SCANA is only a good deal for shareholders

SCANA is only a good deal for shareholders
March 28 18:07 2018 Print This Article

SCE&G (owned by parent company SCANA) electric customers pay the highest rates in South Carolina. At 13.6 cents per kilowatt hour, SCE&G customers pay 23% more than Duke Energy customers in the Upstate. As the result of the Base Load Review Act of 2007, which the General Assembly passed to help utilities finance nuclear reactor projects, customers have paid an 18% premium on electric bills since 2008 for reactors which will never be built. Meanwhile, investors continued to receive hefty dividends, totaling $319 Million in 2017.

Virginia-based Dominion Energy is currently going through federal regulatory hurdles to buy out SCANA in a $14.6 Billion merger deal. SCANA investors will get a stock bonus of more than 30% in the merger while customers continue to pay the nuclear project premium to pay off the debt incurred in the failed nuclear reactor construction effort in the Midlands. The General Assembly is still working on legislation to protect the customers. A study commissioned by the Senate recently concluded that rates for SCE&G customers could be reduced 13% without jeopardizing SCANA’s credit rating. SCANA has maintained that any significant rate reduction would result in bankruptcy.

SCE&G customers have also not realized savings stemming from the 40% federal income tax reduction for SCANA which took effect on January 1. The corporate income tax rate was lowered from 35% to 21% based on the Tax Cuts and Jobs Act, which lowered the cost of generating electricity. Hundreds of utility companies across the country have already passed the tax savings along to customers, but the South Carolina Public Service Commission, the agency which regulates utility rates, has yet to mandate a rate reduction.