Former SCANA executive “silenced” for pointing to issues with nuclear project
Attorneys representing SCE&G ratepayers want about $63.5 million in fees after their lawsuit over the utility’s unfinished nuclear power plant led to a $2.2 billion settlement that included at least $115 million in potential refunds to customers.
But that’s far too much for attorneys — and too little for ratepayers — since SCE&G’s new parent company, Virginia-based Dominion Energy, already planned to dish out $2 billion in rate credits to SCE&G’s customers, according to an objection to the settlement filed Monday.
“The benefits to (ratepayers) are minimal and will likely amount to less than five cents on the dollar (per ratepayer),” Columbia attorney Robert Dodson wrote in the objection Monday. Dodson represents seven SCE&G ratepayers in the Midlands and Lowcountry. “The proposed settlement is plagued by other problems that reduce benefits to class members.”
The objection stems from a disagreement over how much money the attorneys suing SCE&G actually won for the utility’s ratepayers in settling the class-action lawsuit.
The attorneys say they helped deliver $2.2 billion in rate relief, while Dodson contends they really were responsible only for up to $200 million in potential customer refunds.
“Ratepayers are going to get $2 billion of rate relief regardless of what happens with this lawsuit,” Dodson said. “They have over-inflated the value of the lawsuit.”
The attorneys sued SCE&G after it announced in July 2017 it had abandoned the construction of two nuclear reactors at the V.C. Summer Nuclear Station in Fairfield County — a project that already had cost customers more than $2 billion in the form of higher power bills after nine rate hikes.
In a 69-page court filing on April 19 explaining their request for $63.5 million in fees, the attorneys — from 16 law firms working together — argued they spent more than 26,000 hours — or about $2,400 an hour — fighting SCE&G’s attorneys, finding and interviewing key witnesses and poring through hundreds of thousands of pages of crucial documents that revealed details about why the project failed.
They say they spent nearly $865,000 of their own money on the case, knowing they would need a victory or settlement to be reimbursed.
They also say they helped the state’s utility watchdog, the Office of Regulatory Staff, build its case against SCE&G ahead of the Public Service Commission’s hearing on who should have to pay for the V.C. Summer debt. That case ended with the PSC approving Dominion’s purchase of SCANA and its proposal to lower SCE&G’s electric rates in the future.
“With a herculean effort of time and money over fifteen months of hard fought litigation, these lawyers exposed SCE&G’s conduct and forced it to the negotiating table,” the attorneys wrote. “After several months of intense negotiations, the parties reached a settlement that removes a significant portion of the V.C. Summer electric rate load from customers’ bills.”
The attorneys announced in November they had settled with SCE&G’s parent company and Dominion for roughly $2 billion, plus at least $115 million in potential customer refunds — money that the power company had set aside for golden parachutes to its executives. The deal also included up to $85 million in former SCANA real estate the attorneys plan to sell to add to the customer refunds.
The attorneys did not say then how much they planned to seek in fees for their work. But earlier this month, they asked for 3 percent of that total $2.2 billion pot.
Dodson, however, argued that figure is “outrageously high and patently unreasonable” since Dominion already planned to offer roughly $2 billion in future rate credits to SCE&G customers.
He argued the attorneys are taking more than 55 percent of the only real value the attorneys got for ratepayers through the lawsuit: the $115 million in customer refunds. He also argued the attorneys overstated the value of the estimated $85 million in former SCANA real estate they plan to sell.
“The material terms of the settlement are fundamentally unfair,” Dodson wrote.
Dodson also complained a notice of the settlement, mailed to SCE&G ratepayers, was misleading and failed to explain how much of the money would go to customers and how much to the attorneys.
He recommended a judge either reject the settlement or limit how much money goes to ratepayer attorneys. A fairness hearing is set for May 14 in York County.
The ratepayer attorneys appear to have an equally lucrative backup plan if a judge agrees with Dodson that they weren’t responsible for $2 billion of the $2.2 billion settlement.
According to their April 19 filing, they could request one-third of the roughly $200 million in cash refunds and real estate sales that they negotiated from SCE&G in the settlement. That would be worth nearly $67 million.
Trial attorneys typically take one-third of the award in class action lawsuits for their attorneys fees, the attorneys noted.
Ratepayer attorney Ed Westbrook would not comment on Dodson’s objection but called the fight with SCE&G “unprecedented” and “one of the biggest utility cases in American history.”
“Through hard work, risk and other efforts, our team was able to discover valuable evidence critical to the PSC case and this litigation,” Westbrook wrote in an emailed statement. “Our team helped secure more than $2 billion in relief, repayments, and accountability for the people of South Carolina. This settlement delivers for SCE&G customers.”