SCANA set­tles $2B law­suit over VC Sum­mer fail­ure

The Island Packet (Sunday) - - Front Page - BY DAVID TRAVIS BLAND AND AVERY G. WILKS tb­[email protected]­tate.com aw­[email protected]­tate.com

SCANA Corp. has agreed to a $2 bil­lion set­tle­ment with the S.C. cus­tomers it charged high elec­tric rates for a failed nu­clear plant con­struc­tion pro­ject.

And, in a new twist, the le­gal agree­ment turns over to SCE&G cus­tomers the $115 mil­lion golden parachutes that had been set aside for soon-to-be-ousted SCANA ex­ec­u­tives. It also forces the sale of a num­ber of non-es­sen­tial SCANA prop­er­ties that could give SCE&G cus­tomers an­other $ 70 mil­lion or more in re­funds or rate cred­its, ac­cord­ing to one at­tor­ney in­volved.

How­ever, the set­tle­ment — an­nounced Satur­day by Cayce­based SCANA — is not a done deal.

It hinges on a judge’s OK and a rul­ing from the S.C. Pub­lic Ser­vice Com­mis­sion ap­prov­ing Vir­ginia-based Do­min­ion En­ergy’s pro­posed buy­out of SCANA, SCE&G’s par­ent com­pany.

As part of that buy­out, Do­min­ion has pro­posed to slash SCE&G’s nu­clear-bloated elec­tric rates by as much as $22 a month — sav­ing SCE&G’s 730,000 elec­tric cus­tomers more than $2 bil­lion.

That’s how much SCE&G cus­tomers have paid in the form of higher power bills for the failed V.C. Sum­mer Nu­clear Sta­tion ex­pan­sion pro­ject. It also matches what ratepay­ers were seek­ing from SCE&G in nu­clear re­funds, ac­cord­ing to Pete Strom, an at­tor­ney rep­re­sent­ing SCE&G ratepay­ers.

“This is ba­si­cally our ver­sion of the Bernie Mad­off sit­u­a­tion,” Strom said. “We have some bad ac­tors who did some bad stuff at SCANA. As a re­sult of that, hun­dreds of mil­lions of dol­lars are lost. … We’ve got­ten as much money as we pos­si­bly can out of this and still make it some­what at­trac­tive for Do­min­ion to take it over.”

The set­tle­ment seeks to re­solve a le­gal firestorm over SCE&G cus­tomers’ bloated power bills that has raged since July 2017, when the Cayce­based util­ity can­celed its dec-

ade-long, $9 bil­lion ef­fort to build two more nu­clear re­ac­tors at the V.C. Sum­mer Nu­clear Sta­tion in Fair­field County.

SCE&G’s cus­tomers have paid more than $2 bil­lion in the form of higher power bills to fi­nance the now-aban­doned pro­ject. The im­pact on SCE&G’s high­est-in-there­gion power bill was no­tice­able.

Af­ter nine rate hikes, about one-fifth of SCE&G cus­tomers’ power bills were pay­ing for the pro­ject. That cost the typ­i­cal res­i­den­tial cus­tomer about $27 a month.

As soon as SCE&G can­celed the pro­ject, its cus­tomers wanted their $2 bil­lion back. They filed law­suits seek­ing re­funds and ac­cus­ing their util­ity of fraud and neg­li­gence.

The set­tle­ment an­nounced Satur­day could put an end to that le­gal bat­tle.

It came with the en­dorse­ment of S.C. At­tor­ney Gen­eral Alan Wil­son, a Lex­ing­ton Re­pub­li­can who last Septem­ber is­sued a non-bind­ing opin­ion that the 2007 law that en­abled the V.C. Sum­mer nu­clear pro­ject and its nine rate hikes was un­con­sti­tu­tional.

Wil­son thanked Do­min­ion En­ergy “for its will­ing­ness to pro­vide the fi­nan­cial re­sources nec­es­sary to make this resti­tu­tion. It is im­por­tant to note that Do­min­ion En­ergy was not in­volved in the cre­ation of this sit­u­a­tion, and we ap­pre­ci­ate its role in find­ing a res­o­lu­tion that serves the best in­ter­ests of SCE&G ratepay­ers.”

Wil­son said he be­lieves the $2 bil­lion set­tle­ment is the largest of its kind in S.C. his­tory but hinted that his of­fice is con­tin­u­ing its in­ves­ti­ga­tion into the nu­clear pro­ject’s fail­ure.

“This mile­stone ends our pur­suit for resti­tu­tion to ratepay­ers, but does not end our in­quiry into the in­di­vid­ual ac­tors that may have con­trib­uted to the pro­ject’s fail­ure,” Wil­son said.

“We want to ac­knowl­edge the hard work of the pri­vate lawyers who zeal­ously fought for the in­ter­ests of ratepay­ers as well through var­i­ous law­suits filed on the be­half of SCE&G ratepay­ers.”

Strom, the for­mer U.S. at­tor­ney for South Carolina, also said the in­ves­ti­ga­tion into po­ten­tial crim­i­nal wrong­do­ing by SCANA ex­ec­u­tives likely is not over.

“At the end of the day, the real jus­tice is go­ing to come for those who did any­thing crim­i­nally wrong,” Strom said. “I would be sur­prised if there were not in­dict­ments.”

As part of the set­tle­ment, SCANA agreed to turn over to its elec­tric cus­tomers a $115 mil­lion trust it had set aside for ex­ec­u­tives if they lose their jobs dur­ing the planned Do­min­ion takeover. The money once ear­marked for ex­ec­u­tives now could go to cus­tomers in the form of cred­its or re­funds.

That would in­clude for­mer SCE&G cus­tomers who helped pay for the V.C. Sum­mer pro­ject but since have moved away, Strom said.

Those ex­ec­u­tives likely would still re­ceive golden parachutes if they lose their jobs dur­ing the Do­min­ion merger. But Do­min­ion now would be on the hook to pay those sev­er­ance pack­ages.

Cur­rent and for­mer SCE&G cus­tomers also would ben­e­fit from the sale of non-es­sen­tial SCANA prop­er­ties, in­clud­ing the Ram­sey Grove Plan­ta­tion in Ge­orge­town, where SCANA ex­ec­u­tives duck hunted; the orig­i­nal SCE&G head­quar­ters on Meet­ing Street in Charleston; and sev­eral prop­er­ties near SCANA’s Cayce head­quar­ters.

“We wanted to take away the golden parachutes and the toys for any­body still left there,” Strom said.

It was un­clear Satur­day how much the ratepayer at­tor­neys would be paid as part of the set­tle­ment.

The set­tle­ment in­cluded no ad­mis­sion of guilt or blame from SCANA. The com­pany con­sis­tently has de­flected blame for the pro­ject’s fail­ure to lead con­trac­tor West­ing­house for declar­ing bank­ruptcy in March 2017 and sta­te­owned mi­nor­ity part­ner San­tee Cooper for uni­lat­er­ally pulling out of the con­struc­tion ef­fort on July 31, 2017.

“SCANA and SCE&G deny the al­le­ga­tions made in the law­suit, but have agreed to re­solve this mat­ter,” the com­pany said in a news re­lease.

SCANA’s top at­tor­ney, se­nior vice pres­i­dent Jim Stuckey, said in a state­ment, “We are pleased that we were able to achieve a mu­tu­ally ac­cept­able res­o­lu­tion of this mat­ter.”

Reach Wilks at 803-771- 8362. Fol­low him on Twit­ter @AveryGWilks. Fol­low Travis Bland at @DTrav­is­B­land. John Monk con­trib­uted to this story.

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