The retiring chief executive of South Carolina's state-owned utility will be paid more than $1 million in the first year of his retirement, which follows the abandonment of a nuclear power project.
Documents provided Friday by Santee Cooper show CEO Lonnie Carter will also leave with nearly $859,000 in a 401K-style plan to invest or draw down from as he wishes.
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The 58-year-old will receive roughly $800,000 annually for the next two decades, then $345,000 yearly for the rest of his life. His contract provides an additional $270,500 — half of his current salary — over the first year of his retirement.
Carter announced his resignation last week after 35 years with the public utility, the last 13 as CEO. But he remains at the helm until the board names an interim replacement, expected within the next several weeks. His impending departure marks the first executive to leave following the July 31 decision to halt construction on two partly built reactors that customers have been funding since 2009.
The retirement package involves his state pension, his 2011 contract and Santee Cooper's two benefit plans for executives. One is the 401K-style account. The other provides up to $455,200 annually for 20 years, depending on this year's bonus. It's unclear whether he'll receive the total compensation his contract allows.
Carter's salary is $541,000. Last year, he received a $330,500 bonus for meeting corporate goals such as power costs, safety and customer satisfaction, according to the utility.
Carter had been eligible for retirement since 2011, but the utility's board had asked him to remain until the nuclear project's completion. Carter was not asked to leave, and no other executive departures are expected, board Chairman Leighton Lord said last week.
Santee Cooper was a 45 percent partner with South Carolina Electric & Gas Co. in the effort to expand the V.C. Summer Nuclear Station in Fairfield County north of Columbia, where they have shared ownership of an existing reactor for more than 30 years.
The two decided to abandon construction after jointly spending nearly $10 billion, leaving nearly 6,000 people jobless. The utilities' customers have already paid more than $2 billion on the failed project through a series of rate hikes since 2009, which covered interest costs on financing.
The companies don't expect to refund anything. Customers could end up paying off that debt over decades.
Carter and executives for SCANA, SCE&G's parent company, have repeatedly blamed lead contractor Westinghouse for the project's failure.
Westinghouse declared bankruptcy in March, voiding fixed-price contracts negotiated in 2015 to control escalating costs. Utility executives contend they were forced to give up after a post-bankruptcy-analysis determined the price tag for completing the project — budgeted at $11 billion in 2008 and last approved by state regulators at $14 billion — had actually soared beyond $20 billion.
Utility executives told legislators last week concerns about Westinghouse and a constantly-evolving schedule prompted the utilities to hire Bechtel in 2014 to do an independent analysis of the project's status. Legislators question why the utilities didn't change course sooner and have asked for a copy of that report.
Since 2011, Santee Cooper executives were paid more than $70,000 in bonuses for the now-abandoned project. More than half of that went to Carter, The State newspaper reported in Friday's papers.
"The performance goals tied to the nuclear project were specific and measurable, and all payouts were based on those goals being met," said Santee Cooper spokeswoman Mollie Gore.
SCE&G paid nearly $21 million in bonuses to top executives, some of which was for reaching milestones in the nuclear project. The privately owned SCE&G did not say how much of the bonus money was specifically for the nuclear project.