The unfolding tale of widespread utility corruption has expanded again. The Justice Department announced yesterday that former SCANA Corp. executive vice president, Stephen A. Byrne, 60, “pleaded guilty in federal court to conspiracy to commit mail and wire fraud.”
U.S. Attorney Peter McCoy, Jr. said the charges come from SCANA’s (now Dominion Energy) failed attempt to build the two-unit V.C. Summer nuclear units in Jenkinsville, S.C. The DOJ press release said, “From its inception, substantial delays and cost overruns plagued the project. In late 2015 and early 2016, Byrne and others in SCANA’s executive leadership were aware that without extraordinary progress, the project was at risk of not completing the construction of both units in time to qualify for the federal nuclear production tax credit, which will expire on December 31, 2020, and was worth up to $1.4 billion. In or around June 2016, Byrne became aware that efforts to improve the pace and productivity of the project were insufficient to meet the nuclear production tax credit deadline.”
At that point, said the government, Byrne “joined a conspiracy with other senior SCANA executives to defraud customers of money and property through material false and misleading statements to the South Carolina Public Service Commission (PSC), the Office of Regulatory Staff (ORS), and the public. Byrne and his coconspirators used both wires and mails in furtherance of their scheme to defraud.”
To keep the project going, SCANA, and its public power partner Santee Cooper, instituted a series of rate increases on South Carolina electric customers. In SCANA’s case, according to the allegations, the company presented false information to the state regulators in order to get them to approve rate hikes. FBI Special Agent in Charge Jody Norris said, “This conspiracy to defraud SCANA customers is breathtaking in scope and audacity.” According to the feisty, independent online news publication FITS News, which has followed the travails of Summer from the beginning, “In addition to the federal charges, a state investigation is also underway, which is led by S.C. State Law Enforcement Division (SLED).”
The charges carry a potential prison penalty of five years. But it’s likely that Byrne’s guilty plea was the result of a bargain with the federal prosecutors for a reduced sentence in return for implicating other former SCANA executives.
The South Carolina revelations come on top of earlier stories of Chicago-based Commonwealth Edison bribing the Democratic speaker of the Illinois House, Michael Madigan, and agreeing to a $200 million fine, and the arrest of the speaker of the Ohio House, Larry Householder and several Republican operatives, on a $60 million nuclear bribery and racketeering charge implicating Akron-based utility FirstEnergy.
Also in the fallout from the Summer collapse in South Carolina, a federal judge earlier this month approved a $192.5 million settlement for SCANA’s former customers, which Virginia-based Dominion must pay. The Charleston Post and Courier reported, “A separate settlement between Dominion and SCANA’s former electric customers was approved last year. A similar settlement between Santee Cooper and its electric ratepayers awaits approval in state court.”
The failure of V.C. Summer led to the demise of SCANA. It could also result in the death of state-owned Santee Cooper, although that outcome is not clear.
The cascading news of investor-owned utility corruption led Karl Rábago, a former Texas regulator and federal energy official, to comment on Twitter, “Can you bail out or build a nuke today without resort to corruption? (We already know it cannot be done without resort to inter-generational inequity.)”
— Kennedy Maize