Alleging that SCE&G unfairly charged customers up to $1 billion for a failed nuclear expansion project, a lawsuit filed Monday in Fairfield County seeks to recover money for virtually all of the company’s ratepayers in the Columbia and Charleston areas.
The suit says SCE&G and its parent corporation, SCANA, misled state utility regulators and power company customers by failing to tell them about the severity of troubles that ultimately caused the companies to abandon the twin-reactor effort.
SCE&G and its junior partner, state-owned Santee Cooper, said July 31 they would not continue the V.C. Summer reactor expansion after spending nine years and $9 billion on the effort northwest of Columbia. During the construction effort, SCE&G charged customers $1.7 billion and recently indicated it would seek more from ratepayers to shut down the project.
“This is the kind of case that is born out of huge anger and frustration of the people,’’ said Ed Bell, a Georgetown lawyer who filed the suit on behalf of 10 Fairfield County residents. “Our phones are ringing off the hook.’’
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Bell’s case is among a growing number of lawsuits to arise since the project was abandoned and one of at least two seeking class action status. The other was filed several weeks ago by a group of attorneys including former federal prosecutor Pete Strom.
If class action status is granted by a judge, virtually all of SCE&G’s customers could be eligible for some reimbursement, Bell said in an interview late Tuesday afternoon. The suit seeks to represent people who have paid in excess of $100 for the reactor project in Jenkinsville, but it does not say how much customers should be reimbursed.
“In this case, all of the rate holders are injured in some way,’’ Bell said. State Sen. Vincent Sheheen, D-Kershaw, and former state Sen. Creighton Coleman, D-Fairfield. are among other attorneys working with Bell on the case.
The success of the case, however, depends on how vigorously SCE&G fights. Company spokeswoman Rhonda O’Banion said SCE&G and SCANA would not comment on the lawsuit, but “we are confident that the company’s actions complied with all legal requirements.’’
SCE&G, which has about 700,000 customers, has said it was forced to abandon the project amid rising costs and the departure of Santee Cooper, the first to quit the project. The suit does not name Santee Cooper, which unlike investor-owned SCE&G, is a state agency.
Both companies cited the bankruptcy of chief contractor Westinghouse as a key reason they could not complete the work. The project, which would have added two reactors to complement the existing one at the Summer plant, was originally forecast to cost about $11 billion. But costs had risen to more than $20 billion when the companies pulled the plug. The effort also was at least four years behind schedule.
This week’s lawsuit pleased state Sen. Mike Fanning, a Fairfield County Democrat whose area includes the failed nuclear plant site. Fanning said SCE&G should be held accountable for failing to keep a closer eye on the project as costs rose, and for failing to tell the public. Fanning said SCE&G and SCANA were more worried about taking care of stockholders than customers. The suit says stockholders were receiving a 10 percent profit.
“More and more evidence has shown that there has been mismanagement,’’ said Fanning, who is not involved in the lawsuit. “People are looking for ways to hold them accountable and using the courts is a fantastic way of doing so.’’
The state suit, which includes representatives of four different law firms, seeks damages for customers charged by SCE&G. The suit takes aim at how SCANA executives were compensated while the project was underway. It says SCANA executives received more than $14 million in compensation at the same time the company was billing its customers for the now failed project. As the project began to fail, the company received hundreds of millions of dollars in profits, the suit also says.
The suit says SCANA and SCE&G knew for years that the project was failing but misled the state Public Service Commission and ratepayers about the project’s troubles. Among those troubles was the failure to follow a detailed construction schedule and knowing the project was going to cost “significantly more’’ than anticipated, the suits says.
That’s particularly painful because South Carolina has some of the nation’s highest power bills, according to the lawsuit. About 18 percent of the average SCE&G customer’s power bill goes toward the now-failed nuclear project. The suit seeks both actual and punitive damages.
“When power companies have so much control over our lives, they should not be able to benefit from their own misdeeds and negligence,” Bell said in a prepared statement earlier Tuesday. “It’s pretty simple. If you don’t pay your electric bill, what do they do? They cut you off. Now, we should cut them off from future payments for a failed project. They should be held to the same standards as their rate holders.”