Things have been getting uglier for SCANA (SCG) since it abandoned the V.C. Summer nuclear power plant a few months ago. SCANA stock is racing to the bottom. It has fallen more than 15% in the last ten trading sessions.
The $7 billion SCANA is facing a criminal investigation about recent rate hikes that were part of a rate recovery for its abandoned and half-constructed nuclear power plant.
According to the SEC filing last week, SCANA’s principal subsidiary, South Carolina Electric & Gas Company, stated that it sold its future guaranty settlement payments worth $2.17 billion to Citibank.
Standards & Poor’s cut SCANA’s credit rating to “BBB” from “BBB+” earlier and put it on a CreditWatch “Negative.” Fitch also lowered SCANA’s credit rating to “BB+” last week.
Westinghouse Electric, a Japan-based Toshiba’s subsidiary, was the principal contractor of SCANA’s V.C. Summer nuclear power plant in South Carolina and Southern Company’s (SO) Vogtle plant in Georgia. Westinghouse went bankrupt in March 2017. Both of the utilities struggled to complete their respective projects. SCANA abandoned the construction of its nuclear power plant in July when the project’s cost exceeded $20 billion.
Southern Company, the major owner at Vogtle, received another federal loan guarantee of $3.7 billion last week. The Department of Energy already issued loan guarantees of $8.3 billion for the project.
SCANA stock has mostly trended downwards this year. So far this year, SCANA has corrected ~30%, while the Utilities Select Sector SPDR ETF (XLU) has risen 10% during the same period.
In the next part, we’ll see where SCANA might go from its current levels.