Dominion Energy, Inc. and SCANA Corporation recently announced that they had completed their proposed merger, benefiting customers and communities in Georgia, North Carolina and South Carolina. The combination expands Dominion Energy's operations in Georgia and the Carolinas, where the company had already operated an electric utility in northeastern North Carolina, a 1,500-mile interstate pipeline principally in South Carolina, and nearly 1,000 megawatts of gas, hydro and solar generating capacity in all three states.
"The addition of SCANA makes geographic sense and aligns well with our core, regulated energy businesses," added Thomas F. Farrell, II, chairman, president and chief executive officer at Dominion Energy. "These are well-run regulated operations that we expect will help improve Dominion Energy's risk profile and growth outlook."
Jimmy Addison, chief executive officer of SCANA, noted: "This marks a significant milestone in the history of Dominion Energy and SCANA. These two companies share common values, and this combination provides SCANA's businesses with the scale and stability to meet customers' growing energy needs in the years to come. We will now hit the ground running with Dominion Energy and embrace change."
Southeast Energy Group
SCANA Corporation would be a first-tier, wholly owned subsidiary of Dominion Energy. Its operating companies – including South Carolina Electric & Gas Company, Public Service Company of North Carolina, Incorporated, and SCANA Energy Marketing, Inc. – and its services company will be managed by a new operating segment, the Southeast Energy Group. It is Dominion Energy's fourth operating segment, along with the Power Delivery, Power Generation and Gas Infrastructure Groups. The Southeast Energy Group would maintain a significant local presence with a local management structure.
Benefits to customers
During the summer of 2018, South Carolina's legislature passed a law that the Public Service Commission of South Carolina (PSC) implemented, temporarily reducing those bills to $125.34 per month. Under a new plan approved by the South Carolina PSC, the typical SCE&G residential electric customer would pay approximately $125 per month, putting into effect bills below the level requested by South Carolina's lawmakers. The new bill level was made possible by Dominion Energy's proposal – which was approved by the PSC – to provide customer refunds in the form of monthly bill relief of more than $2 billion, amortized over 20 years, and the write-downs and absorption of about $2.5 billion in financing obligations, regulatory assets and a natural gas-fired power station.
"Putting into effect bills below the temporary rates and keeping residential, commercial and industrial electric bills lower and competitive with neighboring states will aid South Carolina in its economic development efforts and ensure that the state has a reliable energy supply to fuel growth and power the state's homes and businesses," Farrell said.
Dominion Energy would also provide bill credits of $3.75 million over three years to PSNC Energy's 564,000 gas utility customers and $2.45 million over three years to SCE&G's 370,000 gas utility customers.
– Implementing an EnergyShare-like program in South Carolina to assist low-income customers;
– Agreeing to a freeze in base rates for SCE&G's electric customers at current levels until Jan. 1, 2021;
– Agreeing to a freeze in base rates for PSNC Energy's customers at current levels until at least Nov. 1, 2021
Terms of transaction
At the merger's completion, each SCANA share was converted into 0.6690 shares of newly issued Dominion Energy common stock. The conversion resulted in a transaction value of approximately $6.8 billion, in addition to the assumption of approximately $6.6 billion in existing consolidated SCANA net debt. SCANA's last declared dividend of 12.37 cents per share of common stock is being paid to SCANA shareholders of record at the close of business on Dec. 10, 2018 and common stock has ceased trading on the New York Stock Exchange.
Dominion Energy Operations
– 93,600 miles of electric transmission and distribution lines;
– 106,400 miles of natural gas gathering, storage, transmission, and distribution pipeline;
– About 31,000 megawatts of diverse electric generation capacity in 10 states; and
– More than a trillion cubic feet of natural gas storage.
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