Post and Courier
March 22, 2018
SCANA Corp. has paid out more than half a billion dollars to investors with money collected from electric customers for its failed nuclear project, according to documents published by state regulators this week.
Last year alone, money earmarked for the V.C. Summer expansion accounted for $120.4 million in dividends to shareholders — or about $10 million a month.
The dividend payments account for more than a quarter of the money SCANA is charging electric customers for the scuttled nuclear project. And, because dividends are paid out after income taxes, the actual percentage is likely even higher.
The nuclear project, meantime, has helped SCANA increase its dividend. The company’s quarterly payouts to investors have swelled more than 50 percent since the project was started in 2009, and virtually all of the increase stems from the effort to build two new reactors at the V.C. Summer Nuclear Station.
That’s according to a summary the company produced for the state Senate last month during the Legislature’s deliberation over how to handle the failed project. The state Office of Regulatory Staff, a watchdog agency, made the document public this week for the first time.
SCANA, the Cayce-based owner of South Carolina Electric & Gas, declined to answer questions about the document or its plans to pay dividends in the future.
SCANA’s dividend has become a political football ever since the company called off construction last summer at the V.C. Summer plant north of Columbia, citing years of delays and skyrocketing costs. The company collects $37 million a month for the project under a controversial 2007 law — about a fifth of its electric rates — and it pays out an $87.5 million dividend each quarter.
“Any time you invest in anything, there is a risk,” said Frank Knapp, chief executive of the S.C. Small Business Chamber of Commerce, which has advocated for a rate cut. “It is not the responsibility of state government to ensure that it works out.”
A bankruptcy attorney hired by the state this year estimated that canceling the dividend would be enough to cover a rate cut, and a lawyer suing the company on behalf of ratepayers has sought to halt the payments.
SCANA, for its part, hasn’t changed the level of its payments since abandoning the V.C. Summer project on July 31. When it announced its latest dividend last month, though, it warned investors that the payments would be “evaluated quarterly.”
Dividends are considered to be one of the tools a power company has to attract investors and finance big projects. Just like it pays interest on the money it borrows, it’s allowed to earn a profit on its spending to return to shareholders.
The nuclear-related payouts started small but increased as the cost of the V.C. Summer project climbed and SCE&G’s electric rates rose. In all, SCANA returned $529.2 million to shareholders between 2009 and 2017.
The V.C. Summer project cost $9 billion before work was halted, a cost split between SCE&G and its co-investor in the new reactors, state-owned power provider Santee Cooper.
SCANA agreed to be acquired by Dominion Energy earlier this year in a deal that both companies say will reduce electric rates. Under that plan, SCE&G customers would payanother $3.8 billion for the failed V.C. Summer project over the next two decades, according to Dominion’s estimates.