SCANA shareholders voted overwhelmingly Tuesday in favor of the company’s buyout by Virginia-based Dominion Energy.
The vote by 72 percent of shareholders had been expected, since Dominion’s stock has been more valuable than SCANA’s since the Cayce-based company abandoned work on the ill-fated V.C. Summer nuclear expansion last year. In an interesting coincidence, Tuesday’s vote came on the one-year anniversary of the abandonment decision by SCANA and its partner on the project Santee Cooper.
“We are pleased with the approval from our shareholders,” SCANA’s board of directors chair Maybank Hagood said in a statement. “We believe the merger with Dominion Energy offers the most comprehensive solution for our customers and aligns SCANA with a company that mirrors our commitment to delivering safe and reliable energy.”
While federal energy regulators and now stockholders have signed off on the deal, the biggest hurdle remains in the South Carolina Public Service Commission. The commission must approve the merger before Dominion can operate in the state, but legislators have prevented a vote before December. Commissioners are also likely to scrutinize Dominion’s offer of $1,000 refunds to SCANA customers, since that offer includes keeping higher rates. Dominion has threatened to walk away from the merger if it is not allowed to continue charging customers to repay V.C. Summer’s debt.
Dominion helped sweeten the deal for shareholders by offering two-thirds of a share in its stock for each SCANA share given up. The agreement would net a $7 per share profit for each stockholder at current trading prices. More than two-thirds of SCANA stock is held by businesses, mutual funds or other institutions.
Tuesday’s vote comes as SCANA is suing to block legislators from temporarily slashing its rates 15 percent. Attorneys representing SCANA’s power utility South Carolina Electric & Gas are in federal court this week, arguing the rate cut is unconstitutional since the company was following a 2007 law which allowed it to recoup losses from the abandoned project. Legislators argue the 2007 law is void because SCE&G did not spend the money “prudently.”
After hearing the news, South Carolina Governor Henry McMaster said there’s still more information that needs to be released to the public.
“We don’t want people to go broke. We don’t want stock prices to go down,” he said. But we’re in a situation where we have to make a lot of very strong and important decisions. So what I’m doing and have been doing since the beginning of this, is to get the facts. When you have the facts then it becomes a lot easier to make decisions.”
McMaster has been adamant that ratepayers should not pay any more for costs of the failed V.C. Summer Nuclear plant.
“Those ratepayers of SCE&G or SCANA, are buying power from a monopoly,” he said. “They can’t get it anywhere else and the government grants that monopoly power but imposes regulatory power in order to keep the rates down.”
If the deal doesn’t go through, McMaster is confident there will be another buyer.
“I don’t think this is the last decision to be made,” he said. “We’re in the marketplace. This is free enterprise to the extent this is a regulated institution–regulated company, but we’ve had a lot of interest since this began from companies all over the country.”