Question: How would this merger impact customers in the short and long term?
This proposed merger includes very significant customer benefits. All electric customers would share in $1.3 billion in cash payments to offset costs related to the withdrawn construction of two new nuclear units that will not be completed because they grew too costly. For an average residential electric customer, the amount would be $1,000.
All customers also would see a rate reduction of at least 5 percent, driven from refunds of previous customer collections, as well as pass-through of corporate tax reform benefits, equal to more than $7 a month for a typical residential customer.
Dominion Energy would assume nearly $1.7 billion of existing withdrawn nuclear construction assets and would never collect them from customers. The proposed merger would eliminate this cost from customer bills in 20 years, far sooner than the 50-60 that had been planned. And, Dominion Energy would never collect from customers the cost of purchasing a gas-fired power plant that would help replace power that was expected from the nuclear units.
Question: Why should customers have to pay for any of the VC Summer 2 and 3 units? They are too expensive and will never generate electricity.
We believe this proposal recognizes that all electric stakeholders have been impacted by the Summer units and should be addressed.
The merger agreement includes for customer cash payments of $1.3 billion ($1,000 for an average residential electric customer), which we believe is the largest cash payment to utility customers ever. There also is a rate reduction of at least 5 percent, more than $1.7 billion in other nuclear-related costs that will never be charged to customers, and the $180 million purchase of natural-gas fired power station at no cost to customers.
Shareholders also have been affected by the VC Summer project. Even including the benefit of today’s merger agreement, they will have lost more than $3 billion in total investment value over the last 18 months. SCANA’s shareholders include tens of thousands of South Carolina residents, many of them being retirees and working families. The merger proposal would allow them to recover some of their loss but they still would bear a substantial part of the burden.
And, the agreement also would end the uncertainty about the future impact of the new nuclear units.. It removes uncertainty that can weigh down economic development, make it harder for SCE&G to meet the growing and changing needs of customer, and leave in question the future of a strong community partner and good employer. The decision to build the VC Summer nuclear units was made in accordance with state law.