The never-ending end game for South Carolina’s abandoned V.C. Summer nuclear project is getting more complicated. Charleston’s Post and Courier newspaper reports that troubled SCANA Corp., one of the two corporate parents of the failed $9 billion, two-unit, 2,000-MW construction project is drawing attention from federal law enforcement.
The newspaper says that when SCANA CEO Jimmy Addison testified this week at the South Carolina Public Service Commission about whether the investor-owned and state-regulated utility withheld crucial information about the troubles at Summer the feds were watching. A week earlier, a veteran consultant, testifying for the PSC’s staff, said SCANA withheld a pessimistic report about the progress at Summer from the commission.
The State newspaper reported that consultant Greg Jones said SCANA’s operating utility “SCE&G fed state regulators overly optimistic and unrealistic projections, which it never achieved, before the utility and its minority partner, the state-owned Santee Cooper utility, canceled the long-delayed and over-budget construction of two new reactors at the V.C. Summer Nuclear Station in July 2017.”
When Addison took the witness stand at the PSC to answer Jones’s charges, the Post and Courier said that “representatives of the U.S. Attorney’s office and the FBI sat just feet away.” The newspaper added that “an FBI agent took notes as Addison sidestepped questions and pleaded ignorance about various aspects of the failed nuclear reactors….” The presence of federal law enforcement is “the clearest indication yet that the company and its leaders could still face criminal charges for their role in one of the biggest financial messes in state history.”
Addison, a CPA who became CEO early this year, was chief financial officer during the construction project before it bit the radioactive dust last year.
In the meantime, the other chief actor in the Summer tragi-comedy, state-owned public power system Santee-Cooper, was facing continuing political headwinds. South Carolina Republican Gov. Henry McMaster has long wanted to sell off the public power system, which dates back to the 1930s, the creation of then-progressive Democratic Gov. Strom Thurmond.
But McMaster’s desire to spin off the statewide utility, which generates power and wholesales it to rural electric cooperatives which sell at retail to its customer-owners, appears to be going nowhere. FITSnews, a respected statewide blog run by veteran Republican political operative Will Folks (the blog describes itself as “Unfair. Imbalanced), reported, “For more than a year, South Carolinians have heard governor Henry McMaster talk incessantly about selling state-owned utility Santee Cooper.
”We are not fans of the Republican incumbent, but we have supported him in these efforts. In fact, we proposed selling Santee Cooper over a decade ago when it could have netted billions of dollars for taxpayers.
“There’s just one problem with McMaster’s plan: Someone has to be willing to buy the thing.”
Folks perceptively noted, “Unfortunately for oft-abused South Carolina citizens and taxpayers – especially ratepayers victimized by Santee Cooper’s ongoing involvement in the NukeGate debacle – no one appears interested in purchasing this debt-addled, scandal-ravaged utility. There was one so-called ‘serious’ offer which made the rounds back in March – but this secretive proposal would have involved a massive taxpayer-funded bailout.
“Even if a serious offer were to emerge, sources tell us one state senator – fiscally liberal Larry Grooms – has vowed to block the sale of the utility via a filibuster. Grooms is committed to the notion that government should continue to run a power company (ignoring all evidence to the contrary).”
Enter Virginia-based Dominion Energy, parent of Dominion Virginia Power. Dominion has made a $14 billion offer to buy SCANA, which SCANA’s shareholders a year after the project collapsed approved the Virginia company’s offer. But hurdles remain. Greentech Media observed, “After gaining approval from the Georgia Public Service Commission, the Federal Energy Regulatory Commission and now Scana shareholders, the two companies still need the OK from regulators in both Carolinas and the Nuclear Regulatory Commission. Dominion must also cope with legislative decisions that threaten how much of the project’s cost utilities can recoup from customers.”
McMaster and others have suggested that Dominion should also buy Santee Cooper. Dominion has demurred, offering to run the best parts of the troubled public power system but not take ownership. The Post and Courier reported that Dominion CEO Thomas Farrell, in a letter sent to the commission and Santee Cooper (with copies to McMaster and leaders of the South Carolina legislature) offered to run the muni, but eschewed any ownership interest.
The newspaper said that Farrell “wrote that no private-sector company would be able to buy Santee Cooper without increasing its electricity rates. As a state-owned utility, Santee Cooper doesn’t have to pay taxes and it can borrow money cheaper than private businesses can.” Dominion’s offer to take over large parts of Santee Cooper was contingent on approval of the purchase of SCANA.
Will Folks in the FITSreport commented, “Dominion sources declined to expand on the Ferrell letter and their company’s filing with the SCPSC, but sources familiar with the solicitation of these bids tell us the Richmond company’s offer was the ‘last man standing’ in the Santee Cooper sweepstakes.”
— Kennedy Maize
This and the troubled project in Georgia remind me of WPPSS and how the trust of customers/members of publicly owned utility members is so often taken for granted and abused. It is scandalous. But I wonder about the structures of governance and the culture of public power that allow this sort of behavior to continue.
Great report. Thanks.