Moody’s rating service has affirmed its negative outlook for crony capitalist energy provider SCANA and its subsidiaries, SCE&G and the Public Service Company of North Carolina (PSNC).
What happened? Easy: The latest unraveling associated with #NukeGate – the Palmetto State’s spectacularly failed command economic intervention in the energy industry.
“The confirmation of the SCANA family’s ratings comes after the enactment of state laws that order only a temporary, lower than originally proposed, reduction in SCE&G’s rates, and leaves permanent rate authority with the Public Service Commission of South Carolina (SCPSC)”, said Laura Schumacher, the company’s vice president and senior credit officer. “The confirmation also considers SCANA’s credit supportive announcement last week that it would cut its dividend by 80 percent in response to these legislative developments.”
According to Moody’s, “the negative outlooks on SCE&G and SCANA reflect continued uncertainty surrounding the ultimate decision of the SCPSC with regard to SCE&G’s recovery of its new nuclear costs, and the future of its relationship with SCE&G.”
The agency also noted that “the political and regulatory environment within which the companies must operate is now considerably below average,” specifically citing “the potential for additional adverse developments as a result of ongoing investigations and legal actions related to the abandoned Summer new nuclear plant and reflects some uncertainty with regard to the company’s future capital structure.”
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