Legislators grill CEO of public co-owner of nuclear debacle
COLUMBIA, S.C. (AP) — The CEO of the public utility that co-owns South Carolina’s abandoned nuclear power project said Tuesday he pushed the majority owner for years for better oversight.
As junior partner, state-owned Santee Cooper could only make recommendations to South Carolina Electric & Gas, said Lonnie Carter, the utility’s retiring CEO.
“If we had been managing the project there would have been changes,” Carter told a House panel investigating the debacle. “They needed better expertise managing the project. ... We didn’t have our hand on the throttle. We had to go with whatever they decided on the management team.”
Carter, who was notably alone in facing the panel, has previously testified his utility began raising concerns in 2013 about construction delays.
SCE&G owned 55 percent of the scuttled project at V.C. Summer Nuclear Station north of Columbia.
Rep. Micah Caskey faulted Santee Cooper for not doing more to “exercise their contractual rights,” to include suing SCE&G.
“I’m disappointed to hear they just rolled over,” said Caskey, R-West Columbia.
The two utilities abandoned construction July 31 after jointly spending nearly $10 billion and charging customers more than $2 billion in interest fees since 2009. The project accounts for 18 percent of the residential electric bills of SCE&G’s customers and more than 8 percent of Santee Cooper’s. The utilities don’t plan to refund any of that.
Legislators accuse SCE&G and its parent company, SCANA, of deliberately hiding the project’s problems as they successfully sought rate hikes from state regulators, who have no authority over the state-owned utility. Following the panel’s previous meeting with SCANA executives, House Speaker Jay Lucas asked state law enforcement to investigate that utility’s role and potential fraud in the project’s “disastrous collapse.”
It is among several investigations and more than a half dozen lawsuits.
Much of the focus has been on a February 2016 report that detailed major problems, including a lack of sufficient oversight by SCANA and constant engineering changes to the reactors’ design. At Santee Cooper’s urging, the utilities had hired Bechtel Corp. in 2015 to assess construction. Gov. Henry McMaster made the report public last month over SCANA’s objections, after receiving a copy from Santee Cooper.
SCANA executives contend the report was confidential, not secretive, and was designed to document already-known problems in case the utilities sued main contractor Westinghouse. No lawsuit was filed.
Like SCANA’s executives, Carter continued Tuesday to blame the abandonment on Westinghouse’s bankruptcy in March, which voided a $14 billion, fixed-price contract negotiated in 2015 in an attempt to control costs. A post-bankruptcy analysis — using data the utilities previously had no access to — determined that completing the project would actually exceed $20 billion and not be finished until 2024.
“We were certainly misled,” Carter said of Westinghouse.
By early July, Santee Cooper executives knew the project was not economically feasible and told SCANA of their determination. The board waited several weeks — as spending continued — to vote to halt construction amid negotiations with Westinghouse’s parent company, Japanese electronics giant Toshiba, which had guaranteed the fixed-price contract. The best deal depended on Toshiba believing the project could still be finished, Carter said.
The utilities’ abandonment decision came days after they signed a settlement with Toshiba that jointly provided $2.2 billion over five years. Last week, the utilities sold the settlement to Citibank, the highest bidder, so they could get 92 percent of it immediately.
Carter said the upfront cash will prevent further rate hikes through at least 2019.