What happens when Dominion comes?
by The Press and Standard | September 20, 2018 5:00 pm
Last Updated: September 20, 2018 at 7:37 pm
Dan A. Weekley, Dominion Energy’s point man in its bid to merge with SCANA, knew he was walking into a public relations nightmare when he was assigned the task of selling South Carolina on Dominion’s plan.
“We walked into a buzz saw,” said Weekley, who is Dominion’s vice president and general manager of Southern Pipeline Operations and Gas Infrastructure Group.
Weekley offered that comment during a visit to The Press and Standard office the afternoon of Sept. 5.
He sat down to talk on the record just prior to a closed meeting with Press and Standard Publisher Barry Moore, who had organized the meeting in his other role as a member of the SouthernCarolina Alliance; S.C. St. Sen. Margie Bright Matthews (D-Walterboro) and Walterboro Colleton Chamber of Commerce President Jeremy Ware.
Since Dominion offered its plan to merge with SCANA in early January, Weekley said Dominion has “done more than 350 meeting like this” — meetings that involved a few people to audiences numbering in the hundreds.
Even using the term “merger” when discussing Dominion’s plan to take over operation of the struggling and generally despised utility company creates problems.
“There are very hard feeling towards SCANA out there and there is more than just small percentage that say if it is good for SCANA, then we are opposed to it because of what happened out there.”
Weekley’s “out there” is Jenkinsville, where SCANA and Santee Cooper were supposed to be constructing two nuclear power plants.
SCANA secured a series of rate increases from the state’s utility commission to generate funds to construct the nuclear plants. Those rate increases are still on the bills even though SCANA and Santee Cooper walked away from the plan.
“It was a $9 billion project. They had almost $5 billion spent on it; realistically, it was going to cost more than $20 billion, more than two times more then it was supposed to,” Weekley said.
Sometimes, he said, when the numbers climb into the billions, it gets a little hard to fathom.
“I think of it like this — there were almost 5,000 people working out there, working one day and gone the next, literally gone,” Weekley said. “They were spending more than $30 million a week on a project that would never be finished.”
In the meetings to address the Dominion proposal, Weekley said he’s heard “A lot of accusations about improper business things with their leadership. Routinely, I hear from the public that the legislature has a very big role in what happened.
“One thing that has lacked in this process has been transparency from SCANA,” Weekley offered.
But, he added, he believes Dominion’s message is getting through. “We do public opinion polling and those types of things, overall support is really strong for this deal.”
Last week, Dominion’s bid to merge with SCANA cleared the final federal hurdle.
It still has to undergo a review by the public utilities commissions in both South and North Carolina. (North Carolina is part of the proposed merger because SCANA operates a natural gas business in North Carolina that serves 700,000 residential customers in the western portion of the state.)
“The customers are mad. They want as much money back as they can get as quickly as possible. So we developed an offer based on that premise,” Weekley explained. But, he added, customers “don’t get everything back — we don’t have it.”
To try and sway customers toward the Dominion merger, Weekley said the company came up with a couple of proposals to assist customers.
One move was to provide customers with a check that allows them to recoup some of the money from their bills that went to pay for the plant construction.
The check would be issued by Dominion to the customers three months after the merger has been finalized. “You don’t have to do anything to receive the check,” Weekley said.
The size of the check, Weekley explained, is based on the individual’s monthly energy consumption. “If your bill averages between $150 and $160 a month, you are going to get $1,000 back. If your bill is $300 a month, you are going to get $2,000. If you live in an apartment in Columbia, and your bill was $75 a month, you are going to get $500 back.”
The figures the company used for determining the size of the checks were 2016 actual data, the last calendar year full information was available when Dominion put its offer on the table Jan. 1. If the state wants Dominion to use different data, “we are totally fine with that.”
The only thing Dominion won’t alter is the $1.3 billion it has dedicated to the repayment program.
The second phase of Dominion’s plan is to provide its customers with a seven-percent reduction in their entire rate, not just the nuclear portion.
Three-and-a-half percent of that rate reduction “came straight from the Dominion shareholders,” Weekley said.
The second three-and-a-half percent reduction, he added, “is derivative of federal corporate tax changes went from 34 percent down to 21 percent.”
Dominion has also pledged it would not seek a rate hike for three years. That pledge covers everything except increases sought for fuel adjustments. The fuel adjustment is an industry standard used to absorb any increase in fuel costs. It just covers the fuel costs. “We make no money on that.”
Weekley added that when the construction project was shut down, SCANA had $1.7 billion invested in Jenkinsville that was not covered by a rate increase.
He said Dominion has pledged not to seek recovery of those funds.
Weekley said Dominion Energy was attracted to the possible merger because the company was “big on South Carolina from economic development prospective.” He added, “This issue is holding the state back (in terms of economic development) and has got to be resolved.”
Dominion put its best offer on the table, and according to Weekley, “we are proud of our offer.”
“If someone puts a better offer on the table, take it.”