The heads of Dominion Energy Inc. and Scana Corp. told South Carolina regulators that the state could either accept Dominion's proposed $14.6 billion offer to buy Scana, or they could watch the troubled public utility potentially fall into bankruptcy.
Richmond, VA-based Dominion unveiled plans to buy Cayce, SC-based Scana in an all-stock deal on Jan. 3. Dominion also proposed completing a $180 million natural gas-fired power plant in Gaston; writing off more than $1.7 billion from a Scana subsidiary's abandoned efforts to expand a nuclear power plant in Jenkinsville; and offering a $1.3 billion cash rebate to all of the subsidiary's electricity customers.
However, the merger is complicated by a South Carolina law that allows Scana to continue collecting payments for two unfinished nuclear reactors, which collectively cost $9 billion. State regulators are also considering whether customers of subsidiary South Carolina Electric & Gas Co. should continue making $37 million in monthly payments for the abandoned project. Meanwhile, state lawmakers are considering legislation to cut the payments, which make up 18% of customer electric bills.
"A little bit more than 70% of what they paid in will be paid back," Dominion CEO Thomas Farrell told the South Carolina Public Service Commission on Thursday."Is it perfect? Does it solve every problem that a South Carolinian has with the history of this? No, it does not. Is it a very good proposal? We think it is. And we're hopeful that the perfect won't be the enemy of the very good."
Television station WLTX-TV reported that Scana CEO Jimmy Addison said the proposed merger "goes billions further than we can go, and I just don't know anything else we can do on our own and remain a financially viable company."
The station also reported that Tom Clements, an adviser for the environmental group Friends of the Earth, doesn't think a merger with Dominion is the best option for Scana. "Bankruptcy, for example, may not be so horrible for the company," Clements reportedly said. "They are totally avoiding this discussion. We're going to review past prudency decisions and past cost overruns. Dominion is acting like our docket simply does not exist and that's just not the case."
The merger must be approved by Scana shareholders and pass the scrutiny of the Federal Trade Commission, the Department of Justice, the Nuclear Regulatory Commission and the Federal Energy Regulatory Commission. Regulators in Georgia, North Carolina and South Carolina must also approve the deal, which is expected to close this year.