair Leighton Lord resigned, in a letter to the governor.

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