Breaking down the SCANA-Dominion merger rebate
COLUMBIA, SC (WIS) - A big vote is expected next month to determine whether Dominion Energy will be able to buy SCANA. If and when the deal closes, Dominion is promising customers an average rebate of $1,000.
A lot of people like the idea of getting a check in the mail, but some customers may not fully understand the offer.
The thousand dollar rebate is really just an estimate of what the average customer could receive if Dominion Energy gets final approval to merge with SCANA.
For years SCE&G customers have been paying for two nuclear power plants as they were under construction. Now that the VC Summer project has been abandoned, many are wondering if customers will ever get back the millions paid for the failed project.
“We represent the customers. Our job is to appear before the public service commission and make recommendations regarding the proposals put forward in this application,” Director of the Office of Regulatory Staff in South Carolina Nanette Edwards said.
Dominion is offering a cash-back proposal that would average about a $1,000 per customer, but Edwards says customers need to understand they would still be on the hook to pay off a mountain of debt.
“That is one of the things my office is worried about, it is that people don’t fully understand the terms and conditions of the cash refund cash back.”
Dominion admits, the cash-back proposal only returns about two-thirds of the money customers have paid for the development of the VC Summer 2 and 3 nuclear reactors.
"It's an upfront cash payment but then over the next 20 years, if Dominion's proposal is approved, you're actually paying it back as a customer. It's not a pure refund with no strings attached."
That debt would be paid off over 20 years, but Dominion points out that under SCANA’s plan, customers will be paying off the nuclear charges for the next 60 years.
In a statement, Dominion says:
“The cash-back proposal is a way to return a large portion — about two-thirds — of the money customers have paid for the development of the VC Summer 2 and 3 nuclear reactors. As you’ll recall, under SCANA’s plan, customers will be paying off the nuclear charges for the next 60 years. Going forward, under our plan, customers would continue to pay off, over 20 years, some of the remaining nuclear debt — that which Dominion Energy isn’t absorbing (about $1.7 billion). The typical customer’s rates would drop 7 percent in year one, and that reduction would stand for eight years. Further reductions would follow annually until the debt is paid off in 20 years – rather than in 60 years. Ours is not the perfect plan, but it is the best that has been proposed — one that provides immediate cash payments and rate reductions.”
The specifics on which customers will qualify for the rebates and the formula they will use to calculate the refund won’t be decided until the Public Service Commission votes on whether to give this merger final approval.
Copyright 2018 WIS. All rights reserved.