Report: SCE&G bankruptcy unlikely after failed nuclear project

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(WCBD) – A new report from a South Carolina utility watchdog says South Carolina Electric & Gas is unlikely to file for bankruptcy protection if regulators force the utility to stop collecting money for an abandoned nuclear expansion project.

Certified bankruptcy law specialist Rick Mendoza put the report together for the Office of Regulatory Staff.

Mendoza says there is a 35-percent chance that SCE&G will file bankruptcy if the 18-percent monthly charge for the nuclear project is terminated.

Between September 2016 and September 2017, Mendoza says SCE&G collected nearly $434 million from its customers for the nuclear project, which was abandoned in July of 2017.

In an October filing with the Public Service Commission, SCE&G claimed the loss of its revised rates would jeopardize the financial viability of the company.  The company filed the document after the Office of Regulatory Staff urged regulators to suspend those rates.

Mendoza says a bankruptcy filing is unlikely because:

  1. Dividend payments to shareholders would stop upon the filing of a bankruptcy case
  2. Shareholders would not receive any portion of the proceeds from a potential sale of the utility, unless all creditors are paid in full
  3. A bankruptcy filing would make borrowing more expensive
  4. Employees might leave out of concern for their futures

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