(Bloomberg) -- Dominion Energy Inc.'s $7.9 billion takeover of troubled utility-owner Scana Corp. is looking even less likely to happen, or less likely on the current terms, after a bill passed by South Carolina legislators late Wednesday.
The state Senate voted to cut the money Scana can collect from customers for a half-finished nuclear power project the company scrapped last year. That may raise the question of Scana's valuation and credit rating, factors that would play into an acquisition. Dominion, which has threatened to call off the merger should legislators make such a move, reiterated Wednesday that it stands by those statements.
Dominion's takeover of Scana faced an uphill battle to begin with. Since pulling the plug on the massive V.C. Summer nuclear project, Scana has found itself at the center of a federal investigation, a state probe and hearings on how the costs of the power plant ballooned to over $20 billion. The company's chief executive officer retired after lawmakers called for his resignation and consumers are facing a multi-billion-dollar bill for a project that may never deliver a single watt of electricity.
Scana fell 2.8 percent to $36.17 at 9:37 a.m. in New York, while Dominion slipped 0.2 percent.
Dominion said by email that the legislation passed Wednesday “would be a material event that could eliminate” the benefits of an acquisition.
And if the bill is enacted, Scana “would consider its options at that time, including challenging the law in court,” spokesman Eric Boomhower said by email Wednesday night.
In January, South Carolina's House of Representatives voted to temporarily block Scana from collecting costs for the failed project and to give utility regulators the authority to abolish recovery. Dominion said then that any change in law that significantly affects the financial benefits of its merger would create a “path for Dominion Energy to walk away.”
Brian Symmes, a spokesman for South Carolina Governor Henry McMaster, had said the governor planned to sign the bill if it came to him in the same version passed by the House. But the Senate plan is different, proposing to reduce Scana's charge instead of altogether suspending it, and Symmes didn't immediately respond to a request for comment Wednesday.
--With assistance from Jim Polson
To contact the reporters on this story: Lynn Doan in San Francisco at ldoan6@bloomberg.net, Joshua Fineman in New York at jfineman@bloomberg.net.
To contact the editors responsible for this story: Lynn Doan at ldoan6@bloomberg.net, Will Wade, Debarati Roy
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