A $7.9 billion deal between utility companies Dominion Energy and Scana includes an unusual term loosely related to the tax bill that passed Congress at the end of 2017.
All residential customers of Scana’s South Carolina Electric & Gas utility will get an average cash payment of $1,000 within 90 days of the deal being completed, the companies said in a statement. Payments will vary depending on how much electricity a client used in the 12 months prior to the deal’s completion.
Dominion announced its acquisition of Scana on Wednesday. The deal is expected to close later this year. Scana shares surged 22.6 percent, while Dominion Energy’s stock slipped 3.9 percent.
The deal would “lock in significant and immediate savings for SCE&G customers — including what we believe is the largest utility customer cash refund in history,” Dominion Energy CEO Thomas Farrell said.
Scana and Dominion also expect to reduce rates by 5 percent from current levels, “resulting from a $575 million refund of amounts previously collected from customers and savings of lower federal corporate taxes under recently enacted federal tax reform.”
President Donald Trump signed a bill last month that slashed the U.S. corporate tax rate to 21 percent from 35 percent. Some of the largest companies in the U.S., including NBCUniversal parent Comcast, said after the bill’s signing that they will give bonuses to their employees.
Scana and Dominion are one of the first companies to explicitly say they will give their customers a credit as a result of the tax bill.