South Carolina Electric & Gas has struck a deal to buy a power plant to partially replace the electricity it had planned to produce at the two reactors it scuttled at the V.C. Summer Nuclear Station.
The SCANA Corp. subsidiary said it has reached an agreement to purchase a 540-megawatt natural-gas-fired generator in Gaston for $180 million. The seller is Columbia Energy LLC.
Normally, utility customer pay for such acquisitions. In this case, SCANA said its shareholders will foot the $180 million bill under a plan announced Thursday to address the fallout of the failed V.C. Summer expansion. The Cayce-based company estimated the deal would cost its investors $500 million in profits over the life of the Columbia Energy Center, not including the purchase price.
"That will not be charged to customers," said Keller Kissam, a SCANA senior vice president who will become chief operating officer in January under a previously announced management shakeup.
The costs of operating and maintaining the Midlands plant will be rolled into the standard customer rate base after the sale.
Columbia Energy Center produces electrical power — SCE&G is its biggest customer — and steam that's sold to a nearby manufacturer. It went into service in 2004.
SCE&G said it hopes to sign a definitive agreement with the New York-based seller over the next several weeks and obtain state and federal regulatory approvals in 2018.
The plant was built by energy giant Calpine Corp., which sold it in 2014 to Columbia Energy owner LS Power Equity Advisors.SCE&G currently purchases about 55 percent of the Calhoun County plant's electrical output.
"We have a need for power," Kissam said. "We wouldn't have been trying to build those two nuclear units if we didn't have a need for power."
The utility is buying the Gaston plant because it "gives us a controllable asset," spokesman Eric Boomhower said.
Jimmy Addison, SCANA's chief financial officer and incoming CEO, said the acquisition is part of a broader plan that would delay the need for a new power source "for several years."
"This is a key step to meeting South Carolina’s robust economic growth,” Addison said in a statement Thursday.