Dominion Energy’s interest in SCANA began in 2016 when senior executives of SCANA began to consider selling the utility due to the challenges they faced ahead.
After all, they were partnered with Santee Cooper (45% owner) and things were not looking too good with their $9 billion nuclear construction project; over a year behind schedule with escalating construction costs, module delivery delays, and issues with their design vendor – Westinghouse.
Therefore, SCANA’s senior executives sought advice from a Chicago-based law firm, and also Morgan Stanley and RBC Capital Markets, two investment banks with expertise in mergers and acquisitions.
Over the next year, 2017, SCANA talked with four different power utility companies, one of which was Dominion Energy, about a potential deal; but there were no takers.
A one point, just before Santee Cooper abandoned the project at V. C. Summer, SCANA tried to persuade Dominion to buy all or part of Santee Cooper’s 45% stake in the project. However, this effort was unsuccessful. And later, SCANA rejected an unnamed company’s $2.2 billion offer to buy SCANA’s North Carolina-based natural subsidiary, PSNC Energy.
Eventually, SCANA senior executives intensified their talks with Dominion and the two utilities negotiated and rewrote at least six versions of the proposed buyout agreement. That final proposal, submitted on January 2, 2018, was unanimously approved by SCANA’s board after the proposal was endorsed by both Morgan Stanley and RBC Capital Markets.
However, the buyout is still subject to approval by state and federal commissions, SCANA’s shareholders, and indirectly the South Carolina legislature. And, on March 1, 2018 the S.C. Senate voted unanimously to delay the Public Service Commission’s ruling until December 2018. The Senate proposal now goes to the S.C. House of Representatives for a vote.
Under current S.C. law, if the Public Service Commission doesn’t rule by July on the Dominion deal, it will be automatically approved.
The S.C. Senate is weighing the Dominion Energy deal against other options, including the S.C. House proposal that could reduce what SCE&G’s 700,000 electric customers pay toward the abandoned project. In addition, the S.C. Senate wants the S.C. Office of Regulatory Staff to have enough time to evaluate the Dominion deal and the circumstances around it, such as whether SCE&G fraudulently won rate hikes for the failing nuclear project.
This delay doesn’t necessarily kill the Dominion Energy deal; the utility’s agreement to buyout SCANA, filed with the Securities and Exchange Commission, expires in April 2019.