By Chris Muldrow | Fredericksburg Today
Dominion Energy is buying South Carolina-based energy company SCANA for an all-stock deal that will be valued around $7.9 billion.
SCANA subsidiary South Carolina Electric & Gas Company announced in July it was abandoning construction of two new nuclear units at the Virgil C. Summer Nuclear Generating Station after already spending $9 billion with another S.C. power company on the project. SCE&G customers have spent $1.4 billion through rate increases to fund the reactor construction.
Richmond-based Dominion has said it will pay $1.3 billion, or about $1000 per customer, to SCE&G customers after the merger closes to offset increased energy costs. The company also says it will build a $180 million natural-gas plant in South Carolina.
Under the deal, SCANA shareholders would receive 0.6690 shares of Dominion Energy common stock for each share of SCANA common stock, the equivalent of $55.35 per share, or about $7.9 billion based on Dominion Energy’s volume-weighted average stock price of the last 30 trading days ended Jan. 2, 2018. Including assumption of debt, the value of the transaction is approximately $14.6 billion.
Dominion said SCANA would operate as a wholly owned subsidiary of Dominion Energy. It would maintain the headquarters of its SCE&G utility in South Carolina.
Thomas F. Farrell, II, chairman, president and chief executive officer of Dominion Energy, said: “We believe this merger will provide significant benefits to SCE&G’s customers, SCANA’s shareholders and the communities SCANA serves. It would lock in significant and immediate savings for SCE&G customers – including what we believe is the largest utility customer cash refund in history – and guarantee a rapidly declining impact from the V.C. Summer project. There also are potential benefits to natural gas customers in South Carolina, North Carolina and Georgia and to their communities. And, this agreement protects employees and treats fairly SCANA shareholders, many of whom are working families and retirees in SCANA’s communities. The combined resources of our two companies make all this possible.”
“SCANA is a natural fit for Dominion Energy,” Farrell said. “Our current operations in the Carolinas – the Dominion Energy Carolina Gas Transmission, Dominion Energy North Carolina and the Atlantic Coast Pipeline – complement SCANA’s, SCE&G’s and PSNC Energy’s operations. This combination can open new expansion opportunities as we seek to meet the energy needs of people and industry in the Southeast.”
Once the merger is completed, the combined company would operate in 18 states from Connecticut to California. The company would deliver energy to approximately 6.5 million customer accounts in eight states and have an electric generating portfolio of 31,400 megawatts and 93,600 miles of electric transmission and distribution lines. It also would have a natural gas pipeline network totaling 106,400 miles and operate one of the nation’s largest natural gas storage systems with 1 trillion cubic feet of capacity.
Dominion is the largest power provider in the Fredericksburg region. The company traces its roots to Virginia Railway & Power Company, founded by Frank Jay Gould in 1909.