Yet another major rate payers’ lawsuit against SCANA and Santee Cooper has been filed, this one alleging the electric power companies for years unlawfully forced customers to pay higher monthly bills to help raise billions for nuclear reactors the companies actually never intended to build.
“Plaintiffs have paid money for nothing and will continue to pay money for nothing,” said the lawsuit, filed on behalf of Santee Cooper customer Hope Brown, of Florence County, and SCANA customer, Thomas Lott, of Richland County.
The lawsuit, filed in state court in Richland County by Columbia attorney Cam Lewis, says not only was the two companies’ plan to build two nuclear reactors a “fictitious project” but also that rate payers were billed monthly for “fictitious costs” for construction.
The two power companies, who were in a partnership to build the reactors in Fairfield County, abandoned the plan July 31, after collecting approximately $1.7 billion so far from rate payers. The companies knew the project was doomed but still continue to bill customers for construction and use the project “as a cash cow ... . In other words, defendants collected billions of ‘fees for nothing’ from their customers,” the lawsuit says.
It is at least the fifth lawsuit filed on behalf of rate payers in recent weeks.
The Brown-Lott action is apparently the first lawsuit to specifically cite a secret February 2016 report by Bechtel Power Corp. as evidence the companies knew their goal wasn’t feasible.
The Bechtel report reported that both Santee Cooper and SCANA had been warned a year and a half ago that the project, for which planning began in 2009, was suffering major problems – “a detailed engineering design had never been completed” and “the design was often not constructible.”
The secret report was made public Sept. 4 by Gov. Henry McMaster over the protests of both SCANA and Santee Cooper.
Neither SCANA nor Santee Cooper had any comment on Tuesday when asked about the latest lawsuit. A Santee Cooper spokeswoman said the company had not yet seen the lawsuit. A SCANA spokesman said, “We generally do not comment publicly on details pertaining to pending or ongoing litigation.”
In a novel turn, the latest lawsuit’s main legal claim is that forcing customers to pay higher rates for nuclear reactors the companies knew they weren’t going to build constituted an unlawful “taking” without compensation and a violation of due process of law – violations of rights guaranteed by the U.S. Constitution.
Takings lawsuits are usually aimed at governments, charging an unlawful seizure of property without fair compensation or a major reduction in a property’s value.
Other lawsuits against one or both companies have been filed in Fairfield, Berkeley and Hampton counties, alleging various causes of actions, including negligence, civil fraud, breach of contract and power company executives unlawfully enriching themselves with at least $14 million worth of bonuses at the expense of rate payers.
Each of the suits ask a judge to classify them as class actions and seek refunds for hundreds of thousands, if not more than a million, rate payers.
The latest cost estimate for the nuclear reactors, were they to be finished, is $12.9 billion. The project was supposed to start generating electricity in 2020.
The fact that rate payers were forced for years to pay for a multi-billion dollar pair of nuclear reactors that would never work has turned into an ironic hot button issue in South Carolina. Palmetto State politicians and voters are fond of saying they detest government regulations, but in this case, it was precisely the lack of regulations and oversight that led to the current situation, critics contend.