Officials from South Carolina Electric and Gas (SCE&G) and state-owned utility Santee Cooper were in the hot seat Monday as state senators grilled them on the failed VC Summer nuclear reactor expansion project.
Santee Cooper President and CEO Lonnie Carter told senators that he knew as far back as 2014 there were issues with lead contractor Westinghouse which put VC Summer’s future at risk. But he insisted there was a lot of pressure to finish. “This project was popular in this state politically and, quite frankly, otherwise,” he told senators. “That certainly is the feeling I got.”
State Sen. Nikki Setzler, D-Lexington, asked Carter why they did not seek the state’s assistance when they knew the project was in serious trouble.
“As a state-owned utility, you don’t think you had a responsibility to come to the legislature or the governor or somebody and say we got a problem, we need help?” Setzler asked.
Westinghouse filed for bankruptcy in March, dooming the project and more than 5,500 jobs. Santee Cooper’s board voted July 31 to no longer pay for further construction. SCE&G announced later in the day it would abandon the project rather than attempt to go alone.
The Santee Cooper CEO, who announced last month he would retire in a few weeks, said Westinghouse was only completing 0.3 percent of the project per month. That was well behind the 2 percent it was supposed to be achieving to meet its contracted deadline, he told the panel.
Carter also testified Santee Cooper wanted to sell part of its 45-percent ownership stake in the reactors as early as 2010. The company had determined that it did not need that much electricity and sought a third utility to buy its remaining share. However, negotiations with other companies fell through.
Senators also criticized SCE&G executives over bonuses they received while construction fell behind schedule. The bonuses were not entirely tied to the VC Summer work, but Securities & Exchange Commission filings showed the company’s top five executives received $3.3 million in performance-based pay last year while the project floundered.
CEO Kevin Marsh insisted the company acted appropriately and would still be proceeding with construction if Westinghouse had held up to its contract. Marsh maintained SCE&G officials acted “prudently” in their decisions, The word choice was intentional: state law allows the utility to recover some of its losses through customer power bills if the state Public Service Commission finds it was spent appropriately.
But some senators scoffed at the idea. “You’ve got a different definition of prudent than I do,” Setzler commented in response.
Carter said he still believes the site could be completed at some point if nuclear becomes more viable. He recommended preserving the construction equipment and supplies at the Fairfield County site. SCANA officials also said they were considering that as a possibility, though preservation could cost at least $11 million a year.