SCANA accused of conspiring against customers it charged for failed nuclear plant

COLUMBIA, SC A lawsuit filed Monday in Columbia alleges that SCANA violated a federal racketeering statute when it charged customers for the cost of a multi-billion dollar nuclear project that won’t be completed.

The federal lawsuit, which could result in rebates to customers if successful, says SCANA and partner Santee Cooper knew the nuclear project was running off the tracks, but continued to provide an optimistic view of the effort – even as customers were billed for the work.

The suit only names SCANA, an investor owned energy company and the project’s senior partner, as a defendant, but it also criticizes state-owned Santee Cooper. SCANA is the parent corporation of SCE&G.

SCANA’s use of “false and deceptive testimony, reports, and reactor projections’’ induced the state Public Service Commission to approve rate increases that the regulatory panel would not otherwise have approved if SCANA had told the truth, the suit says.

The lawsuit relies in part on a nearly 50-year-old federal racketeering law that was first used to battle the mafia, but which has been expanded to allow its use against other organizations, according to www.hg.org. It is used to show a pattern of wrongdoing, as is alleged in Columbia attorney Brian Gambrell’s suit.

“These acts have been committed on multiple occasions by SCANA throughout the state of South Carolina and constitute a pattern of behavior,’’ the suit says.

The racketeering law often is used in criminal prosecutions, but can be used in civil lawsuits, according to www.hg.org. Such civil suits can be expensive to prove, but can be lucrative, the website reports. Those seeking compensation can get three times the actual damages incurred. In this case, ratepayers have been billed about $2 billion for the project.

In this case, when SCE&G sent power bills in the mail, the company broke the federal racketeering law, the suit said.

SCANA spokesman Eric Boomhower declined comment on the lawsuit.

Gambrell’s lawsuit seeks class action status. If class action status is granted and the suit is successful, many customers of both SCE&G and partner Santee Cooper could be entitled to refunds or breaks on their power bills to compensate for the $2 billion they’ve collectively been charged for the nuclear reactor project, Gambrell said.

Gambrell’s case is the latest in a growing number of lawsuits against SCANA over the V.C. Summer project. SCANA and junior partner Santee Cooper walked away from the project July 31 after spending nearly a decade on the effort, citing the bankruptcy of chief contractor Westinghouse and rising costs. Together, the companies spent about $9 billion over a decade, before quitting.

During the time the project was being planned and built, the utilities collectively raised rates 14 times to pay for financing costs, charging customers about $2 billion.

While the suit filed Monday is a civil case, it comes as questions continue about whether criminal wrongdoing occurred as the project advanced.

A federal grand jury subpoenaed records from SCANA and partner Santee Cooper last week and sources confirmed that a criminal investigation is under way. State Attorney General Alan Wilson also is investigating and, on Monday, lawmakers asked the State Law Enforcement Division to look into the failed project.

Questions have surfaced on at least three fronts: whether SCANA withheld information that it is legally required to report to federal regulators; why several top SCANA executives sold $3.4 million in stock before a damaging report on the project’s problems became public; and whether some of the project’s design needed authorization from professional engineers.

Now, questions have been raised about violation of a federal racketeering law in a civil suit.

“It is not in place of or in lieu of what either the U.S. Attorney or the Grand Jury is going to do, but it is a kind in supplement,’’ Gambrell said.

This story was originally published September 25, 2017 at 8:22 PM with the headline "SCANA accused of conspiring against customers it charged for failed nuclear plant."