Virginia-based Dominion Energy has completed its takeover of South Carolina’s investor-owned utility, SCANA Corp., and the operating utility SCE&G. SCANA bet the company on a new two-unit nuclear power plant at its existing V.C. Summer nuclear station. SCANA lost.
The State newspaper commented that the troubled power company “lost $5 billion and, now, its independence to a failed nuclear construction project.” An hour after the deal closed, Dominion announced that it had ousted controversial SCANA CEO Jimmy Addison, replacing him with Rodney Blevins, 54, who has been Dominion’s senior VP and chief information officer since 2014.
The State reported that Addison will walk away with a retirement package of more than $9 million, including $3.8 million in deferred pay, according to a filing with the U.S. Securities and Exchange Commission. SCANA shareholders rejected golden parachutes for executives in a vote in July, but that was non-binding. A host of other top SCANA execs are also leaving.
SCANA’s remnants will become a new Dominion division, the Southeast Energy Group. SCE&G will be renamed Dominion Energy South Carolina. The South Carolina Public Service Commission last December approved the $14 billion takeover, which included a $22/month rate cut for SCE&G customers.
In the meantime, the Sierra Club and Friends of the Earth have challenged the state regulators’ decision to let SCANA, and now Dominion, hit electric customers with a $2.3 billion charge for the cancelled Summer nuclear project. They argued at the PSC that “SCE&G fraudulently lied, misled and withheld material information.”
Also, Santee Cooper, the state-owned generating and transmission utility which was a half-partner in the failed Summer project has charged in state court that SCE&G engaged in “civil fraud” at the $9 billion nuclear project. In 2011, the two utilities signed a deal that gave SCE&G control of the nuclear project. The court filing in late December alleged that SCE&G engaged in “dishonesty, bad faith, unfair dealing and the unlawful appropriation of Santee Cooper’s money by design.”
SCE&G applied to the U.S. Nuclear Regulatory Commission in 2008 for a combined construction-and-operating license to build to new Westinghouse AP1000 reactors at the existing two-unit V.C. Summer site. Both nukes were jointly owned by SCE&G and Santee Cooper. The request came during the “nuclear renaissance” hype, based in part on the possibility of large loans guaranteed by the U.S. government in a 2007 law. (Ultimately, the two South Carolina utilities decided to eschew the federal money and go it alone on the project).
The NRC approved the license in 2013 and construction began, with the expectation that the units would go into commercial service in 2017 and 2018, with an original cost of $10 billion for the two units. Those schedules and cost estimates soon proved highly optimistic, as the project encountered multiple delays and increased cost estimates nearly doubling the initial estimates. In March 2017, Westinghouse, facing problems at Summer and a similar two-unit project at the Southern Co.’s Vogtle site, filed for bankruptcy protection.
SCANA and Santee Cooper announced in July 2017 that they were abandoning the Summer nuclear project.
— Kennedy Maize