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The Pentagon wants to weigh in on SCANA's sale because it pays a power bill, too

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Fort Jackson entrance (copy)

The military says it wants a seat at the table as regulators decide whether to sign off on Dominion Energy's proposal to buy SCANA Corp. The Department of Defense says it buys lots of electricity from the company, which serves a region from the Midlands to the coast. The government has several facilities in that region, including Fort Jackson in Columbia. Provided

The federal government wants to weigh in on Dominion Energy’s plans to acquire SCANA Corp. because it spends millions on electricity in South Carolina each year.

The U.S. Department of Defense asked regulators Monday for a seat at the table as they review the proposed purchase.

The Pentagon says it also will represent other federal agencies which buy power from SCANA.

The government says it has a “substantial interest” in the future of SCANA and its subsidiary — South Carolina Electric & Gas, because it powers several facilities in the utility’s territory. SCE&G distributes electricity from Greenwood in the Midlands to Charleston and Beaufort on the coast.

Government records indicate federal agencies paid SCE&G about $4.7 million in the last fiscal year for electricity and gas, mostly for electric service.

South Carolina is home to four major military installations: Fort Jackson in Columbia, Shaw Air Force Base in Sumter, Joint Base Charleston, and the Marine Corps installation in Beaufort. 

The Pentagon isn’t the only big power user asking to have a voice in the Dominion-SCANA deal, a transaction valued at $14.6 billion.

Wal-Mart also asked regulators to represent its interests Monday, saying it buys 140 million kilowatt-hours a year from SCE&G. That’s the equivalent of nearly 12,000 homes.

Other groups representing factories, small businesses and the elderly have made similar requests.

Dominion’s offer to buy Cayce-based SCANA came in the wake of SCE&G’s failed nuclear project. The abandoned expansion of the V.C. Summer Nuclear Station cost the power company about $5 billion, and regulators are tasked with deciding how much of the bill electric users should pay.

The wave of interest from big electric customers highlights just how contentious the acquisition could be once regulators take up the question later this year. Already, the combination has stirred a heated debate in the Legislature, which is considering a measure to force SCE&G to eat the project's cost — a move that would kill the deal.

It has also become the focus of public uproar over the V.C. Summer project: SCE&G customers have paid about $1.8 billion into the project over the past decade, and the unfinished reactors account for 18 percent of their monthly electric bills.

Dominion has offered to refund most of the money customers have paid so far, and it’s willing to cut about a fifth of the nuclear surcharge going forward. Under Dominion’s proposal, ratepayers would continue to pay for the project for the next 20 years.

In filings with state regulators, the Defense Department and Wal-Mart didn’t say what they made of that proposal, and they didn't respond to requests for comment Monday.

The question will ultimately be decided by the state Public Service Commission, which regulates utilities. The commission is expected to hold meetings late this spring or over the summer to hear arguments on the acquisition and the nuclear project's costs.

The Pentagon will represent the government’s interest as a customer in those hearings, but other federal agencies will have a chance to weigh in on the Dominion-SCANA deal before the companies are tied up.

The Federal Trade Commission and Department of Justice need to review the deal for antitrust violations, and the Nuclear Regulatory Commission and Federal Energy Regulatory Commission will also have to bless the combination before it closes.

And apart from the Dominion deal, the Feds have been reviewing the nuclear project for months: The FBI and U.S. Securities and Exchange Commission are investigating.

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Reach Thad Moore at 843-937-5703. Follow him on Twitter @thadmoore.