Dominion Energy Inc .'s D merger with SCANA Corporation SCG has crossed another important regulatory hurdle with the approval of the Federal Energy Regulatory Commission ("FERC"). FERC approved the merger of the two companies, finding the deal to be consistent with public interest.

However, completion of the merger is subject to pending consent from SCANA's shareholders; review and approval from the public service commissions of South and North Carolina; and authorization by the Nuclear Regulatory Commission.

Development Since January

The deal was announced on Jan 3, 2018, with each shareholder of SCANA likely to receive 0.669 shares of Dominion. With the assumption of $6.7 billion debt of SCANA by Dominion, the entire deal value of the transaction is roughly worth $14.6 billion.

Since the announcement, the deal received approval from the Georgia Public Service Commission and Federal Trade Commission. The merger is expected to close before the end of 2018, subject to remaining approvals.

Dominion's Gain From the Merger

Dominion's merger with SCANA will allow it to expand its operation in the Southeast markets and the combined company will be serving nearly 6.5 million electric customers in eight states. In addition, Dominion will have control over 31,400 megawatts of electric generation capacity and 93,600 miles of electric transmission and distribution lines, with SCANA operating as a wholly-owned subsidiary.

The addition of nearly 1.6 million electric and natural gas customers from SCANA will be accretive to Dominion's earnings going forward. Its earnings are expected to get a boost by 8% or higher through 2020.

However, Dominion Energy is expected to encounter stiff competition from Duke Energy Corporation DUK , which has a strong presence in the Carolinas through its diverse mix of electricity generation.

Price Movement

In the past three months, shares of Dominion Energy have gained 6.5%, outperforming its industry 's growth of 0.6%.

Zacks Rank & Another Key Pick

Dominion Energy currently has a Zacks Rank #2 (Buy). Another top-ranked stock in the same industry is Algonquin Power & Utilities Corp. AQN , currently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here .

Algonquin Power pulled off an average four-quarter positive earnings surprise of 28.56%. The Zacks Consensus Estimate for 2018 has moved up 8.2% in the past 60 days to 66 cents per share. Its earnings are expected to grow 8.0% over the long-term (3-5 year) period.

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Duke Energy Corporation (DUK): Free Stock Analysis Report

SCANA Corporation (SCG): Free Stock Analysis Report

Dominion Energy Inc. (D): Free Stock Analysis Report

Algonquin Power & Utilities Corp. (AQN): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.