Fitch: SCE&G, Scana on watch

Fitch Ratings said it placed the issuer default ratings of South Carolina Electric and Gas Co. (SCE&G) and its parent, Scana Corp., on Rating Watch negative due to the uncertain future of the V.C. Summer units 2 and 3 construction project following Westinghouse Electric Co. LLC's bankruptcy announcement.

The agency said it expects to resolve the Rating Watch negative once information becomes available on the estimated cost and completion timeline for the Summer nuclear construction project and the resulting impact on SCE&G's earnings profile through 2020.

Fitch said it expects SCE&G to promptly make a regulatory filing to the South Carolina Public Service Commission, indicating their intention to either continue or abandon the project.

The agency also said it expects the commission would issue a ruling on the filing by year-end 2017.

Westinghouse's decision to file for bankruptcy creates significant uncertainty regarding the best course forward for the project as it is likely that Westinghouse will reject the current fixed price engineering, procurement, and construction contract, Fitch said.

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