The threat of a mandatory reduction in power rates prompted the parent company of South Carolina Electric & Gas to set aside $109 million last quarter, triggering a steep decline in its profit for the period.
SCANA Corp.'s net income tumbled 93 percent from a year ago as the utility owner reserved the money for refund credits that state lawmakers have ordered for the company's power customers as a result of its failed Midlands nuclear project.
Earnings totaled $8 million for the April-June period, or 6 cents a share. Revenue fell 16 percent to $843 million compared to the second quarter of 2017.
The company released its latest earnings report two days after a majority of its shareholders voted in favor of selling the Cayce-based business to Dominion Energy of Richmond, Va. Citing that deal, SCANA executives did not hold a conference call with analysts and investors to discuss the financial results.
The company also did not announce whether it will pay a dividend to stockholders, saying that decision will be made later.
The General Assembly adopted an act in late June that would temporarily reduce the amount of money that SCE&G can charge power customers for the failed expansion of the V.C. Summer nuclear plant. The typical home pays $27 a month for the nuclear project, but under the Legislature's mandate, it will only pay $5 a month.
The lower rates would only last until the state's utility regulators decide on a permanent answer to who should pay for the unfinished reactors. That's expected to happen at the end of the year.
But lawmakers also said the rate cut would have to be retroactive to April. That's why SCANA took a hit on its second-quarter earnings.
The company is challenging the forced rate cut. SCE&G is asking a U.S. district judge in Columbia to stop the mandatory reduction, which would begin appearing on bills next week. A decision is expected before the reduction kicks in on Tuesday.
Customers have already paid about $2 billion for two new reactors at the V.C. Summer nuclear plant, a project that was abandoned a year ago Tuesday without ever generating a drop of power. For at least a few months, the rate cut would keep SCE&G ratepayers from paying even more to help utility pay down its debts.
Shares of SCANA are down about 40 percent since the nuclear project was scuttled. The stock rose $1.06 Thursday to close at $41.34.