Politics & Government

SCE&G rips agency’s request for $1.5 billion in sanctions as ‘baseless,’ ‘draconian’

Dominion buys out SCANA: How we got here

Since the V.C. Summer nuclear expansion project was abandoned, SC lawmakers and agencies have tried to keep SCE&G and parent company SCANA from overcharging power customers for the failed project. Here is a summary of what has happened.
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Since the V.C. Summer nuclear expansion project was abandoned, SC lawmakers and agencies have tried to keep SCE&G and parent company SCANA from overcharging power customers for the failed project. Here is a summary of what has happened.

SCE&G on Tuesday blasted South Carolina regulators’ request for sanctions, for allegedly concealing problems at a bungled nuclear project, as “baseless” and “draconian.”

The S.C. Office of Regulatory Staff last week asked the S.C. Public Service Commission to levy financial sanctions against Cayce-based SCE&G and its would-be acquirer, Virginia-based Dominion Energy, for engaging in what is called a “deliberate scheme” to conceal key documents needed for pending nuclear proceedings.

SCE&G responded Tuesday, arguing the utility has worked in good faith to comply with PSC directives.

A spokeswoman for SCANA, SCE&G’s Cayce-based parent, said the utility has released 2.5 million pages of information in response to hundreds of requests for information from Regulatory Staff.

“ORS has leveled baseless charges against SCE&G and seeks drastic relief based on those charges,” SCE&G attorneys wrote in their response to the Public Service Commission.

In its motion filed last Thursday, Regulatory Staff said SCE&G violated a PSC order to provide regulators with the once-secret Bechtel report and documents related to that report, which outlined major construction problems at two now-abandoned V.C. Summer nuclear reactors.

ORS attorneys said that, at a minimum, the PSC should disallow any costs related to the failed nuclear project that were incurred after Oct. 22, 2015, in setting SCE&G’s future electric rates. That would cost SCE&G and SCANA about $1.5 billion.

In total, SCE&G’s customers have paid more than $2 billion to finance the bungled $9 billion project.

In May, Regulatory Staff filed a motion to compel SCE&G to produce the Bechtel report and related documents, including draft reports, which found an array of problems at the V.C. Summer project site, which SCE&G and junior partner Santee Cooper abandoned in July 2017.

SCE&G, through SCANA, responded by providing two pages of notes and a log of some 62 documents it is withholding from regulators. The utility claims those documents are immune from disclosure because they are covered by attorney–client privilege or a confidential work product.

Subsequently, the utility produced four additional Bechtel-related documents and filed a revised log listing 57 related documents that it said were privileged.

SCE&G insists documents related to the Bechtel report were kept confidential because it was preparing a possible lawsuit against Westinghouse, the project’s lead contractor, and anticipated regulatory proceedings.

“SCE&G did exactly what it said it would do,” the utility’s attorneys wrote. “There is nothing inappropriate, let along sanctionable, about logging documents as privileged in accordance with the explicit directive in the (PSC) order.”

Regulatory Staff contends the Bechtel report was put together to assess what was going wrong with the construction at the ill-fated project, not to support a lawsuit. And, because the decisions to abandon the project involved business considerations, regulators say no documents related to that decision can be subject to attorney-client privilege.

SCE&G contends “there are no valid grounds for drastic sanctions” over what it says is a good-faith disagreement about the scope of attorney-client privilege claims and work-product protections.

Regulatory Staff has until the end of Thursday to file its rebuttal with the PSC.

Tom Barton: 803-771-8304, @tjbarton8
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