Published: Fri, January 12, 2018
Finance | By Loren Pratt

Dominion, SCANA agree to $14.6B all-stock merger

Dominion, SCANA agree to $14.6B all-stock merger

A deal with Virginia-based Dominion Energy could mean $1.3 billion in refunds for customers of a troubled SC utility who have been funding a failed nuclear reactor project.

According to the terms of this deal, 0.6690 shares of Dominion, was equally valued to the extent of $53.35 per Scana share.

The deal still needs approval from SCANA shareholders as well as federal regulators and regulators in South Carolina, North Carolina and Georgia.

Under the agreement, SCE&G customers will receive a $1.3 billion payment within 90 days after the merger is completed, as well as a 5% rate reduction from current levels.

And some utility watchdogs say the customer refunds don't go far enough.

Santee Cooper, a public power agency formally known as the South Carolina Public Service Authority, has $7.7 billion of outstanding debt.

That said, by agreeing to merge with Dominion, ratepayers in SC would see significant savings because Dominion would write off more than $1.7 billion of the failed-project's cost.

Cayce-based SCANA, parent of the SCE&G utility, is now saddled with a multi-billion-dollar debt following the scuttled nuclear project with Santee Cooper.

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

Friends of the Earth issued its release Wednesday in response to plans by Dominion Energy to acquire SCANA.

In particular, SC regulators would have to approve Dominion's plan for customer refunds, executives said during a conference call Wednesday morning. "It would lock in significant and immediate savings for SCE&G customers - including what we believe is the largest utility customer cash refund in history - and guarantee a rapidly declining impact from the V.C. Summer project".

SCANA has been reeling since announcing last summer its subsidiary, South Carolina Electric & Gas Co., was abandoning construction of two new nuclear reactors at the V.C. Summer Nuclear Station.

Wednesday's conference call provided more details on an historic acquisition that will change the energy landscape in SC, where SCANA is the only large investor-owned utility headquartered in the Palmetto State. The Securities and Exchange Commission, too, has subpoenaed records from SCANA and Santee Cooper.

South Carolina's legislative leaders are weighing in on the proposed acquisition of a troubled SC utility by Dominion Energy.

"The only way to resolve this travesty is to sell Santee Cooper", McMaster said, noting that the state-owned utility had racked up debt of $4 billion as it partnered Scana on the project. And in late December, Santee Cooper board chairman Leighton Lord stepped down following three weeks of legal wrangling after McMaster fired him based on allegations that Lord hid critical information about the failed project.

We specialize in shareholder litigation involving buyouts, mergers, and individual shareholder rights throughout the country.

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