Economy

Dominion Energy To Buy Scana In $7.9 Bln All-stock Deal

Dominion Energy To Buy Scana In $7.9 Bln All-stock Deal

"Under the proposed agreement between SCANA and Dominion Energy, SCE&G ratepayers will get most of the money back they paid for the nuclear reactors and will no longer face paying billions for this nuclear collapse", McMaster said, calling it progress in his quest to hold utilities responsible for the failed project.

Shortly after the announcement of the proposed merger, SCANA shares were up more than 21 percent pre-market on the NYSE at 8:37 a.m., while Dominion shares were down 5 percent.

Dominion also is offering to cut rates for customers of SCANA's South Carolina Electric & Gas subsidiary, and absorb other costs of a failed nuclear project north of Columbia.

Those benefits include a US$1.3-billion cash payment within 90 days upon completion of the merger to all customers, worth US$1,000 for the average residential electric customer. That would come on top of an additional 5% residential rate reduction, Dominion said in a release, resulting from refunds of previously collected funds and the impact of lower federal taxes.

Dominion also plans to write off $1.7 billion in losses tied to the VC Summer project in Fairfield County.

The Dominion-SCE&G deal still must be approved by state and federal regulators.

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Dominion expects the deal to close in the third quarter of this year. Lawmakers may also consider ditching the legislation when they return next week. A law in SC, the Base Load Review Act, allowed Scana to keep collecting money from customers even though the company canceled the V.C. Summer nuclear project.

SCANA would operate as a wholly-owned subsidiary of Dominion Energy, and maintain its Cayce, South Carolina headquarters.

"Joining with Dominion Energy strengthens our company and provides resources that will enable us to once again focus on our core operations and best serve our customers", said Jimmy Addison, chief executive of SCANA. It's also the lead developer of the planned Atlantic Coast Pipeline, which will bring fracked gas from West Virginia to Virginia and North Carolina. Project partners Scana and Santee Cooper said finishing the reactors could cost $25 billion. SC regulators and lawmakers have been debating who should pay for the project's failure.

Under the terms of the transaction, SCANA shareholders will receive 0.6690 shares of Dominion Energy common stock for each share of SCANA common stock-the equivalent of $55.35 per share. But this doesn't resolve the issue.

"The only way to resolve this travesty is to sell Santee Cooper", said South Carolina Governor Henry McMaster in a statement.

Dominion Chairman and CEO Thomas F. Farrell II said the deal will benefit SCANA shareholders and customers.


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