SCE&G credit rating could suffer because of project delays, higher costs

The credit rating for South Carolina Electric & Gas Co. (SCE&G) and its parent, Scana Corp. (SCG) could be downgraded due to issues with the V.C. Summer nuclear project.

Fitch, the global rating agency, said it will probably lower the company’s credit rating if regulators fail to support SCE&G’s new cost estimate and a schedule delay for the company’s 55 percent share of two units at V.C. Summer.

The Public Service Commission (PSC) of South Carolina approved a $5.7 billion cost estimate for the project in 2012. Now SCE&G wants another $1.1 billion and is asking to push the completion date back to June 2019 from March 2017 for one unit and from May 2018 to June 2020 for the other.

As a result of a delay in the project and higher costs announced in 2014, Fitch revised SCE&G’s and Scana’s rating outlook from “stable” to “negative."

The current rating could change for the better if the South Carolina PSC says the higher costs are recoverable and if it accepts the new construction schedule. If not, the companies’ rating will likely be downgraded.

Even with full recovery of the costs, Fitch may consider a downgrade if financial recovery goes past 2018.