Proposed merger of Dominion Energy, SCE&G would benefit South Carolina customers

Published on April 19, 2018 by Dave Kovaleski


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The proposed merger of Dominion Energy with SCE&G and its corporate parent, SCANA Corporation, could result in more than $18.7 billion in increased economic output for the state of South Carolina, according to a new study.

The economic benefits would result, in part, from Dominion Energy’s plan to provide direct cash payments and lower electric rates to SCE&G electric customers, said the study’s author, Joseph Von Nessen, a research economist at the University of South Carolina. The cash payments would be equal to about $1,000 for the average SCE&G electric customer.

“The benefits of the Dominion Energy proposal go well beyond the immediate value of the $1.3 billion in cash payments to SCE&G electric customers,” Thomas Farrell, Dominion Energy chairman, president and chief executive officer, said. “The payments and the extra money in customers’ pockets from the lower rates will flow into the local economy in the form of billions of dollars in increased retail sales, new jobs, added wages and business investment.”

In addition, Dominion Energy proposes to reduce electric rates by about 7 percent after the merger closing. Further, it would absorb $1.7 billion in costs for the abandoned V.C. Summer nuclear project and purchase a natural gas-fired power station at no cost to customers.

“This $18.7 billion total economic output estimate represents an economic multiplier or ripple effect of approximately 1.49,” Von Nessen said. “In other words, for every $100 that is provided to Dominion/SCANA customers in savings, it is estimated that a total of $149 in new economic activity will be generated across South Carolina.”

Von Nessen said labor income alone would result in an increase of approximately $4.6 billion for South Carolinians. Further, “additional employment opportunities associated with new contract labor, an increase in the number of hours for existing workers, and both temporary and permanent hires,” the study found.

Economic benefits would be seen in the 24 counties where SCE&G provides electric service. Charleston county would see the greatest benefit ($4.9 billion), followed by Richland ($4.2 billion); Aiken ($2 billion); Dorchester ($1.2 billion); and Beaufort ($1 billion).

Dominion Energy and SCANA are currently obtaining regulatory approvals for the merger. The Georgia Public Service Commission and the Federal Trade Commission have already granted approvals. It must now get the approval of public service commissions of South Carolina and North Carolina; and authorization of the Nuclear Regulatory Commission and Federal Energy Regulatory Commission. Further, it must be approved by SCANA shareholders.