Utility hires internal investigators of board management
Troubled South Carolina electric utility SCANA Corp. is adding two outsiders to its board of directors to investigate whether current and former company insiders mismanaged a failed nuclear construction project and shortchanged shareholders.
The Cayce-based owner of South Carolina Electric & Gas said Friday that retired accounting executive Jeb Bachman and Patricia Galloway, a consultant on major energy projects, have become independent members of its board of directors.
Bachman and Galloway will investigate mismanagement claims alleged in shareholder lawsuits against SCANA executives and directors and decide “whether it is in the best interests of SCANA to pursue such claims” against its own management, the company said in a statement.
Former CEO Kevin Marsh and former chief operating officer Steve Byrne announced their retirements last fall, months after the decision to scrap the botched V.C. Summer nuclear project. SCE&G and state-owned utility Santee Cooper spent more than $9 billion before abandoning construction on a pair of nuclear reactors near Columbia.
The shuttered project has cost SCE&G customers $2 billion so far in the form of higher rates and it stands to cost them billions of dollars more. Shareholders have lost billions of dollars in value as SCANA’s stock price has plummeted.
A state law approved in 2007 allowed SCE&G to begin charging customers for the reactors before they were completed.
Last week, South Carolina’s Public Service Commission ordered SCE&G to start dropping rates by 15 percent beginning this summer. SCE&G has tried to halt the cut, filing a federal lawsuit seeking to stop regulators from slashing the rates the utility now charges to recover its costs from the failed reactor construction project.
Eighteen percent of SCE&G customers’ rates are currently going toward paying for the reactors, or about $27 monthly for the typical residential customer. A state law passed last month mandates cutting that to $5 a month.
Galloway will lead SCANA’s internal investigation. She is an engineer and the former chief executive of a company which consults with companies on major energy and infrastructure construction projects. Bachman was a partner and ran U.S. audit operations at the accounting firm PricewaterhouseCoopers before retiring in 2015.
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