Virginia Based Dominion Energy To Buy Carolinas Based SCANA Corp
SCANA Corp. is an energy utility based in Columbia, South Carolina, but residents of the Old North State may know it better by it’s natural gas subsidiary Public Service Natural Gas Company, or PSNC.
PSNC serves hundreds of thousands of natural gas customers in North Carolina, and it’s sister company, South Carolina Electric & Gas Co, serves similar numbers in South Carolina (SCEG).
After running into trouble with investors and customers last year as a result of SCEQ suddenly pulling out of a significant nuclear plant investment, with a price tag north of $9 billion, SCANA was ripe for takeover by a buyer that could absorb their mounting debts, and remedy the nuclear deal fallout.
Enter Virginia-based Dominion Energy:
“Dominion said it would pay SCE&G’s customers $1.3 billion, averaging about $1,000 for each residential customer, within 90 days of the deal’s closure.
The company will also assume Scana‘a debt of $6.7 billion, making the total deal worth $14.6 billion, and write off more than $1.7 billion in connection with the abandoned nuclear plant.
Virginia-based Dominion is offering 0.6690 of its shares for each Scana share, or about $55.35, based on Dominion’s average stock price of the last 30 trading days ended Jan. 2.
The offer represents a premium of 42.4 percent to Scana’s Tuesday closing price of $38.87. Scana’s shares were trading well below the offer price at $47.79, suggesting some investors were skeptical of the deal going through.”
That should represent a nice claw-back in share price for shareholders that have watched SCANA dive approximately 40 percent over the last year. At time of this publication, SCANA shares were up nearly 23 percent.
So what’s the deal with the nuclear plant fiasco? Well, an unfortunate pairing of economics and the costs resulting from decades of nuclear energy fear mongering by environemtnalists.
Manufacturing failures, design changes and other delays had driven up the project’s costs. Natural gas prices plummeted from what the utilities had forecast, making other plants that run on that fuel more competitive. Florescent light bulbs, energy-efficient air-conditioning systems and lower-than-expected economic growth reduced South Carolina’s electricity needs, too.
Costs for the plant ballooned to a total of $25 billion dollars over the course of it’s nearly decade long construction. This astronomical cost and building timeline shed light on just how much over-regulation stifles energy production and distribution. Natural gas may face pressures from anti-fracking activists now, but that pales in comparison to the suffocation American nuclear energy has suffered over the decades.
All thanks to environmentalist whackos.
Regulators could halt the deal, but some analyst thinks that isn’t likely considering SCANA’s situation.
“Guggenheim Securities analyst Shahriar Pourreza, however, expects regulators to approve the deal.
“The execution risk is a bit high, but Scana does not have any other option and regulators will be aware of that, so the deal is likely to go through but it will be noisy,” Pourreza said.
The deal is expected to close this year, the companies said.”
With current technologies, it should be a simple and straightforward process for businesses to develop and distribute energy resources for economical prices. Leave it to the Left to turn one of the most important needs in any society into one of the hardest to make meaningful investments in.