The North Carolina Utilities Commission has approved the merger of large investor-owned energy utility companies: Dominion Energy, Inc. and SCANA Corporation. Virginia Electric and Power Company, a wholly-owned subsidiary of Dominion Energy, provides generation transmission and distribution services in North Carolina and Virginia as Dominion Energy North Carolina. Dominion Energy also owns gas utility companies in Ohio, West Virginia, Utah, Wyoming and Idaho. SCANA is a South Carolina Corporation whose principal subsidiaries are Public Service Company of North Carolina, Inc. (PSNC), South Carolina Electric and Gas Co., and SCANA Energy Marketing. The utilities agreed to (1) the creation of a regulatory liability of $3.75 million representing a refund to PSNC’s North Carolina customers through three $1.25 million in bill credits in 2019, 2020, and 2021; (2) a commitment to increase PSNC’s annual community support and charitable contribution initiatives by $150,000 more than its 2017 contributions; (3) exclusion of Merger-related direct expenses, including acquisition premiums, integration costs, and severance payments, from recovery through customer rates; (4) refrain from filing an application for a PSNC general rate case before April 1, 2021; (5) customer protection from debt downgrade; (6) maintenance of PSNC’s current level of customer service; and (7) a requirement to file any new or amended affiliate contracts for approval by the commission.

The commission found no substantial evidence that would support a conclusion that the merger will result in materially increased market or monopoly power, particularly when viewed in the light of the restrictions and requirements contained in the stipulation agreement. According to the commission, a market power analysis entered on the record stated that the wholesale gas market is “moderately concentrated, and the proposed transaction will increase market concentration, but it will remain moderately concentrated” and that planned pipeline development in the region “would not raise competitive concerns, and would improve market supply and competitive alternatives.” Regarding wholesale electricity, within North Carolina, the report indicates that there will be no change in ownership of generation and therefore no concentration of the market that would raise concerns over the exercise of market power. The commission also stated that the analysis also found that “there is no overlap in service territories between retail gas service provided by PSNC Energy (retail gas) and Dominion Energy North Carolina (retail electricity), so there is no concern about reduced competition for utility customers who have the ability to switch between electricity and gas for certain needs. Re Dominion Energy, Inc. and SCANA Corp., Docket Nos. E-22, Sub 551 & G-5, Sub 585, Nov. 19, 2018 (N.C.U.C.).
Previous Article Next Article

Recently Viewed