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Just four days after Dominion Energy and state utility Santee Cooper were given permission to build a large natural gas plant in Colleton County, another utility made a blockbuster announcement impacting South Carolinians.
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Dominion Energy, which serves customers in the Midlands, and Florida-based NextEra want to merge and serve 10 million customers throughout the Southeast.
Before any formal regulatory filings on the merger, some have been asking whether it would benefit South Carolinians, or just utilities’ pockets and whether news of the deal would have changed some recent regulatory decisions on utilities.
“I also hope … that the Public Service Commission [SC utility regulator] will ask a lot of questions and will make sure that this is going to be a benefit for South Carolinians, not for private utility companies,” said Robby Maynor, a policy advocate at the Southern Environmental Law Center.
The May 18 public announcement that the two utilities planned to become the largest utility in the world also occurred just more than a week after Dominion Energy in South Carolina ironed out higher rates for its customers.
Several renewable energy advocates and at least one legislative leader questioned whether it was a coincidence. Considerations about whether regulators should approve a new natural gas plant and rates for Dominion may have looked different if intervenors and the Public Service Commission knew about the $67 billion deal earlier, they suggested last month.
“Now, I don’t know whether NextEra buying Dominion is a good thing or a bad thing,” Senate Majority Leader Shane Massey said in May. “I don’t know yet.”
“But I do think it is interesting, and probably not coincidental, that this announcement was made right after the Public Service Commission made a decision about Dominion’s rate case,” he continued. “It is almost certainly not coincidental that this announcement was made right after the Public Service Commission issued a decision on Canadys,” the Colleton County natural gas plant. The Public Service Commission determined Santee Cooper and Dominion could build the $5 billion natural gas plant May 14.
“And I’m sure it’s not a coincidence that this announcement was made right after everybody expected the General Assembly to be adjourned.” South Carolina legislators were expected to adjourn for the year May 14, four days before the merger’s announcement, but returned early to take up a congressional redistricting plan.
When asked whether there was coordination on the announcement of the merger and other regulatory approvals, a spokesperson for Dominion Energy South Carolina responded “no, there wasn’t” in an email.
Massey suggested the state’s regulator and ratepayer advocate, the Public Service Commission and the Office of Regulatory Staff, should look at the natural gas plant’s approval and new rates for customers in the Midlands and Lowcountry in light of the proposed merger.
“If I were a commissioner, I wouldn’t like that this happens right now because I would feel like I’ve been duped on something,” Massey said. “… I would suggest to ORS and the Commission that maybe that’s something to reopen and take a look at.”
NextEra plans move into South Carolina
Dominion Energy and NextEra are expected to file an application with state utility regulators in mid-July, wrote Hank Page, a spokesperson for the Office of Regulatory Staff, in an email to The State. The application will include details of the business transaction and customer benefits for the deal, Page wrote.
The Office of Regulatory Staff, a state watchdog for consumers, will then evaluate the application.
“ORS anticipates evaluating how the filing may impact rates, services and reliability for customers of the utility and making recommendations to the Commission based upon its evaluation and analyses,” Page wrote.
The new utility would serve about 10 million customers across the Southeast, according to a news release announcing the deal. It would allow the electricity provider to move faster on energy projects and have greater access to capital, the news release said.
“This is a historic moment for our two companies and for the states we are privileged to serve,” said NextEra CEO John Ketchum in a news release announcing the deal. “Electricity demand is rising faster than it has in decades. Projects are getting larger and more complex. Customers need affordable and reliable power now, not years from now.”
Eddy Moore, the decarbonization director at the Southern Alliance for Clean Energy, said the merger could allow the new utility to make large projects happen faster, sometimes to accommodate data centers.
“We have a number of different counties considering moratoria on data center development,” Moore said. “We have concerns about water use. All of those things are going to be heightened if a bigger and quicker acting company begins to make its weight felt in the state.”
The combined utility said it would also give out $2.25 billion in bill credits for customers across Virginia, South Carolina and North Carolina. About 17% of the “savings” would go toward South Carolina customers, according to a NextEra investor presentation.
SC Small Business Chamber of Commerce CEO Frank Knapp said in early June he is optimistic about the proposed acquisition, particularly because NextEra has a larger renewable energy portfolio than utilities in South Carolina and may put less emphasis on natural gas. Knapp and environmental groups opposed the proposed large natural gas in Colleton County over its cost and possible ecological impact to the ACE Basin.
“I am optimistic that NextEra, if they in fact are allowed to purchase Dominion, will put more emphasis on using renewables and batteries going forward,” Knapp said.
NextEra did not respond to a request for more information about the deal.
Canadys natural gas plant: a new partner for Santee Cooper?
Massey questioned whether Santee Cooper would want to work with a new company to build the massive Colleton County natural gas plant. The project is expected to cost about $5 billion and generate 2,200 MW of electricity, both of which the state-owned utility and Dominion will split.
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The Senate majority leader has long been critical of Dominion Energy, particularly since its predecessor SCE&G worked with Santee Cooper during the V.C. Summer nuclear reactor bungle that soaked ratepayers.
“I do have a little bit of concern that if South Carolina didn’t matter as much to Dominion, how much will South Carolina matter to NextEra when NextEra, with this merger, would be the largest utility in the world?” Massey asked in an interview.
Massey also wanted to know whether a deal could be reached in the merger for Dominion ratepayers to no longer pay for debt associated with the two uncompleted nuclear reactors at V.C. Summer.
Santee Cooper spokesperson Mollie Gore said the utilities were moving forward with the natural gas plant at Canadys. With NextEra still seeking state and federal regulatory approval for the plan, Santee Cooper still has plenty of time to understand the details of the combination, she said.
The transaction is expected to close in 12 to 18 months, according to a mid-May NextEra presentation.
Company leaders in South Carolina are also expected to remain the same, so Santee Cooper won’t necessarily have to deal with new people.
The utility in South Carolina would still operate under the name Dominion and current CEO and president Keller Kissam would continue to lead, according to the release.
“The combination will not affect how we operate locally, serve our local customers or engage with local communities,” Dominion spokesperson Rhonda O’Banion wrote in a statement.
Dominion and Santee Cooper received permission from lawmakers to work together on the Canadys natural gas plant. That required new trust in the two companies from the General Assembly after the V.C. Summer fiasco, said Maynor of the Southern Environmental Law Center.
State Sen. Luke Rankin, R-Horry, Judiciary Committee chairman and member of the panel responsible for screening utility regulators, compared the partnership to an Old Testament Bible story where Jacob is tricked into marrying a different woman.
“I share your concern, and the timing and the progress made with a greatly improved, greatly managed, greatly led Santee Cooper that effectively, they’re at the altar with someone that they have been in good faith negotiating with on behalf of this state,” Rankin told his colleagues in May. “And now, in biblical terms, who was it that thought they were marrying their chosen bride, but who had to get the sister?”
NextEra faced allegations of political influence
NextEra has its own alleged baggage while operating in Florida. The utility tried to gain significant political power through its subsidiary Florida Power & Light in the Sunshine State, including by allegedly supporting ghosts candidates in state elections, manipulating media coverage and working with a consultant that surveilled a Jacksonville journalist, media reports show.
In June, the utility company settled a civil action lawsuit for $150 million over allegations that it misled investors while navigating the public scandals.
U.S. Sen. Angus King, I-Maine, also opposed NextEra merging with Dominion in a letter to federal regulators Monday. NextEra, he said, spent millions on an election in 2021 to block a New England transmission project. Delays to the project as a result of NextEra’s campaign cost ratepayers in Massachusetts, King wrote.
“The proposed merger would multiply both the opportunities and incentives to repeat this demonstrated conduct on a far larger scale,” King wrote.
Efforts to block competition, as NextEra allegedly tried with the hydropower transmission project, hurt ratepayers and are not offset by the bill credits, King said.
It won’t be NextEra’s first foray in South Carolina. The utility attempted to purchase Santee Cooper in 2020 and 2021 and later withdrew its bid. It spent six figures on lobbying efforts and tens of thousands on advertising as part of the bid, the Post and Courier reported at the time.
“That’s going to be a hard past to erase,” Rankin said in May of some of NextEra’s previous lobbying in the state.
Knapp, a frequent intervenor in rate cases, said he didn’t think NextEra would gain more influence or political power than other utilities operating in the state, despite the merger potentially creating a much larger company.
“I don’t know that next year would have any more influence than Duke and Dominion,” Knapp said. “I mean, they basically run the show anyway, don’t they?”
Scrutiny over the deal from state regulators and watchdogs is important, regardless of the mergers’ potential merits, Massey said.
“I don’t know that NextEra is worse than Dominion,” said Massey. “I don’t know that they’re better. But I do think this is something that needs to be evaluated, and I just hope that the ORS and the [Public Service] Commission will give it the attention that it deserves.”
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