Prosecutors subpoenaing documents in failed nuke project

By MEG KINNARD Markets Associated Press

The variety of documents that federal prosecutors have demanded from the two utilities involved in a failed nuclear power plant project in South Carolina could offer some hints about what investigators are focusing on in their probe.

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Federal authorities are seeking all documents that served as the basis of a 2015 report detailing a litany of problems with the project, from logistical mistakes to an inability to rein in contractors, according to the subpoena, provided to The Associated Press by one of the power companies involved in the project, Santee Cooper.

The Bechtel engineering firm's report became public as executives testified at a legislative hearing last month, with lawmakers threatening to subpoena it if the utilities refused to provide it. Gov. Henry McMaster released the report to the news media earlier this month, despite written objections from SCANA Energy, parent company of South Carolina Electric & Gas Co., another company involved in the project. A day later, McMaster gave a copy to federal prosecutors, his spokesman Brian Symmes said.

Jim Griffin, an assistant U.S. Attorney in South Carolina in the 1990s who is now in private practice, told the AP on Friday that prosecutors probably wouldn't be digging into the issue to the extent they are if all they had was Bechtel's report.

"This is something more specific, and I've got to believe that it's tied to a tip they've gotten," he said.

The U.S. Attorney's office in charge of the investigation is not commenting.

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Santee Cooper said Thursday that it was complying with a subpoena seeking documents related to the V.C. Summer site, where the state-owned utility and South Carolina Electric & Gas Co. had been partnering up to build two new nuclear reactors. SCANA posted a notice on its website that its officials were doing the same. The companies' statements Thursday were the first official confirmation of a federal investigation.

The companies spent nearly $10 billion on two new reactors before deciding July 31 to halt construction following the bankruptcy of lead contractor Westinghouse.

The failure left nearly 6,000 people jobless, and Griffin said it could be some of those former employees who are giving federal authorities information about things they saw or heard.

"I'm sure they're getting all kinds of leads from insiders," Griffin said.

State lawmakers have convened panels looking into the failure, which has cost ratepayers more than $2 billion and accounts for 18 percent of SCE&G customers' electric bills. A 2007 state law allows SCE&G to recoup its debt from customers if state regulators deem money was spent prudently, but legislators want to stop that.

At least three lawsuits have been filed over the failed project, with plaintiffs accusing the utilities of mismanagement and seeking some sort of compensation for fronting the failed projects for years.

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Kinnard can be reached at http://twitter.com/MegKinnardAP. Read more of her work at http://bigstory.ap.org/content/meg-kinnard/