Politics & Government

SCANA execs lied about failed project, should be prosecuted, former employee says

A second former SCANA employee says the Cayce-based utility’s executives lied to investors about their failing nuclear construction project, according to a newly released deposition.

Ken Browne, a senior engineer who worked on the $9 billion V.C. Summer Nuclear Station expansion project, said a trio of top SCANA executives should be prosecuted for misrepresenting the project’s progress in reports to investors in the utility.

“The general reflection in those filings were that the project was going well,” said Browne, who worked at SCE&G from 2009 until 2016. “And, for at least the last two years of the project when I was there, the project was not going well.”

Browne’s account parallels that of another former SCANA employee, Carlette Walker. In a scathing, early-2016 voicemail, Walker accused the same three SCANA executives of mismanaging the V.C. Summer project, keeping it going only so they could meet earnings goals and collect bonuses.

In her deposition, Walker testified she had been pressured by utility executives to lie to state regulators who were monitoring the project.

SCE&G and its state-owned partner on the project, the Santee Cooper utility, ultimately abandoned the project in July 2017, setting off a firestorm over who was responsible and who — utility customers, investors or both — should have to pay off the project’s billions of dollars in construction debt. The project already has cost SCE&G customers more than $2 billion in the form of higher power bills.

The FBI and U.S. Attorney’s Office in South Carolina have been investigating the project’s failure for more than a year. Among other inquiries, they are probing whether SCANA misled investors and S.C. utility regulators about the project’s flaws, sources have told The State.

In a statement, a SCANA spokesman said the utility would not respond to testimony like Browne’s except through its own legal filings, “out of respect for the regulatory process.”

Browne and Walker both singled out former SCANA chief executive Kevin Marsh, former chief operating officer Steve Byrne and current CEO Jimmy Addison. In his Sept. 25 deposition, Browne said the three papered over the V.C. Summer project’s shortcomings in filings with the U.S. Securities and Exchange Commission.

“I believe that there were some things done by those individuals that they should be prosecuted for,” Browne said. “And the regret is I don’t think they ever will be.”

Browne’s deposition was made public as part of a host of new filings with the S.C. Public Service Commission, which is meeting next month to set SCE&G’s rates and determine who bears the burden of paying off the utility’s nearly $4.9 billion nuclear debt. Also on the agenda is Dominion Energy’s offer to buy SCANA.

In the deposition, Browne was asked about Walker’s voicemail. He said he felt similarly, in part because the project’s contractors never corrected shortcomings that escalated its cost. In particular, Browne said, construction work was taking twice as long as projected.

“There didn’t appear to be any end in sight in those issues,” Browne said. “We had been through many rounds of promises of improvement, but they never followed through on those promises.”

Browne said it was impossible the SCANA executives did not know of the problems, adding they had been briefed in internal reports.

In social settings, Browne said, SCANA employees discussed the likelihood of executives being charged and prosecuted.

“I can explain to you what my feelings were, and I think they were very close to Carlette’s,” Browne said. “We were not – I was not pleased with the path that the project was taking at the time.”

Brown said he was contacted by state and federal investigators in November 2017, four months after the project collapsed.

When he met with FBI agents, they told him they already had met with Walker, Browne said. The agents were interested in the contract that SCE&G and Santee Cooper had with the V.C. Summer project’s chief contractor, Westinghouse, to build the two new reactors, Browne said.

They also wanted to know more about Browne’s projections of how much the project would cost to complete, the senior engineer said.

Reach Wilks at 803-771-8362. Follow him Twitter @AveryGWilks