Attorney: Utilities meant to hide report on nuclear project

For at least two years before a South Carolina nuclear power construction project was abandoned, its owners had a report that they intended to keep secret showing the reactors couldn't be completed as planned, an attorney for a legislative panel investigating the debacle said Friday.

"The report is very, very troubling," said Scott Elliott, hired by the House for the hearings. "It was designed to never see the light of day."

State-owned Santee Cooper and South Carolina Electric & Gas hired Bechtel Corp. in 2015 to assess construction on two new reactors at V.C. Summer Nuclear Station north of Columbia. The utilities were briefed on the findings later that year, though the official report is dated February 2016.

Essentially, the report says "this wasn't going to work. ... If things don't change dramatically, you'll never finish these projects," Elliott said. Its findings included a lack of proper oversight by SCE&G, the majority owner.

SCE&G should have disclosed the report's existence as it successfully sought approval in 2015 and 2016 to spend more on the project. Instead, executives told state regulators they were confident in the presented completion dates, said Elliott, also an attorney for South Carolina Energy Users Committee, a coalition of large industries that need a lot of energy.

Legislators accused SCE&G executives of intentionally hiding the report from regulators and lawmakers, withholding information that could have resulted in "no" votes.

Kevin Marsh, CEO of SCE&G's parent company SCANA, told legislators the report was confidential because it was intended to be used in a potential lawsuit against the site's main contractor, Westinghouse.

"It wasn't secret. It was confidential," Marsh said.

The utilities abandoned the project July 31 after jointly spending nearly $10 billion, leaving nearly 6,000 people jobless. A 2007 state law allows SCE&G to recoup its debt from customers if state regulators determine money was spent prudently.

Legislators who are seeking ways to fix the law want to stop that. Customers have already paid more than $2 billion on interest costs through a series of rate hikes since 2009. The project accounts for 18 percent of SCE&G customers' electric bills.

Elliott said the Bechtel report puts into question every decision made by the utilities over at least the last two years.

But Marsh continued Friday to blame the project's failure on Westinghouse's bankruptcy in March, which voided a fixed-price contract negotiated in 2015 in an attempt to control costs. And he insisted the utility did nothing wrong, and no one deserved to be fired.

"Did we make any mistakes? A project this large, you're going to make some mistakes," he said. "I don't think we made any material mistakes to change the outcome of where we are today."

He said the report's findings only highlighted what the utilities knew. SCANA chief operating officer Steve Byrne said the fixed-price contract addressed many of the budgeting concerns.

"It was mostly to validate our concerns rather than tell us something we didn't know," Marsh said. "I believe we acted appropriately and prudently."

The Bechtel report's existence became public as executives testified at a legislative hearing last month. Lawmakers threatened to subpoena it if the utilities refused to provide it. Gov. Henry McMaster released it to reporters earlier this month, over SCANA's written objections, after receiving a copy from Santee Cooper.

Rep. James Smith, D-Columbia, told Marsh SCANA needs to acknowledge its share of the blame.

House Minority Leader Todd Rutherford, D-Columbia, said executives' testimony shows they "just don't get it."

"At what point does the person paying these bills get some relief? They can't opt out. Their only way out is to move," said Rep. Kirkman Finlay, R-Columbia. "How is this acceptable? I don't think there's anything you can say that makes sense. Spending $30 million a week is prudent?"