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SCANA Agrees for $2B Settlement on Abandoned Nuclear Units

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SCANA Corporation (SCG - Free Report) announced a settlement with the customers of South Carolina after the plaintiffs sued the company for charging lofty electric rates associated with a failed nuclear development.

The class-action lawsuit stemmed from the fact that SCANAconcealed information from customers regarding difficulties that the nuclear plants had been facing long before the project was declared abandoned — in July 2017. Notably, backed by the Base Load Review Act, the company went on charging customers to recoup costs of nuclear units during the construction phase despite the fact that the project was about to shut down.

With roughly $2 billion of settlement, SCANA announced plans to relieve customers in terms of future electric rate credit. However, the settlement deal awaits approval from the court.

Moreover, the settlement fund allocation is dependent on the approval by South Carolina Public Service Commission for the proposed SCANA−Dominion Energy Inc. (D - Free Report) merger. Notably, for the merger to close, this approval would be the last.

Overall, the news of the settlement on Nov 24 has pleased SCANA investors as reflected from the stock’s surge of more than 5%, as of the closing price on Nov 26. Looking at the year-to-date pricing chart, SCANA has rallied 17.2% against the 0.2% collective decline of the stocks belonging to the industry.

Presently, SCANA carries a Zacks Rank #4 (Sell) while Dominion Energy carries a Zacks Rank #3 (Hold). Meanwhile, a few better-ranked players in the utility - electric power space include Atlantic Power Corporation (AT - Free Report) and Black Hills Corporation (BKH - Free Report) . Both the stocks have a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.    

Atlantic Power beat the Zacks Consensus Estimate in three of the last four quarters, the average positive earnings surprise being 25.6%.

Black Hills will likely see earnings growth of roughly 2% in 2018.

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