SCE&G went on the offensive Thursday as a hearing kicked off into its failed nuclear project and bloated electric rates, asserting that the state’s utility watchdog is concocting a false narrative that it misled regulators to keep its project alive.
David Balser, an attorney for SCE&G, said the S.C. Office of Regulatory Staff “knew everything about this project” — including its cost overruns, construction delays and productivity issues — and continued to support the construction of two new nuclear reactors at the V.C. Summer Nuclear Station in Fairfield County.
Regulatory Staff now is trying to save face by leading the charge to slash SCE&G’s rates in a pivotal hearing at the Public Service Commission that began Thursday, Balser told the commission.
“Success has many fathers, but failure is an orphan,” Balser said in his 12-minute opening statement. “Since the project failed, ORS is desperately trying to remove its fingerprints. As a matter of political expediency, ORS is concocting a false narrative” that SCE&G withheld important information from the PSC in order to keep the project alive.
Regulatory Staff says that’s not true. A spokesman said the state agency was not aware of how serious the problems were before SCE&G and minority partner Santee Cooper pulled the plug in July 2017 after nearly a decade and $9 billion spent.
If Regulatory Staff had known, the PSC cases that led to SCE&G’s nine rate hikes to finance the project could have gone much differently, the agency said.
“Our entire case is built around hundreds, if not thousands, of documents that were not shared with ORS or the Public Service Commission and shed a very different light on the project at the time,” Regulatory Staff spokesman Ron Aiken said. “The crux of this case was what wasn’t shared, what was deliberately withheld over a period of years that showed the project was more dire than was ever communicated.”
SCE&G customers have paid about $2 billion in the form of higher power bills for the abandoned reactors. For years, the typical customer paid about $27 a month for the nuclear project. They stand to pay billions of dollars more, depending on how the PSC rules this month.
Balser says the SCE&G “is very sorry for the impact” that its decision to abandon the reactors “is having on our customers, the commission and the state,” but stressed “no one disputes that abandonment is the right decision.”
The Atlanta attorney deflected blame for the project’s collapse to lead contractor Westinghouse’s decision to declare bankruptcy in March 2017 and Santee Cooper’s July 2017 decision to quit the project.
Balser then moved on to Regulatory Staff, SCE&G’s chief adversary in the PSC case over its rates.
He said the agency had an office at the nuclear site, frequently communicated with project officials and expressed “heightened concern” — quoting from a letter written by former Regulatory Staff director Dukes Scott — about some of the project’s flaws.
He added that Regulatory Staff is “concealing” letters Scott wrote to the governor’s office over the course of the project, some of which note problems at the construction site.
“Release those documents showing the communications with the governor’s office,” Balser urged Regulatory Staff. “Let the public know what was being said at the time.”
Aiken, Regulatory Staff’s spokesman, says the agency isn’t withholding anything and has turned the letters over to everyone who has asked for them.
The State obtained those letters months ago. In them, Scott relayed his concerns about the project’s schedule delays and cost overruns to the governor’s office and S.C. House and Senate leadership. However, Scott did not sound alarms that the project’s problems were serious enough to sink the construction effort.
That’s because Regulatory Staff didn’t know, Aiken said. The agency’s understanding of the project was limited “by SCE&G’s withholding of documents,” Aiken said.
“We saw everything, except what they didn’t give us,” he said.